"This copper plant is the natural sequence to our development process as we are a big importer of this product," Suren Madanayake, managing director of ACL Cables, said in a statement.
The factory will produce almost double the requirement of ACL Cables and the firm plans to export a large quantity of copper rods to the region.
The statement said the new venture for the manufacture of copper rods should improve ACL's competitiveness and quality standards, since the company will have access to "the purest and finest quality copper".
ACL Cables, which claims a 45 percent share of Sri Lanka's cable market, has four factories in the country manufacturing cables, conductors and enameled wire, and employs over 500 people.
It also exports to India, Australia, the Maldives, Bangladesh and African countries and is seeking new markets, the statement said.
The firm has been grappling with high costs and its group net profits fell sharply to 294 million rupees in the financial year ending March 31, 2008 while sales rose to 8.8 billion rupees.
It has attributed the downturn to high metal prices and lower margins on exports which make up 30 percent of group sales. Also, finance costs almost doubled last year.
The statement said ACL has already completed two backward integration projects.
It set up its own PVC compounding plant in 1993 which helped the company not only to improve the quality of regular compounds imported but also to develop new products such as fire rated compounds and water resistant compounds.
In 2007 ACL started its own rod plant to get various grades of aluminum rods to suit the needs of the local market.
Madanayake said the 2008 Asia Pacific Quality Award ACL Cables won recently should help it boost exports.
"This can only help us to forge ahead to develop other markets across the region and the globe for our products."