Business
Wickramanayake will not expand on Pelwatte’s alcohol business

by Namini Wijedasa
The new owner of Pelwatte Sugar Company said last week that he would expand sugar production and improve all aspects of the enterprise but would not add value to the products of its distilleries arm because he was "not a fan of alcohol".

"I am not a fan of alcohol or liquor," said Ariyaseela Wickramanayake in an interview with The Island. "I will continue to sell it as one hundred per cent spirits and not expand into value addition because I don’t want to promote alcohol." The Pelwatte Sugar Distilleries Ltd. deals in spirits, a by-product in the processing of sugar, and sells it for manufacture of liquor.

Wickramanayake, the chairman of Master Divers Ltd., bought the government’s 53.35% stake (32.6 million shares) in Pelwatte Sugar at Rs. 8.25 a share and has now made a mandatory offer to buy the rest. However, Wickramanayake was pragmatic when asked what sort of commitments he may incur on the offer.

"I don’t think anyone will want to sell," he said. "If I was them, I wouldn’t. Naturally, they would expect me to raise my offer."

He was reluctant to say how much of the money used to purchase the stake was pocket cash and how much was borrowed. His company has also offered to buy the government’s 49% stake in Shell Gas Lanka Ltd.

"I’m a good, marketable man and a good performer in this country with a clean record," Wickramanayake smiled. "I have never defaulted, and the banks are available."

Questioned about the position of former Pelwatte chairman Irwin Weerakkoddy, a government nominee, Wickramanayake said it was unlikely he would be retained in that capacity although his expertise may be used in other ways.

Meanwhile, Wickramanayake expounded plans to increase sugar production in Sri Lanka by promoting growth of sugar cane in lands owned by the 23 management companies. He noted that the country now produces only 10% of its sugar requirement while the rest is imported.

"I want to save foreign exchange, generate employment and make Sri Lanka self-sufficient in sugar production," he elaborated, also outlining plans to diversify into sale of milk. His proposal for the latter involved providing sugar cane farmers with cows for milk production.

"I want to sell packeted liquid milk under the Pelwatte label," he explained.

Pelwatte now produces about 55,000 metric tonnes of sugar a year from about 4,000 cultivated hectares of land, according to Wickramanayake. He wants to raise the extent cultivated to at least 30,000 hectares by asking plantation management companies to plant sugar cane on neglected rubber estates.

"They are losing on rubber... uprooting trees and selling them as firewood," he pointed out. "They can grow sugar cane and we will buy it back, crush it and take it to Pelwatte." Sugar cane is a hardy and adaptable grass and much low-country estate land can be used.

He said that Pelwatte also turns out animal feed and produces four megawatts of power from burning molasses and alcohol.

The company’s existing machinery will be upgraded and improved to meet the added requirement in sugar production, Wickramanayake explained, adding that discussions have been held with some Indian companies in this regard. Further action — including discussions with plantation companies — are likely to take place after Master Divers take over complete management, he said.


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