“The production would be mainly targeted for the export market while the products would also be available locally,” it quoted Kent Kee, director, commercial operations of Demak Manufacturing Lanka, as saying.
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.