Lanka IOC Ltd. is nearing the completion of work on Sri Lanka’s first grease manufacturing plant in Trincomalee, a move which will help save valuable foreign exchange as at present the requirement is met entirely via imports.
The company began construction work on the ground breaking venture early this year and is estimated to have invested Rs. 200 million. The plant’s capacity of 3,000 tons is capable of meeting the entire market demand in Sri Lanka.
“The works for the proposed grease plant in Trincomalee are already in progress and is expected to be completed by the end of 2020. This strategic investment will benefit the country as it’ll generate foreign exchange savings by manufacturing the requirement locally,” LIOC Chairman Ranjan Kumar Mohapatra told shareholders in the company’s Annual Report for FY20 released last week.
He said that the infrastructure development which is proposed will certainly augur well for LIOC, with increased demand for petroleum products.
LIOC Managing Director Manoj Gupta said the commissioning of the grease plant is “in line with the Government’s policy for import substitution,” as the country’s grease product requirement is met from imports.
“The new grease plant provides a cost advantage against imported grease, thus offering immense prospects of expanding our sales volumes. This would also conserve foreign exchange whilst creating employment opportunities and generating revenue to the Government through value addition,” Gupta added in his review.
During the year under review, the company achieved a profit-after-tax of Rs. 422 million, which reflects a moderate gain of around 5% compared to Rs. 403 million in FY19. The company’s net profit-before-tax increased significantly during the year to Rs. 599 million from Rs. 331 million, driven by the strategic focus on diversifying its operations from the auto-fuel segment to the high-yielding bunkering, lubricant and bitumen segments that drove growth in both business volumes and margins.
(FT)