Sri Lankan state-owned dairy company Milco, is yet to operationalise a facility with an investment of Rs. 18 billion in Badalgama, of which 95% of infrastructure had been completed in 2022, Milco (Pvt) Ltd. Chairperson G. V. H. Gotabhaya told the media yesterday (18).
“The construction of the Badalgama factory by Milco underwent various infrastructure updates between 2015 and 2022. From 12 April 2022, further construction had been stopped. More than 95% of the machinery has been installed, only a few more installations need to take place,” Gotabhaya said, speaking to the media.
“For this regard, the Sri Lankan government has so far spent Rs. 18 billion,” Gotabhaya added, explaining the total investment made for the construction of the facility. “Even though Rs. 18 billion has been spent on this investment, not a drop or litre of milk has been processed in this plant.”
According to Gotabhaya, the total estimated valuation of the plant is € 63.9 million.
“This was facilitated through a loan taken out by the Sri Lankan government from the HSBC bank,” Gotabhaya said.
In February of 2022, Ada Derana reported that the Sri Lankan government received a € 600 million investment into the construction of a dairy factory in Badalgama by the Danish Government. At the time of announcement, it was expected that the commencement of operations were to take place in September, of the same year.
“If we take the infrastructure as a whole, 95% of the infrastructure has been completed, from April 2022 onwards. But since then, this facility has been overgrown with neglect. The machinery and equipment, and the power lines have been damaged by rats, so have termites taken hold,” Gotabhaya said, describing the current state of the facility.
According to Gotabhaya, the proposed facility is capable of processing 200,000 litres of milk per day, with the added capacity potential of increasing productive output to process 400,000 litres of milk.
“On average for a day, the facility has the capacity of producing 60,000 litres of pasteurised milk. In ultra-high temperature (UHT) processing, the facility is capable of processing 70,000 litres of milk in three ranges of tetrapacks, going by 250 ml and 180 ml,” he added, explaining the varieties of products that could be produced daily.
Gotabhaya had previously told media this year that the construction of the facility in Badalgama was halted in 2022 due to financial constraints, and that the current government was in the process of recommencing the construction towards completion this year.
Utilising the European technology installed within the plant, he said that Milco looked forward to developing its own capacity to fund its own future investment requirements, and also launch three new products.
The previous government had also expressed the need to operationalise the facility to scale milk production.