France to upgrade Lankan investment profile

• Wants to enter rubber, dairy sectors

France wants to upgrade its investment profile in Sri Lanka in a considerable way. The top EU trade partner is mulling Sri Lanka’s rubber and dairy sectors in its first wave of new investments.

“My first impressions of Sri Lanka are very positive. We are keen on new joint ventures in the resurgent Sri Lankan economy. We also want to evaluate current investments by French firms in Sri Lanka,” announced Pierre Lignot, Director of Ubifrance of India.

Lignot revealed this to Minister of Industry and Commerce Rishad Bathiudeen during a courtesy call he made yesterday at the Minister’s office in Colombo.

Accompanying Lignot was Jean-Louis Poli, Economic and Commerce Counsellor of the Embassy of France in Colombo. Ubifrance is the French Government’s agency for international business development and export promotion and its profile is currently being expanded to cross-border investments as well.

According to the Department of Commerce of Sri Lanka, France is one of the most important trading partners for Sri Lanka, accounting for US$ 408.2 million trade in 2011. Bilateral trade between the two countries has been fluctuating in both directions and the trade balance has been in favour of Sri Lanka during the last six years except in 2005, 2008 and 2011.

Apparel and clothing accessories have been the main export items from Sri Lanka to France, accounting for 45% of total exports in 2011, followed by fish fillets (6.2%), pneumatic tyres (5.14%), articles of vulcanised rubber (4.8%), bicycles (4.3%), coconut (3.6%), and tea (3.4%), amongst others.

Among the top French firms operating in Sri Lanka are Alsthom (a world leader in energy and transport), Alcatel-Lucent (a leader in mobile, fixed, IP and optics technologies and also the network provider for Etisalat Sri Lanka), Lafarge (cement and concrete), Schneider Electric (a global energy management specialist firm) and Noyon-Dentelle (Noyon Lanka).

“Chief amongst the JVs we are looking for here are the rubber and rubber-based product sector as well as dairy. We like Sri Lanka’s export rubber varieties and products. We believe we can enter in this sector for value addition. We are also keen to bring in France’s well-known livestock and dairy technologies to Sri Lanka, thereby enhancing domestic capacities. I believe that the high levels of French dairy technologies can help upgrade the Sri Lankan dairy sector. We are also capable of JVs in hotel equipment, renewable energy and biomass, and packaging, especially cold storage,” Lignot revealed.

Responding to Lignot, Minister Bathiudeen said: “We are thankful for France’s interest on our resurgent economy. New investments from France will no doubt further strengthen our bilateral cooperation. France’s entry to our diary sector can help us to save $ 400 m in expenditure that Sri Lanka is spending on annual milk food imports. We also encourage France to invest in our value-added rubber production more than raw rubber exports, as well as in our mining sector. We are proud to inform you that our crepe rubber is the world’s best in its category.”

Demand for Sri Lanka’s crepe rubber has been surging and according to the Export Development Board, in 2011 crepe rubber exports surged to $ 116.4 m from $ 72.58 m, registering a 60% growth spurt.