The Board of Investment signed an investment agreement with M G Sugars Lanka (Pvt) Ltd for revival and restructuring of Kantale Sugar factory. Shri Prabulingeshwar Sugars and Chemicals Ltd, Bangalore an experienced group of companies engaged in sugar cane cultivation, sugar manufacturing, co-generation of power plants and dairy industry will be the technical partner for the project.
The total number of the 30 year project agreement would be run on Built, Operated and Transfer (BOT) basis and the basis of shareholding of 51% held by the Government of Sri Lanka and 49% by the foreign investor.
The total investment of the project US $ 110 Million will be borne by the investor. SLI Development Pte. Ltd, Singapore is the foreign investor of this project. A total number of direct employment generations would be around 1,220.
The new investment agreement to be signed will be to revive and restructure Kantale Sugar factory to process 4000 TCD of sugar cane and manufacture 72,000 MT sugar per year, generation of electricity and dairy products, as per the approval granted by the Cabinet of Ministers.
Kantale Sugar Factory was constructed in 1957 as a grant offered to the country during the tenure of Prime Minister S W R D Bandaranaike by the government of Czechoslovakia and it was opened in 1960. It had been smoothly functioning as a profit earning venture until 1986. Thereafter it ceased to be an income earning enterprise and various attempts were made to identify a suitable investor.
Accordingly, it would be highly beneficial to restart Kantale Sugar Factory which was inactive over a long period of time as an accelerated development process. Restarting the Kantale Sugar Factory would address loss of direct and indirect job opportunities in the area as well as losses to the local economy due to non-operation of the sugar factory.
The sugar cane required for manufacturing of sugar will be grown by farming communities in the area. With the establishment of Kantale Sugar industry development project in Kantale the concentration of industry, agriculture, infrastructure, communications and community services in one location would rapidly become a regional economic growth stimulator.
Contribution to national requirement of sugar when the company is in full capacity will be 72,000 Mt of sugar annually. BOI is therefore proud of the signing of a major agreement which will have an extremely positive impact on the economy of the country.
Source : AdaDerana
