Galoya Plantations invests Rs 12 BN in sugar factory
Galoya Plantations (Pvt) Limited (GOPL) has invested Rs. 12 billion in the construction of a new factory to increase sugarcane-crushing capacity and boost sugar production.
Danesh Abeyratne
“We will also utilize sugarcane waste to generate electricity, with the goal of adding 8.75 MW to the National Grid, of which 5 MW will power our operations,” said Danesh Abeyratne, Executive Director of the Galoya Plantation Company.
The generation of 15MW of electricity by the Galoya Plantation Company exceeds the output of the power plant at the Inginiyagala Senanayake Samudraya Reservoir.
He mentioned that the foundation stone was laid last month, and they aim to have the new capacity operational by 2025. The new factory at Galoya Plantation Company will have the capacity to crush 4,500 metric tons of sugarcane per day. GOPL was established in 2007 to revive the former Hingurana Sugar Industries Limited, which had been closed since 1997. A consortium led by Brown & Company PLC and LOLC Holdings PLC now operates it successfully as a Public-Private Partnership (PPP), with a 49% ownership stake and an investment of Rs. 14 billion to date.
Abeyratne also noted that securing credit through the local banking system was initially impossible due to the Hingurana Sugar Plantations’ poor financial track record. Therefore, the investment was raised within the group.
One of the significant challenges they faced when taking over the factory was rebuilding the confidence of sugarcane growers who had been repeatedly promised that their produce would be purchased by previous management but were disappointed when investors left.
“We entered into forward buying agreements with them, instilling confidence, and today, they are high-income earners. Some farmers have even abandoned paddy cultivation to grow sugarcane, as they are guaranteed better returns with us. We have also paid approximately Rs. 14 billion to farmers thus far.”
Annually, approximately 87% of the country’s sugar requirement is imported, with only 13% produced domestically. GOPL contributes about 36% to local sugar production and made its highest contribution in 2022.
“We have modernized our operations, employing mechanization, drones, and other advanced technologies. This has sparked renewed interest among youth in sugarcane farming. Thanks to the confidence we instilled, we achieved a record year of sugar production in Galoya, with 25,187.35 tons last year. The highest production in the history of Hingurana Sugar Industry was 15,735 MT in 1978. With unwavering dedication and strategic collaborations, we have achieved prominence and posted a Profit After Tax of Rs. 5.6 billion for the 2022/23 financial year and expect to increase PAT to Rs. 6.1 billion in 2023/24 FY.”
Abeyratne proudly stated that they have paid around Rs. 1,430 million in taxes to the government since their inception, including Rs. 600 million as corporate income tax for the year 2022/23.
Gal Oya Plantations, which had been closed for 15 years, has emerged as a leading force, playing a pivotal role in reshaping Sri Lanka’s economic landscape. It showcases how a dedicated and well-managed entity can create positive and lasting impacts by reviving a dormant asset.
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