Sri Lanka tile firm buys clay deposits

Sept 12, 2011 (LBO) - Sri Lankan tile manufacturer Lanka Walltile group has bought land with deposits of clay to ensure an adequate supply of raw materials amid growing fears of a shortage.

The company, part of C T Holdings, formerly known as the Ceylon Theatres group, is also investing in its plant to make value-added tiles for the export market, managing director Mahendra Jayasekera said.

Demand for building materials was growing with economic growth increasing after the end of the island's 30-year ethnic war in 2009, although rising fuel prices were a concern, he told shareholders in the company's annual report for 2010-11.

"It is important to have a regular, uninterrupted supply of raw materials for the economic operation of the tile factories," Jayasekera said.

During the year, Lanka Walltile and its subsidiary Lanka Floortiles bought land in Dediyawela and Nattandiya containing deposits of ball clay and silica sand.

"These are two important raw materials for the manufacture of wall and floor tiles and we need to secure our future supplies of these materials," Jayasekera said.

"The continued lack of a clear cut policy in the mining of ball clay is hampering the progress of the ceramic industry in the country.

"We keep making representations to the authorities concerned and we hope that this matter will receive the urgent attention of the government regulators and an acceptable solution found," Jayasekera said.

The company had repeatedly warned of fears of a clay shortage as existing deposits get used up with land under which other deposits lie being used for agriculture or housing.

Jayasekera also said the company planned to make special value-added tiles and had invested 39.7 million rupees in upgrading plant and machinery to improve efficiency last year.

"Further investments are being made to manufacture special value added tiles to complement the existing product range, mainly targeting the USA market," he said.

The company now has the capability to produce a wide variety of tile sizes, ranging from the 20cm x 20cm tiles to the large format 30cm x 60cm tiles.

A new plant began production at its Meepe factory in June 2011 raising capacity to 7,500 square metres a day.

"The Meepe factory continued to perform well and operated at full capacity during the year," Jayasekera said.

In 2010 there had been a 15.5 percent growth in mining and quarrying and a 9.5 percent growth in the construction sector.

"However, rising global fuel prices continued to pose challenges to the growth of the industry," Jayasekera said.

The price of LPG (liquid petroleum gas) remained volatile during most of the year, fluctuating between a low of 99.76 rupees a kilo and a high of 134.32 rupees.

"The first quarter of 2011/12 saw LPG prices rising to an all-time high of Rs.139.00 per kg and then dropping to a somewhat sustainable level at the time of writing.

Lanka Walltile group comprises of Lanka Walltile, Lanka Floortiles, Ceytea Plantation Management Limited and Parquet (Ceylon).

source - www.lbo.lk