New Zealand has long-standing Commonwealth, migrant and sporting ties with Sri Lanka, and a growing trade relationship.
Sri Lanka is New Zealand’s fifth largest market for milk powder and Fonterra has exported dairy products to Sri Lanka for over 30 years. Fonterra employs approximately 600 staff in the country and their factory located in Bigyama (established in 1983, as a joint venture) processes milk from approximately 3,000 local dairy farmers.
The New Zealand Dollar (NZD) and the Sri Lankan Rupee (LKR) fluctuate somewhat in relation to each other. During the last two years, one New Zealand Dollar has been able to purchase a high of 97.27 LKR (31 July 2011) and a low of 75.13 LKR (8 June 2010).
Opportunities
The following sectors present opportunities for New Zealand exporters.
- Food and beverage: There are demands from high-end restaurants and hotels for oysters, mussels, bakery products, other seafood and ready-to-use sauces. The quantities required are currently not large, but may be viable if sent in consolidated containers from New Zealand.
- Horticulture: There are opportunities in flower production as the market is open to new hybrid varieties imported from overseas, which can be modernised using tissue culture technology or used as mother plants. Similarly, opportunities exist in the fruit and vegetable sector.
- Fisheries: Sri Lanka has much to offer to local and foreign investors in the diverse agro climatic zones and provide access to a large fishing area.
- Manufacturing: The manufacturing sector is a key sector in Sri Lanka, which generates over 25 percent of national industrial exports.
- Infrastructure: The government’s economic infrastructure development programme is focused on development of roads, water supply and sanitation, ports and aviation, transport, housing and urban development, establishment of industrial zones, hospitals and warehousing and logistic centres.
- Information communication technology (ICT): Sri Lanka is emerging as a global business process outsourcing (BPO) destination of choice. The country is ranked among the top 50 global outsourcing destinations by AT Kearney and ranked among the top 20 emerging cities by Global Services Magazine.
Challenges
- Unpredictable security situations.
The security situation in Sri Lanka remains unpredictable, particularly on the northern regions: north of the boundary line from Mullikkulam, the northwest coast to Kokkilai and on the north east coastal regions (i.e. Mannar, Vavuniya, Mullaitivu, Kilinnochchi and Jaffna Districts). Piracy may be a problem in coastal areas of Sri Lanka.
- Challenging bureaucratic environment.
The country has been ranked 89th out of 183 economies by the World Bank. While this is a low ranking, they are ahead of their neighbours such as Pakistan (107th), Bangladesh (121st) and India (132nd).
- Developing infrastructure.
Cultural and business tips
- Most business people speak English.
- Some areas are dangerous to travel in. For details check with the New Zealand Government’s travel advisory service at www.safetravel.govt.nz.
