CIC Agri accquires Kelani Valley Canneries

To bolster value addition chain:

Ravi Ladduwahetty

Agriculture rich blue chip Chemical Industries (Colombo) PLC (CIC) through its subsidiary CIC Agribusiness acquired a controlling 60 per cent stake in Kelani Valley Canneries (Lanka) Ltd last Friday, a deal earmarked for higher value addition of the former's local and export agri-business.

This follows CIC Agribusiness purchasing a 60 per cent stake in KVC, held by the DSI Group for which we paid a consolidated Rs. 18 million, CIC's Group Chief Operating Officer (GCOO) Samantha Ranatunga told Daily News Business.

The signatories to the Shareholders' Agreement were Chairman B.R.L. Fernando and GCOO Samantha Ranatunga on behalf of the CIC Group and Chairman Kulatunga Rajapakse on behalf of the DSI Group.

"This is a perfect match. What CIC hitherto lacked was a processing facility to its value addition chain. This acquisition will set the Group for higher value addition and favourable effects for our bottomline. The Rs. 18 million was not only for the acquisition but also for the provision of working capital and expansion of the marketing network for the company's products in both local and export markets", he said.

CIC Agribusiness will be re-branding KVC products. There will be no change to the brand name having a high brand identity.

"We will only change the livery and packaging, he said. There will be merging of another commercial synergy in that the CIC Group also has a packaging facility through its subsidiary CISCO Packaging (Pvt) Ltd from which the Agri business subsidiary will network its business.

CIC has a limited export market in the Gulf, the Continent (Germany and France) and Australia for fresh fruits and vegetables will also make use of this latest acquisition to bolster its value added exports there.

"We will also be adding the United Kingdom to the list soon," he said. "We are looking at jak fruits in sugar syrup, cut vegetables pickled in brine which we will can through KVC, he said.

"We will exploit our customer base through our already existing dealer network. "We have Dubai and Abu Dhabi both strong ethnic markets, he explained.

CIC Agribusines Managing Director Keerthi Kotagama said the company has a strong presence in the agriculture sector with 650 acres in Pelwehera in Dambulla, 1350 acres in Hingurakgoda, 150 acres in Thalawa in Anuradhapura and 50 acres in Rikillagaskada.