Sri Lanka’s state owned Kantale Sugar Factory gets US$ 300 million investment foreign investment
One of the ailing state owned ventures, Sri Lanka’s Kantale Sugar Factory, which is a state owned venture that requires a vital upliftment, is now on a road to revival with the receipt of US$ 300 million foreign investment.
The revival programme is now being executed by MG Sugars Lanka (Pvt.) Ltd., a joint venture of the Government of Sri Lanka (the Treasury holds 51% shares) and Shri Prabulingeshwar Sugars and Chemicals Ltd., of Bangalore and SLI Development Pvt. Ltd., of Singapore.
“We will invest US$ 300 million for the entire project out of which US$ 30 million has been already invested,” Managing Director MG Sugars K. P. Nagaraja has been quoted as saying.
“The project would generate 1,200 jobs and also plant over 350 hectare of new sugar cane cultivation through a farmer out grower programme.”
According to reports, MG Sugars was first involved in the apparel sector project in Sri Lanka, who first approached the government in 2011 when an international tender was floated to review his state entity.
“We won the tender but had some issues and the project never got off the ground. Then the company proceeded with arbitration in Singapore.”
MG Sugars Lanka has reportedly inked shareholder agreements for its revival and restructuring of the factory with the Board of Investment (BOI).
According to this 30-year agreement, it was structured as a build, operate and transfer project.
MG Sugars Lanka would receive 500 acres for factory, office, residential and also to have its own nursery.
Nagaraja has been quoted as saying that they were hopeful of starting production in 2021, after new sugar cane plants were ready for harvest. “By 2022, we hope to produce around 500,000 tonns (TCD) per day and increase production annually.”
OSL take:
The government of Sri Lanka is engaged in a development programme covering the entire country as well as a programme to revive and uplift state owned enterprises through public private partnerships (PPPs). This has resulted in the opening of many business/investment opportunities in Sri Lanka. The country’s economic policies as well as the ease of doing business environment are encouraging signs for foreign investors to enter Sri Lanka’s economy.
| Article Code : | VBS/AT/30072019/Z_4 |