Four foreign firms interested in Lanka Cement

Four foreign firms interested in Lanka Cement
Published: 09 February 2009

Four foreign firms have expressed interest for a strategic alliance with Kankesanthurai (KKS) Cement Factory Ltd, a subsidiary of Lanka Cement PLC (LC), according to a senior LC official.

"Ramco India, the Birla Group India, Shanghi Cement India and Cement Italia have expressed interest for a strategic deal with KKS plant," the LC official told The Sunday Times FT. He said Ramco and Cement Italia were taken to the plant about two months ago and Ramco India was very interested in investing in the plant.

He said what LC is interested in is how much these firms can invest for repairs. In June last year, Holcim Lanka said it made an investment proposal to the company to restart production at KKS or build a new one.

The LC official said Holcim had quoted Rs100 million for repairs in the plant. “This proposal was submitted to the Ministry of Industrial Development and is still being reviewed,” he said. The company similar to its parent LC, comes under the Ministry of Industrial Development.

KKS has more than 1,000 acres of limestone, the basic raw material for cement manufacture. It also owns a 250,000tpa capacity kiln that has been non-operational for more than a decade. Another LC official said the LC management is more interested in technical and financial corporation with a foreign party rather than a joint venture.

"This is because LC can retain its profits in the country," this official said. According to him, LC so far has recorded about Rs. 50 million in profit. A stock analyst said that with the military conflict in the north seemingly coming to an end LC has attracted buying for the past few weeks.

“This was on the news that a few foreign firms have shown interest in investing in the cement plant in KKS in the Jaffna peninsula,” he said, adding that moreover the expectation is high that the company would perform well with the possible construction boom in the north, once the war comes to an end.