Industrial Asphalts and Singapore partner sign deal for Bitumen Tank Terminal at Hambantota Port

Industrial Asphalts (Ceylon) PLC (IAC) for and on behalf of the proposed Joint Venture between IAC and Hiin Holdings Ltd. (Hiin) has entered into a Memorandum of Understanding (MoU) with the Hambantota International Port Group Ltd., (HIPG) to set up a Bitumen Tank Terminal at Hambantota International Port. 

The MoU will create the required environment to establish a fully integrated Bitumen Tank Farm within the premises of Hambantota International Port. The MoU will facilitate IAC, along with its joint venture partner Hiin Holdings, to work with HIPG in order to carry out and finalise the ongoing financial and technical studies to establish a fully integrated Bitumen Tank Farm at the Hambantota International Port. The commencement of the project is subject to signing a comprehensive agreement between IAC/Hiin and HIPG.

HIPG is the exclusive port operator at the Hambantota International Port in Sri Lanka. They have been granted the sole right to invest and operate in terminal-related businesses in the Port.

IAC and Hiin Holdings, on entering into the MoU to explore opportunities in the bitumen space in Sri Lanka, have identified onshore port-based bitumen terminal as meeting the partners’ investment and return expectation criteria. 

This venture would be structured as a 60:40 joint venture between IAC and Hiin. IAC and Hiin have further identified Hambantota Port to be the most strategically located, and the location having the required infrastructure to establish the port-based bitumen tank farm. 

The markets catered to would encompass the home market as the anchor market and would reach the fast-growing South Asian markets, including India and Bangladesh. 

The Tank Terminal, with its strategic position, would be able to source bulk bitumen globally to supply to its intended markets; and at the same time, would be able to source bulk bitumen from within the country for exports when bulk bitumen is available in the required commercial quantities.

In October, IAC announced a MoU with Hiin Holdings of Singapore. Hiin is East Asia’s leading asphalt and fuel supplier and logistics provider. Hiin’s capabilities are enforced through a fully integrated supply chain that synergises strong business networks with a comprehensive suite of logistical capabilities that includes their fleet of asphalt and fuel tankers, in-land oil terminals, and other in-land distribution capabilities. This enables Hiin to support complex and large-scale shipments, especially those in the most remote locations. 

Established in 1970, Hiin is a four-time winner of the prestigious Enterprise 50 awards in Singapore. The MoU is to explore opportunities of mutual benefit in the bitumen business. The MoU will be an arrangement which will bring IAC and Hiin under one umbrella to study and understand the current and future business opportunities in the bitumen space encompassing Sri Lanka and the South Asian region. This enables the creation of the required platform to explore the possibility of establishing a Joint Venture Company.