Govt. sticks to existing cement terminals in ports; imposes bar on new entrants
Monday, 30 September 2013 01:20
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The Government has firmly decided to stick to existing operators of cement grinding or packing plants in functioning ports of Sri Lanka, putting a bar on any new entrants.
The move is following a recommendation by President Mahinda Rajapaksa who is also the Minster of Ports and Highways.
Sources said the Government will allow existing cement factories to operate further in designated ports and not grant approval to operate other than one cement factory in a port and if required to operate more, priority should be given to existing operators of the cement factories.
Industry analysts said this move effectively shuts the door for Holcim Lanka which was planning to put up a cement plant at Trincomalee.
At present Colombo Port has two cement plant operators – Lafarge Mahaweli Cement Ltd. and Tokyo Cement Colombo Terminals Ltd., in Galle – Ambuja Cement Co Ltd., (Holcim), and in Trincomalee – Tokyo Super Cement Co Lanka Ltd.
The rationale for the latest stand of the Government is that protection of existing large-scale investments is very important to ensure sustainability of the cement manufacturing industry and healthy competition among them. Therefore, the Government has decided not to release port lands for new cement grinding or packing plants until the full potential of existing investments are fully realised.
The Government will continue to require the existing companies to comply with all international standards and best practices with special emphasis on environmental consideration.
The local industry has been calling for a national cement policy for a long time and viewed the latest stand by the Government as a welcome move though a more comprehensive national policy will help realise the country’s socio-economic development goals in a faster and sustainable way.
The Government’s long-term port development policy is to consolidate and further develop the country’s strategic position to become the most competitive and preferred maritime and logistics centre in South Asia. In pursuance of this policy, sources said the Government endeavours to encourage private sector participation in port related industrial activities.
The total cement supply in the second quarter has increased from 1,149,610 tons to 1,269,255 tons, indicating 10.41% increases. Imported cement quantity has increased by 24% from 670,815 tons to 828,962 tons.
In real terms the construction sub sector indicated a 17.8% growth for Q2 2013 compared with the growth of 18.3% in the same quarter of last year. Government expenditure on constructions was Rs. 59 billion, compared to Rs. 42.7 billion in 2012 reflecting a 40% increase in the second quarter of 2013.
