BOI forays into import-substitution | Daily News

BOI forays into import-substitution

Representatives laying the foundation stone. Picture by Wimal Karunathilake
Representatives laying the foundation stone. Picture by Wimal Karunathilake

The Board of Investment will be flexible on the proportion of goods sold into the local market in line with the import substitution policy of the government. The necessary laws will be amended where required.

Minister of Export Agriculture Ramesh Pathirana said: “it is part of the President’s policy of increasing exports and slowly reducing imports.” Pathirana noted that investors were complaining of a lack of BOI space and as such the government has set aside 194 acres in Warakapola which will be ready in between 6-12 months.

These sentiments were expressed at a BOI staff meeting following the laying of a foundation stone for a pharmaceutical company utilising the scheme on 18 September at the Koggala Free Trade Zone.

Premium International Injectable (PI) Pvt ltd a joint venture between Raddella Holdings and the State Pharmaceutical Manufacturing Corporation will be given leeway to sell higher proportions into the local market until they receive certification allowing them export into Europe.

PI will be producing insulin and 33 other drugs and vaccines. The firm will be able to provide these goods at 1/3 the price currently in the local market. The factory sees an investment of Rs. 3.5 billion by all local partners.

Insulin is currently imported from regional countries. The portfolio of products produced at the plant is expected to save Sri Lanka US$ 10 million a year in foreign exchange and in the long run, provide the country with export revenues.

The plant will directly employ 200 employees and be operational in 24 months. The plant utilises machinery from Japan and Germany. It will use Supervisory Control and Data Acquisition (SCADA) system. The firm has already invested in engineering and processing consultants thereby bringing technology transfer to the country.

The plant was initially envisioned in 2014 with the buyback concept. The former Yahapalana government prevented progress with only a PPP agreement signed in 2018. Under the new government, the new plant has cabinet approval and is the first of the current government’s many envisioned factories in the country.

BOI Director Sanjaya Mohottala said that the government will look to improve the conditions at BOI zones. Mohottala noted that a stable government with increased market access through free trade agreements will bring in much FDI into the country.