Milco’s Rs. 18 billion Badalgama facility yet to operationalize
The Morning: Sri Lanka’s state-owned dairy company Milco is yet to operationalise a facility with an investment of Rs. 18 billion in Badalgama, of which 95% of infrastructure had been completed in 2022, Milco (Pvt) Ltd. Chairperson G. V. H. Gotabhaya has told the media.
“The construction of the Badalgama factory by Milco underwent various infrastructure updates between 2015 and 2022. From 12 April 2022, further construction had been stopped. More than 95% of the machinery has been installed, only a few more installations need to take place,” Gotabhaya said, speaking to the media.
“For this regard, the Sri Lankan government has so far spent Rs. 18 billion,” Gotabhaya added, explaining the total investment made for the construction of the facility. “Even though Rs. 18 billion has been spent on this investment, not a drop or litre of milk has been processed in this plant.”
According to Gotabhaya, the total estimated valuation of the plant is € 63.9 million.
“This was facilitated through a loan taken out by the Sri Lankan government from the HSBC bank,” Gotabhaya said.
In February of 2022, Ada Derana reported that the Sri Lankan government received a € 600 million investment into the construction of a dairy factory in Badalgama by the Danish Government. At the time of announcement, it was expected that the commencement of operations were to take place in September, of the same year.
“If we take the infrastructure, 95% of the infrastructure has been completed, from April 2022 onwards. But since then, this facility has been overgrown with neglect. The machinery and equipment, and the power lines have been damaged by rats, so have termites taken hold,” Gotabhaya said, describing the current state of the facility.
According to Gotabhaya, the proposed facility is capable of processing 200,000 litres of milk per day, with the added capacity potential of increasing productive output to process 400,000 litres of milk.
“On average for a day, the facility has the capacity of producing 60,000 litres of pasteurised milk. In ultra-high temperature (UHT) processing, the facility is capable of processing 70,000 litres of milk in three ranges of tetrapacks, going by 250 ml and 180 ml,” he added, explaining the varieties of products that could be produced daily.
OSL take:
With Sri Lanka on the path to achieving self-sufficiency in the dairy milk industry, there are many business/investment opportunities now emerging in the industry. There has been an increase in the number of businesses in the local dairy industry carrying out expansion programmes while there have also been business acquisitions by foreign companies. All these are indicative of the expanding business/investment opportunities in Sri Lanka’s dairy industry and sectors related to it, especially in the production, distribution and even export of dairy based products. Given these developments, foreign businesses/investors could confidently explore the growing opportunities in Sri Lanka’s dairy industry and related sectors as they guarantee quick returns on investment (ROIs). It is in such a backdrop that the Sri Lankan government is also looking at further uplifting and expanding the operations of state-owned ventures in the dairy industry. While foreign businesses/investors could explore the business/investment opportunities in such business ventures, they could also look at expanding operations through local collaborations.
| Article Code : | VBS/AT/20250822/Z_2 |