Renuka Agri to set up new plantations

Renuka Agri Foods Limited (RAFL) is planning to set up new plantations and extend its out-grower network in the Eastern province said Managing Director, Renuka Holdings PLC, Dr. S. R. Rajiyah.

After the liberation of North East more land is available for coconut cultivation which is a vital foreign exchange earner for the country.

"Short term crops such as soya and maize can be cultivated as intercrops to maximise returns from land", he said.

Dr. Rajiyah was speaking at a ceremony at Cinnamon Lakeside on Wednesday to launch an Initial Public Offering (IPO).

The IPO is for a subscription of Rs. 270 million for 120 million shares valued at Rs. 2.25 each. The subscription for the shares will open on November 27.

The IPO was launched to finance new investments, repayment of long term borrowings and facilitate the listing of the company in the Colombo Stock Exchange.

RAFL, a subsidiary of the Renuka Holdings PLC plans to expand its activities and move into new technologies of packaging, intercrop coconut plantations and acquire its own distribution channels locally and in Europe.

Executive Director Renuka Holdings PLC, Shamindra Rajiyah said the global demand for value added coconut products has grown with the increase in emerging markets.

"Increased competition from the Far Eastern countries offering similar products at a lower price is a threat to value added coconut exports of Sri Lanka", he said.

Coconut is Sri Lanka's third largest export earner with 1.8 percent of GDP last year. The production of nuts last year was around 2.9 billion on a land extent of 400,000 hectares.

Commercial production of coconut milk, cream variants commenced in 1973 in Western Samoa. Since then the market has been growing and a study by the Asia Pacific Coconut Community revealed that from 1996 to 2006 coconut milk exports increased by 25 per cent per annum.(LF)