Financial Times

Hemas to set up freight forwarding business abroad
Hemas Holdings Ltd. plans to expand its freight forwarding business and is thinking of setting up operations abroad, particularly in regional markets like India and Pakistan, the group’s CEO Husein Esufally said.

“In our freight forwarding business we’re looking at setting up a regional network where we will be trying to have a direct presence in the region in countries like India and Pakistan,” he said in an interview.

“Through that we hope to increase the volumes of business that we do. And once we have sufficient volume and sufficient client base we will see how we can add value to these clients either by delivering logistics solutions or some other value added solution.”

Hemas Holdings has a diversified set of business activities covering healthcare, fast moving consumer goods (FMCG), leisure, transportation and strategic investments. Transportation has become a fairly important contributor to group revenue and profits.

Companies in Hemas transportation sector are mainly engaged in airline representation, travel agency services, freight forwarding and logistics. Its subsidiary firms are Hemas Air Services, Forbes Air Services, Discover the World Marketing, Hemas Travels, Prime Destinations and Hemas International Freight.

“Our present exposure in the transportation sector is mainly in the travel agency and airline GSA area,” Esufally said. “So we’re more focused on the aviation sector but we feel that there are a lot of opportunities outside this in the maritime and logistics sectors.

In fact, one of our growth strategies here is to extend our presence both in the logistics and maritime area.” Group profit from transportation was Rs 23.2 million in the quarter ending June 30, compared with Rs 15.5 million in the same quarter last year. It was the third highest contributor to group profit, behind the FMCG and power segments.

Esufally told shareholders in his review of the group’s quarterly performance that its transportation sector continued the “robust” performance that it posted last year into the first quarter of this year.

“Whilst airline representation and travel agency businesses have posted strong growth in performance, our freight and logistics business has made significant strides in its regional growth plan,” he said.

The main areas of business of Hemas International Freight include air and sea freight forwarding for both imports and exports, Customs house brokerage and packing and shipping services. Esufally said Hemas was not presently in shipping, unlike some of the other conglomerates listed on the Colombo bourse which are building up small fleets of second hand cargo ships.

“But we’re always open to any opportunities in this area. It’s an interesting area but we would be looking for some sort of comparative advantage or some way we can be successful before we enter into it.”

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