SRI LANKA VENTURES INTO NANOTECHNOLOGY

UNCLAS SECTION 01 OF 02 COLOMBO 000850 SIPDIS STATE FOR SCA/INS, SCA/RA, EEB/CBA, and OES/STC E.O 12958: N/A TAGS: ECON EINV ETRD PREL CE SUBJECT: SRI LANKA VENTURES INTO NANOTECHNOLOGY ¶1. Summary: The Sri Lankan business community and the government will establish Sri Lanka's first-ever attempt at public-private partnership in research and development with the establishment of a nanotechnology research and development institute and a nanotechnology park. The venture, which aims to infuse nanotechnologies into locally-manufactured export items such as rubber products, apparel, and activated carbon, is being led by apparel giant MAS Groups Chairman Mahesh Amalean. Although full funding is not yet in place, Amalean and others are convinced that the project will help to develop cost-effective new technologies that will make Sri Lankan products more competitive in the world market. The government will invite foreign investors to set up nanotech companies as part of this new initiative. End Summary -------------- New Public-Private Nanotechnology Initiatives -------------- ¶2. The government and private sector are jointly forming two entities that will explore ways to infuse nanotechnology into Sri Lanka's local industrial sector. The first - a Sri Lanka Institute of Nanotechnology (SLINTEC) -- is the brainchild of local apparel giant Mahesh Amalean, Chairman of MAS Groups, and the National Science Foundation. Numerous CEOs from other top conglomerates, as well as the President's Secretary and scientists from the National Science Foundation, have committed to the project. Several Sri Lankan expat nano scientists are also closely involved. SLINTEC marks the first time the government and the private sector will collaborate on research and development. Equity for the SLINTEC will be 50% public, 50% private. ¶3. According to Amalean, who is leading SLINTEC as chairman, the entity will initially develop new products and technology that can be used by local industries such as apparel, rubber and activated carbon. These are key export industries in Sri Lanka. There appears to be keen interest from these industries for R&D, and several top companies in these sectors have already identified R&D projects to be carried out by SLINTEC. Loadstar, the largest solid rubber tire manufacturer in the world, wants SLINTEC to develop a "nano tube" to mold tires and the rims into one component. The apparel industry desires technology that will reduce die, chemical and water usage in manufacturing; the industry also want to develop �0A;functional "intelligent clothing." Sri Lanka's leading mobile phone operator, Dialog, hopes to do R&D into using solar energy to power their base stations as well as research on integrating bio-monitoring into wireless communications. SLINTEC will hold the intellectual property rights of products/technology created by the group. ¶4. The government and private sector are also forming NANCO, which will establish and operate a nanotechnology park on a 30 acre site approximately 35KM from the capital of Colombo. Ownership, like SLINTEC, will be 50% public, 50% private. SLINTEC will be co-located at the NANCO site once the industrial park becomes operational. (Note: Until then, it will operate from a popular Export Processing Zone near Colombo. End note.) NANCO hopes to attract companies that want to take advantage of nanotechnologies within the park, to ensure that R&D and production maintain in close contact. The government plans to invite foreign investors to set up manufacturing plants within the park, likely with the benefit of special concessions. -------------- Possibility of Success? -------------- ¶5. While excitement for nanotechnology is building among Colombo's business executives, funding has yet to fully materialize. SLINTEC start-up costs are estimated to cost $10 million; NANCO will need an investment in the range of $50 million. Private sector contributions for SLINTEC are already in place; however, the government contribution has yet to materialize. Contributions for NANCO, other than the government-identified location, are not in place. Amalean is actively seeking assistance to establishing links with U.S. nanotech labs and identify additional funding sources. ¶6. The National Science Foundation reports that Sri Lanka's key advantage in the nano-science field is the availability of several Sri Lankan scientists, who are counted among the world's top nano-scientists. The promoters of these projects plan to "make use" of these expat Sri Lankans while also recruiting scientists from Sri Lankan universities to work at SLINTEC. However, at this early stage, it remains to be seen whether expat experts, some of whom have been involved in the initial organization of these two entities, will agree in the end to join such ventures. COLOMBO 00000850 002 OF 002 Additionally, as this is Sri Lanka's first attempt at private sector collaboration with the government on research and development, problems are likely. ¶7. Nevertheless, the involvement of very successful private sector leaders and a well-trained local scientific community bodes well for this project. Post will monitor developments and report further as appropriate. BLAKE