CIC invests Rs. 500m in dairy venture
Leases two 3600 acre farms in Eastern Province:
Ravi LADDUWAHETTY
Buoyed by the investment opportunities in the Eastern Province,
Agriculture rich blue chip Chemical Industries Colombo PLC, through its
subsidiary CIC Agribusiness (Pvt) Ltd, has embarked on two ambitious Rs.
500 million milk processing facilities at Welikanda and Punani.
“The Rs. 500 million investment, a joint venture between CIC
Agribusiness and State owned limited liability company Mahaweli
Livestock Enterprises (Pvt) Ltd has started this project, where CIC
Agribusiness has invested the funds. The State company’s contribution
will be the land and the cattle, CIC Group Chief Operating Officer
Samantha Ranatunga told Daily News Business yesterday.
He explained that of the Rs. 500 million, Rs. 300 million will go
into the purchase of the milk processing equipment while Rs. 100 million
will go into purchase of livestock and the final Rs. 100 million will go
into further infrastructure such as reefer containers, cold rooms,
collection centres and other affiliated investments such as training of
outgrowers The joint venture company has been offered 2300 acres in
Punani in the Batticaloa District and a further 1300 acres at Welikanda.
The company’s farm land which is currently producing 600 litres of
milk per day, will be expanded to 25,000 litres by the end of three
years, which will also have a network of 5000 outgrowers by that time.
The attraction of these two farm lands is that there are very conducive
areas for cattle grazing and subsidiary crop cultivation and
development, Ranatunga explained.
The prospects for Sri Lanka’s milk production is very positive with
current annual consumption being a billion litres where the local
production is a mere 20% while the remaining 80% is imported.
CIC Agribusiness Managing Director Keerthi Kotagama said that the
company will also be using the farm infrastructure to grow maize and
soya bean which will be converted to animal feed and the surplus will be
sold in the local market. “This is a public/private sector partnership
and the State company has been offered 51% of the equity in the joint
venture,” he said.
The venture manufacturing of curd on a limited basis which is around
1000 pots to 1200 pots per day, will be expanded by 25% by June 2009, he
said.
The venture will also be expanding into a wide variety of dairy
related products such as yoghurt which will be in three forms - drinking
yoghurt, flavoured yoghurt and low fat yoghurt, ice creams, sterilized
and pasteurized milk, cheese and a host of others, Kotagama said.
Responding to a question as to how the company hopes to survive in a
market that has four stiff competitors- Anchor, Newdale, MILCO and
Nestle he said that the products will be targeted at the upper end of
the market and will be in Colombo and the rest of the Western Province
along with the metropolitan cities such as Kandy, Galle, Matara,
Kurunegala and Ratnapura.
CIC Agribusiness will also invest another Rs. 30 million in an
Agricultural Academy at Pelwehera in the Dambulla District to train
farmers and investors in agricultural practices. |