Great Success Story of Converting Loss Incurring Lanka Sugar into Rs 1 Billion Profit Making State Enterprise

Minister of Industry and Commerce Rishad Bathiudeen tabling his Committee Stage (budget) speech in the Parliament on 2nd December said ,  he was  pleased to inform the House that for the first time, Lanka Sugar Company (Private) Limited coming under his Ministry, which was incurring 1 billion  loss last year  has  now earned 1 billion profit by third quarter of 2016 . As a result of Industry and Commerce Minister’s initiatives, Lanka Sugar has now emerged with marvellous  financial performance.

Minister believed that it was a great success story among state owned business enterprises.  He praised  Hon Finance Minister’s proposals for sugar industry development in this budget such as imposing a minimum price of Rs. 5,000 per Metric Tonne for sugarcane with effect from 1st January 2017, calling local and foreign investors to invest in Sugar Mills in Monaragala, Batticaloa, Kilinochchi and Ampara districts with a minimum plant size of 2,000 Tonnes etc.”

It also plans to establish Sugar Cane Juice Extractor Factory and 2000 Hectare Sugar Cane Plantation in Vavuniya district Settikulam Division. A sugar pricing formula based on incentive to be competitive with any commercial crop in Sri Lanka will also be introduced.

Upto third quarter (3Q) of 2016, Lanka Sugar’s Pelwatte and Sevanagala facilities cultivated 13,164 hectares of sugar cane (an increase of 7.6% compared to the entire 2015), harvesting 561,067 MT of cane resulting in 44,059 MT of sugar output (an increase of 2.5% from Y2015). According to Company financials, the Company reported a net loss before tax of Rs 1,030 Million in FY 2015 but reported a stunning turn-around “net profit before tax” of Rs 1,018 Million, as of third quarter of FY 2016.

Rishad proved his mettle  by converting  a loss incurring state enterprise into a profit making enterprise within a  short period.  It shows  other state enterprises  can also be made profitable  if correct people  are placed in charge of those enterprises.

‘’I can go one way , I have not got a reverse gear ‘’ –  Tony Blair 1953