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| Wednesday, 16 July 2003 |
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Loans for DC millers to restart businesses by Channa Kasturisinghe The Coconut Development Authority (CDA) has arranged a loan scheme in collaboration with six banks for the desiccated coconut (D/C) millers to restart their businesses which have been severely affected due to the shortage of coconuts. According to this arrangement the banks will provide up to five million rupees per D/C miller and the CDA will meet 10 percent of the interest component for one year, CDA Chairman H.A.Thilakaratne told the Daily News yesterday. He said this move would help the D/C owners who have been on the verge of closing down their factories due to the unrealistically high prices of coconuts to infuse capital into their businesses. "Due to the severe drought in 2000/2001 coconut production declined heavily and coconut prices skyrocketed. This increased the production costs of D/C millers and they found it difficult to compete with other D/C producing countries. As a result the D/C mills ran into liquidity problems and their working capital eroded. Today, although coconut prices have come down to an affordable level D/C millers are unable to start their business as they do not have working capital," Thilakaratne said. Among the six banks are Bank of Ceylon, People's Bank, Hatton National Bank, Commercial Bank, Seylan Bank and DFCC bank. A senior official of the Ministry of Plantation Industries said that this measure was taken following the call by the D/C Millers Association of Sri Lanka to provide them financial assistance to revive the industry. "The nut equivalent of D/C production, which declined by 43 percent in 2001, declined further by 40 percent or 246 million nuts, which is the lowest DC output since 1998. The average export FOB price of DC in US dollar terms increased and the total D/C export earnings dropped dramatically. Before 2001 the average D/C export earnings were around five billion rupees but it dropped to Rs.2.7 billion by 2002. Plantation Industries Minister Lakshman Kiriella having considered the plight of the D/C industry instructed that a Committee headed by the Deputy Minster Navin Dissanayake be appointed last year to recommend measures to revive the industry," the official said. The President of the D/C Millers Association Sunil Watawala said today the price of a thousand nuts has come down to Rs.7,000 but the factories which had to be closed for six to nine months a year have found it difficult to recover due to financial problems. "We have about sixty mills which were set up using the most modern technology investing a huge sum of money. Over the years Sri Lanka has been maintaining its position as the second largest exporter of D/C in the world with an average market share of 60,000 to 65,000mts per annum. However, production dropped in 2002 to 30,000mts which is much less than the total installed capacity of the mills in the country," Watawala said. He said the Association expects the banks to provide the maximum amount of credit possible to all the affected mills in order to revive this industry which is a 100 percent export oriented industry. |
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