‘15 new private sector sugar cane factories in next two years’

* Investment over US$ 1 billion
* Fresh plan of cultivating 135,000 hectares in 8 Districts
* Initial strategy to slash import bill from Rs. 55bn to Rs. 25bn
* Exploiting industrial townships



By Ravi Ladduwahetty

The government has embarked on an ambitious plan of setting up 15 sugarcane factories with private sector participation within the next two years where the total investment will top the US $ 1 billion mark.

"We will get the private sector to make the requisite investment given that the break even point of the investments of the US$ 1050 million (US$ 70 per factory for the 15 factories) will be as short as three years, New Sugar Industries Minister Lakshman Seneviratne told The Island Financial Review yesterday.

The Minister, sworn in on Monday, said that the 15 industries will be supplemented by the new 150,000 hectares of sugarcane which will be under cultivation in eight districts which have been earmarked according to a directive by President Mahinda Rajapaksa. They will be in the Districts of Anuradhapura (20,000 hectares), Ampara (28,000 hectares) , Moneragala (30,000 hectares), Batticaloa ( 20,000 hectares), Kilinochchi (20,000 hectares), Mullaitivu, Mannar and Vavuniya – 10,000 hectares

He explained that the first priority of the government would be to slash the annual bill of Rs. 55 billion spent on sugarcane imports to at least Rs. 25 billion when the factories were operational. The fifteen projects would also yield around 13,000 direct employment opportunities in addition to the thousands of out-growers who will gain meaningful incomes, billed to be thrice more than paddy farming.


However, responding to a questions as to whether he was aware that a record 43 by products could be manufactured from sugarcane which also includes hard board, chip board, particle board, writing paper, vinegar, charcoal briquettes, bleach pulp and chemicals such as Fufural which go into manufacture of plastics and resins, Acetone, Acetic Acid in addition to baggasse, alpha cellulose, ethanol and animal feed and whether he sees the possibility of creating industrial townships with the promotion of sugarcane cultivation, he said that the idea was to consolidate the cultivation and the processing while the manufacturing of bi products and industrial townships would be at a latter stage.

He was also confident that the sugar industries would be able to add 10 Megawatts of power to the national grid as well.

Commenting on the current local sugar industry, he said that Sevanagala Sugar Industries generated Rs. 790 million in post tax profits since the takeover by the government and that it had generated Rs. 2.5 MW of power through bio gas which is a bi product as well. Sevanagala generated Rs. 795 million in profits where the wages bill was only Rs. 9.5 million while Pelwatte Sugar generated Rs. 400 million in profits with a Rs. 110 million wages bill with a 5000 strong labour force.

The import of new machinery was also on the cards and he predicted that Rs. 26 million worth green energy would be produced at Sevanagala.

One of the attractions of sugarcane cultivation over paddy was that it consumed only a seventh of the requirement for paddy and the incomes of the former was thrice that of paddy. Farmers also grew cash crops such as soya, cowpea and others.

One of the principal attractions of sugarcane is that it is a grass and could be grown even in the Northern and Eastern Provinces and it was also encouraging that it could also be grown in the liberated areas now that paddy is also grown there, leading to the country’s self sufficiency in rice as well.

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