Sri Lanka’s China-backed Hambantota industrial park advances with new investments

The low hum of excavators and dump trucks echoes across 228.5 hectares of land belonging to the Hambantota International Port’s (HIP) industrial park, as contractors scramble to complete ground leveling for a 300 million U.S. dollar tire factory, China’s state-run news agency Xinhua reported. 

According to the official website note of the port, “The Port Industrial Park follows and replicates the success of China Merchants Port’s strategic ‘PPC’ or Port, Park & City model, which was first effectively implemented in the renowned industrial zone – Shekou in Shenzhen, in the People’s Republic of China.” 

Chinese news agency Xinhua reports, Sri Lanka’s southern district of Hambantota is mostly known for its sprawling paddy fields, peacocks and ruins from the ancient Kingdom of Ruhuna. But the sound of heavy machinery signals the impending arrival of modern manufacturing, which the government hopes will transform the district into an industrial powerhouse and commodities trading hub.

While the COVID-19 pandemic disrupted international shipping, HIP had a busy first half of the year in 2021, with throughput nearly tripling year-on-year. Meanwhile, a slew of newly signed investments are set to kickstart export-oriented manufacturing in the Port Industrial Park and generate domestic container traffic.

“Since the pandemic, Hambantota has been able to achieve good results and seize business opportunities. The most important thing is that cargo volume for the first half of this year increased by 187 percent compared with the first half of last year. The number of our investment agreements has also increased significantly,” CEO of Hambantota International Port Group (HIPG) Johnson Liu told Xinhua.

In November 2020, HIPG(Hambantota International Port Group) signed a 300-million-U.S. dollar agreement with Chinese company Shandong Haohua Tires to manufacture tires in Sri Lanka in the Port Industrial Park using local rubber resources and exporting to the world market. Ground leveling for this factory is expected to be completed by the end of August.

On June 11, HIPG signed a 16-million-U.S. dollar agreement with Chinese company Shenzhen Xinji Group to set up a plug-and-play “Park in Park” facility in the Port Industrial Park. The facility is expected to transfer skills and technology and begin production of household electric and electronic appliances within 12 months.

On August 9, HIPG signed a 58-million-U.S. dollar agreement with Maldivian company Sea Horse Yachts to assemble and export yachts in the Port Industrial Park. The project is expected to generate 200 direct and 300 indirect jobs.

Meanwhile, HIPG is in talks with Sri Lankan company Melwa Group which seeks to set up a cement factory with a capacity of 1.3 MT adjacent to the Port Industrial Park and import inputs directly through the Hambantota harbor.

Liu, the CEO, has set his sights on leveraging Sri Lanka’s unique strengths to attract new investors.

“The secret of Hambantota Port’s success in the past year is that we have a comparative advantage of having an industrial park linked to the port area, alongside favorable logistics and energy costs,” Liu said.

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