COLOMBO, Jan. 9 (Xinhua) -- Sri Lanka's state Pharmaceuticals Manufacturing Corporation has signed an agreement with a Malaysian firm to build the island's first ever pharmaceutical manufacturing zone in the southern district of Kalutara, the Information Department said Tuesday.

Sri Lanka entered into a 10-million-U.S. dollar agreement with Pharma Zone (Pvt) Ltd whose principals include Patrick Lim Soo Kit, a leading Malaysian entrepreneur.

Chairman of State Pharmaceuticals Manufacturing Corporation (SPMC) Sayura Samarasundara said that with the completion of the Pharmaceutical Zone, envisaged to be in operation within one year, the country's dependency on imported drugs will go down.

"This will achieve the government's target of localizing production of essential pharmaceutical items to a value of 100 million U.S. dollars, thus saving valuable foreign exchange," the Information Department said.

The zone will be run and administered by Pharma Zone, headed by Patrick Lim Soo Kit, while the SPMC along with the Ministry of Health will set the standards and monitor quality.