Kotmale to raise Rs. 125m in private placement
 

by Shirajiv Sirimane

Kotmale Holdings Ltd. will announce a private placement to raise Rs. 125 million on June 14 to broadbase its share capital. Lambretta Ceylon limited established in 1967 will be renamed to Kotmale Holdings Ltd on the same day.

Director Kotmale Holdings Ltd, Ramesh Schaffter said that it will also to raise funds for urgent expansion of their factory.

Production of two of their popular products, Kotmale ice cream and Tetra milk packs have reached maximum capacity. Sri Lanka still imports over 75 percent of their milk requirements and the company sees a growing market within Sri Lanka for its products.

The company has also turned down many international orders for this reason. "We are not in a position to meet the local demand and this is the reason why we decided to go for a factory expansion," he said.

He said that they would invest Rs. 30 million to purchase new machinery and for other urgent factory refurbishment.

Over the past four years the company has achieved a total growth rate of 200 percent. "Our aim is to achieve an annual growth of 30 percent and for this we need working capital," he said. For this purpose Rs. 60 million would be invested for the enhancement of their working capital. This would also include the retirement of temporary overdrafts. He said that these two areas would be addressed immediately.

In addition the company would also invest Rs. 30 million to improve their distribution network. This would include purchase of new vehicles, setting up of cold storage, acquiring freezers and other urgent work in this area.

Kotmale is the largest supplier of fresh cream and cheese in Sri Lanka and they would also invest to re consolidate this market.