Apr 16, Colombo: In a new breakthrough for Sri Lankan exports sector, one of the fastest growing free ports in the world, and one of the biggest free-ports in the powerful Gulf Cooperation Council has opened its doors to Sri Lanka with unparalleled incentives of entry, Minister of Industry and Commerce Rishad Bathiudeen disclosed.
The offer for Sri Lanka exports to enter the Sohar Freezone in Oman, known as Gateway to the Gulf, came when the Acting Undersecretary of the Foreign Ministry for Diplomatic Affairs of Oman, Dr. Mohammed bin Awad Al Hassan met Minister Bathiudeen on 6th April at the Ministry in Colombo.
"Sri Lanka has multiple benefits beyond exports when starting at Sohar which can be Sri Lanka's main manufacturing and re-exports base in the Middle East," said the visiting Undersecretary Al Hassan.
"We like to discuss the possibility of a Ceylon Tea Hub in Sohar Free Port and Free Zone's newest phase," he said.
The Omani officials pointed out that Sri Lanka can process, blend Ceylon Tea and re-export to the entire Gulf Cooperation Council (GCC) region, the Indian Sub-Continent and East Africa, almost duty free from Sohar. "From Sohar, Ceylon Tea and other Lankan exports can reach 3.5 billion consumers in the Gulf region straight away," he said.
The 11000-acre Sohar free zone is Oman's joint venture with the Port of Rotterdam and is one of the fastest developing port cum economic zones in the world.
While the free port's first phase has been completed and taken almost entirely by 16 global companies, vast amount of space is available for Sri Lankan exporters to set up with us in Phase II, the Omani officials said.
The Acting Undersecretary explained that Oman allows full ownership, zero custom duties and great tax exemptions, and most importantly, Sri Lanka can employ its own workers.
"We do not impose stringent rules on employees-there is no requirement to employ only Oman citizens but you can bring your own Sri Lankan workers for your export projects at Sohar and employ them. Only 10% of your workforce at Sohar need to be Omani nationals and the other 90% can be Sri Lankans," the official told Minister Bathiudeen.
"Therefore Sri Lanka has multiple benefits beyond exports when starting at Sohar which can be Sri Lanka's main manufacturing and re-exports base in the Middle East as well as GCC. At this moment I talk only about Ceylon Tea since it is the well-known Sri Lankan export in the Middle East, but you are welcome to set up in other defined segments in Zohar's designated clusters -rubber, plastics, ceramics, food & perishables and steel & iron, and take advantage of our capacity in GCC logistics market," he said.
The GCC's logistics market is estimated to be one of the fast growing sectors at a valuation exceeding US $70 billion, with Oman playing a lead role in it with Saudi Arabia and UAE.
Minister Bathiudeen during his visit to Oman six months back has discussed trade opportunities with the Omani officials.
"I believe Oman can be the Ceylon Tea hub for Middle East and we will convey your good news to our exporters and Prime Minister Ranil Wickremesinghe," said Minister Bathiudeen responding to Undersecretary Al Hassan.
He added that the Oman's offer is a great news to our historic Ceylon Tea industry and invited Omani businesses and investors to invest in Sri Lanka using its FTAs with India and Pakistan, to the huge 1.7 billion South Asian markets.
The Minister also noted that Oman-Sri Lanka bilateral trade has also been irregular and it is time to boost trade to strengthen the relations further.
"We are encouraged by the fact that our products can reach more than 13 billion Middle Eastern customers through Oman," he said.
According to the Department of Commerce, annual bilateral trade between Oman and Sri Lanka shows an irregular pattern and totals around $250 Million. More than 50% of Sri Lanka's imports from Oman are Petroleum oils while Sri Lanka's main exports to Oman are light electrical products and coconuts. Both Sri Lanka and Oman are members of Indian Ocean Rim Association (IORA).
During their 6 April meeting both Minister Bathiudeen and Undersecretary Al Hassan also delved into many other ways and means of cooperation between the two countries.