Raigam Wayamba Salterns pushes expansion despite profit squeeze

By Nishel Fernando

Raigam Wayamba Salterns PLC, a key player in Sri Lanka’s salt industry, announced its plans to establish a new saltern in the Eastern province.

This strategic expansion comes as the company navigates squeezed profit margins, despite a record-breaking turnover and follows a year where it played a crucial role in mitigating a national salt crisis.

The move to the Eastern province is intended to bolster the company’s production footprint and enhance its long-term capacity in the sun-dried salt segment. This development is part of a forward-looking strategy to strengthen future capacity, even as the company deals with the immediate aftermath of an industry-wide crisis.

The 2024/2025 financial year was marked by a severe salt shortage in Sri Lanka, brought on by three consecutive years of inclement weather that devastated the local production. As the national reserves dwindled, Raigam stepped in to manage the crisis. 

The company leveraged its resources and foresight to import salt, not just for its own needs but also for the smaller industry players, an action that was instrumental in averting a major disruption in the country’s food sector. 

In his message to the company’s shareholders, Raigam Wayamba Salterns Chairman T. Dharmarajah highlighted how the company’s “quick actions helped the industry and country literally and figuratively weather the salt crisis”.

Financially, the year presented a mixed picture. While the company’s turnover surged by over 60 percent to a record Rs.2.365 billion, profits saw only a marginal increase. 

Raigam Wayamba Salterns CEO Kishan Rohana Theodore explained that the substantial rise in turnover was offset by a reciprocal increase in the cost of sales, primarily due to the necessary salt imports. 

“The reasons for the comparatively marginal increase in profit, despite the substantial increase in turnover, were due to the increase in the local raw material price levels, with the dropped harvest and due to the fact that the salt imports ... incurred a reciprocal increase in the cost of sales, resulting in a significantly reduced margin on sales,” Theodore stated in his review.

Despite these pressures, the company demonstrated stability by increasing its net assets per share to Rs.8.65, from Rs.7.40 the previous year and recommending its highest-ever dividend of Rs.0.25 per share.