Ceylon Grain Elevators to invest Rs.3bn in Seeduwa poultry processing plant expansion

Ceylon Grain Elevators PLC has announced a strategic investment of Rs.3 billion to expand its chicken processing facility in Seeduwa. 
The move, approved by the board of directors on January 9, 2026 and disclosed in a stock exchange filing, signals a significant push by the Prima group subsidiary to consolidate its market leadership amidst a volatile yet recovering poultry sector.
According to the stock filing, the expansion is designed to double the plant’s processing capacity, increasing the output by up to 100 percent. The investment will focus on state-of-the-art automation technologies aimed at enhancing the production speed, consistency and product quality. 
A key strategic focus of this initiative is to increase the share of value-added products in its portfolio while improving yield efficiencies through precision processing and waste minimisation. The company expects these upgrades to drive a reduction in overhead costs, through improved energy efficiency and streamlined resource utilisation.
This aggressive expansion comes against the backdrop of a robust financial performance for the group. In its interim financial statements for the nine months ended September 30, 2025, the group reported a revenue increase of 30 percent to Rs.21.9 billion, while the profit for the same period rose by 27 percent to Rs.2.8 billion. The company attributed this growth to increased demand for processed chicken and broiler day-old chicks, supported by the shortages in substitute products and a revival in tourism.
The timing of the investment is particularly notable, given the recent upheaval in the local poultry sector, caused by Cyclone Ditwah, which struck the island in December 2025. The disaster dealt a severe blow to the industry, with reports estimating a loss of approximately 500,000 layer birds and over 1.4 million broiler chickens, due to flooding and power disruptions. 
The mass culling effectively created a supply shock, reversing the trend of oversupply that had previously dampened the prices. Following the cyclone, the egg and chicken prices have recorded an upward trajectory, as the market adjusts to the sudden contraction in the livestock numbers.
For major integrated operators like Ceylon Grain Elevators, the post-Ditwah landscape presents a unique opportunity. While the small and medium-scale farmers struggle with the capital requirements to restock and rebuild the damaged infrastructure, the larger players with secure supply chains and biosecurity measures are better positioned to capture the supply gap. The resulting price increases, driven by the shortage of chicken meat and eggs, are expected to aid margin recovery for the surviving flocks, potentially offsetting the losses incurred during the disaster.
The investor sentiment reflected this optimistic outlook on the Colombo Stock Exchange last Friday. The shares of Ceylon Grain Elevators PLC closed on a positive note, at Rs.492.75, marking an increase of Rs.2.50 or 0.51 percent, from the previous close of Rs.490.25. (NF)