Kantale sugar factory to be revived with Indian assistance
The Kantale sugar factory which was taken over by the Mahinda Rajapaksa-administration under the Underperforming and Underutilised Assets Act in 2011 is to be revived with Indian assistance.
The defunct factory will be re-opened soon following the signing of an investment agreement with an Indian company on July 27.
The Ministry of Land, Board of Investment and Treasury will sign the MoU on behalf of Sri Lanka with the Indian company.
This was disclosed by Prime Minister Ranil Wickremesinghe when he addressed a meeting in Kantale on Tuesday.
41 per cent of shares will be vested in the Indian investment company while the balance 51 per cent is owned by the government.
Meanwhile necessary incentives are being provided to improve the sugar industry in Sri Lanka while developing sugar factories at Sevenagala, Pelwatte, Hingurana and Kantale.
The purchasing price of sugar cane has been increased to Rs.4,500 per metric tonne from Rs. 4,000/mt for the benefit of around 25,000 sugar cane cultivators in the Uva and Eastern Provinces. The 2015 budget had proposed to increase the farmgate price of sugar cane to Rs. 4,500 per mt from the present average of Rs. 4,000/mt.
A concessionary tax rate of 12 per cent applicable to the agricultural sector has been extended to the local sugar industry; previously, sugar industry profits were liable to tax at the standard rate of 28 per cent.The Treasury has allocated Rs. 5,000 million to build modern sugar manufacturing plants at Kantale, Hingurana and Pelwatte and develop smallholder plantations in accordance with the 2015 budget proposal, Finance Ministry sources said, adding that the government spends a sum of Rs. 60 billion annually for sugar imports.
The Government has identified 120,000 hectares of land suitable for sugar cane cultivation.