Sri Lanka’s Melstacorp invests over Rs. 150 million in joint venture on cement bagging
Sri Lanka’s Melstacorp PLC has reportedly invested a further Rs. 175 million for the upcoming cement bagging business through a joint venture.
According to reports, the new venture, ‘Melsta Gama’, is with Pyramid Gama, a joint venture between Gama Corp. of Indonesia and Pyramid Holdings of Sri Lanka.
The latest investment is by way of enhancing capital and originally Melstacorp’s stake in the joint venture was Rs. 952 million and in FY20, it had increased to Rs. 1.127 billion.
The Daily FT has reported that the cement import and bagging venture is entering the business at a time when the government of Sri Lanka has given a big boost to local manufacturers after increasing the CESS on imported cement.
However a pick-up in demand for cement is being forecast, which is likely to give room for new entrants, such as Melsta Gama, the news report stated.
The Gama Group is one of the largest cement players in the region, and currently manages one of the largest cement-producing operations.
Pyramid Holdings owns Pyramid Wilmar, which is the leading edible oil and specialty fats syndicate, in Sri Lanka.
Melsta’s investment in the cement venture comes under its diversified portfolio which includes healthcare, beverage, plantations, telecommunications, insurance, power generation, logistics, textiles, leisure, BPO, and media.
The million rupee investment undertaken by Sri Lanka’s Melstacorp is indicative of the economic stability in the country despite recovering from the global Covid 19 pandemic as well as the strength and growth of the country’s private sector. Given Sri Lanka’s geographical positioning in the Indian Ocean, ease of doing business environment and the many trade agreements as well as trade concessions enjoyed by the country have made it a business hub in the South Asian region. Therefore foreign businesses/investors could confidently explore business/investment opportunities in Sri Lanka as well as explore possibilities of forming partnerships/joint ventures with local companies.
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