Chevron Lubricants is looking to expand operations in Sri Lanka after reporting positive financial results over the past year in spite of challenging circumstances.
Managing Director Kishu Gomes told the Business Times this week the company is hoping to capitalize on market growth in the north and east in the post war era. “Over the last three years, there has been an industry decline of 4% to 5% but given the peaceful environment, the global economic recovery and enhanced investor confidence in Sri Lanka, we believe the market decline will end.”
Mr. Gomes attributed the industry decline to the war which took a toll on volumes not only in the north and east but also affected activities in the rest of the country. High import duties on vehicles also affected business. Due to the global recession, some export companies in Sri Lanka were unable to secure average levels of volumes. “The transport sector was not doing that well and our fisheries were restricted,” he said. “Boat owners didn’t have easy access to fishing areas around the country due to restrictions by security forces. Agriculture wasn’t doing that well either and there were natural disasters.
Hopefully, if these things won’t be there during this year, it will create positive growth in the industry.”
In terms of investment, Mr. Gomes said the company is looking towards expanding its distribution network in the north and east and supporting various channel brands such as service stations brands in the rest of the country. The company will also be focusing on consumer awareness programmes and technical seminars to equip customers with the right knowledge to select the correct lubricants.
“The main growth should come from agriculture and fisheries, helped by growth in the construction sector. It’s all about putting the right distribution network in place and supporting the channel partners and retailers through investment for them to be able to capture new volume.”
The company posted a net profit of Rs.375.9 million in 4Q09 compared to Rs.31.5 million for the corresponding period in 2008 due to high gross profit margin enjoyed on the back of low raw material costs. |
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