Sri Lankan government pushes ahead with four new cement plants

The Sri Lankan government has accepted a proposal put forward by the Minister of Ports and Highways to establish four cement plants adjacent to the country’s main ports. Approval has been granted to lease lands owned by harbours in Colombo, Galle and Trincomalee to set up grinding and packing plants under the ‘One Cement Factory in One Harbour’ concept.

In recent months we have reported of several developments within Sri Lanka’s cement industry. Thatta Cement has signed a Business Venture Agreement with Sri Lanka Ports Authority to establish a 100 000 tpa grinding and packing plant at Magam Ruhunupura Mahinda Rajapaksa Port. Meanwhile, Holcim Lanka is set to more than double its current grinding capacity at the Galle plant, construct a new terminal at Trincomalee and upgrade operations in Puttalam. Tokyo Cement has established a new subsidiary to produce cement together with other building materials at an investment of Rs.8 billion, and there were reports of a US$75 million investment in a new plant in Jaffna by a Nepalese billionaire. It is not clear whether some of these projects are included in the government’s proposal or whether they are separate agreements.

Such interest in the Sri Lankan market comes at a time when the country is on track for growth following the end of its decades-long civil war. Earlier this year we reported that cement demand is currently running at 4% above last year’s figure, with some areas experiencing an 8% year-on-year increase.

Written by Katherine Guenioui