The Browns Group on the back of posting a revenue of Rs. 6.2 billion for the last quarter (ended 30th September 2010) showing an increase of 58% as against the same period last year, is hoping to get into the real estate business starting with the large land bank that they own in Colombo, officials said.
“We hope to get into real estate development in a big way by next year, as we own large extents of land in the heart of Colombo,” Murali Prakash, Group Managing Director/CEO, told the Business Times in an interview.
Murali Prakash |
He further stated that Browns’ 225 perches where its headoffice is housed (near HNB), a 2-acre plot further down in Darley Road near St. Joseph’s College and a 2.5-acre land in Ratmalana are all up for development.
“This is still in the infant stages of planning and there are a host of possibilities for a city hotel, apartments, mixed development, etc,” he added.
He said the company is exploring some foreign participation in this project in terms of capital infusion and management expertise.
Mr. Prakash said Browns Group, which made a net profit of Rs. 1.9 billion for the period under review, recently acquired 30% in LOLC Leisure which in turn now controls the Confifi Group of Hotels. He added that the company will also revive the Browns Yala Safari Hotel soon.
He said that Browns has acquired a 9.55% stake in Seylan Bank while holding a stake of 6.9% in HNB as well. Of the latter stake, Browns last month sold more than 3% in HNB. Mr. Prakash noted that part of the monies from this sale went into a strategic 10% buy in Sierra Construction and the Confifi Hotels investment with LOLC. “The rest was absorbed into the company’s working capital,” he added.
The Browns Group’s most current investment is in hydro power through Free Lanka Limited. “The Public Private Partnership that Browns has with the government in Hingurana Sugar Factory has also potential for power generation and we have looked at it carefully,” Mr. Prakash added.
He said that the company is currently upgrading the Hingurana factory and its plantations and that it will become fully operational by 2012.
He said that nearly four years ago Browns decided to get into six ‘sunshine industries’ that were fast becoming the future of the national economy. “These were power, plantations and agriculture, financial and related sectors, retail trading real estate and construction and health care. We got into all the sectors in a big way ” he noted.
He said that Browns has quite a bit of land in the outstation which has potential for healthcare, hospitals, etc. “There’s more need for healthcare in the outstation and Browns’ is exploring the possibility of taking it there,” he said.
At present the Browns Group holds the market leadership in seven segments it operates, namely vehicle batteries, two and four wheel tractors, marine engines, office automation equipment, radiators and power tools. “We are also further focusing on trading and manufacturing divisions which have all performed well with significant growth been shown in all sectors during the last quarter,” Mr. Prakash said.
He said the company’s battery product called the Battmobile which was developed as the service on wheels to assist a customer when in need, has come to stay. “This, along with exclusive dealer concept, state-of-the-art battery service stations under the name “Power Mart” and educational programs, have all contributed to making this division to be one of the best performing divisions of Browns,,” he added, saying that the division hopes to continue expanding on Battmobiles and other concepts, while introducing new products and services in future.
He said that Browns Group will bring in similar experiences for customers in tractors and power tools.
He added that there are plans to have 12 to 15 large regional centres all around the island, facilitating customer touch points. “We already opened one in Dambulla and there are plans to start one in Jaffna by mid next month,” he said.
He also added that Browns acquisition in Maturata and Pussellawa Plantations in collaboration with Taprobane Holdings have made significant post-consolidation contribution to the bottom line. There are 31 tea estates and nine rubber estates belonging to the above plantations.
He also noted that the company’s expansion strategy will continue as there’s more potential now that new markets in the form of accessibility to the North and East have opened. “This has also brought about a positive mindset across Sri Lanka, which is a must for any business to thrive. We also believe that this will trigger improvements in a host of industries such as agriculture, fisheries and tourism, all of which we want to explore,” he added. |
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