Weliweriya-disillusioned Dipped Products to put up new export glove plant in Biyagama zone
Friday, 20 December 2013 00:54
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Dipped Products Plc said yesterday it has decided to set up a new export glove manufacturing plant at the Biyagama BOI Zone, as the subsidiary Venigros Ltd. operations in Weliweriya remain suspended over five months.
“The Board of Directors of Dipped Products Plc has made a decision to invest in a new manufacturing facility at the Biyagama BOI Zone where commercial operations are expected to commence from mid-April 2014,” the company said in a filing to the Colombo Stock Exchange.
The new venture will obtain all the requisite approvals and initiate required formalities for this purpose in accordance with the applicable laws, DPL added.
The move follows continued opposition from certain segment of the villagers in Weliweriya preventing the commencement of Venigros’ operations in spite of all efforts made by the management.
Due to the closure Dipped Products has been losing Rs. 400 million a month, according to analysts.
DPL was compelled to close down the Venigros operations in end July as villagers protested against alleged contamination of ground water by the company. DPL has denied responsibility.
In late November the Appellate Court issued notice on the Central Environmental Authority (CEA), the Board of Investment (BOI) and the controversial glove maker Venigros Ltd. over allegations of water pollution by the company in the Rathupaswala area of Gampaha District.
This was after the Court took up a writ application filed by the Centre for Environmental Justice (CEJ) and a representative of a movement called Siyane Jalaya Surakeeme Jana Neguma (SJSJN), alleging the company was polluting the ground water in the area.
The CEJ and SJSJN are seeking a writ of mandamus compelling the CEA and the BOI to bring justice to the residents of Rathupaswala.
The company has asserted that its waste is discharged according to the guidelines and the effluents are not the cause for unsuitable water quality. The protests demanding clean drinking water by the villagers in August this year turned deadly when they clashed with Police and military personnel, resulting in the deaths of three youths and injuries to many others.
The Court of Appeal has issued the return notice on 27 January 2014.
At a media briefing in late November Dipped Products Ltd., pleaded to be allowed to reopen following a steep decline in its global market share and negatively impacts Sri Lanka’s investment climate.
DPL Managing Director Dr. K.I.M. Ranasoma said its longstanding customers had been compelled to seek out suppliers of household and industrial gloves in Malaysia, Indonesia and other regional markets following the factory closure.
“The company is crumbling before our eyes,” he added. He explained that due to longstanding customer relations the company did not wish to endanger, DPL had resorted to purchasing products from other global suppliers and selling them to customers, incurring major losses. “Or sometimes, we are compelled to tell our customers to try to get the same product from this or that supplier,” Dr. Ranasoma explained.
The company’s inability to resolve a baseless controversy and reopen its doors was eroding customer confidence in the operation, he added.
The company says some 25,000 people along its supply chain have been indirectly affected by the four-month closure. “These are the silent sufferers. No one speaks up for them,” Dr. Ranasoma told reporters.
DPL officials say no tests conducted by multiple Government authorities so far have substantiated the claim.
“The Government Analyst report, the Central Environmental Authority Report and the Water Board report have all failed to link factory waste to the contamination of the ground water in the area,” Dr. Ranasoma explained.
