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.
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.
source - www.dailynews.lk
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