Dhammika Perera enters cement industry

Business leader Dhammika Perera 

• Invests $ 20 m to acquire 51% stake in Indo-Lanka joint venture DHT Cement via his new entity Vallibel X
• DHT’s PowerTech Premium Cement brand sets sights on bigger growth post-acquisition
• Total cement market grew by 22% to 4.45 m tons in 2024, with local producers gaining share
• Construction sector anticipates rebound from 2025 onwards, but tax landscape remains unfavourable for local cement industry
• Dhammika-controlled companies already leading players in tiles, aluminium, rooftop solar and home appliances businesses

By Nisthar Cassim

Business leader Dhammika Perera has forayed into the competitive yet high-potential cement industry by acquiring a 51% controlling stake in DHT Cement Ltd., a joint venture between Indian and Sri Lankan investors.

Manufacturing the “PowerTech Premium Cement” brand, DHT will benefit from Dhammika’s entry via Vallibel X, the new venture after Vallibel One PLC, the investment holding arm of the business leader, who quit from a temporary diversion to politics last year.

Dhammika is the largest shareholder of Vallibel One PLC as well as the most diversified blue-chip Hayleys PLC, apart from several other publicly listed and private companies.

To get to 51% stake, Dhammika had acquired equal stakes from four original shareholders (two Indians and two Sri Lankans) paying $ 8 million collectively, and invested a further $ 12 million in buying new shares issued by the company, bringing Vallibel X’s total investment to $ 20 million.

The DHT plant at Ekala is equipped with advanced German engineering, with innovation in both operational efficiency and environmental stewardship. The company markets Ordinary Portland Cement (OPC), with PowerTech Premium Cement as the flagship brand in bag form for all types of projects. It also provides bulk cement for large scale construction projects, structural work, and engineering applications. With an installed capacity of 80 metric tons per hour, DHT is estimated to be commanding 10% market share, and post-Dhammika investment, is expected to set sights on a higher trajectory.

The entry into the cement industry by Dhammika comes amidst extensive interest in tiles, aluminium, rooftop solar, and home appliances businesses by several Dhammika-controlled companies already.

PowerTech Premium Cement carries the SLS 107 certificate, whilst DHT is also an ISO 9001:2015 certified company. Additionally, DHT provides concrete lab support, mobile technical assistance, and continuous testing and research.

Sri Lanka’s total cement market is estimated at 4.45 million tons in 2024, up by 22% from 2023 but lower than 5.45 million tons in 2022. Local production grew by 31% to 3.5 million tons in 2024 from 2023, according to the Central Bank. On the other hand, imports declined by 2.5% to 0.9 million tons.

The industry faces multiple issues amidst fierce competition between local producers and imported products. The industry is dominated by Tokyo Cement Company (Lanka) PLC and INSEE Sanstha Cement.

CT CLSA Securities recently said the construction sector is also expected to witness a rebound in 2025, as stalled Government projects recommence following the conclusion of the external debt restructuring. 

“This recovery will be bolstered by the recovery in the retail market for construction material suppliers in 2025 amid a lower interest rate environment and reduced prices of construction materials,” it added.

On its part, Tokyo Cement has increased Group production capacity to 4 million tons per annum. It has seen Group revenue increase by 1% to Rs. 37 billion in the first nine months of FY25 and profit from operations rise by 14% to Rs. 4 billion, and after-tax profit by 64% to Rs. 2.8 billion, of which Rs. 1 billion had been in 3Q.

However, according to Tokyo Cement, the tax landscape for the manufacturing sector unfairly burdened the local cement industry. For instance, the Port and Airport Development Levy (PAL) is applied disproportionately on local cement manufacturers, compared to other construction material producers. Additionally, a cess is applied on clinker imports used in cement production. This is an unusual exception, in which cement is among the few industries where its raw materials for local production are subjected to para-tariffs. Consequently, tariffs and taxes contribute nearly 22% of the price of a 50 kg bag of cement, making it the primary cost factor after raw materials, leading consumers to perceive cement as unfairly priced.

The constrained market growth has prompted intensified competition, with some competitors resorting to unsustainable practices to expand market share.