By Dilina Kulathunga
France’s top-ranked company and the world’s third largest container shipping company, CMA-CGM Group is to set up a Shared Service Centre (SSC) in Colombo to serve its global clientele and the facility is expected to be fully functional by December 2014, according to a top company executive.
To this end, a local entity was set up under Sri Lanka’s Board of Investment (BoI) – CMA-CGM Shared Services Centre Lanka (Pvt.) Limited as a joint venture between CMA-CGM Group and the logistics arm of the Hayleys group, Hayleys Advantis Limited with 90 and 10 percent stakes, respectively.
According to CMA-CGM Shared Services Regional Managing Director for South Asia C.S. Anand, the company will invest US $ 2.4 million (Rs.315 million) in building infrastructure before upsizing the investment in the medium term.
“This is just the start which we have made with this investment of having an SSC with around 800 to 1,000 people over the next 18 to 24 months. We definitely have a plan to scale it up,” Anand said.
CMA-CGM is the newest entrant into Sri Lanka’s thriving IT/BPM (business process management) industry, which has over 220 companies.
Despite being a joint venture with a local entity, BoI Chairman Dr. Lakshman Jayaweera said the entirety of the investment was coming as foreign direct investments (FDIs).
During the 1H14, Sri Lanka doubled its FDIs to US $ 817 million against the corresponding period last year and 60 percent of it flowed into the tourism sector. CMA-CGM Group appears to be leveraging the vast talent pool available in Sri Lanka, particularly in financial and accounting (F&A) services sphere.
“The company has already employed 50 graduates and young CIMA and CA part qualified staff, who are currently undergoing training,” a statement released by the BoI said.
According to the Business and Administration Director of the newly set up entity, Dammika Ekanayake, the company is currently seeking potential locations in the heart of Colombo to set up shop but Anand was upbeat of branching out into the other parts of the island in the medium term.
“Going forward, the idea is to look at multiple locations, not only to grow in Colombo. We are going to spread out and tap talent because I understand a lot of talent comes from other locations to Colombo,” Anand remarked.
Further, the project will also complement with Sri Lanka’s goal of transforming itself to a regional maritime hub as well as a knowledge hub.
“Large ship owners have their SSCs in various other parts of the world. So, one of the biggest coming here is a big boost for the development of the maritime hub,” said Hayleys Group Chairman and CEO Mohan Pandithage, adding that this would also open up doors to other maritime operators to set up SSCs in Sri Lanka.
Recently, in the IT/BPM industry sphere, Sri Lanka moved up five places to become 16th in the world out of 51 countries worldwide in the A.T. Kearney’s Global Services Location Index.
Currently, the sector provides 75,100 employment opportunities and earned a foreign income of US $ 720 million in 2013. The industry targets US $ 5 billion export income by 2022 with 200,000 employment opportunities. CMA-CGM operates two SSCs in India employing over 1,750 employees. While the Sri Lankan centre will initially serve the group’s back-end operations, going forward the company will serve clients outside the group depending on the progress.
“Going forward, we are looking at moving from a cost-centre to a revenue-generating centre,” Anand said.
Further, the Sri Lankan operations will initially serve the Asia-Pacific and the European region and will provide almost all streams of operational services to run an effective organisation such as customer services, sales support, operational support, F&A and financial services.