Pelwatte and Sevanagala sugar mills turnaround brings sweet success
View(s):A complete turnaround in Sri Lanka’s sugar production following the takeover of private owned Pelwatte and Sevanagala factories by the government and bringing it under the management of state owned Lanka Sugar Company Ltd in 2012 has met with sweet success, a top official of the company said.
Pelwatte and Sevanagala Sugar have recorded a profit before tax of Rs.1,341 million in 2013 and the company is now paying dividends to the Treasury, Keerthi Bandara Kotagama, chairman of the company revealed.
Sugar production in the country has doubled to 10 per cent of the national requirement of 600,000 MT per annum and thereby saving Rs. 5.5 billion for government coffers in just over two years, he said.
Some 12,499 acres out of 17,499 cultivable land in Pelwatte and Sevanagala areas have been cultivated with sugar cane and it has resulted a yield of 510,104 sugarcane last year.
According to Finance Ministry statistics, Sri Lanka presently imports around 600,000 MT of sugar, spending over Rs. 55 billion per annum which is next only to the import of oil. In 2011 the local production was only 4.8 per cent of the total national demand while 95 per cent was imported from countries like India, Thailand and Brazil.
The outgrower based growing model has been introduced and measures were taken to improve yield with high yield varieties, better agricultural practices efficient extension services ensuring high returns to farmers, Mr. Kotagama. He noted that the company is making an advance payment of Rs. 1500 per MT for farmers but private owners of two factories paid only Rs. 1300 in 2011.The purchasing price has been increased to Rs. 4000 per MT from Rs.3000 in 2011, he disclosed.
Staff motivation is based on performance based schemes and incentives on productivity, he said.
Outlining future plans, Mr. Kotagama noted that after overhauling Sevanagala, crushing capacity will be increased from 1,250 MT to 2,000 MT per day and will generate 12MW of power using bio mass with the objective of adding 6 -8 MW of power to the national grid.
For the overhauling of these two sugar mills, the company will have to spend approximately US$55 million, he disclosed.
The two sugar factories and all its assets were taken over by the government under the Act titled “The revival of Underperforming Enterprises and Underutilized Assets” hurriedly passed in parliament in 2011.