18 January 2017 10:40 am
Bairaha Farms PLC (BFP) yesterday announced additional investments amounting to Rs.239 million to the ongoing construction of its animal feed manufacturing and storage facility.
The project, which is a joint venture with Farms Pride Limited and, carried out in two phases, was estimated to have cost Rs.1.45 billion when the project was announced in 2014, excluding the working capital.
BFP yesterday said it commenced work on the facility gradually from June last year and the work on the feedmill silos project and the installation of equipment is ongoing. However, BFP stated that additional costs were being incurred by them to cover the cost overruns on the feedmill on account of civil works, land development, additional machinery and other ancillary non budgeted machinery and other costs amounting to Rs.114 million.
At the same time, additional costs of Rs.125 million have been incurred on account of silos for maize and soya meal storage facilities built under the second stage of the project, totalling additional cost to Rs.239 million.
“The above mentioned Rs.239 billion additional costs will be met; Rs.80 million each from Bairaha Farms PLC and Farm’s Pride (Pvt) Ltd.
and Rs.79 million from Fortune Agro Industries (Pvt) Ltd. (JV feedmill company) or from Fortune G-P Farms Lanka Ltd. (JV grandparent farms & hatchery)” BFP said in a stock exchange filing.
It also noted that any further cost overrun or new capital expenditure to be incurred would be borne by Fortune Agro Industries with its internally generated funds.