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Tuesday, 28 July 2015 00:41 - - {{hitsCtrl.values.hits}}
By Waruni Paranagamage
The Board of Investment (BOI) yesterday signed an investment agreement with M.G. Sugars Lanka Ltd. to revive and restructure the Kantale Sugar Factory with an investment of $ 110 million.
The MoU was signed by BOI Chairman Upul Jayasuriya and M. G. Sugars Lanka Ltd. Director Mendle Gluck.
An experienced group of companies engaged in sugarcane cultivation, sugar manufacturing, the co-generation of power plants and dairy industry Shri Prabulingeshwar Sugars and Chemicals Ltd., Bangalore will be the technical partner for the project.
The total investment of the project - $ 110 million - will be borne by SLI Development Ltd., Singapore, as the foreign investor.
The project agreement will be run on a Built, Operated and Transfer (BOT) basis for 30 years with 51% of the shareholding held by the Sri Lankan Government and 49% held by the foreign investor.
BOI Chairman Upul Jayasuriya said that the overall investment of the project would be covered through foreign investments while overall technical support would be provided by foreign investors.
“According to the agreement, we are supposed to replace all the old machines with new ones. We have been trying to start the project for more than five years in order to return the livelihoods of the people of Kantale. Finally we have succeeded,” Jayasuriya stated.
Director Gluck asserted that the agreement was the greatest outcome of their effort to restart the Kantale sugar factory with the Sri Lankan Government.
“We have been here for six years. Unfortunately things never worked out with the previous Government. So finally we won after many years’ effort,” he emphasised.
The new investment agreement details the revival and restructuring of Kantale Sugar factory to process 4000 TCD (Tons of Cane per Day) of sugarcane, manufacture 72,000 MT of sugar per year and generate electricity and dairy products, as per the approval granted by the cabinet of ministers.
The Kantale sugar factory was constructed in 1957 through a grant offered to the country during the tenure of Prime Minister S.W.R.D. Bandaranaike by the Government of Czechoslovakia and it was opened in 1960. It functioned smoothly as a profitable venture until 1986. Thereafter, it stopped being an income-generating enterprise and various attempts were made to identify a suitable investor.
The sugar cane required for the manufacture of sugar will be grown by farming communities in the area. With the reestablishment of the Kantale sugar industry development project in Kantale, the concentration of industry, agriculture, infrastructure, communications and community services in one location will rapidly become a regional economic growth stimulator.
The company’s contribution to the national sugar requirement when functioning at full capacity will be 72,000 MT annually.
The BOI said it was therefore proud of the signing of such a major agreement which would have an extremely positive impact on the country’s economy.
