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Kantale sugar factory movable property issue settled to start production

Kantale sugar factory movable property issue settled to start production

Kantale sugar factory revival will soon get underway following the release of the 500-acre land to the foreign investor and the dispose of discarded machinery and scrap metal paving the way for the investor to resume the sugar production process. Official sources said.

All the movable property including discarded machinery and scrap metal had been sold to a private FIRM Meerigama Lanka company at a price of Rs.540 million, the highest bidder of the tender which was opened at the land ministry on Friday.07.

The land was handed over to the Board of Investment (BOI) to proceed with the project Lands Ministry officials said that the ministry will has sold the discarded machinery and scrap metal accordance with the instructions issued by the Cabinet Committee on Economic Management (CCEM).

The valuation report of the Chief Valuer on the sugar factory has been submitted to the Attorney General and the ministry has received his consent to go ahead with the project handing over the land to the investor through BOI.

The BOI will have to sign a supplementary agreement with MG Sugars Lanka Pvt Ltd to revive the defunct Kantale Sugar Factory.

It was nearly two years ago, in July 2015 that the BOI signed an agreement with MG Sugars Lanka Pvt Ltd to revive the Factory.

The company, a partnership between Bangalore-based Shri Prabulingeshwar Sugars Chemicals Ltd and Singapore’s SLI Development Pte Ltd, had agreed to invest US$100 million inclusive of a Swiss Bank guarantee of $10 million.

The company had then conducted a $2 million feasibility study on the project through a German Company Bosh.

It planned to process 500,000 metric tons of sugarcane within 18 months after re-launching the factory providing benefits for 25,000 farmer families in the area. The total number of direct employment generation would be around 1,220.

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 30-year lease agreement has to be signed with the investor and the project would run on Built, Operate and Transfer (BOT) basis in the basis of shareholding of 51 per cent held by the Government of Sri Lanka and 49 per cent by the foreign investor.

The new investment agreement 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.

This sugar factory was constructed in 1957 by the government of Czechoslovakia as a grant offered to the country during the tenure of Prime Minister S.W.R.D. Bandaranaike and it was opened in 1960.

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