Monday, October 3, 2011

Pelwatte Chief implores blue chips to invest in milk, sugar

Says self sufficiency could save Rs. 70 billion annually
By Ravi Ladduwahetty

Chairman of Pelwatte Diaries and Director Pelwatte Sugar, Ariyaseela Wickremanayake yesterday implored blue chips to invest in sugarcane and milk industries, claiming that self sufficiency in both would lead to saving Rs. 70 billion annually spent on imports.

"This is an absurd situation where this country is spending US$ 300 million (over Rs. 30 billion) on importing milk powder and a further US$ 400 million (over Rs. 40 billion) on importing sugar, and this could be saved if efforts are made to reach self sufficiency in both which would be instrumental in saving US$ 700 million or Rs. 70 billion," he told The Island Financial Review yesterday.

Commenting on the milk industry, he said that all that has to be done would be for six top blue chips to invest in six milk producing factories in the districts of Trincomalee, Jaffna Anuradhapura and Polonnaruwa where the milk could be collected from farmers on the out-grower basis which will add 100% value in this country .

This is vital in the context of the deficit of imports over exports exceeding gradually where it was US$ 2.5 billion in 2009, US$ 5.5 billion in 2010 and the projected figure for 2011 is expected to be in the region of US$ 10-12 billion. This is where blue chip corporates should be investing doing instead of only investing overseas, he quipped.

In a startling revelation, he also said that this country had the cattle population of 1.5 million which could lead to self sufficiency but the drawback was that they were not milked by farmers due to the imported milk being offered cheaper.

This is absurd where New Zealand dumps milk here which is subsidized by the Government and sold at Rs. 30 per litre where the farmer could produce it at Rs. 50, but the heart of the matter is that the price of a litre of the same milk in New Zealand is the equivalent of Rs. 390. When the Government should be subsidizing the local milk farmer, it is subsidizing the Kiwi milk farmer which is economic terrorism, he said in indignation.

He also said that investments by corporates should also be in the sugarcane industry where six companies could see Sri Lanka through towards self sufficiency. "Sri Lanka produces a mere 15% of the national sugar requirement at present which originate from Pelwatte ( 10%) and Sevanagala ( 5%) .

What is also striking is that sugarcane is a grass and which grows anywhere in Sri Lanka and could be cultivated in any part of the country which means that factories could be established in any part of the country including the North and the East, he pointed out.

Each of the sugar cane factories would give direct and indirect employment to 175,000 people which means that six factories would could provide employment to over a million people.

As reported earlier in The Financial Review, Pelwatte Diaries is planning to raise around Rs. 500 million through an IPO soon
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