Lanka Sugar Company to invest Rs. 15 bn for new factory in Weli Oya
Lanka Sugar Company (Pvt.) Limited is investing Rs. 15 billion to build a new Sugar crushing and ethanol producing factory in Weli Oya.
Chairman Lanka Sugar, Janaka Nimalachandra speaking to ‘Daily News Business’ said the investment of Rs. 15 billion includes building a new factory complex, purchasing of new machinery and an agricultural vehicle fleet and other infrastructure investments.
The proposal has received Cabinet approval since the ROI in this regard is quick and would help towards the reduction of the sugar import bill to the country thus saving a huge US dollar bill.
Picture by Sulochanan Gamage
Commenting further on their ROI he said Lanka Sugar owns two factories in Sevenagala and Pelwatte and both of them were making huge losses and by 2020 this had reached a staggering figure of Rs. 2.1 billion.
To add to its financial woes salaries of staffers were not paid for a long time while huge bills due to farmers from whom sugarcane were collected too were not settled. The two factories were in a decapitated state and urgently needed refurbishment in all segments. In addition there were huge loans to be settled to banks and Lanka sugar was melting very fast to a point of no return.
With several new initiatives, increasing production of both Sugar and ethanol Lanka Sugar Company Ltd in 2020 had an all time record profit of Rs. 1.1 billion in 2021 it was increased to Rs. 1.6 billion. “My target for 2022 is to pass the Rs. 2 billion mark which is visible in the horizon. Last year we also made over 2000 employees permanent and gave bonuses for both farmers and staff of both factories,” he said.
Asked how they hope to raise capital for the investment he said that they are looking at a self-funding option as well as a Build Own and Operate (BOT) or similar models. This factory too would produce their own electricity via sugar cane waste and they also hope to lease out their proposed factory roof tops to the private sector generating additional income.
“We also hope to cultivate new land to feed the proposed factory which will also bring in additional income to the families in the area and over 500 new jobs too would be created. We also have plans to invest in a spate power generation unit but have kept this on hold due to dollar shortage and will look at this option in 2025,” he added.