Target Industries
SLGI is targeting a range of industries that have strong domestic appeal and international competitiveness when based at Trincomalee.
Power Generation
Sri Lanka currently produces approximately 2,000MW capacity for power generation nationwide. This capacity is currently growing at the rate of economic growth + approximately 2% year on year, meaning the growth in required power demand is approximately an additional 200MW p.a. Sri Lanka also lags other developing countries substantially in terms of power consumption per capita (~400 kwH pp vs India ~1,200 kwHpp), an indicator with continued stable economic growth that is set to change. With no appreciable increase in population, continued economic growth will push growth in power demand. With hydro electric generation schemes fully utilised and a continuing trend of existing heavy fuel oil power stations being phased out due to operational costs, the growth of new efficient large scale power stations is set to continue. Trincomalee is the ideal location to satisfy this growth in demand. SLGI intends to work closely with the Ministry of Power and Energy and Ceylon Electricity Board to deliver the most cost effective and sustainable power sources using Trincomalee as a hub for such activities.
Transhipping Coke and Thermal Coal
Given the escalation of costs of thermal and metallurgical coal from mines in key markets such as Australia, Indonesia and South Africa, steel and power developers are seeking increased competitiveness of shipping raw coal. Inevitably this leads to larger vessels, more efficient port handling and beneficiation of coal product in bulk quantities at more efficient rates. Sampur Heavy Industrial Zone will provide an efficient solution for transhipment, beneficiation and blending of coal for supply into key markets of India, China and the Middle East. Trinco will also provide for a captive location for metallurgical coal on completion of the steel making facility at the site.
Iron Ore
Recent logistics trends of leading global resource companies indicate industry trends for driving down the costs of raw materials to key markets. The key rationale is reduction of price of logistics to enhance profitability. Sampur Heavy Industrial Zone aims to capitalise on these trends by leveraging factors such as locality, port depth and access to nearby steel making markets to provide a platform for major mining companies to increase profitability by driving down logistics costs. On completion of the steel plant, Sampur Heavy Industrial Zone will provide a captive location for a major mining company to service the local steel industry.
Ferrous Based
The past decade has seen an unprecedented growth in steel making capacity largely fuelled by China and India. Presently Sri Lanka has no steel industry other than small scale merchants and some limited downstream industry. The outlook for steel production using Trincomalee as a hub is highly attractive. Against an estimated global steel consumption growth of 13.2% in 2010, the World Steel Association has forecast continued world growth of 5.9% and 6% for 2011 and 2012 respectively. While steel consumption in China is forecast at 5% in 2011 and 2012, in India it is expected to grow at 13.3% in 2011 and 14.3% in 2012. SLGI’s belief is that Sampur Heavy Industrial Zone can become a beachhead for Sri Lanka’s entry into the crude steel production market through use of its Free Trade Agreement with India, its ideal port characteristics and strong development fundamentals.
Oil and Petrochemicals Refining
Sri Lanka currently imports all of its oil and gas from abroad with little industry developed in exploration of potential reserves domestically. In 2009 this cost Sri Lanka in excess of USD 3 Bn, a significant impact on its USD 50 Bn economy. Recent efforts by the Sri Lankan government to grant exploration licences for oil and gas to international investors have been welcomed and drilling of test wells is currently under way. Whether Sri Lanka creates its own upstream oil business is not yet clear however the requirement for additional, cleaner forms of refining in accessible are paramount. SLGI aims to support the Sri Lankan government with its approach to the development of a domestic oil refining hub through the delivery of quality infrastructure, enabling development of this important facility by a major international co-investor. On completion the Trinco oil refinery will contribute to supply a growing Asian market for demand of refinery products.
SLGI intends to capitalise on the growth of LNG resources and proven reserves worldwide as means of establishing a more sustainable energy source for power generation in Sri Lanka. Trincomalee is most ideally placed as a hub for the development of LNG degasification and storage facilities as well as power generation given it's proximity to the key LNG producing markets within the Gulf region, Western Australia and Asia.The Sri Lankan Ministry of Power and Energy (MoPE) has mandated a total cap on electricity production of 2,000MW via thermal coal (900MW at Noracholai, Puttalam and 1,100 MW at Trincomalee) after which new power generation will have to be achieved through more environmentally sustainable resources. Accordingly MoPE has mandated Trincomalee as a future hub for the development of LNG facilities.
Fertilizer Plant
There are many countries in the region which are categorized or depend on agriculture. With this prevailing situation, Fertilizer demand in the region is ever growing. Further nearly 90% of the local Fertilizer demand is met by imports. In this scenario Fertilizer Plant is considered an ideal investment opportunity.
Vehicle Manufacturing and Assembling Plant
SLGI intends to attract a leading vehicle manufacturer in the world for setting up their Vehicle Manufacturing & Assembling Plant in Sampur. With the availability of Ferrous based industry in Sampur Heavy Industrial Zone of SLGI, this also will be an ideal and investor friendly investment opportunity in terms of economy in operation.