E.B. Creasy subsidiary Lanka SSL invests Rs.1.3bn in new GI wire manufacturing plant

From left: E.B. Creasy and Company Chairman/MD S.D.R. Arupragasam and Lanka Special Steels Director/CEO Pravin De Silva launch Lanka SSL logo

By Nishel Fernando

Lanka Special Steels Limited (Lanka SSL), a subsidiary of E.B. Creasy & Co. PLC and the market leader in galvanised steel (GI) wire, this week launched the operations of its state-of-the-art manufacturing facility located in Lanka Industrial Estate in Sapugaskanda, with an investment of 
Rs.1.3 billion.
Lanka SSL plans to export 70 percent of the output of the new production facility, which has a capacity of 30,000 MT per year.
“We are planning to export 70 percent of the output and to supply the balance 30 percent to the domestic market. As the domestic market is in a tough spot at the moment, we believe that exports are the key for the growth. Earlier, the capacity was our bottleneck; that’s the main rationale behind the new plant,” Lanka SSL Director/CEO Pravin De Silva told Mirror Business on the sidelines of the inauguration ceremony held in Colombo, this week.

Earlier, Lanka SSL was supplying 90 percent of its output to the domestic market, which accounted for 70-85 percent of the domestic demand. 
Since the economic crisis, the domestic demand has significantly declined to around 1,000 MT per month. With the ability to now meet the entire domestic GI wire demand, Lanka SSL aims to unlock the untapped opportunities and further its strategic business expansion goals.
By offering superior quality wires to both the existing and potential clients, Lanka SSL aims to reduce reliance on imported products and strengthen Sri Lanka’s manufacturing sector. The new state-of-the-art manufacturing facility is equipped with modern high-speed European wire drawing machines and the world’s best galvanising furnace, with an inbuilt annealing furnace and supporting systems.
Lanka SSL is already exporting to a number of countries, including the United States, Canada and India, directly and indirectly.  De Silva shared that Lanka SSL now plans to commence direct exports to the United States, South Africa and Canada, shortly. He noted that the South Indian market remains the largest market for Lanka SSL, with plans to further penetrate deep into the market.
“We understand the South Indian consumer quite well,” he added.
In addition, he noted that there’s a 5 percent duty benefit in exporting to India, under the Sri Lanka-India FTA.

E.B. Creasy & Co. PLC Chairman/MD S.D.R. Arudpragasam said Lanka SSL is able to breakeven, even running at 15-20 percent production capacity of the new plant. He noted that the new plant has significantly reduced production cost and enabled Lanka SSL to compete with global players in domestic and global markets. Lanka SSL’s hot-dipped GI wire is the only one with SLS 139:2003 and lately its barbed wire with the SLS 31:1988 certification as the only barbed wire in the market with the SLS certification.  The manufacturing facility, which was initially established in 1995, had become Lanka Special Steels in November 2003, with its incorporation in Sri Lanka under the BOI, after Tata Steel, India acquired the business. 
In April 2015, Lanka SSL was acquired by E.B. Creasy & Co. PLC, which was founded in 1878 and is one of Sri Lanka’s oldest continuously operating companies.