Sri Lanka’s Silvermill Group receives Asian Development Bank loan for expansion project
The Asian Development Bank has announced that it will lend US$ 5 million to PTSASL and Sons Indonesia (PTSASL), which is part of Sri Lanka’s Silvermill Group, to expand its coconut processing operations.
According to reports, the loan will help Silvermill set up a modern processing plant for value-added coconut products for export, benefiting 9,500 smallholder coconut farmers, and creating over 1,200 jobs in the Central Province of the Sulawesi Island.
“As the second largest producer of coconuts in the world, Indonesia’s coconut industry has huge potential to become a high-performing, high value-adding sector of the economy,” ADB Agribusiness Investment Specialist Carine Donges has been quoted as saying.
“Silvermill’s expansion to Indonesia will allow the group to tap into a much larger supply of coconut resource, while directly improving livelihoods of thousands of rural households in Central Sulawesi.”
The local media has reported that Silvermill is one of Sri Lanka’s largest coconut processing and estate management firms that exports finished products for both food and beverage and industrial applications.
The Indonesian subsidiary was incorporated in 2017 as Sri Lanka faced a decline in coconut and its processed product manufacturing in 2017 due to the worst drought in 40 years which led to a rise in the prices of nuts.
“This facility will enable Silvermill to further our multi-sourcing strategy to mitigate climate risks to serve our clients better, while uplifting the coconut community and working towards the betterment of coconut farmers not only in Sri Lanka but also in Central Sulawesi,” Silvermill Group Chief Executive Suresh Silva has said.
“We further believe that the synergies between Silvermill and ADB, and our mutual values, will help make a meaningful difference to empower and inspire the communities around us.”
At full operational capacity, the new processing plant will procure over 100 million coconuts annually and is expected to provide a stable source of income to local coconut farmers at a premium compared to the traditional off take from manufacturers of copra – the dried kernel of the coconut.
Media reports further state that the proposed new plant is expected to produce over 9,400 metric tons per year of desiccated coconut and has a capacity to produce over 2,500 metric tons of virgin coconut oil per year.
OSL take:
The loan facility extended to a Sri Lankan based company by the Asian Development Bank is indicative of the strength and growth of the country’s private sector. Sri Lanka’s business conducive environment and the continuous improvement in the ease of doing business environment in the country have helped boost the country’s private sector. Therefore foreign lending agencies are confidently prepared to extend funding facilities for expansion programmes. Foreign companies could therefore explore the possibility of forming partnerships/joint ventures with Sri Lankan companies and expand the business in the region.
| Article Code : | VBS/AT/20200203/Z_2 |