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Sunday, 2 May 2010

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Ceylon Steel Corp invests $ 18m on rolling mill

Ceylon Steel Corporation Ltd (formally known as CHICO) will modernize the plant operations investing $ 18 million with a state-of-the-art rolling mill, the first of its kind in South Asia.

The plant will be operational by the third quarter of 2011 producing high quality QTB rebar used in the construction industry.

Executive Director of Ceylon Steel Corporation Ltd., Dammika Lokuwithana said that they do not have any plans for exporting raw materials as the cost is high but we want to give the highest quality product to the domestic consumers.

When asked whether the Onyx Group has any plans to venture into other areas of business he said not in the immediate future.

Ceylon Steel Corporation Ltd., the largest producer of steel under the brand name LANWA was acquired by UAE based Onyx Group during the latter part of 2009 and since then it has been managed under the chairmanship of Nandana Jayadewa Lokuwithana who is a Sri Lankan.

Business Development Manager Onyx Group Thomas Zachariah said that Ceylon Steel Corporation Ltd have joined hands with the world leader in steel plant technology Danieli MORGARDSHAMMAR of Italy to instal the state-of-the-art rolling mill.

This will help the company produce 250,000 tons of steel products per annum and the enhanced capacity will cater to the increasing demand in the infrastructure and housing construction sectors.

He said, that the machinery and technology used by CHICO was old. Therefore, they were producing a limited number of products which were of quality and complying to environmental standards.

‘The plan of our company is to upgrade the quality and quantity while maintaining all environmental standards. Once the modern mill is operational we will be able to save energy which will amount to about 10-15% of the power cost.

Once the new plant is operational we will be able to give the consumer a large range of products at an economical price.

Zachariah said that they invested $ 38 million in the first phase which included operational expenses as well. He said that the Ceylon Steel Corporation Ltd is still running at a loss and it will take another 2-3 years to turn it to a profitable venture.

He said that from last week the name Ceylon Steel Corporation Ltd is back as a Sri Lankan company managed by Sri Lankans for Sri Lankans.

He said that though Onyx Group was looking for an opportunity to invest in Sri Lanka for the last four years it was made possible due to Mahinda Chintana initiated by President Mahinda Rajapaksa whose vision is to make Sri Lanka self sufficient. (SG)

 

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