A new business venture, Thatta Cement Company Ltd. yesterday signed a business venture agreement with the Sri Lanka Ports Authority to construct a cement grinding and bagging plant at Magam Ruhunupura Mahinda Rajapaksa Port (MRMRP).
Thatta Cement Company Ltd. is the local subsidiary company of Thatta Cement Company Ltd. in Pakistan. The proposed plant will employ a closed circuit cement grinding mill, cement and packing plant for cement manufacture and dispatch. The total investment is concluded as US$ 15.15 million to be incurred during the first five years of operation.
This business venture agreement has been signed for a term of 25 years. At the commencement, minimum guaranteed production volume of the plant will be 100,000 Mt/year and it will be increased gradually up to 1,000,000 Mt/year at the end of the first decade.
Land allocation for this business venture will be four hectares and that will generate minimum revenue of US$ 9.9 million over the 25 years via a land lease agreement. In addition to that by royalty payment SLPA will earn US$ 65.5 million over 25 years. SLPA will achieve more benefits via this project as it generates a number of vessel movement at the port. Since Thatta Cement willing to employ more than 150 Sri Lankan, the project is worth to our country from that view too.
The business venture agreement in this regard was signed between SLPA Chairman Dr. Priyath B. Wickrama, SLPA Managing Director Capt. Nihal Keppetipola and Thatta Cement Company Ltd. Karachi, Pakistan, CEO and Vice Chairman Muhammad Fazlullah Shariff and Thatta Cement Company Ltd. Karachi, Pakistan, Director Khawaja Mohammad Salman Younis.
Speaking at the occasion Minister of Port and Highways (Project) Rohitha Abegunawardhena stated that the US$ 650 million investments by the foreign investors at the very first stage of MRMRP had further strengthen the confidence of global industrial and commercial giants of the success of this innovative project in southern Sri Lanka.
“The port in Hambantota is a major economic centre that has ensured to bring socioeconomic prosperity from the south to whole Sri Lanka in the future,” he said.
Dr. Wickrama stated that the effective intervention of President Mahinda Rajapaksa to lure the international community to commence business in sustainably peaceful environs in the country has brought about the dawn of an era of prosperity for all Sri Lankans.
“At the second stage of the investment process at MRMRP, 11 more investors will arrive at the port with investments of nearly US$ 1.1 billion, which would carry the total investment by investors at MRMRP up to US$ 1.8 billion. The port in future will play a key role in the Indian sub continent to enrich the industries in the region,” he added.
Expressing confidence in the ongoing post-war developments in the country to commence convenient commercial ventures, Shariff said that further support by the present Government and authorities would be an added strength to successfully develop these industries in Sri Lanka to strengthen socioeconomic ties.
In parallel to the construction of MRMRP in Hambantota, the SLPA received investment proposals from prospective local and foreign investors to establish industries and businesses within the port premises.
Currently, Cabinet has approved seven investment proposals, subsequent to the recommendations by Cabinet Appointed Negotiating Committee with the assistance of the Technical Evaluation Committee. Out of these eight investors, two investors have already signed the usiness venture agreements.
Lanka Sugar Refinery Company Ltd. and Hambana Petro Chemical Ltd. also recently signed their business venture agreements with SLPA to start construction work at MRMRP. With the latest additions, the total investment of all these companies is nearly US$ 650 million and the total revenue from the same is US$ 165.03 million over a 25-year period.
The aforesaid revenue has been received from the land lease and royalty payment alone, whereas there are many other benefits such as increased vessel movements and job opportunities arise from these industries. Hence this industrial zone and the free port facility can interact effectively on mutual basis.
After the end of 30 years of civil war, Sri Lanka is currently being rapidly developed, whilst construction of infrastructure, hotels, high-rise office and apartment complexes, hospitals and new harbours as well as new airports have become apparent signs of oncoming socioeconomic prosperity.
One of the most important materials for all of these projects is cement. By 2008 Sri Lanka was consuming more than 3.5 million Mt of cement per year and it was increasing at the rate of more than 8% per year at that time. However, local production is less than half of the demand requirement in the country.
Minister of Investment and Promotions Faiz Musthafa, Secretary of the Ministry of Port and Highways R.W.R. Pemasiri, Additional Secretary (Ports) of the Ministry of Port and Highways Anuradha Wijekoon, Urban Development Authority Chairman Janaka Kurukulasooriya, SLPA Vice Chairman Indika Karunajeewa, SLPA Managing Director Capt. Nihal Keppetipola, SLPA Additional Managing Director Norman Weerarathne, SLPA Executive Director Dr. Sanjaya Sedara Senarath, SLPA Director (Logistics) D.W. Atapattu, SLPA Director (Finance) Shirani Wanniarachchi, SLPA Director (Technical) A.D.T. Gunasekara, SLPA Director (Security) Major General Sanath Karunarathne, Chief Engineer (Southern Port Dev.) Agil Hewageegana, Deputy Chief Manager (Communication and Public Relations) Nalin Aponso, Consultant and the Local Partner F. Ibrahim of Thatta Cement Ltd. and Nasim Beg of the Board of Directors of Thatta Cement Company Ltd. in Pakistan were also present at the occasion.