Pelwatte Sugar and BoC sign multi-billion rupee MoU

PROJECT: Bank of Ceylon and Pelwatte Sugar Industries Ltd. signed an MoU that marks the start a multi-billion rupee joint development programme.

The project will boost sugar and alcohol production as well as the economy in the Moneragala district: increase sugar production from 42,000 metric tons to 100,000 metric tons per year; increase extra neutral alcohol production from 8 million to 18 million litres per year.

They will construct a modern milk processing factory to produce butter, cheese and milk powder; and construct a 5-star luxury hotel complex with a golf course and seaplane landing facilities.

Speaking at the launch ceremony held at Pelwatte on Tuesday, the chief guest, Prime Minister Ratnasiri Wickramanayake said, "I am very happy to see two giants, Bank of Ceylon and Pelwatte Sugar Industries, working together to improve the region's economy through increased sugar production, agricultural development, dairy farming, tourism, and thousands of new employment opportunities."

Addressing a very large gathering Deputy Minister of Finance and Planning and Higher Education, Ranjith Siyambalapitiya, said.

"The collaboration between Pelwatte Sugar Industries and Bank of Ceylon will save US$ 40 million annually in reduced sugar imports. This multidimensional development programme will help the entire region to achieve self-sufficiency."

In addition to the signing of the MoU, the ceremony held at Pelwatte also covered the opening of a new Bank of Ceylon branch inside the Pelwatte Sugar Industries premises to help sugar cane farmers, and the handing over of agricultural machinery to a large number of farmers under Bank of Ceylon's 'Govi Shakthi' loan programme.

As a result of Bank of Ceylon investing up to Rs. 1.5 billion initially to help sugarcane growers to double their production, Pelwatte sugar production is expected to go up by 138%. About 15,000 sugarcane growers cultivating 24,000 hectares will each receive loans up to Rs. 150,000 repayable in 3 annual instalments at 9% interest per annum.

Pelwatte Sugar Industries will guarantee the loans and advance the monthly interest due on these loans on behalf of the borrowers. Pelwatte Sugar will also prepare the land, provide all necessary inputs and buy the entire produce.

This will enable its sugar production plant to operate at full capacity and thereby increase sugar production from 42,000 metric tons to 100,000 metric tons per year.

As sugar production goes up, the production of molasses will also go up from 30,000 metric tons to 70,000 metric tons per year.