Having tied up with a US based multi-national company, Chemanex PLC, through its subsidiary, Chemcel is gearing to produce a super absorbent for diapers, officials said.
We spent close to Rs. 400 million for the first phase to set up the factory of Chemcel (which was incorporated for this business) and plan to start manufacturing within two months,” Preethi Jayawardena, CEO Chemanex told the Business Times, adding that the second phase of this project is slated to start in a year’s time.
He noted that Chemanex's most ambitious venture to date is Chemcel which boasts the ardent support and financial backing of overseas partners. He also added that Rs. 300 million which Chemanex secured through divesting their 40% in Commercial Leasing to LOLC this year was utilized to set up this factory. Mr. Jayawardena explained that the technology for the super absorbent belongs to the US firm. “This venture will dramatically change the dimensions of Chemanex,” he added.
Chemanex recorded low results last year, he said mainly due to steep escalation of raw material prices along with the strengthening of the rupee. “We lost two major orders for CAL Exports Lanka and Chemanex Exports, which are both export firms. The raw material price increases and the currency strengthening had a negative impact on these firms - especially when we lost two good regular orders," he explained.
He noted that Chemanex's export market continues to suffer, bearing the brunt of fluctuating market prices for raw materials and obstacles in supply chains. He added that last year, Chemanex Adhesives (Pvt) Ltd and CAL Exports Lanka were successfully merged to simplify operation and also tower overall costs. "We are currently attempting to venture into new world markets to sustain this subsidiary," he added.
Mr. Jayawardena noted that Chemanex Exports achieved reasonable success through a reawakening of the Pakistani market, which was earlier impacted by political volatility and public unrest in the region. He also noted that Chemanex Exports is also gearing towards exploring new Asian markets such as Bangladesh.
Yasui Lanka (Pvt) Ltd another firm belonging to Chemanex Group, has also witnessed a steady increase in business and has recently begun experimenting in new product lines using new material. Mr. Jayawardena added that Yasui Lanka has also invested in stae-of-the-art machinery to boost the quality and quantity of production. “This company intends to begin the 'second phase' of the project, which will add a new dimension to the overall outlook of Chemanex Group. We are already scouting for a convenient location to begin the purification process required for the second phase,” he added. |
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