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Two
ministries in tug-o-war over KKS cement grab
Two ministries are playing tug-o-war to grab a lucrative US$
100 million deal to re-open the Kankesanthurai Cement Factory.
The Industrial Development Ministry (IDM) and Construction
and Engineering Services Ministry (CESM) are both trying to
get approval for two Indian cement companies, to invest in
the Kankesanthurai cement plant. IDM is leaning towards Ramco
Group, which has Madras Cements Ltd., as an investment possibility,
while CESM has multi-national conglomerate Aditya Birla Group
in its corner. Both ministries had completed feasibility studies,
but IDM had moved ahead in the game by gaining cabinet approval,
while CESM was still considering taking that step. However,
CESM had held discussions with Birla Group representatives
and government officials over the deal before IDM had snatched
the carpet from under them and insisted that the deal was
exclusively theirs.
Lanka
Cement Chairman and Sri Lanka Cement Corporation Director
S.J. Paranagama told The Bottom Line that IDM would not budge
over the deal. He pointed out that this was a plan that had
received cabinet approval and therefore, could not be interfered
with by other parties.
“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.
All prospective investors have been requested to present a
feasibility study and Paranagama was adamant that they would
ensure correct procedure. “If the 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
adding that earlier plans to begin repairs on the cement factory
in December were still on track. Once the company is in full
flow, it is expected to manufacture 3,200 metric tonnes of
cement per day and employ a workforce of over 3,500, drawn
mostly from cleared areas.
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