A new state owned sugar factory is to be set up soon in Welioya in the Moneragala district, cabinet spokesman minister Ramesh Pathirana said.
Sri Lanka’s state-run Lanka Sugar (Pvt) Ltd has made a billion rupees of profit, Minister Pathirana disclosed.
Lanka Sugar is made up of Pelwatte and Sevanagala sugar factories expropriated in 2011 under Pelwatte Sugar and Sevanagala Sugar Industries Co Ltd,
Sugar prices have moved up in recent months and Sri Lanka government has also banned the import of ethanol boosting profits of the sugar firms at the cost of lost import taxes.
Sri Lanka is estimated to require 600,000 metric tonnes of sugar each year, and 85 percent is imported.
Domestic production was 45,000 metric tonnes and the factory is expected boost local production.
Sri Lanka has been engaging in ‘import substitution’ after printing money to keep interest rates down.
Sri Lanka is now in a severe forex crisis, with policy rates at 6.0 percent, two years of balance of payments deficit.
Lanka Sugar Company which operates the Pelwatte and Sevanagala sugar factories recorded Rs.1.2 billion net profit last year from a net loss of Rs.1.3 billion in the previous year which is the highest profit earned by the company for the last 35 years,
This was disclosed by Lanka Sugar Company Chairman Janaka Nimalachandra pointing out that the growth in earnings was a major achievement for the company which had been loss-making in the past.
The company had cultivated 10,000 acres of sugarcane last year which included 8,500 acres at Pelwatte and 1,500 acres at Sevanagala.
It plans to crush around 200,000 MT of additional sugarcane and add over 5,000 acres to the cultivation this year,” the chairman said.
The company produced around 40,000 MT of sugar last year and plans to add 15,000 MT of sugar this year embarking on a factory expansion program to boost the capacity at Sevanagala and cultivation at Pelwatte.
The government allocated Rs. 475 million through the last budget to increase factory capacity at Sevanagala.Phase II of Sevanagala Sugar factory expansion is to be carried out this year. Crushing capacity is to be expanded from 1,250 TCD to 1,500 TCD,” the chairman said, adding that through the expansion the factory will be able to crush an extra 60,000 MT of sugarcane