Upcoming Hambantota Pharma Zone to boost export earnings by 2025 - BOI

The most influential aspect in globalization can be notified as the economic globalization. Sri Lanka too has to adopt initiatives that are compatible with global developments, so as to improve performance. While keeping traditional markets as they are, Sri Lankan presence in the global market should expand. Sri Lanka has to modernize and start a new cycle of export growth. Established export sectors such as apparel, tea, rubber and coconut products have proven their ability to compete in world markets. While these mature sectors are the backbone of Sri Lanka’s export performance, introducing of high-value exports emerges as an inevitable path for Sri Lanka to achieve its sustainable growth goals.

As Sri Lanka looks to usher a decade of growth, we need to progressively and continuously diversify the export basket and take advantage of the supply chain diversification and the geopolitical ships. Therefore in enlighten the vision of the country to transform the economic landscape, The Board of Investment of Sri Lanka has identified 05 new thrust industries in its strategy to create a conducive investment climate. Pharmaceutical industry is one of the above thrust industries to develop to bring down foreign direct investments, enhance foreign exchange earnings and save foreign exchange by way of import substitution. This novel initiative is being carried forward with the blessings of the Mr. Basil Rajapaksa as the Head of the Presidential task force. To fast track this strategic initiative a “Pharma” subcommittee has been formed with the officials of the key relevant institutions under the Presidential task force. The Pharma subcommittee consists of the BOI Secretary to the State Ministry of Production, Supply and Regulation of Pharmaceuticals, the Secretary to the Ministry of Health, EDB, SPC, SPMC, NMRA, and CEA. The Chairman of the Board of Investment of Sri Lanka as the head of this subcommittee has made a steady platform in this process.

Currently 85% of countries’ pharmaceutical needs are imported and about 15 local manufacturing plants including State Pharmaceutical Manufacturing Cooperation [SPMC] provide the balance 15% of the requirement with an estimated value of Rs.18 Bn annually. The countries’ pharmaceutical expenditure has shown a rapid growth during the past years and it is expected to reach a value of US$ 750 Mn, posting a five –year compound annual growth rate (CAGR) of 4.1%. The dedicated Pharmaceutical Manufacturing Zone’s goal is to meet 40% of the domestic demand for pharmaceutical products by locally manufactured drugs while creating a pathway to US$ 1Bn export earnings as import substitution by 2025.
The establishment of the pharmaceutical zone in an area of 400 acres of BOI land in Hambantota – Arabokka will be implemented in two stages of 200 acres each and will be declared as a “Strategic Development Project” and strategic pharmaceutical investments established within the proposed zone will be eligible for benefits under the SDP act. The customized concessions will be granted by the Pharma subcommittee for each individual project based on criteria not limited to such as the investment threshold, market orientation, value addition, employment generation and transfer of technology.


Under the BOI’s sector strategy, this dedicated Pharma Zone development will be the 2nd initiative of introducing 05 zones for the thrust sectors. This State –of –Art zone will be designed by a leading architect to the International standards and will qualifies the international accreditations too. This specifically tailored zone will make a conducive and livable business environment to the world renewed pharmaceutical companies to bring the latest technological advances to manufacture pharmaceutical products. In the same time this dedicated zone will create opportunities to manufacture its products at internationally competitive prices, while creating access to the local market. This platform will be a sound mechanism to control drug prices and to provide quality medicines to the market at affordable prices, made in accordance with the standards of the world health organization.
At the first phase of the project, 200 Acres of land will be developed to accommodate pharmaceutical companies, while ground breaking of the zone and the construction of zone enterprises are planned to commence in end of 1st quarter of 2021. Infrastructure readiness in phase 01 is scheduled to be taken place at the end of 2021. The balance 200 Acres will be developed as the second phase, while setting the timeline for the products to be sent out to the markets by the year 2024.In addition to the above 400 Acres there will be another 50 Hectares additional land area next to the Mattala Airport available for pharma related value added and export logistics operations.


Mr.Sanjaya Mohottala, Director General of the BOI expressing his views mentioned that if the pharmaceutical industry is developed to the anticipated level, it will lead to an industry creating a pathway to US$ 1Bn export earnings and import substitution post 2025. Further it will provide dynamic long- term benefits to the economy such as skills upgrading and technology transfer creating a new export vertical. The high skill Pharma qualified work force needed for this industry will create opportunities for high specialized jobs in the future. It’s worthy to note that discussions and actions have been taken to build the work force, to cater to the industry. Therefore skills development plan is scheduled to commence along with the initiation of development activities for the Pharma zone, will ensure the availability of skilled human resource in coming years.
In the same time attracting the top most companies in the world to invest in this zone in order to develop the entire pharmaceutical industrial chain is also a major requirement. It’s encouraging to see several inquiries already received from the pharmaceutical giants to establish their manufacturing plants is a positive response in developing this industry vertical.

Media Release 
Media & Publicity Department
Board of Investment of Sri Lanka