Financial Times

Kuwaiti investor favours Colombo
Thalib T Al-Nakib, a retired Kuwaiti businessman currently making waves in the Colombo stock market, believes his latest stake, Asian Cotton Mills (ASCOT), is a very viable investment even though it is going through troubled times and plans to improve it from the present state.

He told The Sunday Times last week that ASCOT - in which he has 51 percent control - is a company with a lot of potential. "The working capital has been lost due to a long strike by the workers and currently the operations are dragging on rudderless," he said.

Al-Nakib estimates an infusion of Rs. 80 million is required to revive the company. "Injection of capital is not an issue. In order to bring it back to life, we want to give the company what it was missing, which is the working capital," he said.

He said that he was interested in ASCOT having seen the demand for its products. "There is more demand than the company could supply and there is a lack of money to buy more raw material," he said in an exclusive interview in Colombo.

There is a great demand in the world for yarn producers, apart from the local demand. He said the ASCOT factory on a replacement value is worth $6 million. "I feel there is great value in the factory." ASCOT had cost the wealthy investor two billion rupees enabling him to hold a majority stake in the company.

Graduated from the University of Cambridge in 1958 with honours in economics, Al-Nakib said he chose Sri Lanka as a retirement destination and began investing in Sri Lankan stocks as a hobby, as he was not interested in idling during retirement. Al-Nakib who has four children and 13 grandchildren was granted residency in Sri Lanka in October 2001.

"My three brothers also started to invest after I recommended investing in Sri Lanka," he said. Initial stocks that he invested in were Tokyo Cement and James Finlays after which he diversified into property. Together the Al-Nakib family owns a substantial number of apartments at the Crescat Residencies bought in three stages over three years from 2001 to 2003.

Al-Nakib has invested in over 15 different stocks, among which are Apollo hospitals (10 percent), James Finlays (13 percent), Print Care (28 percent), Hunter and Company (10 percent), Lee Hedges (12 percent), Lanka Milk Foods (15 percent), CIC (more than 5 percent), Talawakele Plantations and Chemanex at four percent each.

When asked why he opted to invest in Sri Lanka overlooking India, he said that that it is very easy to invest here compared to India. Well-advanced banking systems exist in Sri Lanka as opposed its neighbour such as the Share Investment External Rupee Account (SIERRA). It is a very farsighted endeavour by the government, he said. "It is a first class system and is as modern as any that you can have anywhere in the world," he added.

He emphasised that whatever investment he has in Sri Lanka will stay in the country. However he noted that the issue of the existing legislation of confining foreign ownership of plantations to 40 percent as against the impending legislation of 100 percent, if not resolved will alter his course in investments.

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