Lanka Transformers Ltd was set up as a joint venture between Ceylon Electricity Board and Bonar Long of Scotland in 1980. The sole objective of setting up of the company was to have the technology of transformer manufacture be available to CEB within the country and thereby have a high quality, locally manufactured transformer for the electricity distribution system of Sri Lanka with reliable supply and after sales service. In 1982 CEB invested Rs. 8.5 M to acquire 70% stake of the new company.
Through a series of mergers and acquisitions the stake of Bonar Long was transferred to Swiss multinational, Asea Brown Boveri (ABB) in early nineties. ABB is one of the world’s biggest multi-national in electrical engineering sector.
Most of the steel structures galvanized by LTL were fabricated and imported. LTL wanted to add a steel fabrication facility as a backward integration for the galvanizing facility. Thus in 1996, a modern steel fabrication facility with automated equipment was set up in a factory in Bandaragama.
By 1995 the Government of Sri Lanka introduced a major policy shift in power sector by allowing private investment for power plants in the CEB system. In 1996, LTL submitted a proposal to set up a 24MW power plant with its ownership to sell power to CEB under a long term Power Purchase Agreement. In what would later become the single most important diversification of LTL and its major income source, this proposal was accepted by CEB. In 1997 the two shareholders further invested Rs. 125M in the company to set up Lakdhanavi as a specialized subsidiary for Thermal power generation. Power Project cost Rs. 890M. Lakdhanavi power plant was set up under 11 months and commissioned in November 1997 under a 15 year contract with CEB.
By 1996, LTL wanted to foray into the remaining major segment in Power industry i.e. transmission. Together with ABB, it bid for a large transmission line and substation project in Anuradhapura and Ampara. A separate company called LTL Projects Ltd was set up in 1997 to carryout these projects. LTL trained its personnel with ABB engineers in design and implementation of substations and high voltage (132kV) lines. These projects, which until then were carried out by European based multinationals, now had a new local competitor. Being a low cost and lean organization, LTL soon became a formidable player in the field. (Note. In 2005, LTL divested its entire investment in LTL Projects)
By 1998, LTL’s first Galvanizing plant was running on full capacity. An expansion was essential. LTL seized the opportunity to further develop on its technology advantage by investing in one of the largest and most modern gas fired galvanizing plants. The new facility in Sapugaskande (10km from Colombo) became operational in 2000.
In 2001, LTL tied up with Norwegian Power Utility Statkraft and two venture funds, Norfund from Norway and Lanka Ventures from Sri Lanka to start Nividhu (pvt) Ltd to invest in hydro power generation. Its first project, 2.2MW BelihulOya commenced operations in 2002 operating under a 15 year agreement with CEB. The small power plant had German equipment and entire civil construction was done by Sri Lankan engineers.
Lakdhanavi in consortium with Hemas PLC (a publicly held diversified conglomerate) in 2003 set up Heladhanavi Ltd to carry out a USD 60M investment to set up a 100MW Fuel Oil based power plant in Puttalum. The consortium won the international tender for 10 year concession by being the lowest bidder. This power plant, which became operational in 2004, is still the cheapest Independent Power Producer in Sri Lanka.
LTL, managed with private sector vigour despite its CEB ownership constantly reviews its marketing strategies. By 2004, LTL realized the diminishing demand by CEB for transformers due to tapering off of rural electrification. LTL embarked on a massive marketing effort to export its products and obtained various international certifications. It its first success in exporting a Sri Lankan made Transformer to northern Iraq in 2003 under a UN programme.
Nividhu invested in its second hydro power plant in 2004. The 4MW Assupiniella Power plant was grid connected in 2005. In 2005 a major change in shareholding took place. ABB instituted a global policy of exiting from non-core investments. Thus it offered the 27% stake to CEB which was not in a position to finance the deal. CEB advised the employees to carry out a management buy out to prevent the stake being sold to a competitor. A LTL ESOT Ltd, a only employees owned company was created which successfully raised the required funds and became the 27% shareholder.
LTL ventured into its biggest project in 2006. The government of Sri Lanka, having recognized its project management skills, entrusted the design, financing and construction of Sri Lankan’s largest thermal power plant. The work started in 2007 to build the 300MW, USD, USD00M Combined Cycle Power plant financed by offshore debt funding and local equity. The project had a very tight deadline but LTL rose to the occasion and completed the first phase of 200MW by November 2008. By May 2010, the entire project, owned by West Coast Power Ltd (a GOSL owned entity) was completed. Lakdhanavi is the Operation and Maintenance Contractor for the 25 year term.
In 2011, Lakdhanavi won a contract to build two 100MW power projects in Bangladesh. Despite being a difficult environment, Lakdhanavi completed both projects within 7 months. With this, Lakdhanavi received lot of recognition as a EPC contractor. Since then it has invested of its own in two more 50MW power plants for a 15 year power supply arrangement. The first of these, 52MW Raj-Lanka Power Plant in northern Bangladesh was commissioned in January 2014. Its second power plant of similar capacity in Comilla, Bangladesh is schedule dto come into operations in December 2014.
In 2012, LTL made its first wind power investment in the western coast of Sri Lanka. The Rs. 2.5B, 10MW Pawandhanavi Wind Power Plant was commissioned in just under 6 months and has proved to be one of the most successful ventures of LTL.
In early 2013, Lakdhanavi further cemented its EPC reputation and helped the re-construction efforts of Sri Lankan government in Northern Sri Lanka by completing the 24MW thermal power plant in Jaffna within a extremely short period of 185 days.