$ 300 m Chinese tyre project gets Cabinet nod for SDA status

Wednesday, 9 December 2020 00:19 - - {{hitsCtrl.values.hits}}

Prime Minister Mahinda Rajapaksa

Chinese tyre manufacturer Shandong Haohua Tyre’s plan to set up a $ 300 million project to manufacture tyres for the export market received Cabinet approval to be marked for significant tax concessions under the Strategic Development Act (SDA).

Cabinet approval for SDA was given on Monday when Prime Minister Mahinda Rajapaksa in his capacity as Finance Minister presented a proposal, Cabinet Spokesman and Media Minister Keheliya Rambukwella said yesterday.

The Board of Investment (BOI) project was inked last month and is the largest project earmarked for the Hambantota investment zone to date. Exports are expected to commence within three years.

The BOI at the time of the signing said the rubber sector was one of the five thrust sectors identified by the BOI’s strategy to drive foreign direct investment (FDI) to the country.

Presently, Sri Lanka gains $ 1 billion worth of export earnings through the rubber industry, while the Government has set up a target of $ 2 billion to be achieved by 2025. It is expected that once the project is completed and operations commence, it will fulfil 30% of the set target.

Shandong will manufacture semi-steel radial tyres and all-steel radial tyres needed for trucks, buses and passenger cars, creating job opportunities for nearly 2,000 people. The inflows of the skills and the technology to the local youth through this investment will be another unique advantage for the country, the BOI said.

Small and medium scale rubber plantation industry employees will be benefited through this new development. The upcoming manufacturing process will create indirect employment, creating new income opportunities to the livelihood in the area as well.

Shandong will be established on 121 acres of land in the Industrial Park within the Hambantota International Port. The Hambantota International Port Group (HIPG) has offered this land to the Chinese company as their first ever FDI within the Industrial Park.

In Phase One, the company is targeting an annual production of nine million tyres to be shipped in 45,000 containers. It is expected that the Hambantota Port will become more productive with this establishment and thereby generate revenue while achieving the country’s economic goals.

Shandong’s presence in Sri Lanka being a world leader in manufacturing tyres to the world shows the growing attractiveness of Sri Lanka as a destination for investment, the BOI statement added.