Malaysia's DNC Asiatic Holdings is to set up a plant to make motorcycles in Sri Lanka mainly for export with an investment of 16 million US dollars, the island's investment promotion agency said.

The Board of Investment said in a statement the venture, Demak Manufacturing Lanka, will provide employment for a workforce of 200 people initially.

The plant, which will make a range of motorcycles, bikes and scooters as well as spare parts, is expected to start in five months.

BOI chairman Dhammika Perera presented the agreement to Gao Rong, chief executive of DNC Asiatic Holdings.

BOI approval entitles investors tax concessions and duty free imports of machinery and material.

DNC Asiatic Holdings, the manufacturer of the Malaysian motorcycle brand, Demak, is a joint venture between Malaysian and Chinese interests.

The BOI statement said DNC Asiatic Holdings has sold over 20 models of motorcycles, scooters and mopeds, and secured a share of the market in Malaysia.

Source LBO