Sri Lanka bans foreign investments in steel, cement

COLOMBO (AFP) - Sri Lanka announced plans on Thursday to protect local manufacturers and retail traders by banning foreign investments in steel, cement and supermarkets.

Government spokesman Keheliya Rambukwella said a ministerial team has been appointed to curtail foreign capital going into sectors where locals have sufficient competence.

"In order to protect the local investors, it was decided that foreign investment should not be encouraged in small scale agricultural industries, retail trade, manufacturing of steel and cement and beauty care products," the minister said in a statement.

He said the government, however, was keen to invite investments into manufacturing vehicles, boats and refining crude oil.

The announcement came despite Sri Lanka missing its foreign direct investment target of US$2 billion (S$2.5 billion) in 2012 by 50 per cent.

The minister said the ban will not apply to projects that have already been cleared by the country's investment promotion authorities.

Earlier this year, the government had approved a US$15 million Pakistan cement manufacturing plant near the southern port of Hambantota .

The centre-left government of President Mahinda Rajapakse has also slapped curbs on foreigners owning property in the country.

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