Manufactured Capital

Sunshine’s manufactured capital makes up the physical and operational backbone of the Group, allowing our businesses to deliver on their promise of access, efficiency, and quality across all three core segments. From advanced production lines to digitally integrated distribution systems, our investments during the 2024-25 financial year were motivated by a single, clear imperative to build resilient, scalable infrastructure capable of supporting long-term value creation.

Strategic role and segmental deployment

Our manufactured capital is much more than a fixed asset base; it is, at its core, a source of operational leverage and innovation. This is true across all three verticals of the Group: Healthcare, Consumer Goods, and Agribusiness.

In the Healthcare segment, Lina Manufacturing continued to be the primary holder of our high-value infrastructure, where asset renewal and digital enhancement closely align with regulatory readiness, supply chain agility, and sustainable growth. Consumer and Agribusiness, meanwhile, continued to benefit from shared warehousing and logistics infrastructure, as well as upstream process optimisation made possible by Group-wide digital systems and supply chain platforms.

Asset base and capacity upgrades

The year under review saw a continuation of our capital investment programme, particularly within pharma manufacturing, with new machines and process improvements across the metered dose inhaler (MDI), tablet, capsule, nasal spray, and cream product lines. These included:

• A new MDI filling and crimping machine sourced from DH Industries, a UK-based industry pioneer, strengthening capacity for aerosol-based therapies
• Capsule line upgrades including two empty capsule sorters to improve process yield and reduce material waste, in addition to a 3D mixer from WAB, Switzerland
• Significant enhancement to quality control capabilities with new analytical instruments, such as additional HPLC machines, a fluorescence detector, and upgraded microbial testing infrastructure, expanding our capacity to support higher production volumes under the 3X automation project

Energy-efficient utilities and plant-wide systems including ISO-classified cleanrooms and compressed air systems, purified water systems, and variable frequency drive (VFD) compressors continued to support operational resilience in 2024-25 while mitigating energy intensity.

Digitalisation and process automation

Perhaps the most notable digital milestone during the reporting period was the completion of Project Light, a strategic SAP amalgamation initiative that unified Lina Manufacturing and Lina Spiro into a single enterprise resource planning (ERP) ecosystem, a transition that marked a shift in digital maturity, paving the way for standardised workflows, master data governance, batch-level traceability, and audit-ready reporting. Functional enhancements have also strengthened compliance, financial control, and operational discipline, laying the groundwork for further automation, preventive maintenance, and future integrations with lab systems and document management platforms.

Efficiency and sustainability metrics

Despite a 40% year-on-year increase in production volumes, Lina Manufacturing recorded a 240,000 kWh reduction in total energy consumption during the reporting period, translating to cost savings of Rs. 6.9 Mn. These outcomes were made possible by:

• Installation of desiccant wheels for dehumidifiers, which were once the plant’s most energy-intensive units
• Deployment of VFD-driven compressors across Block A, where multiple production lines operate
• Temperature and humidity optimisation of air-handling unit (AHU) systems, which account for over 60% of site-level energy use

In logistics, route optimisation algorithms helped reduce fuel consumption and emissions across Healthguard and MSD delivery routes. We also strengthened fleet maintenance protocols and encouraged logistics partners to upgrade to more fuel-efficient vehicles.

Lean manufacturing and operational excellence

Our lean journey, embedded in the Lina Production System (LPS), continued to deliver transformative impact in 2024-25. Grounded in Lean Six Sigma and structured around eight operational pillars, the LPS framework has improved process discipline, enhanced frontline leadership, and created a culture of problem-solving. Major initiatives such as Project 20/20, Optipak, and Timetrim yielded a 48.6% increase in MDI filling and packing capacity, ensuring our ability to meet local therapeutic demand. Recognition at the 2024 CPM Best Management Practices Awards also affirmed our status as an industry leader in operational efficiency.

Regulatory compliance and environmental impact

In line with our commitment to responsible sourcing, in 2024-25, we continued to monitor and comply with national quotas and certification requirements under the Kigali Amendment to the Montreal Protocol. Our handling and storage infrastructure for HFA 134a, an essential propellant in MDI manufacturing, remained fully compliant with Sri Lanka’s National Ozone Unit regulations. We are also actively evaluating infrastructure requirements to support a potential transition to low-Global Warming Potential (GWP) alternatives, in line with global decarbonisation goals.

Though our facilities are not yet certified under formal green building frameworks, we routinely conduct Environmental Impact Assessments as required, and all expansions adhere to local regulatory standards. Ecosystem disruption is minimised through proactive land-use planning and engagement with local authorities.

Manufactured capital in the supply chain

A vital enabler of product integrity and service reliability, Sunshine’s warehousing and distribution infrastructure facilities, managed both in-house and through third-party logistics partners, are GDP-compliant and equipped with temperature-controlled zones to safeguard pharmaceuticals and food products. Material handling systems, ranging from electric forklifts to automated pallet stackers, are, at the time of compiling this report, being upgraded for both sustainability and operational safety.

Looking ahead, our supply chain roadmap includes:

• Expansion of cold chain infrastructure with automation capabilities
• Enhanced storage systems for regulated substances like HFA 134a
• Integration of digital monitoring for real-time visibility across the distribution cycle

Sunshine’s manufactured capital strategy is built on the time-tested principles of resilience, efficiency, and future readiness. As we deepen our investment in digitisation, lean systems, and clean technologies, our asset base will no doubt continue to evolve, not just as a source of operational capacity, but as a driver of sustainability, regulatory leadership, and long-term competitive advantage.