Kantale Sugar Factory on road to survival with US$ 300 mn investment | Daily News

Kantale Sugar Factory on road to survival with US$ 300 mn investment

Shri Prabhulingeshwar Sugars & Chemicals Ltd. factory in India
Shri Prabhulingeshwar Sugars & Chemicals Ltd. factory in India

One of the ailing state owned ventures, the Kantale Sugar Factory, is finally on its road to revival, while the plantation of sugar cane and land clearing for the factory is not in progress.

This task is now being executed by MG Sugars Lanka (Pvt.) Ltd., a joint venture of the Government (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,” said Managing Director MG Sugars K. P. Nagaraja. The project would generate 1,200 jobs and also plant over 350 hectare of new sugar cane cultivation through a farmer out grower program.”

MG Sugars was first involved in the appeal 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.”

Subsequently, the former Presidential Chief of Staff I.H.K. Mahanama and State Timber Corporation Chairman P. Dissanayake, were nabbed by the Bribery Commission last year, while counting a cash bribe of Rs 20 million in exchange for transferring machinery, scrap metal and other assets of the Kantale Sugar Factory to MG Sugars, according to media reports.

“However, all such issue and controversies are fading away and finally, things are falling in to place after we renegotiated with the Government,” he said.

Subsequently, MG Sugars Lanka also 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. He said 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.”

He said that Sugar is the fourth highest import bill for Sri Lanka after crude oil, fertilizers, milk and their aim was to help make Sri Lanka self-sufficient in sugar in four years.

Shri Prabhulingeshwar Sugars & Chemicals Ltd was founded in 1999 and was primarily engaged in the manufacture of sugar and allied products. In 1999 the first plant was commissioned with a capacity of 2500 TCD and power generation of 17.5 MW in, Bagalkot District. Today the plant has a capacity of 8500TCD & 38.5 MW power generation and have diversified to manufacture of ethanol/industrial alcohol production.

 


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