Packing plant to be launched this year:

KKS Cement Factory to resume operations

By L.S. Ananda KANNANGARA

The Kankesanthurei Cement Factory, the oldest in the country was set up in 1950 by the then Industries Minister G.G. Ponnambalam.

The factory was destroyed by the LTTE when it was manufacturing the best quality "Kankesen" cement in Sri Lanka.

The factory will resume operation before the end of this year under the program to revive State ventures, said State Resources and Enterprise Development Ministry Secretary Dr. Willy Gamage.

The Sunday Observer interviewed the Secretary and Sri Lanka Cement Corporation (SLCC) Chairman S.J. Paranagama about the progress of the Kankesanthurei cement factory.

Excerpts of the interview:

SLCC Chairman:

Q: Kankesanthurei port is a natural harbour where there were number of ventures including the cement factory until 1990. What were other ventures?

A: The Kankesanthurei port is of strategic importance. A power plant and the Harbour-view hotel were set up for the cement factory. The hotel was developed as a highly popular tourist location. The power plant supplied the excess power to the Jaffna peninsula. It was however a complete disaster when the LTTE destroyed the factory in 1990.

Ministry Secretary Dr. Willy Gamage.	Chairman SLCC S.J. Paranagama

Q: LTTE terrorism was eradicated on 2009 May. During the last two years what was the progress of the Cement Corporation?

A: The factory and the machinery were damaged. Later it was decided to set up a yard to make concrete electricity and telecom posts for development work in the area. Concrete floor tiles were another product.

Q: At present you are importing and selling "Lanka Cement". How is the market for cement today?

A: Cement is essential for the construction industry growing at a phenomenal rate due to post-conflict growth trajectory in the country.

The demand for cement is rapidly increasing due to new infrastructure projects launched by the government and the private sector in the conflict-affected areas in the North and the East.

The new housing development program also needs cement in large quantities. As a State Corporation we have to supply cement to consumers at a reasonable price and also to look after the interest of the employees who are there for the last number of years.

That is the reason why the corporation entered the cement business by importing and marketing cement bags under the brand name 'Lanka Cement'.

Q: Do you have a blue print to expand operations of the Corporation?

A: Two projects are in the pipeline. One is to set up a cement packing plant which will be launched shortly.

The packing plant costing Rs. 800 million has the capacity to pack 2,600 bags per hour.

The annual production will be 249,600 MT. We expect an annual net income of Rs. 90 million from the packing plant.

The second project - the recommissioning of the cement manufacturing plant will restore the past glory of the corporation.

Raw materials such as Limestone and cement clay deposits are found in Jaffna, Mannar and Puttalam districts. The German scientists who had worked earlier in the corporation had acclaimed the quality of such raw materials.

State Resources and Enterprise Development Ministry Secretary Dr. Willy Gamage

Q: The KKS cement factory is still non-operational despite several such institutions being revived by your ministry. Your comments?

A: Some national ventures faced difficult situations as a result of the privatisation policy launched by J.R. Jayewardene government in 1977.

We had three major cement factories in Galle, Puttalam and Kankesanthurei. The Galle and Puttalam factories were sold to the private sector at a very low price.

The Kankesanthurei factory could not be sold due to LTTE terrorism in the North.

The government had paid the salaries of the KKS Cement Corporation employees. Today the Sri Lanka Cement Corporation has emerged as a profitable venture earning over Rs. 10 million in 2010, and 2011. The packaging plant and cement manufacturing will also begin this year.

Q: Manufacturing cement was a pioneer industry in the country. A large quantity of cement is imported. Your comment?

A: The local cement market has now hit a target of 6.2 million metric tonnes a year, some industry experts believe. The market is growing at the rate of 10 percent per annum. There is large scope for the cement manufacturing industry in the country.