BOI signs agreement on largest investment in Hambantota Port

India’s number one sugar company, Shree Renuka Sugars Ltd., has signed an agreement with the Board of Investment of Sri Lanka to invest US$ 220 million to set up a sugar refinery complex in Hambantota. The company participated in the bidding process in 2010 and was selected and later approved by the Cabinet to set up the proposed sugar refinery.

Investment Promotion Minister Lakshman Yapa Abeywardena formally presents Dr Vidya Murkumbi, Chairperson, Shree Renuka Sugar Ltd with the BOI Certificate of Registrations. Rawat, Director, Lanka Sugar Refinery Ltd.

Shree Renuka Sugars is the largest sugar company in India and also has four sugar mills in Brazil. The proposed project plans to bring inedible raw sugar from Brazil in bulk and add value locally by refining it in the complex. The refined sugar would be sold locally as well as exported from Hambantota Port.

The sugar refinery will have large scale capacity and will contribute to over a million MT of cargo movement for the Hambantota Port. Apart from paying royalty and lease rental to the Sri Lanka Port Authority, the project would result in saving foreign exchange of nearly US$ 450 million for the country.

The project would bring around 300 direct employment opportunities for locals and indirect employment for nearly 1,500 people through various services in operation, maintenance and logistics. The industrialisation project would thus boost the regional economy in Hambantota.

The sugar refinery project will not require any power from the main grid and instead will be generating surplus power of nearly 12-15 MW and will supply it to Ceylon Electricity Board, eliminating the power deficit for the region to a significant extent.

The agreement was signed between the local company Lanka Sugar Refinery Pvt. Ltd. by its director Mr Rajesh Rawat in the presence of Minister Lakshman Yapa Abeywardena. Shree Renuka Sugars founding chairperson, Dr. Vidya Murkumbi was present to grace the occasion.

Lakshman Yapa Abeywardana, Minister of Investment Promotion, stated: “Hambantota is rapidly emerging as a major business, logistics and communication hub in Sri Lanka with a modern harbour, state-of-the-art airport and two new Export Processing Zones. In the future, many investors will opt to invest in Hambantota, taking advantage of its strategic location.

“By setting up a sugar complex in the booming city, Shree Renuka Sugar, a leading sugar manufacturer in India, will enjoy many benefits, whilst creating new economic opportunities in the island and addressing to some extent Sri Lanka’s requirements. It is clearly a win-win situation for all parties.”

Dr. Murkumbi said that they look forward to start work on the project within a few months immediately after the procedures and necessary approvals are completed and are happy to start operation in the country.

Chairman/Director General of the BOI, Dr. Lakshman Jayaweera, said: “This project is very significant to the country as Sri Lanka currently imports sugar at great cost. One of the mandates of the BOI is to create economic opportunity that will save foreign exchange for the country, in addition to promoting FDI. The project of Lanka Sugar Refinery at Hambantota addresses this national requirement.”

In India, the company has its refineries on the east and west coasts and Hambantota is strategically well located to get logistics leverage for its operations. Murkumbi also praised President Mahinda Rajapaksa, Secretary Treasury Dr. P.B. Jayasundera and all concerned officials who assisted this project for the successful signing of this historic agreement.