July 28, 2015 (LBO) – Sri Lanka’s Board of Investment (BOI) signed 100 million US dollars agreement with M G Sugars Lanka, a subsidiary of UK based Mendel Gluck to restructure the island’s state owned Kantale Sugar Factory.
“Sri Lanka’s government will own 51 percent of the factory while 49 percent will be held by the foreign investor.” Upul Jayasuriya, the chairman of BOI said.
“No loans will be taken for this purpose, the funding will be from foreign banks and not from our local banks,”
“The old equipment won’t be used, new machines from overseas will be bought.”
Shri Prabulingeshwar Sugars and Chemicals, an Indian company involved in sugar cane cultivation, sugar manufacturing will act as the technical partner for the project.
The new investment agreement will revive and restructure Kantale Sugar factory to process 4,000 TCD of sugar cane and manufacture 72,000 MT sugar per year.
It will also be utilized in generating of electricity and dairy products.
“This is an industry the government said that will not invest any tax money of the people,” Jayasuriya said.
“The Kantale factory was shut down for over 25 years,”
“About five years ago, this same company (Mendel Gluck) wanted to come and invest during the previous regime but no interest had been shown in this regard.”
Jayasuriya said about 1,220 direct employment and 30,000 indirect jobs will be created through this venture.
The Kantale sugar factory was taken over by the previous government under the Underperforming and Underutilized Assets Act in 2011.
It was opened in 1960 by late Prime Minister Sirimavo Bandaranaike and the factory was operating at a profit of 70 million rupees from 1980 to 1986 period.