The history of Buttala goes back to the time of King Dutugamunu in the 2nd century BC, when it was known as Guthala. The Mahavamsa chronicle of ancient Sri Lanka states that when Dutugamunu's army passed through Buttala en route to Rajarata in the north to wage war on Elara. The names of many places are derived from ancient times, often from the names of the generals of armies, as in the case of Buttala.
Buttala is the home of the largest sugar mill in Sri Lanka, Pelwatte Sugar Industries PLC, which was established in 1981. The company provides livelihood to approximately 4,200 employees and over 300,000 sugarcane farmers.
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