Malaysia firm to build US$10mn pharma industrial zone in Sri Lanka
Jan 09, 2018 07:32 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - An industrial zone for pharmaceutical manufacturers will be built in Sri Lanka with a 10 million US dollar investment by the Sultan of Johor and entrepreneur Patrick Lim Soo Kit, which will accommodate at least 17 companies, officials said.
Inti Kemuncak Sdn Bhd, the investment vehicle of Sultan Inbrahim Ismail Ibni Sultan Iskander will be a key investor in Pharmazone (Pvt) Ltd, which will run the industrial estate on a 49.5 acre site in Welipenna, in the Kalutara district.
Health Minister Rajitha Seneratne said Sri Lanka was giving incentives for local firms to produce drugs for the state health system, through a 15-year guaranteed buyback agreement and a cost plus 20 percent purchase price in an 'import substitution' strategy.
The industrial zone will lease land to prospective firms for a premium and annual rental.
The zone will come with common infrastructure including effluent treatment and warehousing.
The firms in the zone will partner with Sri Lanka's State Pharmaceuticals Manufacturing Corporation (SPMC).
The SPMC will provide drug formulations and monitor quality, Lohitha Samarawickrema, President of the newly established National Chamber of Pharmaceutical Manufacturers of Sri Lanka said.
SPMC had signed memorandum of understanding with 25 companies to make drugs for the government's medical supplies division.
SPMC Chairman Sayura Samarasundera said prospective investors who were attempting to set up pharma factories were turned away from several industrial zones operated by the Board of Investment except Kandy, due to lack of understanding about the nature of the business.
Patrick Lim Soo Kit said the zone will adhere to the 'very strict' environmental standards of Sri Lanka.
The pharma manufacturing zone through its common facilities including warehousing will help reduce costs, Samarasundera said.
It costs about 2 million US dollars to set up a factory to make 1-1 billion tablets or capsules but the warehouse cost about 200 million rupees (about 1.5 million dollars), Samarasundera said.
The common facilities in the zone will provide common infrastructure helping keep down costs, he said. (Colombo/Jan09/2018)