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Sunday, 10 April 2016

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Watawala Plantations diversifies with US$ 11.5 m dairy operation

Watawala Plantations PLC, a member of the diversified Sunshine Holdings conglomerate and one of Sri Lanka's largest Regional Plantation Companies (RPCs), hopes to set up a mega commercial dairy operation, with a initial funding commitment of USD 11.5 million.

Of this funding, a majority (of USD 4.3 million) has been committed by Watawala Plantations PLC while a USD 3 million share represents Foreign Direct Investment (FDI) by Duxton Asset Management, a leading Singapore-based international and boutique asset manager.

This is the first-ever agricultural FDI in Sri Lanka by Duxton Asset Management, which manages and advises assets of approximately USD 690 million, of which USD 460 million are in agricultural investments.

The new Board of Investment (BOI) approved venture, Watawala Dairy Ltd., is a subsidiary of Watawala Plantations PLC.

With the new investments, once it is in full operation, Watawala Dairy will expand its herd to 1,000 dairy cattle and is forecast to generate over Rs. 1 billion in revenue from the fourth year of operation.

Thereafter, it sees significant potential for further expansion as well. The state-of-the-art Watawala Dairy farm will use the expertise of two South African veterans - who have a combined experience of over 40 years in the dairy industry.

The present small-scale dairy farm operated by Watawala Plantations - consisting of 75 dairy cattle and generating annual sales of Rs. 30 million - has been brought under Watawala Dairy Ltd.

The agreement to set up Watawala Dairy Ltd. was recently signed by Sunshine Holdings PLC Group Managing Director, Vish Govindasamy and by CIO, Duxton Asset Management,Desmond Sheehy.

Sunshine Holdings, Group Managing Director, Govindasamy said, "By attracting substantial Foreign Direct Investment and contributing to the nation's vision of achieving self-sufficiency in fresh milk production, Watawala Plantations and Sunshine Holdings take pleasure in reiterating our continuous commitment to nation-building industries."

Duxton Asset Management, CIO, Desmond Sheehy said, "We see significant potential in Sri Lanka, particularly in the agriculture and dairy industry of the country, and therefore take pleasure in making this our first of hopefully many agricultural investments in Sri Lanka."

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