Government gives land to defunct paper factory to restart operations as PPP

The Cabinet nod has been given to transfer over 111 acres of land to State-owned National Paper Company Limited on a 30-year lease to restart operations of the country’s second oldest paper mill Embilipitiya paper factory as a joint venture with Korean Spa Packaging (Pvt.) Limited.

Industries Minister Wimal Weerawansa sought the approval of the Cabinet of Ministers on Monday to transfer a land in extent of 111 acres 02 roods and 33 perches to National Paper Company Limited on a long term lease basis to re-initiate production at the Embilipitiya paper mill as a public-private partnership (PPP). 

Although, the land and the buildings of the factory in which the Embilipitiya paper factory was situated had been approved to be given to Korean Spa Packaging (Pvt.) Limited for 30 years followed by a decision of the Cabinet, the decision could not be implemented since no actions had been taken to transfer the said land to National Paper Company Limited properly from the Mahaweli Authority.

Embilipitiya paper factory, which was founded in 1976 was the second oldest paper mill in the country, and it was privatized in 2011 as it struggled to continue operations following the removal of 35 percent  tariff on the importation of paper.

Minister Weerawansa recently revealed that the government had reached an agreement with Korean Spa Packaging to revive the mill under a PPP arrangement instead of disposing the factory entirely.

Korean Spa Packaging (Pvt.) Limited, a part of Pandura-based Anunine Holdings, is a leading player in corrugated packaging and polyethylene industries in the country.