‘Bring back Lanka Sugar under mic’

Worried workers of a state-owned, rare business success have flocked to HE Sri Lankan President’s office on 31 May bitterly complaining that after the operation has been swapped to a different Ministry from its parent, it now risks falling back to the ‘loss-making venture’ that it used to be.

“Under Minister Bathiudeen’s leadership, Lanka Sugar turned around with Rs One Billion in profits in less than a year” said Chairman of Lanka Sugar Progressive Workers Union (LSPWU) Lalith Sripal on 31 May. LSPWU’s Sripal was from Sevanagala Factory, and was leading a Lanka Sugar worker delegation to HE President’s office on the afternoon of 31 May and was speaking of the demands they submitted to HE President Maithripala Sirisena that afternoon.

“Lanka Sugar (Private) Limited has been removed from the Ministry of Industry and Commerce during the recent Cabinet reshuffle and now placed under a different Ministry. We believe this move would ruin Lanka Sugar’s progress. We believe that later on, Lanka Sugar would be re-transferred to someone else on the pretext of it “is a loss-making venture.” Under Minister Bathiudeen’s leadership however, Lanka Sugar turned around with Rs one billion in profits in less than a year. After Minister Bathiudeen took over, all the workers started receiving employee benefits too. Therefore we want Lanka Sugar to continue under Minister Bathiudeen, and to be re-gazetted under him. We handed over this demand to HE President’s office this afternoon –it was favourably received by officials in President’s office” said LSPWU’s Sripal.

Lanka Sugar (Private) Limited, a fully government-owned entity has Sevanagala and Pelwatte production units under it. Lanka Sugar was brought under the Ministry of Industry and Commerce in December 2015 from the Plantations Ministry. At the time of this transfer, Lanka Sugar was reporting a huge loss of Rs. One Billion. The losses of both Sevanagala and Pelwatte were such, there were no funds to pay for employee wages, services, raw and even material (sugar cane). Minister Bathiudeen appointed new management and Lanka Sugar proved that despite state ownership, such an enterprise can become viable through streamlined management and be a role-model for other State Owned Business Enterprises (SOBE) as well. Its net loss before tax at Rs 1.05 Bn (2015) reversed to net profit before tax of Rs 1.01 Bn (2016) and then surged to Rs 1.18 Bn in 2017. This was despite government’s new Tax on Molasses (from November 2017) depressing its Rs 1.18 Bn profits down to Rs 903 Mn. The average selling price of sugar by Lanka Sugar at Rs. 62 per Kg (2015) was increased to Rs.96 and thereafter to Rs.103 per Kg.  Ethanol, the major by-Product of Lanka Sugar, fell significantly in 2015 to a low volume of 7.3 Mn liters but increased to highest ever produced (2016) to 11.9 Mn liters. Deteriorating factories (over three decades old) were repaired for the first time. Sevanagala factory which was only crushing 850 tons of canes per day is now at 1550 tons per day while Pelawatte factory which was crushing 2000 tons of canes per day, is now at 3000.

According to reports from Lanka Sugar, the success story “included direct uplifting of the lives of staffers, farmer families, and business community including pavement hawkers in areas such as Moneragala, Buttala, Pelwatte, Wellawaya, Sevanagala and Embilitiya.”