Sri Lankan corrugated company to raise Rs. 700 million for expansion programme
Sri Lanka’s Ex-Pack Corrugated Cartons Limited is looking at an initial public offering (IPO) to open on 22 October to raise Rs 700 million in a bid to expand its production capacity.
Proceeds of the IPO are to be used to fund the purchase of a new plant and machinery which will be operational within a year and go on to be fully operational by 2024.
The share is expected to begin trading in the second week of November, according to local media reports.
Ex-Pack Managing Director Zulficar Ghouse has said during a recent event held in Colombo to promote the IPO that Ex-pack produces 1 in 5 cartons utilized in Sri Lanka and that the company has decided to go for the expansion given the limited production capacity of the current plant that has prevented the company from accepting many orders.
According to Ghouse, Ex-Pack is to use the investment proceeds along with a sale of an investment property (Rs 450 million), internal funds (Rs 602 million), and debt financing (Rs 1.2 billion) to meet the cost of establishing the new plant.
While the new plant is to be constructed in phases, it is expected to be able to deliver 1,000 metric tons of capacity with the old plant delivering an expected 1,500 metric tons of capacity.
The expansion programme undertaken by a local private company is indicative of the strength and growth of Sri Lanka’s economy and the private sector. It is also indicative of the increase in demand for corrugated packing solutions that plays a key role in goods transport and logistics. Sri Lanka’s private sector has recorded a growth momentum despite challenges faced due to the global Covid 19 pandemic. The country’s economic expansion, it’s geographical positioning in the Indian Ocean and the strong trade ties have made Sri Lanka an emerging business destination in the South Asian region. Given the expanding economy, foreign businesses/investors could confidently explore the growing business/investment opportunities in Sri Lanka while also looking at forming partnerships or joint ventures with local businesses.
|Article Code :||VBS/AT/14102021/Z_6|