Sri Lanka VW Plant – BOI agreement with Senok Automobiles
The Board of Investment of Sri Lanka (BOI) signed an agreement with Senok Automobile (Pvt) Ltd and Volkswagen AG to set up an assembly plant for Volkswagen Automobiles in Kuliyapitiya on 13th August 2015. BOI Chairman, Upul Jayasuriya who signed the agreement with President of Senok Group of Companies, Noel Selvanayagam, and also Mr. Gerard Fernando, MD Senok Group of Companies and Deputy Head of Mission at the German Embassy, Dr. Michael Dohman participated for this event.
Proposed assembly plant will bring in an estimated Foreign Direct Investment (FDI) inflow of US$ 21.5 million and an additional inflow of US$ 5 million as indirect investments, Jayasuriya disclosed that Volkswagen AG had been granted an eight-year tax holiday for the project.
Under this agreement which is a BOI Section 17 agreement, the investor will assemble vehicles in the 1000 cc to 2000 cc category. These vehicles will be diesel powered and include passenger cars, Sport Utility Vehicles (SUV), Multi Utility Vehicles (MUV) or commercial vehicles.
Initially these vehicles would be marketed locally for a period of 3 years and thereafter the vehicles manufactured will be exported to overseas markets.
There is also a potential for export vehicles which would be petrol/electric/ hybrid vehicles to be built without the concessions that have been given for assembling diesel vehicles. The total value of this project will be an investment of US$26.5 million of which 21.5 million will be invested in fixed assets within a period of 24 months.