Sri Lanka is aiming to boost sugar production, leading to new companies investing capital in the sugar sector.
Sri Lankan sugar producer Galoya Plantations (Pvt) Limited (GOPL) has invested Rs 12 billion (Sri Lankan Rupee) in the construction of a new factory to increase sugarcane-crushing capacity and boost sugar production, reported Dailynews.lk.
The new factory, which is scheduled to be operational by 2025, will have the capacity to crush 4,500 metric tons of sugarcane per day.
GOPL Executive Director Danesh Abeyratne said that the company is also investing in generating electricity from sugarcane waste. The goal is to add 8.75 MW to the National Grid, of which 5 MW will power GOPL’s operations.
Abeyratne said that GOPL was established in 2007 to revive the former Hingurana Sugar Industries Limited, which had been closed since 1997. A consortium led by Brown & Company PLC and LOLC Holdings PLC now operates it successfully as a Public-Private Partnership (PPP), with a 49% ownership stake and an investment of Rs. 14 billion to date.
He also mentioned that one of the significant challenges GOPL faced when taking over the factory was rebuilding the confidence of sugarcane growers who had been repeatedly promised that their produce would be purchased by previous management but were disappointed when investors left.
One of the most significant challenges encountered during the factory takeover was rebuilding the trust of sugarcane growers who had been repeatedly disappointed by previous management’s unfulfilled promises to purchase their produce. Abeyratne noted, “We entered into forward buying agreements with them, instilling confidence, and today, they are high-income earners. Some farmers have even transitioned from paddy cultivation to sugarcane cultivation, as they are guaranteed better returns with us. We have also disbursed approximately Rs. 14 billion to farmers thus far.”
Annually, Sri Lanka imports roughly 87% of its sugar requirements, with only 13% produced domestically. GOPL plays a pivotal role in domestic sugar production, contributing around 36% and achieving its highest contribution in 2022.
