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DC
miller mulls overseas expansion "We have a lot of clients here wanting coconut products but there's not enough of these products," said Suresh Silva, Marketing Director of Silvermill. "So we're looking for extra capacity abroad." The company already has full management control of a plant in Ben Tre in southern Vietnam in a joint venture with a government mill called the Treximco Silvermill Co. "We're looking at extending this arrangement elsewhere in the world, may be in India, the Philippines or Indonesia. The idea is to take over existing plants for management because putting up a new factory is very costly." Silvermill provides the technical and marketing expertise along with management skills. Silva said they were looking at taking over under-utilised plants overseas. The company processes about 60 million nuts in Sri Lanka and about 25 million nuts in Vietnam. "We produce 6,000 MT of DC in Sri Lanka and 2,500 MT of DC in Vietnam," Silva said. DC millers have had to face shortages of coconut during times of drought which have been a recurring phenomena in recent years. He also said the recent opening up of the Indian market augurs well for Sri Lanka's DC industry. "It could prove very lucrative for Sri Lanka if we keep it intact and especially if we can get it under the Indo-Lanka FTA (free trade agreement). Now it is under the Bangkok agreement where duty is 30 percent." Sri Lanka's very close proximity to India gives Sri Lankan producers and exporters an advantage. "It is a market other competitors cannot get in because of freight cost constraints and import duty." "India produces about 50,000 MT of DC but the market could easily be over 100,000 MT - they do not have enough product," Silva said. "India is a very large market which could be expanded to suit Sri Lanka very well." |
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