Local firms look for profits beyond Sri Lanka’s shores
Sri Lankan companies are increasingly looking beyond the island’s shores for major expansions through mergers and acquisitions amid favourable macroeconomic environment, while there is renewed interest from foreign investors in the island’s different business sectors, officials said.
One such company looking outward is Browns Investments PLC (BIL). The company is seriously looking at acquisitions locally and globally in the plantations, top officials said. The company, which had produced 101 million kilogrammes of tea last year, was almost double the size of all tea plantation companies together in Sri Lanka, which had produced only 61 million kilogrammes of tea.
BIL is especially looking at expanding tea plantations in South America, they said.
Just last month, Hemas Holdings PLC announced a conditional agreement to acquire a majority equity stake in a consumer products company in Kenya, signalling a strategic move into the East African market. The transaction announced on September 25 is pending regulatory approvals from the Competition Authority of Kenya and the Central Bank of Sri Lanka, along with other customary conditions. Hemas expects that the deal will be finalised within six months.
Many high-net-worth individuals and corporate bigwigs are open to listed company acquisitions, especially in the manufacturing sector, analysts said.
At the business forum organised by the Sri Lankan Embassy in Japan and the Sri Lanka Export Development Board last month, the country reaffirmed its interest in Sri Lanka, noting consistent economic growth for eight consecutive quarters. Hideki Sho, the Director-General of JETRO Osaka, underscored several key factors adding to this renewed interest, stating that the formidable reputation of Ceylon Tea in Japan is a major draw, along with the growing demand for graphite, a critical component in lithium-ion batteries. CBL Group, known for its Munchee biscuits and Ritzbury chocolates, has established a
distribution hub in Kenya aimed at serving local and broader African markets as part of a global expansion strategy to enter international markets with its confectionery business.
Analysts said more and more companies are working with accounting firms and tax consultants to check the potential for overseas expansion, noting the considerable growth potential in emerging markets and the opportunity for driving innovation in these regions. Maliban Group of Companies has established a strategic partnership with Reliance Consumer Products Ltd, a subsidiary of Reliance Retail, marking Maliban’s inaugural entry into the Indian market, setting Maliban as a regional brand.
Industry analysts said that power sector companies in renewable energy are especially bullish in the African market, with a trend that has been constant for the last decade.
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