Sri Lanka’s leading agribusiness company Watawala Plantations PLC (CSE: WATA) announced that SBI Ven Holdings (Pte) Limited, the overseas private equity firm of SBI Holdings Inc., has invested USD 2 million in Watawala Dairy Farm through Watawala Dairy Limited (WDL).
The investment will further propel WATA’s dairy operations in the country and contribute to the economy by committing to the Government’s effort to promote local milk production and towards the goal of achieve self-sufficiency in milk. Furthermore, Watawala Plantations plans to utilise the investment to expand the herd (reach 1000 milking cows), further improve its infrastructure to function at optimal levels and to strengthen the upstream value chain.
The strategic venture offers SBI Ven Holdings an11% stake in Watawala Dairy Ltd. Watawala Plantations, in the meantime, will invest Rs. 296 million to settle inter-company debt and strengthen the balance sheet of WDL.
The state-of-the-art dairy farm by Watawala Dairy Limited is a Board of Investment (BOI) registered project situated in Watawala, Ginigathhena. The project commenced in March 2016 as a pilot project called ‘Lonach Farm’ with 120 cattle, three cow houses and a milking parlour. Today, the farm manages a herd of 1600 dairy cattle, where 800 are milking cows. Using an ultramodern milking parlour system, the farm currently produces around 18,000 litres of fresh milk per day and 540,000 litres per month. Annually, the farm releases 6.5 million litres of milk to the local market, which is 3.5% of the annual Sri Lankan milk production.
Commenting on their latest association with Japan’s financial giant, Watawala Plantations Chief Executive Officer Binesh Pananwala said, “At a time where the investor confidence and sentiment have been greatly affected, SBI VenHoldings’s investment on Watawala Dairy Limitedbrings in vital foreign direct investments (FDI) to Sri Lanka when it is much needed in the market and the economy. Not only this strategic investment paves a path for us to support the Government’s vision to promote local milk production and achieve self-sufficiency in milk by 2025, but it also validates our long term vision and investor-friendly corporate governance framework, helping us to build confidence and attract leading global equity firms like SBI Ven Holdings.”
WDL aims to drive sustainable production of fresh milk in Sri Lanka. The company is conscious that healthy husbandry covering sound animal health and welfare underpins high yields and quality of milk. The farm provides facilities to a healthy herd with feed supplements scientifically formulated by a global expert nutritionist with the construction of its feed mill to process the special cattle feed. Stringent hygiene farm management controls have been implemented within the farm, conforming to international standards, including adequate clean water, slurry, and effluent management systems.
Furthermore, Watawala Dairy has taken steps to provide vital support to the entire maize farming community in Sri Lanka and bolster Sri Lanka’s rural economy by managing and purchasing maize supply to the farm from harvesters. Since 2017, the company has invested a significant amount in purchasing maize from more than 40 suppliers from regions like Anuradhapura, Polonnaruwa, Ampara, Monaragala and Mahiyanganaya.