Sri Lanka Holcim unit keen on cement plant eyed by India's Birla

Holcim Lanka, the Sri Lankan subsidiary of the Swiss cement multinational, says it is interested in bidding for a defunct cement plant in northern Jaffna that is eyed by India's Birla group.

Holcim Lanka chairman Manilal Fernando said Tuesday he believes the government will give all interested parties a chance to bid on equal terms for the plant.

"Holcim is interested," he said. "We're sure the government will go about it in a transparent manner so all those who are interested can be given the chance to bid on equal terms."

Construction minister Rajitha Seneratne, who has been promoting the Birla deal, said other cement firms could also bid although they had not made any proposals so far.

"Any foreign investor can come and make an offer," he said. "We are having talks with the Birla group."

The government plans a site visit with company officials to assess the current state of the plant in Jaffna, which is cut off from the rest of the country as the Tamil Tigers control the land route. The only access is by air and sea.

Asked if others firms too could bid for the plant if they are interested, Senaratne said: "They can if they want to. But all this time there were no bids. Everybody said they were interested but nobody came."

India's Aditya Birla group had proposed reviving the defunct cement plant in Kankesanturai in the northern Jaffna peninsula following talks in Colombo earlier this month.

The plant is sitting on a rich limestone deposit in Jaffna and had long drawn the interest of other cement producers such as Holcim, and Tokyo Cement, which is partly owned by Japan's Mitsui.

But they had been deterred so far by the risks of the war, with the plant now part of a sprawling military base and damaged by shelling by Tamil Tigers in previous battles.

The plant is owned by Lanka Cement, a government firm listed on the Colombo bourse, whose share price has been rising in recent weeks after reports of the Birla deal.

Senaratne has said he was keen to revive the plant in Jaffna both to meet the current cement shortage and bring down high prices and also to provide youth of the peninsula employment opportunities.

Birla's interest was sparked by the current worldwide shortage of cement owing to a construction boom, especially in emerging economies like China and India, which have sent up cement prices.