New manufacturing FDI in Horana and Ingiriya: pharma and spice processing

Two mid-October agreements with the Board of Investment of Sri Lanka (BOI) point to continued interest in export-oriented manufacturing west of Colombo, in and around the Horana investment zone: a pharmaceutical plant and a delayed spice-processing expansion that has now been unblocked.

A pharmaceutical plant in the Horana BOI zone

Zydus Sunshine Lifesciences, a joint venture between Zydus Lifesciences Ltd and Sunshine Healthcare, signed an agreement with the BOI on 13 October 2026 to establish a pharmaceutical manufacturing facility in Sri Lanka, according to a company regulatory filing reported on 15–16 October. The project involves a phased investment of more than USD 20 million. The plant is to be built on a site of nearly four acres in the BOI zone at Horana. Commercial operations are expected to start in 2028, subject to project timelines and relevant regulatory approvals.

The company said local manufacturing is intended to strengthen medicine supply-chain resilience and support the availability of essential medicines in Sri Lanka, as well as expanding Zydus’s international presence. Sunshine Healthcare is part of Sunshine Holdings PLC. The joint venture itself had been announced earlier, on 26 June 2026.

A USD 26.3 million spice-processing facility in Ingiriya

On 16 October 2026, HDDES Extracts signed a supplementary agreement with the BOI, with coordination facilitated by the National Initiative for Research and Development Commercialisation (NIRDC). HDDES Extracts is described as an exporter of value-added, export-oriented spices, oleoresins, essential oils and related products.

The agreement is intended to advance a USD 26.3 million foreign direct investment in a new high-tech spice-processing industrial facility in Ingiriya, near the Horana Investment Promotion Zone. The proposed facility is also to include a laboratory complex for research and development in spice processing and quality assurance. Reports on the signing said the project is expected to create employment, strengthen rural incomes by opening opportunities for local spice suppliers, and earn foreign exchange.

Those same reports said legal and administrative issues had delayed the project for more than a year, and that the NIRDC unit at the Presidential Secretariat, working with the BOI, helped to resolve them before the supplementary agreement was signed.

What it means for Israeli investors

Taken together, the two agreements are a useful reminder that Sri Lanka’s investment recovery is not only about real estate and tourism. Pharmaceuticals and value-added agro-processing are precisely the kinds of export-oriented manufacturing that can sit inside a BOI zone, with a clearer path on land, incentives and utilities — provided the legal and administrative work is done properly. The HDDES case also shows that projects can stall for more than a year on paperwork, and then move again once those issues are cleared. Israeli investors looking at manufacturing, food processing, or related joint ventures should budget time for approvals and should not assume that a first agreement is the last word.

Kenglobe Lanka can help you assess sites, incentive structures and local partners. We do not publish third-party application portals or official filing routes on this page; the next step is to speak with us.

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If a manufacturing or agro-processing investment in Sri Lanka is on your agenda, contact Kenglobe Lanka. Write to sh@kenigs.com or message us on WhatsApp.

This page is general information, not investment or legal advice. Figures and dates are as reported in the mid-October 2026 announcements and may be updated as the projects proceed.