The factory was established in 1954 as Government Chemicals Factory and was destroyed due to terrorism in 1985.

According to the Minister of Industry and Commerce Rishad Bathiudeen, Rs.525 million has been earmarked to restart work on the Factory. Minister Bathiudeen on Sunday (24th April) visited a patch of 217 acre landmass in Kilinochchi where the former Chemicals Factory was located.

With the recommencement, the factory will produce the Sri Lanka’s total Chlorine requirements domestically and will save foreign exchange of around US Dollars 900,000 per year that is spent to import Chlorine. The factory can obtain its required salt from Elephant Pass saltern.

“We are also planning to upgrade Elephant Pass saltern so that we will become self-sufficient in domestic and industrial salt supplies”, Minister added.

Former Paranthan Chemicals Factory manufactured Caustic Soda using salt as the key raw material and was re-named as Paranthan Chemicals Corporation in 1957 by the State Industrial Corporation Act No 49 of 1957. Subsequent to the collapse in 1985, Caustic Soda and Chlorine were begun to be imported for local soap, paper, textiles and manufacturing. At present, Paranthan Chemical Co imports liquid Chorine in 900 Kg cylinders and refill in to 68Kg cylinders at its refilling units in Horana and Kaluthara. It supplies the entire chlorine to Water Supply and Drainage Board and private sector industries. Paranthan Chemical Corporation is a profit making state firm that reported more than Rs.150 million profits in 2015.