India’s Amul to boost Sri Lanka’s dairy industry with Cargills Ceylon Plc
The Morning: In a significant development in Sri Lanka’s dairy industry, a Joint Declaration of Intent (JDI) was signed in July 2023 between the Department of Animal Husbandry and Dairying of the Ministry of Fisheries, Animal Husbandry and Dairying of the Republic of India and the Ministry of Agriculture of the Democratic Socialist Republic of Sri Lanka.
The shareholders’ agreement was inked by prominent organizations from both nations. The primary Indian partners in this endeavor are the National Dairy Development Board of India (NDDB) and the Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), popularly known as Amul. These organizations bring decades of expertise in dairy production and marketing. The Sri Lankan partner in this agreement is the Cargills (Ceylon) PLC (CCP) and under this agreement, CCP will hold a substantial shareholding of 49%.
The JDI envisions the formation of a joint venture company with the participation of relevant entities from both India and Sri Lanka. After months of negotiations and discussions, this partnership has taken a significant step forward with the execution of a shareholder agreement recently.
The genesis of this collaborative project can be traced to President Ranil Wickremesinghe’s official visit to India, which resulted in the allocation of funds for the modernization of Sri Lanka’s livestock sector.
The primary goal of this project is to substantially increase milk production by 53% within the first five years, ultimately achieving self-sufficiency in milk production within 15 years.
Through this venture, around 200,000 local farmers in Sri Lanka will receive support, including access to high-quality medicines, animal nutrition, and technical guidance. This support aims to empower the nation’s dairy farming community, enhancing their capabilities and productivity.
This initiative also encompasses the digitalization of Sri Lanka’s livestock sector, bringing modern technology into the farming process. This includes investments in new technologies to improve the quality of milk-related by-products and ensure the availability of milk-related products at affordable prices for consumers.
OSL take:
Sri Lanka and India have seen a boost in trade, business and investments between the two countries through the years with an operational free trade agreement (FTA) presenting new trade ventures. India is also a key development partner of Sri Lanka with many ongoing development programmers covering key economic sectors in the country. There are already many Indian businesses operating in Sri Lanka and these businesses have recorded growth and profits through the years, indicating the overall strength and resilience of Sri Lanka’s economy. These businesses serve as confidence boosters for other Indian businesses to explore the expanding opportunities in Sri Lanka. The close proximity between Sri Lanka and India have added to the attraction among Indian businesses to enter the Sri Lankan economy. There have been new Indian investments coming into Sri Lanka’s power and energy, agriculture, dairy and tourism industries. Given the strong ties between the two countries, Indian businesses could confidently explore the growing opportunities in Sri Lanka.
| Article Code : | VBS/AT/20231023/Z_6 |