9 December 2020 09:11 am
The Cabinet of Ministers has cleared tax holidays to the tune of US$300 million for the proposed tyre plant by China’s Shandong Haohua Tire Co. Limited in the industrial park within the Hambantota International Port.
The Cabinet memorandum put forward by Prime Minister and Minister of Finance Mahinda Rajapaksa to grant the said tax relief for the project under the Strategic Development Projects Act was approved by the Cabinet of Ministers on Monday.
The tax concessions are subjected to conditions that the company maintains a minimum of 80 percent of its production for exports and the project being inaugurated within a period of 36 months.
The Strategic Development Act allows tax exemptions for projects, which are identified as strategic developments, up to a period of 25 years.
The Board of Investment (BOI) of Sri Lanka in November inked an agreement with Shandong Haohua Tire Co. Limited and Hambantota International Port Group (HIPG) to facilitate the project under the Strategic Development Act.
HIPG has offered 121-acre land in the industrial park within the Hambantota International Port to Shandong, which would be the first-ever foreign direct investment of the industrial park.
Shandong is expected to manufacture semi steel radial tyres and all steel radial tyres required for trucks, buses and passenger cars generating employment for nearly 2,000 people.
The BOI anticipates exports to commence in three years.
In the initial phase of the project, the company plans an annual production of nine million tyres to be shipped using 45,000 containers.
Shandong claims to be one of the largest private sector tyre manufactures in China with United States being its top export market.