Japanese giant Mitsubishi Corp. to wind up Lankan operations next month

Thursday, 9 February 2023 01:50 - - {{hitsCtrl.values.hits}}

Sovereign debt default, abrupt cancellation of key new Japanese proposals such as LRT, LNG and bleak outlook among reasons for exit after nearly 60 years of presence in Sri Lanka

Japanese giant Mitsubishi Corporation has decided to wind up operations in Sri Lanka next month after being an integral part of bilateral ties and some of the country’s key infrastructure projects for nearly 60 years.

The closure of Colombo Office by Mitsubishi by 31 March has come as a big shock to the private sector, both local and foreign which described the move as a big setback for Sri Lanka.

Sources said for Mitsubishi, Sri Lanka was one of its first overseas offices as it contributed immensely towards the businesses and many Sri Lankan companies. It also played a significant role in the bilateral relationship between Japan and Sri Lanka.

Japan is Sri Lanka’s second largest lender with $ 2.46 billion outstanding as of September 2022.

A key reason to close the office is Sri Lanka’s default of external debt, adverse international ratings and economic outlook.

Mitsubishi operations was a key partner in several of Japan International Cooperation Agency (JICA) funded projects.

Relations between Sri Lanka and Japan have strained in recent years due to abrupt cancellation of several key projects including those involving Light Rail Track (LRT) and Liquefied Natural Gas (LNG) proposed by Japan.

At present, Mitsubishi Corp.’s Colombo office employs around 20 but its businesses and projects provided livelihoods to thousands in multiple sectors.