Hambana Petro Chemical Ltd (HPL), a firm owned by Peak Energy (Pte) Ltd of Singapore has recently signed agreements with the Sri Lanka Ports Authority (SLPA) to set up a plant to produce thermoplastic polymer resin at the Magam Ruhunupura Mahinda Rajapaksa Port (MRMR Port) in Hambantota.

Accordingly, HPL is proposing to set up a state-of-the-art Polyethylene Terepthalate (PET) Packaging Resin Plant with an annual PET Resin production capacity of 540,000 Mt or 1,500 Mt per day.

PET Resin is the raw material used in manufacturing PET Bottles and containers which is a popular packaging solution for carbonated soft drinks, water, liquor and various food/ non food packaging applications.

The Business venture agreement was signed for an initial term of 25 years and the expected total investment is US $ 137.39 million.

“Hambana Petrochemical Ltd would require to import raw materials of 453,000 Mt of Purified Terephthalic Acid, 183,600 Mt of Mono-Ethylene Glycol and 10,800 Mt of Purified Isophthalic Acid per annum.”

“As the investor is willing to export the total production, this will lead to increase the port activity approximately by 45,000 TEU’s and 180,000 Mt liquid cargo per annum and the annual turnover from this facility will be approximately US $ 1 billion annually,” SLPA said in a statement.

It further said, in addition to the increase of port activity, the proposed plant is expected to generate many direct and indirect employments during 24 months of its construction period as well as during the plant operations.

However, the main direct revenue stream for SLPA out of the business venture would be land lease and royalty schedule that would amount to US $ 100 million.

In parallel to the construction MRMR Port, SLPA received investment proposals from prospective local and foreign investors to establish industries and businesses within the port premises.

Currently, Cabinet of Ministers have approved 7 investment proposals, subsequent to the recommendations by Cabinet Appointed Negotiating Committee with the assistance of Technical Evaluation Committee.

Out of these 7 investors, India’s Shree Renuka Sugars Ltd recently signed the business venture agreement with SLPA and formed its subsidiary Lanka Sugar Refinery Company (Private) Limited, committing an investment of US $ 220 million.

Meanwhile, the other five investors— Thatta Cement (Cement Grinding Plant), Hayles Advantis Ltd (Fertilizer Bagging Plant), McLarnes Holdings Ltd (Warehousing), Agalawatta Plantation PLC (Warehousing) and ACE Distripaks (Pvt) Ltd (Warehousing) are also expected to sign the business venture agreements with SLPA shortly.