Police officers also found over 100 empty shells of bullets used for T-56 assault rifles at the location.
The discovery was made during a search operation carried out based on information received by officers of the Negombo Division Crimes Unit.
The security forces investigations revealed that empty artillery shells of used for heavy weapons as well as suspected live ammunition and gun powder were stored at this facility.
Therefore, the Air Force Bomb Disposal Squad was summoned to the location and investigations had commenced.
Later the empty shells and the live ones were separated. Among them were a large amount of 50mm and 80 mm mortar ammunition and 130mm artillery bullets.
The security forces said that had this stock of ammunition exploded, it would have caused greater damage than the explosion at Salawa, Avissawella on June 05th 2016.
The workers at the factory said that there have been explosions from time to time.
Through a tender during the war!
The General Manager of the factory said that the stock of ammunition had been obtained through a tender process during the war.
However, when contacted for clarification, the Air Force Spokesman Group Captain Gihan Seneviratne said under no circumstances would shells containing gun powder be given to a third party.
The Military Spokesman Brigadier Sumith Atapattu said under the empty shell tender procedure such materials are given to the Technical Development Board.
He further noted that he was not aware if there were sub-contractors in this process.
Meanwhile, the Navy said that strict action would be taken against those who illegally provide such explosives to third parties.
However, the security forces have uncovered information that this stock of explosives had been given to this factory together with scrap iron from the Kankasanthurai Cement factory to a person with a permit said to have been obtained under the recommendation of a former Air Force head.