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sweet taste of success for Sugar Industry

Daily News 2020-06-30 05:38:26

The Government under the leadership of President Gotabaya Rajapaksa is taking measures with firm determination to revive the country’s economy. The Government firmly believes that the national economy has to be strengthened by giving priority to the agricultural sector and attention has also been paid to develop indigenous industries and other production sectors.

As pledged in ‘Vistas of Prosperity and Splendour - Saubhagyaye Dekma’ policy statement, the way has been paved for a people-centric production economy. Accordingly, the current challenge before the industrialists is to win the domestic and global market.

Encouraging imports is not the policy of the present Government. So, various measures have already been taken to promote local produce through the development of the field of agriculture and the imposition of bans on the importation of non-essential items. In this scenario, the sugar industry has also been identified as a key industry that needs to be developed in order to save the substantial outflow of foreign exchange to import sugar.

Chairman of Lanka Sugar Company Ltd.  Janaka Nimalchandra

“Our policy position is that the country’s sugar needs must be met with domestically produced sugar. This would enable us to save the substantial outflow of foreign exchange to import sugar. The extent of land earmarked for cultivation of sugarcane will be expanded and high-yielding sugar cane varieties will be introduced. Immediate action will be taken to reopen Kanthale and other sugar factories and the private sector will be given incentives to commence new sugar factories. Needs of sugarcane cultivation firms, in terms of water and technical knowledge will be provided and action taken to fulfil capital needs.” (Vistas of Prosperity and Splendour –National Policy Framework)

Sri Lanka has a vast potential for the development of the sugarcane industry in terms of the availability of suitable land, soil, climatic conditions, stable market and the required technical know-how. But, unfortunately, only 10 percent of the total sugar requirement of the country is locally produced and the balance requirement of 90 percent is imported from countries such as India and Brazil.

Through the development of the sugarcane and sugar industry, Sri Lanka would be able to save a large amount of foreign exchange. Taking this matter into consideration, the Government’s attention has been focused to take appropriate measures to develop the sugarcane and sugar industry, enabling both growers and the millers engaged in the sugarcane industry to enhance their income.

Lanka Sugar Company Ltd. (LSCPL) established in 2012 to manage Pelwatte and Sevenagla sugar manufacturing factories with the intention of making Sri Lanka self-sufficient in sugar is a fully Government-owned company running under the purview of the Ministry of Plantation Industries and Export Agriculture.

The new Chairman of LSCPL Janaka Nimalchandra told the Daily News that the sugar industry needs drastic changes in order to bring it to a correct path for better contribution to the country’s economic development.

According to the Chairman, Sri Lanka today imports around 600,000 MTs of sugar, spending over Rs. 30 billion per annum which is second only to the import of oil. The annual sugar production of the country is around 55,000 MTs and Sevenagala and Pelwatte produce around 50,000 MTs of sugar.

Nimalchandra further said that the golden brown sugar is the best quality sugar produced locally and has a huge demand in the market. Around 6,000 workers are currently working at two factories and 15,000 others, including sugarcane farmers, directly depend on these two factories. Apart from that, another 30,000 families indirectly depend on the industry as service providers.

Pelwatte sugar manufacturing factory

“When I took over as the Chairman, LSCPL had incurred a loss of more than Rs 1.4 billion. LSCPL was highly neglected and mismanaged during the previous regime since they wanted to privatize Sevenagala and Pelwatte factories by showing them as loss-making institutions. Sugarcane farmers had also been discouraged by not giving a proper price for their produce. So, I encouraged both the workers and farmers by making them economically stable,” Chairman LSCPL Nimalchandra said.

“We have also taken measures to absorb nearly 2,000 workers who worked for more than 20 years on contract and casual basis into the permanent cadre. We also added a part of the Cost of Living allowance which was granted during the tenure of President Mahinda Rajapaksa but not paid by the previous administration. Also, we managed to give festival bonuses for both the employees and farmers. Not only that, we increased the price we pay to our farmers for their sugarcane supplies by Rs. 500 per metric tonne. We have also come into agreements with relevant authorities to directly supply sugar produced at the two factories to Lanka Sathosa and Co-operative shops islandwide,” he said.

The Chairman is confident in making Sevenagala and Pelwatte factories profitable institutions and meeting 15 percent of the country’s sugar demand by the end of this year and 25 percent of total sugar demand within the next five years.

Ethanol Production

Ethanol is produced by the fermentation of molasses which is a byproduct of the sugar-manufacturing process. The importation of ethanol has been a controversial issue for many years. President Gotabaya Rajapaksa has taken a decision to ban the import of ethanol to Sri Lanka.

Local liquor producers say that the local production of ethanol is insufficient for the market and an import ban will only encourage the smuggling of ethanol. Refuting the allegations, LSCPL Chairman Nimalchandra said that Sevenagala and Pelwatte factories have succeeded in meeting the national demand of ethanol.

“Certain liquor manufacturers are attempting to discourage us by making those false allegations. But the Government will not remove the ban on ethanol considering the baseless facts highlighted by those businessmen,” he said.

Sevenagala sugar manufacturing factory

He also refuted the allegations levelled by various groups claiming that the ethanol produced at these factories does not meet the required quality standards. Workers of both factories worked throughout the curfew period in order to supply ethanol without any disruption.

He further stated that a large stock of ethanol had been imported by certain individuals regardless of the ban and those stocks are currently stored at the port under the custody of the Department of Customs.

“Certain liquor manufacturers are still depending on black-market ethanol forcing the Government to lift the ban. They really want to continue the mafia. President Gotabaya Rajapaksa has clearly stated that he will not withdraw the decision due to pressure from any businessman,” he said.