Ind Dev Plan 2007 15 Jica Ind

A project on

New Export Oriented Industries’ Development by Research Assistant in Industry and Investment Promotion JICA (26.01.2006 -08.08.2006)

The Agenda JICA and donors Sri Lankan work procedure with donors The main project My experience

JICA and Donors JICA – Japan International Cooperation Agency. Providing technical cooperation. Founded by the Japanese Government.

Sri Lankan work procedure with Donors Government of the Donor country

Sri Lankan Government External Resources Department National Planning Department Relevant Ministries

Current Situation There are so many opportunities in India Sri Lanka should grasp these business changes By utilizing FIDs from Asia

Problems & Issues of Japanese Companies Operating in India - High costs caused by inferior infrastructure, such as road transportation ,electricity, etc. - Labor dispute problems caused by strong labor unions, - High turn-over rate of workers/managers due to FDI booms - Complex and frequently changing tax rules, - Shortage of reliable local suppliers with high quality,

Despite the Strong invitation of Japanese set Markets, - Few Japanese suppliers are willing to invest in India, due to the hard business and living conditions, difficult management control with J/V setting, and shortage of secondary suppliers, ect.

Present Situation of Indian Market Japan

Indian Market Invest

Set Makers

J. Set -Makers 1st Tier Suppliers J. 1st –Tier Suppliers

Export

2nd Tire Suppliers

L. 2nd - Tier Suppliers

S-E Asia J. Set Makers Sri Lanka J. 1st Tier suppliers J. 2nd Tier Suppliers

Future operations of Sri Lanka Indian Market

Japan Set Makers

J. Set -Makers 1st Tier Suppliers J. 1st –Tier Suppliers

2nd Tire Suppliers

L. 2nd - Tier Suppliers

S-E Asia Sri Lanka J. 2nd Tier Suppliers L. Entrepreneurs

J. Set Makers J. 1st Tier suppliers J. 2nd Tier Suppliers

Attractiveness of Sri Lanka for Japanese SMEs’ Investment Indo-Lanka Free Trade Agreement Well educated and precision work oriented Human resources availability (w. low cost) Fewer labor disputes ( cf. India) Simple government administration and tax incentives for export oriented industries Easier operations for inexperienced SMEs Japanese companies’ high satisfaction

Comparatively Advantages Items to produced in Sri Lanka for Indian Market 1)

Precision Car Parts (including Die & Mold) - Secondary suppliers’ products for automotive industries (specially small size and precision parts)

4)

Electronics Parts & Components (general) - Most of the electronics products are not available in India!! (import duties are generally low , caution)

7)

Labor Intensive Parts (competition w. India) - Products quality in Sri Lanka ( by support of Japan) > product quality in India - Production cost + freight + tax < Indian suppliers’ price

Action (1)

to India

Prices needs investigation of Japanese companies operating in India (1st Tire) - Visiting and Interviewing major Japanese automotive and electrics companies operating in India. (First priority is in the Southern India) - Identification of candidate products which are presently imported and can be produced in Sri Lanka by the technological support of Japanese companies. - Inviting potential buyers to Sri Lanka for informing them positive image of S.L. and potentials of S.L. products. - In depth quantitative analysis of each item to be conducted in Sri Lanka

Action (2) 1.

To S-E Asia

Identification of overseas suppliers (in Japan) - In parallel with the Action (1),potential investors of Japan and SE Asian countries ,i.e Thailand, Malaysia, Singapore are identified. - Identified companies are visited and interviewed their interests to invest in Sri lank a for targeting their export market to India. - Inviting the potential investors to Sri Lanka for informing them the correct situation of S.L. and advantages of S.L. - Examination of promotional measures to satisfy the potential investors of Japan &S-E Asia.

Action (3) 1)

Within Sri Lanka

Implementation of integrated actions of investment ,export and industrial promotion

- Along with the Action (2), well targeted investment promotion program is prepared by special team of relevant agencies. - International standard industrial parks are prepared. - Improvement of the transportation from Colombo to Chennai & Bangalore by sea and air routs. - Local SMEs are encouraged to take initiative of the program. - Local SMEs supporting systems need to be strengthened. - Aggressive campaign of integrated actions among investment, export and industrial promotion is initiated.

Sri Lanka-Japan Cooperative Project for New Industries’ Development Objectives: To formulated strategic plan to implement pilot objective for new globally linked industries creation in Sri Lanka.

Target Year : 2015 Project period: for 1 year in 2007 Working Group; - Nation Planning Dep’t - Ministry of Enterprise Development and Investment Promotion (co-chair) - Ministry of Industrial Development (co –chair) - Dep’t of Commerce - BOI, EDB , SME bank - Private Sector (automotive , electronics) - Academic Sector - JICA

My Experience A Research Assistant for Mr. Koyama Yoshio, Senior Advisor, JICA. Should Sri Lanka be Industrialized Working with Governmental Authorities at the policy formulation level. Exposure and contacts. Overall experience

Thank you