Thursday Nov 14, 2024
Thursday Nov 14, 2024
Monday, 12 May 2014 00:00 - - {{hitsCtrl.values.hits}}
While the ports, airports and the roads were built, the last two budget proposals saw President Mahinda Rajapaksa as the minister of finance, and Dr. P.B. Jayasundera as Secretary to the Ministry of Finance, having introduced many reforms to create a conducive environment for global capital to flow into the logistics industry.
These reforms include, modernisation and simplifying of tax structures, reducing shipping and logistics 
corporate tax to 12% and by doing so bringing the sector in par with the export sector and the lowest in south Asia, introducing a hub act, allowing the creation of free ports and special bonded zones, expediting trade facilitation through e-commerce and automation, skills development drive are among many.
In addition a transparent and a market driven freight mechanism was introduced which has been recognised by the global shippers community as an example to the rest of the world.
Attracting global capital
One of the strategically important sectors that needed foreign capital was the logistics and forwarding industry. The more players that enter the market would help Sri Lanka to create the needed critical mass to attract more trade operating through its ports and airports. On the contrary to a few protectionists’ views, the Government now has liberalised logistics where foreign investments can come in without ownership restrictions subject to FDI. This is another positive move as a policy where Sri Lanka is now on par with the Singapore and Dubai hubs, and India and Pakistan in the region.
Six months ago, nobody would have anticipated Japan’s SG holdings, one of the largest logistics companies in Japan, would enter South Asia using Sri Lanka as the platform. It is well known that the Japanese would not enter a market that is not conducive or strategically important. This new entrance would certainly give a strong signal to the rest of world’s top logistics companies; an eye opener to enter emerging Sri Lanka at an early stage before the country entry cost would rise due to more demand.
Beneficial for shippers and trade
The local export/import trade too will benefit when more quality players in the service industry enter. Companies such as Sagawa will provide better access to new markets with greater economies of scale. The more connectivity country gets through international players would be a catalyst to expand FDIs for the manufacturing sector too.
The upcoming China/Sri Lanka FTA along with the exiting of the India/Sri Lanka FTA and now with the entrance of global logistics providers will bring about a new era for the country to grow its economy in the field of logistics and shipping over the next decades.
The Expolanka group led by its dynamic CEO Hanif Yusoof too have to be recognised for their outstanding contribution to the country. Having establishing itself as a Sri Lankan multinational after its humble beginnings the company has now strategically geared itself to be a top Lankan brand for the logistics industry in Asia. With SG Holdings coming in as a strong investor it will help the group’s capabilities domestically as well as globally.
