Raigam salterns in massive expansion drive
Sanjeevi JAYASURIYA
Raigam Wayamba Salterns PLC which entered the country’s salt industry
six years ago is the dominant player in the table salt market in Sri
Lanka, where there is a drastic decrease in salt imports.
The company a subsidiary of Raigam Group of Companies has become the
trend setter in salt industry in Sri Lanka which was instrumental in
controlling salt imports to the country by establishing the first ever
free flow table salt refinery in Sri Lanka.
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The Raigam salterns in Trincomalee |
Starting its commercial operations in mid 2005, its rapid growth and
performance have led the company to become a public listed company in
the Colombo Stock Exchange in Sri Lanka while recording an unprecedented
success in its IPO executed in 2010.
The company is on a massive project development phase in salterns
development and new salterns based in Puttalam and Hambantota while
concentrating on its revenue generating business unit of free flow salt
manufacturing and distributing based in Puttalam.
“We saw the opportunity in the market and also wanted to contribute
to the national requirement as in 2004 salt imports was staggering
45,000 metric tonnes which is equal to 35 percent of national
requirement, explaining the entry into the salt industry,” Raigam
Wayamba Salterns PLC Chairman and CEO Dr. Ravindranath Liyanage told
Daily News Business.
The salt imports have dropped to 10,000 metric tonnes at present
where 90 percent of refined table salt available in the market is
produced by us, he said in an interview.
Excerpts of the interview.
The company decided to enter the industry at a time where potential
salt manufacturing areas were controlled by the LTTE and a couple of
large salterns including the Elephant Pass was beyond reach. There were
no commercial operations taking place in these areas where 80 percent of
salt manufacturing areas were located.
Puttalam to Hambantota being wetlands resulted in low production
volumes during the past two decades. With low production the requirement
was increasing as salt has an inelastic demand.
The recent Tsunami too had an adverse impact on the country’s salt
industry. The changing weather patterns created negative multiple
effects.
The Raigam Wayamba Salterns was able to bridge the industrial gap to
a certain extent.
The consumption pattern of people has changed from crystals to table
salt as it is convenient and hygienic. Table salt was imported and no
company was willing to refine to make table salt.
The table salt consumption is less than five percent and 95 percent
is in crystal form. This has changed to 18 percent and 82 percent of
table salt and crystal respectively. The crystal market is rapidly
changing at present.
This is a life long industry and we took up the challenge. It was
difficult at the initial stage as banks were not willing to fund this
project.
The reasons being this is a new filed of operations and highly
corrosive in nature.
The first ever refining plant was set up in 2007 at Palavi in
Puttalam followed by a couple of salterns. This venture was successful
and the Tangalle Saltern was acquired and the second refinery set up as
an associate of the Puttalam Saltern.
The third saltern was set up in Bata-Atha making Raigam a trend
setter.
The government has given the fullest support by way of non-tariff
barriers for imports to protect the local industry.
The peaceful environment that prevails now has provided an
opportunity to venture into salt industry in a big way.
With the success in the recent IPO, one of the best in the country
during the past two decades which came to the market after a few years
of silence, we took the initiative and this was unprecedented. The Rs
200 million IPO for the Puttalam Salterns was well accepted. The IPO was
20 times oversubscribed in the first 30 minutes.
The share market price has been stable over the second year into the
IPO where impressive results have been recorded.
With the clearance of North and East, Raigam ventured into the
Eastern Province to construct the largest saltern in Sri Lanka of 1,805
acres in Trincomalee. The acquisition process is already completed and
the construction is half way completed. The company will implement an
eco tourism project to further supplement tourist attractions in the
area. The main focus will be shallow water activities where there are
about 100 fishing families living in the surrounding area who will be
given special attention.
There will be a fishing pier inside the saltern to retain water
during arid seasons to ensure 365 days of fishing. The composite of the
project will also be to sustain the overall eco friendliness of the
environment.
This will be a CSR project to support the rapidly developing eco
tourism sector whilst doing core business. The first phase of the eco
tourism project will be completed within one and a half years.
Raigam Wayamba Salterns recorded significant growth in its
performance while concentrating in massive project development
activities. During the financial year 2010/11, the company has recorded
a turnover of Rs 297.4 million as against Rs 259.5 million recorded in
the previous year which is an increase by Rs 37.8 million or 14.5
percent.
It recorded Rs 57.8 million profit after tax in contrast to Rs 51.2
million last year which is a 12.8 percent increase. The company
envisages deploying its strength of endowing a large salt harvesting
capacity to divert in to salt based other chemical industries such as
caustic soda, so-dash and chlorine which are entirely imported to the
country at present. |