Mirotone acquisition to repaint JAT on global stage
JAT Holdings PLC’s New Zealand-based Mirotone (NZ) Ltd, a leading name in industrial wood coatings, will pivot the company onto the global stage.
“We have been studying a few of the companies in Thailand and the Philippines, and also in Australia, and finally we set our sights on New Zealand’s Mirotone, a globally recognised coatings brand founded in 1935 (which I admire so much) to expand further into the different markets,” Aelian Gunawardene, Founder and Managing Director, JAT Holdings PLC, said. The total deal, including the purchase price and committed reinvestment for growth, is a strategic investment of over Rs. 800 million or Australian dollars 4 million. Mirotone owns 60 per cent of the market in New Zealand, and JAT aims to relaunch the brand in three to six months in Australia. Mr. Gunawardana noted that acquiring Mirotone helps JAT gain not only a strong brand but also an opening to the world, providing immediate access to Australia and future opportunities in European and American markets.
JAT Holdings’ Chief Executive Officer, Nishal Ferdinando, stated that the acquisition represents a significant milestone for the company, noting that establishing JAT as a Sri Lankan multinational with a comprehensive global footprint in manufacturing, innovation, and distribution is the ultimate goal.
The company posted the best-ever results for the last fiscal year with a profit after tax of Rs 1.8 billion, pursuing high-growth business areas. Noting that the relaunch of this brand will be a game changer for JAT, he said the company’s absolute profitability will rise by 15 times. He predicted that within 2 1/2 years, the international revenue will increase by 30 to 50 per cent. The group’s top line was predicted to increase by 106 per cent to Rs. 12 billion. The group’s bottom line is expected to increase to Rs. 1.8 billion, which is a 71 per cent growth. Around 40 to 70 per cent of revenue will be fetched by JAT’s own brands, Mr. Ferdinando noted. The company’s first quarter this year has outperformed last year’s first quarter by about 20 per cent. “We expect this growth momentum to continue this year with the growth expansion plans,” Mr. Gunawardena said. He attributes gaining market share, expanding territories, increasing turnover, implementing cost-cutting measures, and promoting internal efficiencies to surpass their profitability targets.
One of the biggest things JAT did since it went public was to set up the binder plant, which is an acrylic resin manufacturing facility. “Acrylic resin is the biggest raw material that we use for our wood coatings and wall paints. Previously, we used to import the resins and pay taxes on them. Resins have attracted very high taxation, but since we started manufacturing them, the gross profit (GP) levels have gone up significantly. We also have the control to tweak a product to suit the market even more this way.”
JAT set up an Alkyd resin plant in Bangladesh over the last two years. That helped the company manufacture the main raw material for the polyurethane lacquers and the NC sealers (a clear nitrocellulose-based sealer that can effectively fill and seal the grains in wooden surfaces) and lacquers. Setting up that plant help GPs to improve in Bangladesh.
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