CIC enters food sector with CIC Foods launch

Friday, 3 December 2010 03:00 - - {{hitsCtrl.values.hits}}

By Cheranka Mendis

Chemical Industries Colombo (CIC) has invested over Rs. 200 million for its food sector initiative within the year, CIC officials said.

The new logo launched - Pix by Dinuka Liyanawatte

Speaking to Daily FT at the launch of CIC Foods, under which the brand ‘Malty’ was introduced on Wednesday, Managing Director/CEO of CIC S.P.S. Ranatunga stated that the new food initiative under which the concept ‘Seed to Shelf’ is bought forward was just the beginning of what would soon become a thriving food related business.

He stated that CIC Foods was launched with the idea of broadening the company’s presence in local agribusiness and that many new products would soon be introduced to the local clientele. ‘Malty,’ which will stand to compete against market giants, will initially be launched as an imported product from Pakistan, and will soon be made in Sri Lanka using local ingredients. “The medium term goal through this product is to import it and add value to buffalo milk,” Ranatunga said.

The subsidiary under CIC hopes to venture into dry fish manufacturing – drying fish using solar power by 2011. The company has set up its own centres in east and another one is to be erected in north within the year.

Producing a line of cereals is also in the company’s plans. “We are also very interested in launching a line of cereals with the use of ingredients such as green gram by mid 2011. There is no proper market for such products in Sri Lanka even though such food items can be easily produced in the country. We hope to change that through launching a new range of cereals which utilise only such grams.”

The product will be of good quality and will be packaged well in order to lure customers. Several orders have been placed with a number of farms for their next crop which would be utilised to give life to this project.

The company launched a line of fish tins last year August which managed to bring in revenue of Rs. 100 million by the end of fiscal year 2009. The product distribution which started from Kekirawa has now reached islandwide and the officials expressed confidence over earning revenue well over Rs. 300-350 million by the end of 2010. However, the fish used for the tins are imported as the kind needed for the tins have no economies of scale in Sri Lanka, he said.

“Food and nutrition will never grow out. Even if people don’t have money, they will not stop buying food. Therefore, it is an important area for CIC to focus. Our initial interest in the agro and nutrition business was by providing food chemicals such as ice cream stabilisers, fragrances, etc. and also with the CIC seeds and fertilisers. KVC is also part of the same initiative. However, farmers expected more than what we offered and therefore we saw this (CIC Foods) as an initiative that can help both the farmers and the company in its growth targets,” Ranatunga said.