KKS cement works re-opening delayed, Sri Lanka

KKS cement works re-opening delayed, Sri Lanka
Published: 01 December 2008

Plans to reopen the Kankesanthurai Cement Factory have been delayed by two months due to security reasons.

Reliable sources told The Nation that due to the on-going offensive, the planned US$100m project would be stalled till at least February. “There are concerns that it could become a target under the current circumstances,” sources said, adding that so far the existing factory was in good condition.

Lanka Cement Ltd. under the Industrial Development Ministry was to begin renovations to the factory in December, and it was to be declared open by around March. However, these plans have been held back. It is estimated that Rs.10 million would be needed for the initial tune-ups needed for the machinery and personnel before it can commence production. Following this, the Ministry plans to sign a joint venture with a foreign company to produce cement. The project has already garnered cabinet approval.

“We have been given proposals by several companies including Ramco of India, Italian Cement and Pakistan Cement. But we are still awaiting more proposals from other prospective investors. It is too early to comment on a possible investor, but we are looking for a company that would ideally funnel in around US$100 million for a full expansion,” he said. He added that a feasibility study has already been done by Lanka Cement.

All prospective investors have been requested to present a feasibility study and officials are adamant that they would ensure correct procedure. “If a company wants to sell raw material or they have other plans, then they have been told to mention it in the feasibility study,” he remarked.

Once the company is in full flow, it is expected to manufacture 3,200tpd of cement and employ a workforce of over 3,500 drawn mostly from cleared areas.

The company has also started importing cement using its own ship saving the government around Rs. 20 million. The ship, which is the first such vessel to be privately owned by a local cement company, had been procured without a deposit using personal contacts.