Industrial Asphalts to assist in coating roads

Increased investments in highways and roads related infrastructure by the state is opening up opportunities for the oldest bitumen-producing company in the country.

In a bid to participate in the nation’s infrastructure revival, Industrial Asphalts (Ceylon) PLC (IAC), an investment holding company and originally specialised in manufacture and distribution of specialised bituminous products, distribution of a range of surface coatings and marketing of industrial chemicals is to raise Rs. 150 million via a Rights Issue to expand its business.

The Board of Directors has resolved to issue almost 750 million shares at 20 cents each, which incidentally was the last traded price. Net asset value per share is Rs. 825.32 as at 31 December 2019. The company’s stated capital is Rs. 6.6 million.

Major shareholder of Industrial Asphalts ( Ceylon) ( IAC) cum Managing Director G. Ramanan told the Business Times that the company realigned itself to the road construction sector from its earlier focus in protective coating sector (weather proofing). "In 2017, with the softening of the economy we pulled back from this side of the business and concentrated on bitumen roads which are more commonly known as tarring roads. We unlocked the full value in our expertise in the roadside of the business. We hope to keep an eye to expand the coating sector as the demand improves with the rise of the economy," he explained. The company said the proceeds of the Rights Issue are to finance the working capital requirements to support the expansion of core activities.

Mr. Ramanan said that the consumption will increase after government investment in infrastructure. "This will be about two to three years into the future where an infrastructure driven stimulus package will increase the consumption levels."

The government has big plans to revive roads – not only in highways and expressways but also the widening of narrow roads and expanding single lane roads to double lane ones.