From left: Serendib Flour Mills Sales and Marketing Director Abdul Cader, Serendib Flour Mills CTO Mark Healing, Serendib Flour Mills CEO Mohamed Riyal, Serendib Flour Mills CFO Zeeshan Khawar and Serendib Flour Mills Marketing and Communications Head Kalinga Wijesekera
Pic by Samantha Perera
Serendib Flour Mills (Pvt.) Ltd, the second largest flour mill in Sri Lanka, hopes to further catch up to its competitor over the next three years with foreign direct investment (FDI) exceeding over 27 million Swiss francs.
“We are investing more in expansion and diversification in Sri Lanka,” Serendib Flour Mills CEO Mohamed Riyal said.
A 12 million Swiss franc expansion to the core wheat milling business will see the current daily capacity of 1,000 metric tonnes expand to 1,500 metric tonnes and the expanded production will begin approximately four months after the installation of the machinery at the firm’s facility in the Colombo Port begin this April, according to Serendib Flour Mills Chief Technical Officer
Riyal added that investing 15 million Swiss francs on an export-oriented 300 metric tonne per day semolina mill is currently under study to be operational in 2019, although the location of the semolina mill will depend on whether space is available at the current production facility, which is the world’s largest single-line wheat mill.
The year 2019 may also see Serendib Flour Mills, of which the main brand is ‘7 Star’ flour, invest in an animal feed mill and poultry, although these plans are still at the initial conceptual stage, he said.
“Our plan is to increase our market share from the current 27 percent to 35 percent over the next three years,” Riyal added.
The firm, which had Rs.18 billion in revenue in 2017 and planning for Rs.22 billion in revenue this year, started production in 2008 after the investments began in 1999 as the government decided to open up the flour market albeit with restrictions.
However, Riyal is of the opinion that said the industry needs protection to save foreign exchange, despite heavy lobbying made by the traders to remove tariffs on wheat flour imports.
He said that the traders would only import as long as the margins are healthy and that Serendib Flour Mills in contrast keeps six months of buffer stocks in flour, wheat required for milling and raw inputs in transit from the US, Australia and Canada, contributing to Sri Lanka’s food security.
The wheat flour market has grown strongly over the past years from 30,000-35,000 metric tonnes per month to around 60,000-65,000 metric tonnes per month, Riyal said.
“Why is there such a growth? There’s a shortage in rice production and there’s the lifestyle change. People prefer baked products now and tourists also prefer flour-based products instead of rice-based products,” he said.
Serendib Rice Mills is a US $ 100 million joint venture between the UAE’s Al Ghurair Foods and Emirates Trading Agency. Riyal recently took over the CEO position from Kevin O’Leary.