By Namini Wijedasa
An Italian company that was reported to be investing in a US$ 75 million (Rs 11 billion) tyre production plant in Sri Lanka under the Board of Investment (BOI) has distanced itself from the project.
Marangoni is only involved indirectly in the possible US$75 million investment in Sri Lanka, the company says in a statement on its official website. What has been discussed is only a “hypothetical transfer of technology to a Sri Lanka-based investor” as part of a possible joint venture with a Sri Lanka-based investor.
The investor is Ceylon Steel Corporation, owned by controversial UAE-based Sri Lankan businessman Nandana Lokuvithana. Prime Minister Ranil Wickremesinghe on Thursday laid the foundation stone to build what was painted as “Sri Lanka’s largest integrated tyre manufacturing plant” at Wagawatte in Horana.
It was reported that Rigid Tyre Corporation (Pvt) Ltd (Marangoni of Italy) was the investor for the project which would create more than 3,000 direct and indirect jobs. A statement from Rigid Tyre Corporation said the plant would manufacture a whole gamut of products from radials for light and heavy vehicles to off-the-road tyres. However, there is still no joint venture formed with Marangoni to set up the factory, authoritative sources told the Sunday Times. Neither has the BOI agreement for the project been signed.
“Contrary to what was reported in several recent articles, the possible 75 million dollar investment in Sri Lanka only involves Marangoni indirectly,” the Italian firm said. “The news, in fact, does not refer to the industrial tyre segment but rather to a hypothetical transfer of technology to a Sri Lanka-based investor–Ceylon Steel Corporation–discussed as part of a possible joint venture in the passenger car tyre sector.”
Ceylon Steel Corporation (CSC) is owned by Mr Lokuvithana. Marangoni has been operating its own industrial tyre manufacturing facilities in Sri Lanka since 2008. But six years later, the company suspended passenger car tyre production in Europe and has now begun negotiations to sell its production plants to CSC.
The Marangoni plant in Sri Lanka was opened when production capacity at its original Rovereto site in Italy was no longer sufficient. The location of the plant “has allowed the company to exploit the possibility to enter and supply its products to new international markets”, the statement said.
Cabinet approved the allocation of a massive 100 acres of land in Wagawatta for the project on a proposal by Development Strategies and International Trade Minister Malik Samarawickrama. With Marangoni’s clarification this week, it becomes unclear where the US$ 75 million pledged to the venture will be sourced from. The BOI is to grant a decade-long tax holiday to the investor.
Via Sunday Times