Financial Times

CIC finds cure for Samahan
Chemical Industries Ltd (CIC), Sri Lanka's biggest agricultural group, made a strategic move last week acquiring a sizable stake in the herbal products company that markets the popular "Samahan".

A company spokesman said it fits in with CIC's expensive and serious research and development in a hitherto untapped area - indigenous plants and its applications as herbal remedies.

The plan to tap the many medicinal uses of indigenous plants led the company to acquire a 34.5 percent stake in Link Natural Products (Pvt) Ltd, makers of the popular Samahan and Sundantha among other products. CIC is planning to increase this stake to 49 percent of its voting equity and to 60 percent in the non-voting category.

"It was not a hostile takeover," assured Preethi Jayawardene, group finance director at Chemical Industries. "We could have acquired 60 percent but we didn't want to upset the current structure where there is an excellent management team including its pioneering managing director Dr. Devapriya Nugawela and Prof. Tuley de Silva, a well-known figure in the pharmaceuticals industry."

Link Natural Products Ltd is part of the Link Engineering group that is involved in construction, soya bean production, leisure and herbal products. Industry sources said that the group was having problems and the herbal entity was not getting enough financial backing from the holding company which then looked for buyers to take over its stake.

"This is a good investment. We are excited about the prospects and future potential." Jayawardene said. Link produces Samahan, an all-purpose home-spun drink that is said to cure a lot of ailments ranging from coughs, colds, fever or lethargy, Kesha, Muscleguard and Sudantha toothpaste. Link has a state-of-the-art factory and research and development centre with a total annual turnover of Rs. 500 million. "That added to the CIC group turnover of Rs. 8 billion will give us a definite edge in the market," the group finance director noted.

Currently there are five more herbal healthcare products being developed by Link's R & D unit in addition to the on-going basic research and development activities.
CIC is involved in agro-chemicals, paints, products like 500 acres of pine fields in Dambulla, biotech, farms and rice mills among other areas.

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