Business Times

New life for loss-making government firms

By Chanaka de Silva

Loss-making government enterprises could be changed into very profitable ventures with proper management. Accordingly, Lanka Mineral Sands Company made a profit of around Rs. 700 million over the previous year's figure of Rs. 100 million, according to a top government official.

Of 23 loss-making government enterprises Lanka Mineral Sands is a shining example of how they could be turned around, said Dr. Willie Gamage, Secretary Ministry of State Recourses & Enterprise Development in an interview with the Business Times.

He further added that under the duties and functions specified they had to implement policies, programmes and projects with a view to achieving the relevant national objectives within the time lines agreed upon with the national planning authorities and within budgeted resources."

Salu Sala and Laksala were among the state enterprises that have been successfully turned around. Paranthan Chemical Ltd which is presently located in Kalutara on a temporary basis is making Rs 5 to 6 million turnover monthly without any loss, but this can be revived to make several times this figure as profits once the factory is fully functional in the north.

Elkaduwa Plantations which had a loss of Rs. 60 million made a profit of Rs. 20 million last year, he said adding that the JEDB's debt of Rs. 900 million has now been brought down to Rs. 400 million.
The Lanka Phosphate Ltd which ran into some trouble earlier has now been resolved. The phosphate deposit in Eppawala is estimated at around 120,000 Metric Tonnes which at the present rate of local consumption is sufficient for a 1000 years. However the present refining methods produce only the grade of phosphate that can be used for coconut cultivation.

The greater requirement is for paddy cultivation, Dr Gamage said. To refine this grade of phosphate requires an ultra modern factory. At the moment discussions are on with the Japan International Co-operation Agency (JICA) to obtain a credit line to upgrade the factory. "If this is achieved the country can save Rs. 30 billion which the government gives as fertilizer subsidy for paddy cultivation," he said.

On enterprises closed down, Dr Gamage said "the National Paper Company at Embilipitiya which was closed down still has 300 workers who are still being paid. We will be inviting bids for the purchase of this unit and we are seeking Rs. 360 million as advance from any potential investor to settle debts and dues of the company."

As at present the Treasury has to pump in Rs. 4.2 million monthly to pay the salaries of employees. A similar case is the Ceylon Ceramic Corporation where the Treasury has to fork out Rs. 9 million a month for the same purpose. The KKS Cement Factory is to be restarted with the required power supply land already been allocated for wind turbines to be installed. This will provide the uninterrupted power supply required.

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