Sri Lanka’s leading poultry manufacturer, Ceylon Grain Elevators PLC (GRAN), has entered into an agreement to acquire land and a poultry processing plant from related party Ceylon Agro-Industries Limited for Rs. 272 million.
According to a filing at the Colombo Stock Exchange, GRAN will purchase a poultry processing plant with machinery and equipment from Ceylon Agro-Industries for Rs.215 million, while also sub-leasing a fraction of the latter’s land in Seeduwa for 20 years with a total lease rent of Rs.57 million.
“(The) acquisition of poultry processing plant will bring synergies to Ceylon Grain Elevators PLC,” GRAN said.
Analysts have noted that given the growth of Sri Lanka’s income levels, the demand for animal-based protein will continue to increase and poultry would take the lead, with only supply side constraints holding back the industry in the long-term.
GRAN and Ceylon Agro-Industries are related through 4 individuals who sit on the director board of both companies.
Related Party Transactions Review Committee had appointed a Special Committee to review the related party transaction, which had found without an opinion from an independent expert that the transactions are on normal commercial terms and are not prejudicial to the interests of GRAN and its minority shareholders.
GRAN is Sri Lanka’s largest listed poultry manufacturer in terms of revenue and profits, according to the six months ended September 2016, while its subsidiary Three Acre Farms PLC is the fourth largest, coming after CIC Holdings PLC and Bairaha Farms PLC.
Prima Limited, Singapore, owns 45.45 percent of the shares in GRAN, while the Employees Provident Fund owns 8.92 percent of the shares, Supra Limited, Hong Kong, owns 8.63 percent, and Eka Limited, Singapore owns 3.78 percent. GRAN’s public float was 54.54 percent as at last September.