BOI signs agreement on largest Investment in Hambantota Port - Sugar production to be boosted

India's No 1 sugar company, Shree Renuka Sugars Limited, has signed an agreement with the Board of Investment of Sri Lanka to invest US$ 220 Mn to set up a sugar refinery complex in Hambantota. The company participated in the bidding process in 2010 and was selected and later approved by the Cabinet to up the proposed sugar refinery. Shree Renuka Sugars Limited, is the largest sugar company in India and has also 4 sugar mills in Brazil. The proposed project, plans to bring inedible raw sugar from Brazil in bulk and add value locally by refining it in the complex. The refined sugar would be sold locally as well as exported from Hambantota Port.

Lakshman Yapa Abeywardena, Minister of Investment Promotion, formally presents Dr Vidya Murkumbi, Chairperson, Shree Renuka Sugar Ltd with the BOI Certificate of Registrations. Also present is M. Rawat, Director, Lanka Sugar Refinery (Pvt) Ltd.

The Sugar Refinery would have a world scale capacity and contribute to over a million MT of cargo movement to the Hambantota Port. Apart from paying royalty and lease rental to the Sri Lanka Ports Authority, the Project would result in saving foreign exchange of nearly US$ 450 Million for the country.

The project would bring direct employment for locals to the tune of 300 and indirect employment for nearly 1,500 people through various services in operation, maintenance and logistics. The industrialization project would thus boost the regional economy in Hambantota. The Sugar Refinery Project would not require any power from the main grid and instead, it would be generating surplus power of nearly 12-15 MW and would be supplying it to the Ceylon Electricity Board, meeting power deficits for the region to a significant extent.

The agreement was signed between the local company Lanka Sugar Refinery Pvt Ltd., by its Director Rajesh Rawat, in the presence of Minister Lakshman Yapa Abeywardena. Shree Renuka Sugars Ltd., founding Chairperson Dr Vidya Murkumbi, was present to grace the occasion.

Lakshman Yapa Abeywardana, Minister of Investment Promotion stated, " Hambantota is rapidly emerging as a major business, logistics and communication hub in Sri Lanka, with a modern harbour, state-of-the-art airport and two new Export Processing Zones. In future, many investors would opt to invest in Hambantota, taking advantage of its strategic location.

By setting up a sugar complex in that booming city, Shree Renuka Sugar Ltd., a leading sugar manufacturer in India, will enjoy many benefits, whilst creating new economic opportunities in the island and addressing to some extent, Sri Lanka's requirements. It is clearly a win-win situation for all parties."

Dr Murkumbi said that they looked forward to start work on the project within a few months, immediately after the procedures and necessary approvals have been completed and are happy to start operations in the island country.

Chairman / Director General of the BOI, Dr Lakshman Jayaweera stated, "this project is very significant to the country as Sri Lanka currently imports sugar at a great cost.

One of the mandates of the BOI, is to create economic opportunities that would save foreign exchange for the country, in addition to promoting FDI. The project of Lanka Sugar Refinery at Hambantota, addresses this National requirement."

In India, the company has its refinery in the east and west coast and Hambantota is strategically well located to get logistics leverage for its operations. She also praised President Mahinda Rajapaksa, Secretary Treasury Dr PB Jayasundera and all concerned officials who assisted this project for a successful signing of this historic agreement, according to a press release.