Raigam Salterns offers 80 million ordinary shares to raise Rs. 200 m

Dr. Ravi Liyanage

Raigam Wayamba Salterns (Pvt) Ltd. a fully owned subsidiary of the Kingdom of Raigam will go for an Initial Public Offering (IPO) during the first quarter of this year.

The final approvals from the Colombo Stock Exchange (CSE) are expected in the coming weeks said Chairman Dr. Ravi Liyanage. The IPO will offer 80 million ordinary shares to raise Rs. 200 million at Rs. 2.50 per share.

Managing Director Ganaka Amarasinghe said that they were planning the IPO for two years and this is the correct time.

Dr. Liyanage said that the money raised from the IPO will be used to finance capital expenditure requirements at the salterns in Vanathavilluwa and Palavi with an investment of Rs. 72 million as equity or debt in Southern salt company as well as enhance the infrastructure of the integrated logistic system which includes transportation, IT, research and development as well as distribution.

Under this project the saltern in Vanathavilluwa, Puttalam will be developed with reservoirs, deep tanks crystallisation beds and collection, transportation and storage facilities on a state owned 325 acre land.

The company has taken the land from the government on a long term lease and is awaiting government approval.

Completing the final phase of the salaterns is being developed in 110 acres of land owned by the company in Palavi.

The company is also planning to invest in increasing the capacity of the existing state-of-the-art salt refinery and to upgrade the plant by introducing a vacuum evaporation plant which will produce pure vacuum dried salt with no impurities at all.

Salt being processed

Completing the final phase of development at the natural saltern in Tangalle establishing a modern salt refinery factory at the Bata Atha Industrial zone will also use the funds raised by the IPO. Dr. Liyanage said that the turnover for 2008/09 was Rs. 382 million while the profit had been Rs. 172 million. In the previous year the turnover was Rs. 157 million and profit was Rs. 12 million. He said that Sri Lanka is one of the few countries surrounded by the ocean with dry weather which is ideal to manufacture salt which could be obtained at no cost.

But unfortunately the country imported most of its requirements until recently. The Raigam group of companies started test market operations by importing salt and as there was a great potential in the industry the company installed the first state-of-the-art salt refinery using Krebs Swiss solex technology at Palavi, Puttalam at the RWSL.

Meanwhile, the parent company acquired a reasonable stake of the Puttalam Salt Ltd. by purchasing the shares held by the Bank of Ceylon.

Now the company is planning to establish salterns in close proximity to the markets around the country as cost of transportation is very high.

The new investments will focus around the salt business with the objective of becoming the number one company for salt in the country. (SG)