May 27, 2021

By Lynda Kiernan, Global AgInvesting Media

SBI Ven Holdings, the overseas private equity firm of Japan’s SBI Holdings, has committed a $2 million in exchange for a 11 percent stake in investment in Watawala Dairy Farm, one of the leading agribusiness companies in Sri Lanka. 

Begun as a pilot project called Lonach Farm in March 2016 with 120 cows, three cow houses, and a milking parlor, Watawala Dairy Farm has grown to currently manage a herd of 1,600 head, of which 800 are milking cows.

Employing a state-of-the-art milking parlor system, the farm produces approximately 18,000 liters of fresh milk per day, or 540,000 liters per month. Each year the farm accounts for 540,000 liters of milk, or 3.5 percent of Sri Lanka’s total milk production. 

This infusion of capital will further enable Watawala to expand within the country and to strengthen its contribution to the Sri Lankan economy by committing to the government’s initiative to promote local milk production with the ultimate goal of becoming self-sufficient.

This investment also will be used by the company to expand its herd to 1,000 milking cows, improve its infrastructure, to strengthen its operations, and to bolster its upstream value chain.

“At a time where the investor confidence and sentiment have been greatly affected, SBI Ven Holdings’s investment on Watawala Dairy Limited brings in vital foreign direct investments (FDI) to Sri Lanka when it is much needed in the market and the economy,” said Binesh Pananwala , CEO, Watawala Plantations.

“Not only this strategic investment paves a path for us to support the Government’s vision to promote local milk production and achieve self-sufficiency in milk by 2025,” continued Pananwala, “but it also validates our long term vision and investor-friendly corporate governance framework, helping us to build confidence and attract leading global equity firms like SBI Ven Holdings.”

Watawala also understands that prioritizing animal welfare is key to high yields and quality of milk. With an eye toward fostering sustainable production of fresh milk in the country, the company provides its herd feed supplements scientifically formulated by expert nutritionists with a dedicated feed mill to process the special cattle ration.

Likewise, the company adheres to strict hygiene controls within the management of its farm, conforming to international standards including adequate clean water slurry and effluent management systems.

Furthermore, the company has invested significantly since 2017 to provide critical support to the country’s maize farmers and the country’s rural economy by managing and purchasing maize through local channels – buying corn from more than 40 suppliers from regions, including Anuradhapura, Polonnaruwa, Ampara, Monaragala and Mahiyanganaya.

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.