Germany confirms October delegation to Colombo

As Sri Lanka and the EU’s leading economy, the Federal Republic of Germany, mark 60 years of diplomatic relations, the Eurozone leader is looking to enhance its profile in Sri Lanka significantly.

With the race for Sri Lanka’s key strategic resources (rare earth elements and mineral sands) warming up, Germany too is looking at exploring this crucial domestic sector which is poised for a boom.  “I too believe that there is strong unrealised potential for trade and investment cooperation between the two countries as we arrive at the 60th anniversary of our bilateral relations. A top German investment delegation is now scheduled for Colombo this October,” revealed German Ambassador to Sri Lanka Dr. Jürgen Morhard on 24 April.

Dr. Morhard was responding to the Minister when making a courtesy call on the Minister of Industry and Commerce Rishad Bathiudeen on 24 April at the EDB premises in Colombo.

On 25 February, the immediate Past President of DAW German-Asian Business Circle (Deutsch-Asiatischer Wirtschaftskreis) Ekkehard Stein announced that DAW was planning to send a representative team of German investors to study emerging opportunities in Sri Lanka.

“The team could be visiting Sri Lanka this August or somewhat later,” he revealed, addressing the 2013 DAW Asia Pacific Forum on 25 February at Maritim Hotel in Frankfurt, where Minister Bathiudeen, representing Sri Lanka, was also taking part in the forum.

Dr. Morhard did not specify the details of the October investment delegation, however it should be stressed that several notable German private sector giants were in attendance at the 2013 DAW Asia Pacific Forum on 25 February in Frankfurt, where Vietnam and Sri Lanka – the only two Asian economies invited to do so in the Frankfurt session – made country presentations to a keen group of potential high level German investors and business ventures seeking to expand to new destinations in Asia.

Among the giants present were Eurex Frankfurt AG, Duetsche Borse Group, IVP Group Germany GmbH, Asico Handels GmbH, MAZARS GmbH, Adam Opel AG, SWB GmbH, LUTHER LLP, and VietinBank, and Rigging Service GmbH.

Germany is the leading Eurozone investor in Sri Lanka with 170 investment projects currently in the country. German investments in Sri Lanka are protected by the bilateral Investment Protection Guarantee Agreement. Among leading German firms in Sri Lanka are BASF Finlay and Kramsky GMBH.

“On behalf of our Government, I extend our thanks to the Deutsch-Asiatischer Wirtschaftskreis e. V and the German Government for providing the opportunity to Sri Lanka to showcase its new upswing at the 2013 DAW Asia Pacific Forum. As we celebrate the 60th anniversary of our bilateral relations, I realise that there is strong potential for trade and investment development between the two countries that we can jointly explore,” said Minister Bathiudeen.

“We specially encourage German firms to invest in our rare earth elements and mineral sands. We like Germany’s high industrial expertise and know-how that can, without doubt, enhance Sri Lanka’s mineral-sands sector. This is a sector we believe that urgently needs value addition capacity support, so that we can capitalise on the emerging global opportunities presented by this commodity,” Bathiudeen added.

“We too are exploring Lanka’s REE and mineral sands sector,” stated Dr. Morhard. “I am already talking to a German firm regarding investing in Sri Lanka’s REE and mineral sands sector,” the Ambassador added.

It was revealed that German mining groups such as Deutsche Rohstoff AG and leading German energy firms such as Siemens AG are keen consumers of REE and mineral sands in bulk.

On 1 April, China’s Ambassador in Sri Lanka Wu Jianghao during his courtesy call on Bathiudeen stated: “We too want a more pragmatic trade relationship with Sri Lanka. China welcomes more export product diversity from Sri Lanka. The expansion (of Lanka-China trade and investments) to mineral sands (in Sri Lanka) will certainly help in this direction for quality ‘Made in China’ products.”

In 2012, Germany purchased 0.91 million of REE and mineral sands from Sri Lanka of which 92% consisted of graphite. In the same year, Sri Lanka’s overall rare earth and mineral exports to the world totalled US$ 42.7 million, rising by a strong 30% from 2011’s US$ 32.86 million. 65% of Y2012 exports consisted of mineral sands followed by silica and quarts (20%), graphite (10%), mica (3%) and other natural sands (2%).

China was the lead buyer of Lankan mineral sands in 2012. The lead buyer of ‘other natural sands’ was India. According to the Department of Commerce of Sri Lanka, bilateral trade volume between Germany and Sri Lanka stood at US$ 771.69 million in 2012.

According to the EDB, Germany is ranked as the sixth largest exporting partner for Sri Lanka representing 4.8% (US$ 451.9 million) of Lanka’s exports in 2012. Sri Lanka’s main exports to Germany are apparels and clothing, solid tyres, tea, gloves, rubber tyres, natural rubber, fish and leather products. While motor cars, electrical machinery, organo-sulphuric compounds, medical and surgical instruments and appliances and sound recorders constituted major import items to Sri Lanka from Germany.