Sri Lanka’s Raigam Group, which recently went public with its subsidiary Raigam Wayamba Saltern Ltd (RWSL) is diversifying into confectionaries and has acquired a manufacturing plant with which it hopes to produce branded toffees.
“We invested Rs. 30 million in this firm and we are in the process of negotiating a new brand name for the confectionaries,” Ravi Liyanage, Chairman/CEO Raigam told the Business Times.
He said the Raigam Group is exploring the prospects of manufacturing chemical-based products such as caustic soda, soda-ash and chlorine for which crystal salt is the main input now that their subsidiary has gone public. “We are looking at setting up a chemical plant in Trincomalee. This is still at its initial stages and will be used as a ‘feeder saltern’,” Dr. Liyanage said.
He said the acquisition of 1805 acres in Trincomalee for this purpose was completed and it will take about three years for this plant to be up and running.
He also said that once completed, this will be the largest saltern in the country. Dr Liyanage said that in a bid to develop this saltern, RWSL may go in for a rights issue to raise the cash. He said that after completing this project, the company will put up an eco tourism project in the same premises.
He said that Raigam is also gearing to go public with its beauty care product arm, Dream Life Science with plans to list this company in the latter part of 2012.
Dream Life Science posts about Rs. 50 million in revenue per month and it’s hoping to capture some markets of products which are manufactured by multi-nationals. He added that Raigam hopes to mainly diversity in cosmetics.
He added that Raigam will immediately start making toothpaste and a toothpaste manufacturing machine has been imported for this purpose with Rs 20 million investment.
Dr Liyanage said that of the Rs 200 million raised from RWSL’s IPO last March, so far Rs 130 million has been utilised for capital expenditure. Development of Vanathavilluwa Saltern will cost Rs 90 million, the completion of Palavi Saltern will cost Rs 15 million and Puttalam Salt Refinery Plant will cost Rs 15 million,” he said.
RWSL will use some Rs 8 million for enhancement of its infrastructure, while the investment in Southern Salt Co. for completion of final phase of Saltern in Bata – Atha will cost Rs 27 million. The modern salt refinery in Bata - Atha will cost Rs 45 million.
Analysts say that the demand for both household and industrial consumption in Sri Lanka is estimated to be 150,000 Metric Tonnes (MT) per annum. The actual average production is approximately 110,000 MT and the balance demand is met by imports where the imports are carried out by private parties. The industry has significant potential to develop as the country is surrounded by the sea and the tropical weather is conducive to the production of salt. |
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