ACME hit by resin monopoly, rising costs as Sri Lanka’s economy rebounds

By Nishel Fernando

ACME Printing and Packaging PLC said it is struggling with the impact of a “resin monopoly” in the local market, a structural challenge that has limited its pricing flexibility and bargaining power.

The company said the monopoly was a key factor behind the rising raw material costs and profitability pressures facing the packaging manufacturer, despite a broader economic recovery and steady industry growth.

Sri Lanka’s economy expanded about 5.0 percent in 2024, rebounding from a 2.3 percent contraction the previous year. The printing and packaging sector has also grown, supported by the demand from food and beverages, pharmaceuticals and fast-moving consumer goods, while an industry-wide shift toward sustainable packaging has gained pace.

Yet, the sector faces headwinds from the low-cost imports, competing packaging materials and high capital investment needs to upgrade the technology to meet the international standards.

ACME reported an 8.2 percent rise in revenue to Rs.1.196 billion for the year ended March 31, 2025 but posted a net loss of Rs.406 million. Its financial position weakened further, with the current liabilities exceeding the current assets by Rs.1.078 billion and total liabilities outstripping total assets, resulting in negative equity. The annual report flagged a “material uncertainty” over the company’s ability to continue as a going concern, noting a “serious loss of capital situation”.

In response, ACME has launched a new product development programme to diversify its portfolio and introduced formalised pre-production meetings to improve operational efficiency.

The board has also resolved to issue 190 million new shares through a rights issue, at Rs.2.50 per share, subject to regulatory and shareholder approval, to raise funds for working capital and debt repayments.

After the reporting period, parent Lankem Ceylon PLC increased its stake to 53.82 percent as of June 30, 2025. Lankem has provided a letter of support, pledging financial assistance to ensure ACME can meet its obligations for at least the next 12 months.