Lankem grants Rs.300mn corporate guarantee to SunAgro

Lankem Ceylon PLC has granted a Rs.300 million corporate guarantee on behalf of its subsidiary SunAgro LifeScience.
In a filing to the Colombo Stock Exchange, Lankem said the corporate guarantee, a security for banking facilities obtained by SunAgro LifeScience, was executed on May 10.
As of March 31, 2023, Lankem had issued Rs.789.4 million worth of corporate guarantees and letters of comfort for the borrowings obtained by SunAgro LifeScience. 
In 2022, SunAgro LifeScience achieved a revenue growth of 87 percent, along with a divisional profit growth exceeding 200 percent when compared to the previous financial year, driven by the revocation of the agro chemical ban and the resulting scarcity of agrochemicals during the early half of the year.

However, as the year progressed, the higher prices of agro chemicals and influx of illegal and substandard pesticides led to a decrease in demand for legal pesticides. Additionally, the revocation of the ban created a more competitive market environment, which negatively impacted the efforts to achieve the budgeted turnover.
SunAgro LifeScience was planning a new product to the market, which would cater specifically to the insecticide segment, targeting the control of BPH in paddy. The product was expected to contribute significantly to the company’s revenue growth. To enhance sales operational efficiency by leveraging the power of technology, sales force automation was also on the cards. 
The company was also looking towards revamping the fumigation operations while replacing the currently available technology with newer and more efficient technology.
At yesterday’s market closure, Lankem’s share price was down by 70 cent or one percent to Rs.69 per a share.