CORPORATE INSIGHTS
2017/18

SWIMMING IN MURKY WATERS

Sri Lanka’s leading listed entities continue to perform with aplomb even though the macro economy floats in murky waters against a backdrop of what’s been a consistently inconsistent policy regime and extreme political uncertainty

Even in times of crisis and hardship, Sri Lanka’s corporate community has been called upon to venture forward with a ‘business as usual’ mindset so that this island’s economy can at the very least keep its head above water – and of course, these are times when one is called upon to sink or swim.

Amid the growing sense of disillusionment, business confidence has in recent months plummeted to pre­-war levels although it spiked unexpectedly in November. And to add insult to injury, in late October the nation was thrown into what some are calling a ‘constitutional crisis’ where­as others maintain that what transpired is for all intents and purposes a political coup – instigated by the head of state, no less.

On the fiscal front, the prospect of Budget 2019 was thrown into disarray on account of goings-on in the political sphere; if the corporate community had been hoping for a sense of consistency in terms of the policy environment (and perhaps some goodies to balance the ad hoc increases in taxes and levies that were announced ahead of the now abandoned budget presentation), they would surely have been dismayed by this sudden turn of events.

In terms of the latest data, the Central Bank of Sri Lanka’s (CBSL) publication titled ‘Recent Economic Developments: Highlights of 2018 and Prospects for 2019’ notes: “The Sri Lankan economy faced renewed challenges emanating from global market developments, which disrupted the steady stabilisation path observed up to the first quarter of the year.”

It reveals that the economy grew at a moderate pace of 3.6 percent in the first half of 2018, following the relatively low growth of 3.3 percent recorded in 2017.

Agriculture continued to rebound in the first half of 2018 supported by favourable weather conditions during this period. Growth in industrial activity slowed mainly due to subdued performance in the construction, and mining and quarrying subsectors. In the meantime, the expansion in services was broad based, and driven mainly by the growth of financial services, the wholesale and retail trades, and other personal services.

Meanwhile, the unemployment rate rose in the first half of 2018. Consumer price inflation has remained subdued thus far in 2018 although temporarily edging up in some months mainly as a result of volatile food prices, and upward adjustments to domestic petroleum and other administered prices. Monetary and credit expansion decelerated gradually in response to the tight monetary policy stance maintained in the past.

In the external sector, the trade deficit widened further as the increase in import expenditure outpaced higher earnings from exports – although earnings from services including tourism and workers’ remittances helped cushion the external current account deficit to some extent.

CBSL points out that “these developments resulted in a sharp depreciation of the Sri Lankan Rupee, and the Central Bank intervened in the market at times to prevent disorderly adjustment of the exchange rate while allowing demand and supply conditions to determine its direction.”

“The performance was mixed on the fiscal front with the overall budget balance and the primary balance improving during the first eight months of the year while the current account balance deteriorated marginally. Nevertheless, the lower than expected revenue collection is likely to challenge the achievement of the targeted budget deficit for 2018 despite the slowdown observed in expenditure,” the Central Bank adds.

According to the Central Bank, “in the financial sector, the growth momentum continued during the first half of 2018 without major macro-prudential concerns while measures are being taken to address longstanding issues with a few distressed financial institutions.”



The programme under the Extended Fund Facility with the IMF continued with the country achieving the Quantitative Performance Criteria for June 2018 in relation to the primary fiscal balance and inflation although missing the target on international reserves due to volatile global conditions.

Meanwhile, CBSL’s most recent Monetary Policy Review observed tight monetary policy conditions globally with a continuous strengthening of the US Dollar.

At its meeting held on 1 October, the Monetary Board of the Central Bank decided to maintain policy interest rates at prevailing levels, having considered current and expected developments in the domestic and global economy with the aim of stabilising inflation at mid-single digit levels in the medium term to support growth.

These and other key elements – including the lead up to and outcome of the forthcoming general election – will influence the outlook for local business while the global geopolitical climate will also surely play its part.

As for the results of the 2017/18 special edition of the LMD 100 , they reveal the best of the best among the island’s listed corporates. The 10 leading listed entities in the rankings that comprise the Leaderboard have also witnessed changes over the financial year as illustrated below.

Hayleys retains its place at the top in the rank­ings. The conglomerate has occupied pole position on four other previous occasions – i.e. 2016/17 and 2014/15, as well as 1995/96 and 1996/97 (when the pioneering rankings were presented as The LMD 50 ).

The highly regarded Sri Lankan multinational reported a consolidated revenue of over Rs. 163 billion in financial year 2017/18, which represents a substantial increase of 47 percent from the prior year – thanks in the main to its acquisition of Singer (Sri Lanka).

In its annual report for the period under review, Chairman and Chief Executive Mohan Pandithage asserts that “Hayleys group became the first public listed company in Sri Lanka to surpass a turnover of US$ 1 billion, marking the first milestone on our new course.”

On the other hand, Hayleys’ 2017/18 bottom line (Rs. 3 billion) reflects a decline from the previous year, which Pandithage says is a consequence of higher net finance costs “mainly due to the increased cost of funding acquisitions through debt and consolidation of finance costs of the acquired companies.”

Hayleys’ transportation and logistics sector was the largest contributor to group profitability in the reporting period; it invested 845 million rupees in capital expenditure to support plans for growth.

In the group’s industry inputs, power and energy sector, “both wind and solar power had a good year, cushioning the poor performance of hydropower, which was affected by the prolonged drought and flash floods that followed, causing damage to the intake channel of a project,” according to Pandithage.

Hayleys’ plantations sector recorded a turnaround although its Chairman cum Chief Executive acknowledges that “the positive performance masks the underlying issues that increase the downside risks to the continued profitability of this vital sector. The glyphosate ban damaged the tea industry and resulted in the loss of a promising Japanese market whilst increasing the cost of production. The biennial wage negotiations, scheduled for 2018, is another area of concern with industry wide implications.”

Pandithage continues: “Hayleys Global Beverages, the group’s tea extracts business, is taking time to realise its potential as obtaining regulatory approvals in prospective countries is a lengthy process. Entering into markets where existing suppliers have strong links has also been beset by delays.”

As for Hayleys’ purification products, the sector experienced a difficult year due to supply issues in raw materials in its activated carbon business, which impacted operations in Sri Lanka, Indonesia and Thailand.

The performance of the group’s consumer and retail sector was buoyed by the acquisition of Singer (Sri Lanka) in 2017.

However, the construction materials sector performance declined due to the closure of a plant, and the hand protection segment experienced a challenging year due to its reliance on natural rubber and volatility in rubber prices, alongside a difficult year for Hayleys Fabric on account of a shift in strategy to move up the value chain.

Pandithage reveals that during the period under review, “the leisure sector was beset with issues that impacted the entire industry ranging from health advisories for dengue, floods, the airport closure and withdrawal of direct flights from Europe.”

His outlook for the conglomerate encompasses “plans focussed on the expansion of e-commerce and improved customer service” and he points out that the “focus on the construction business will be increased… The group will move to rapidly reduce gearing and realign the capital structure with a view to bolstering the bottom line.”

Lanka ORIX Leasing Company (LOLC) continues to be among the notable movers and shakers in the LMD 100 – it occupies the No. 2 position in this edition (from fifth place in the previous year).

The non-banking financial institution reported 63 percent year on year growth in income (to nearly Rs. 150 billion) for the 12 months ended 31 March 2018. However, LOLC’s after-tax profit of 19 billion rupees reflects an eight percent contraction from the preceding year when it assumed the self-initiated title of ‘most profitable corporate in Sri Lanka.’

In LOLC’s annual report, Deputy Chairman Ishara Nanayakkara notes that organisational performance “was once again spearheaded by the group’s financial services segment, which contributed 85 percent to profitability despite a challenging year.”

LOLC’s investments in nonfinancial sectors such as leisure, plantations, construction, healthcare, and trading and manufacturing are also thought to have supplemented growth in the financial services industry.

Furthermore, the year under review saw LOLC Holdings purchase the 30 percent share of ownership held by ORIX Corporation of Japan, resulting in the exit of ORIX Corporation from LOLC. ORIX Corporation had been LOLC’s investment partner since 1980 when the company formed a partnership with LOLC Group in a consortium that included IFC to introduce leasing to Sri Lanka.

Financial year 2017/18 also marked the merger of LOLC Micro Credit (LOMC) with its flagship finance subsidiary LOLC Finance.

Nanayakkara elaborates: “LOLC Group’s long-term funding partner of over 25 years, FMO (Dutch Development Bank) helped pave the way forward to the merger by divesting their ownership stake in LOMC.”

The group’s regional presence in microfinance now includes Myanmar, Cambodia, Indonesia and Pakistan, and “it will look to venture into markets with high potential for MSME (micro, small and medium enterprise) growth,” the Deputy Chairman reveals.

Looking ahead, Nanayakkara affirms: “The group will continue to focus on the SME and micro lending sectors, and look to harness the dividends of its overseas investments … It is gearing up to replicate its success across the region to become the largest multi-currency, multi-geographic microfinance platform in the world.”



Group Managing Director and CEO Kapila Jayawardena states that the group achieved substantial growth in customer acquisitions despite a non-conducive environment of low economic activity during the year, while “key contributors to profits during the year also derived mainly from our overseas operations such as PRASAC and LOLC Cambodia.”

The group’s insurance businesses, LOLC Life Assurance and LOLC General Insurance, completed their first full year of operations as two separate entities with Jayawardena commenting that “both businesses achieved strong growth – well above industry growth during the year.”

Meanwhile, buoyed by the success of its maiden venture in the healthcare sector Browns Hospital in Ragama, the group acquired properties in Kurunegala, Jaffna and Negombo to establish new hospitals. Outlining plans for the future, Jayawardena says: “Fintech will play a vital role in all strategic initiatives of the group with a special focus on digitalisation of processes, distribution channels and product portfolio.”

A step down the ladder from where it was last year sees John Keells Holdings (JKH) slip to third place in the LMD 100 rankings for 2017/18. JKH achieved 14 percent year on year growth in its top line to reach Rs. 121 billion while its profit after tax increased by a more substantial 28 percent from the prior year (to in excess of 23 billion rupees). The group’s key business verticals include transportation, leisure, property, consumer foods and retail, financial services, information technolo­gy and others including plantation services.

Outgoing Chairman Susantha Ratnayake informs: “During the year under review, the key businesses of the group underwent a comprehensive five year strategy formulation and planning exercise. Consequent to this exercise, key investments were identified and earmarked for implementation over the next few years across key growth businesses particularly in the leisure, consumer foods and retail, financial services and property.”

As for JKH’s transportation business, he states that “revenue and profitability of the group’s bunkering business improved as a result of the growth in volumes and an increase in base fuel prices during the year. The logistics business recorded a strong performance due to an increase in throughput in its warehouse facilities.”

“Despite the increasingly competitive operating environment, the city hotels sector increased its fair share of available rooms in the five-star category in the year under review … The Sri Lankan resorts segment recorded an overall improvement in occupancy despite the increase in competition within the sector particularly in the coastal areas of the island,” the Chairman asserts.

He adds: “The model for expansion will primarily be on an asset light investment model where the group will seek partners for select hotel investments to manage its effective capital deployed in the industry group whilst increasing rooms under its management.”

With respect to the property industry group, Ratnayake discloses that JKH seeks to establish a continuum of projects and in this light, “land parcels in the city and the suburbs have been identified and earmarked for development.”

In the year under review, the group announced the launch of its Tri-Zen joint venture residential development project, the construction of which is set to commence by the second half of 2018/19 with expected completion in 2022/23.

Ratnayake also reveals that “construction of the Cinnamon Life project is progressing with encouraging momentum with the completion of the superstructure of the buildings expected in the second half of 2018/19… The project is slated for completion in calendar year 2020 with the residential apartments and office complex ready for hand over and occupation by early 2020.”

JKH’s Chairman explains that the decline in profits in the consumer foods and retail industry group “is on account of the consumer foods sector and to a lesser extent the retail sector,” while “the volume decline in the beverage business was further exacerbated by the implementation of a sugar tax from November 2017.”

The group’s financial services entity Nations Trust Bank launched FriMi during the 2017/18 financial year, which it promotes as the country’s first digital bank that enables the opening of a bank account through a smart device.

Ratnayake points to “a general tapering of demand and slowdown in consumer discretionary spending,” which he attributes to volume declines across product categories in the office automation business.

Hatton National Bank (HNB) is also down a notch in the 2017/18 edition of LMD 100 – it drops to fourth place in Sri Lanka’s premier listed company rankings.

The leading private sector bank registered an income of Rs. 120 billion for calendar year 2017, which represents a top line increment of 25 percent year on year. Its post-tax profit meanwhile, rose by a mere seven percent from the prior year to approximately 17 billion rupees.

Chairman Rienzie Arseculeratne maintains that “HNB’s performance is commendable considering the challenging macro environment that prevailed in 2017.” He also points out that “HNB’s SME and microfinance verticals continue to support financial inclusivity and poverty reduction as we couple investment with capacity building initiatives.”

“We are closely monitoring the proposed changes to the Banking Act and introduction of a Bank Sustainability Risk Index as these will directly impact our operations,” Arseculeratne adds.

In the meantime, Managing Director and CEO Jonathan Alles remarks: “Profit growth was supported by the high interest rates that prevailed in 2017 easing pressure on margins. Business verticals supported growth in fee based income with successful implementation of strategies to increase market share in trade finance, transaction banking and digital products.”

“Following two years of strong growth, 2017 was a consolidating year to review the hygiene factors of our portfolios… The consolidation also supported an in-depth review of stressed portfolios to determine appropriate strategies to prevent further deterioration of non-performing loans,” he reveals.

Outlining HNB’s forward strategy, Alles declares: “Our digital transformation continues to deliver innovative products, scalability and cost leadership, while enhancing the customer and employee experiences, which are key to our goal of becoming the No. 1 digital bank by 2020.”

He is of the view that “declining interest rates will present an opportunity for HNB to improve its asset portfolio through increased credit to high growth sectors of the economy, and creditworthy customers to achieve a balance between margins and management of non-performing advances.”

Fellow representative from the banking sector Commercial Bank of Ceylon (ComBank) occupies fifth place in the LMD 100 rankings for 2017/18 – a one spot drop from the position it held in the prior year.

The highly regarded private sector financial services institution with more than three million customers reported a 25 percent annual uplift (to almost Rs. 117 billion) in income during the period under review. ComBank’s profit after tax grew by 15 percent to record a bottom line of nearly 17 billion rupees. And its total assets at 31 December 2017 exceeded Rs. 1 trillion.

Chairman Dharma Dheerasinghe stresses: “The bank recorded an enhanced overall performance across all business lines and geographies … overseas expansion is now one of our foremost strategies, which will help us geographically diversify our risk profile.”

As he points out, over 12 percent of ComBank’s lending is to SMEs given that the bank believes “the SME sector is the backbone of the economy.”

For ComBank, 2017 was a year in which it inten­sified its focus on exploring methods that would increase efficiency and productivity through the use of state-of-the-art technology, according to the Chairman: “Our efforts encompassed digital bank­ing and automated banking centres.”

Towards ensuring greater customer centricity, the bank partnered with US based software vendor FISERV for procuring a digital banking solution that was scheduled to go live by mid-2018.

“This solution would enable an omni-channel presence, and provide a true contextual banking experience to customers across web, mobile phones, tablets and wearables. The bank is looking towards establishing partnerships with global IT players such as Microsoft and IBM in order to provide a better customer experience,” Dheerasinghe explains.

ComBank’s Managing Director and CEO Jegan Durairatnam states: “The growth of deposits and credit reflects the bank’s strong capacity for financial intermediation, and illustrates a deployment of funding resources that is most conducive to the pursuit of productive assets.”

Moreover, he reveals that during the year, the bank borrowed US$ 100 million from the IFC to fund business growth that “came at a relatively lower cost and also eased pressure on securing funding from other sources.”

Durairatnam highlights the fact that Commercial Bank contributed approximately 41 percent of its profit to the government through taxes in addition to over two billion rupees in taxes collected from customers on behalf of the state.

However, he cautions that “regulators need to work together and take a longer term view to ensure that while the necessary checks and balances are in place, banks are not stymied from achieving their full potential.”

Sampath Bank breaks into the LMD 100 Leaderboard in financial year 2017/18 to occupy the No. 6 position in the rankings. This comes on the back of the bank’s 38 percent upside in its top line from the prior year (to Rs. 97 billion). Meanwhile, its bottom line improved by an equally impressive 33 percent year on year (to 13 billion rupees).

Chairman Channa Palansuriya posits: “We took what we believe is a quantum leap to ensure that we are well positioned to stay aligned in a changing world. Termed the ‘Paradigm Shift’ programme, the move entailed a massive revamp of our operational architecture in what is perhaps the single largest internal restructuring effort we have undertaken to date.”

He explains that “the purpose of the exercise is threefold: firstly, to fuel growth of corporate business through sector specialisation; secondly, to raise the standards of consumer banking, and reach out to as many individuals and SMEs as possible across Sri Lanka; and finally, to position Sampath Bank as the market leading financial technology (fintech) solutions provider in the country.”

In parallel, the bank invested in upgrading its core banking system while also migrating from its legacy system to a more powerful Finacle 10 core banking platform, the Chairman notes. And to comply with capital requirements under BASEL III regulations, Sampath Bank took action to strengthen its Tier I and Tier II capital, formulating a new capital plan with actionable objectives.

Palansuriya reveals: “We raised Rs. 7.6 billion by way of a rights issue after a lapse of 12 years. I see this as an important step towards strengthening our Tier I capital. Adding a Rs. 6 billion boost to the bank’s Tier II capital, Sampath Bank became the issuer of Sri Lanka’s first ever BASEL III compliant debenture. The bank also succeeded in securing a further US$ 100 million senior debt from China Development Bank in a landmark offshore deal with a five year tenure.”

“Our vision in the next phase of growth is to act like a startup, and be able to respond and innovate quickly to deliver simple, fast and contextual banking in the digital age,” he adds.

In the bank’s annual report, Managing Director Nanda Fernando observes that “in 2017, the bank benefitted from favourable macroeconomic conditions including the revival in global trade and investment activities, and reasonable GDP growth in Sri Lanka.”

Fuelled by private sector credit demand, Sampath Bank’s advances portfolio grew at a faster pace than sector growth, the MD says: “Despite the growth in the credit portfolio, credit quality remained strong.” And according to Fernando, “the bank’s deposit strategies for the year were aimed at maintaining deposit growth at above industry average levels.”

“Having revived our offshore lending programme in 2017, I am proud to announce that we reached a historical milestone by performing our first official lending transaction to Myanmar through the bank’s offshore banking unit… More focussed efforts to pursue offshore lending opportunities in other regions saw the bank venture into project financing activities in a number of East African countries, a hitherto untapped market for the bank,” he adds.

Amid a nine percent year on year upturn in turnover (to Rs. 94 billion), Dialog Axiata surrenders one place in the latest LMD 100 rankings to occupy the No. 7 spot. Meanwhile, after-tax profits of the telecom entity expanded by 19 percent year on year (to 11 billion rupees) for its financial year ended 31 December 2017.

Addressing shareholders in the telco’s annual report, Dialog’s Chairman Datuk Azzat Kamaludin proclaims: “The year, which was marked by macroeconomic challenges, regulatory changes and technological shifts, saw your company consolidate its position as the undisputed converged communications leader in Sri Lanka.”

“Our focus remains on technological innovation through investments in digital infrastructure of the future,” he confirms.

The Chairman points out that during calendar year 2017, Dialog was able to grow its mobile subscriber base to over 12.7 million while claiming a subscriber market share growth of 1.1 percentage points. Dialog also remitted a total of Rs. 35.7 billion in the form of taxes to the Government of Sri Lanka during the year, which represents an increase of 13 percent annually.

Meanwhile, Supun Weerasinghe – who completed the first year of his tenure as Group Chief Executive in calendar year 2017 – points out that “investments in 2017 were directed towards spearheading the democratisation of broadband connectivity in Sri Lanka, centred on ‘inclusive digital empowerment’.”

According to him, the telco was able to deliver superior results despite a declining trend in wallet share among consumer driven businesses as Dialog “balanced the dual pressures of short-term profitability with long-term investment and shared value creation.”

In 2017, Dialog’s core voice revenues remained stable, and the emerging segments of mobile broadband, and fixed and digital services contributed substantially to the overall profile, its annual report states.

Weerasinghe alludes to the fact that OTT players continue to disrupt and erode revenue streams such as voice and messaging, but that growing opportunity exists to drive digitalisation efforts across industries and societies.

To this end, he notes: “Our outlook for the sector includes emerging technologies such as the Internet of Things (IoT), big data, augmented reality, cloud computing and artificial intelligence (AI) coming together, to transform lives and enterprises as we enter the Fourth Industrial Revolution.”

Moreover, Weerasinghe underscores the fact that “it is essential that the regulator and policy makers act swiftly to create enabling regulatory platforms, which can propel Sri Lanka’s development trajectory.”

CT Holdings further distances itself from the top five in the LMD 100 in financial year 2017/18 by falling one place from the preceding year to No. 8. This comes despite an eight percent year on year increase in turnover (to Rs. 92 billion) while its consolidated profit after tax expanded to nearly four billion rupees (up 40%) from the prior year.



A diversified entity, CT Holdings has interests in retail and wholesale distribution, fast-moving consumer goods (FMCG), real estate, restaurants, banking and financial services, and entertainment.

Chairman Louis Page says that “the group achieved a satisfactory top line growth amidst a relatively subdued eco­nomic environment, which has been impacted by inclement weather affecting the key agriculture sector of the company while tightening fiscal conditions have also impacted consumer spending.”

During the year ended 31 March 2018, the group invested Rs. 4.8 billion in property plant and equipment covering all its main operating sectors. In addition, it invested in training and development of management and staff “to upgrade the capabilities of the team in a rapidly changing marketplace,” the Chairman reveals.

The group expanded its ‘Mini Mall’ concept by completing its third investment property – Cargills Square, Gampaha – in the latter half of 2017 with Page asserting that “efforts would be made to unlock the value of these properties by developing the same along the lines of the Mini Malls already constructed, subject to local conditions and demand.”

As for the entertainment sector, the Chairman draws attention to moves by the National Film Corporation (NFC) to take over exclusive islandwide distribution of all movies, both imported and locally produced, which is “in effect a nationalisation of film distribution across Sri Lanka. Previous experience with the NFC in this regard had been a disappointment and we have expressed our strong opposition to this move by the NFC.”

Unchanged from its prior year position of No. 9 in the LMD 100, Lanka IOC (LIOC) registered a 13 percent year on year expansion in turnover (to Rs. 91 billion). However, the locally listed Indian petro giant suffered a post-tax loss of 744 million rupees whereas it posted a profit of over three billion rupees in the preceding year.

Chairman Ranjan Kumar Mohapatra attributes the losses incurred in 2017/18 to “under recoveries on sale of petrol and diesel owing to non-revision of selling prices in the country in line with international prices.” Nevertheless, during the period, LIOC’s bunkering sales doubled while lubricant sales increased by 19 percent.

Mohapatra maintains that the company “further optimised its supply chain management, imported products at the right time, optimised its inventory at appropriate times, negotiated hard with suppliers and vendors, and carried out several other initiatives to cut costs in a difficult year.”

He also voices concern over “the continuous upward movement in the price of petroleum products in the international market” that leads to countries witnessing “higher import bills that greatly affect their fiscal deficit as well as the current account balance.”

As for the future outlook, LIOC’s Chairman claims that “after a challenging year, the board has [in principle] decided that the company shall not bear losses on petrol and diesel in a major way.”

He continues: “We plan to continuously expand our retail network by commissioning more petrol pumps at key locations and also adding more dis­tributors, Servo shops etc. to our lubricants network… Extending our reach to neighbouring countries also remains a persistent part of our growth strategy and we feel that the lubricants segment gives us an opportunity to achieve it in a minimum time frame.”

Managing Director Shyam Bohra commends the organisation for achieving its highest ever turnover, which he says is mainly a result of the expansion in the bunker segment that registered volume growth of 56 percent.



“Despite of net loss, the positive gross margin is upheld by LIOC’s diversification into lubricants, bunkering and branded automotive fuels. All segments lived up to our expectations except generic auto fuel where the company incurred losses due to non-revision of selling prices in line with international prices,” he acknowledges.

LIOC added five new outlets to its net­work during the year, bringing the total to 207 at 31 March 2018. The Managing Director also outlines plans to develop ‘green corridors’ on highways where an electric car charging facility will be available at every 50 km thereby creating ‘green highways.’

In 10th place (No. 8 in the prior year) in the LMD 100 rankings is Cargills (Ceylon) with a top line expansion of eight percent from the prior year – to surpass Rs. 91 billion. And its post-tax profit for the period of three billion rupees reflects a growth of 46 percent from the prior year.

The group consists of three key operating segments covering retail, food manufacturing and restaurants. Its retail operations are executed through Cargills Foods Company and at 31 March 2018, 353 Cargills Food City outlets were operational across all 25 districts in Sri Lanka.

Chairman Louis Page opines: “Consumer response to the remodelled supermarkets has been positive, and justifies the Retail Management Team’s emphasis on fresh food categories and maintaining our competitive advantage in pricing, which is driven by our integrated supply chain sourcing directly from farmers and producers while focusing attention to minimise wastage.”

Meanwhile, the FMCG segment of the group holds eight production units and one primary processing facility along with 22 collection centres for the sourcing of fresh milk. The group’s FMCG brands are largely distributed within Sri Lanka with limited exports to India, the Maldives and the Middle East.

“The sector comprises brands that have market leadership in dairy, agrifoods and processed meats while the confectionaries segment has turned profitable in the year under review,” according to the Chairman. He also notes that the restaurants business, which consists of KFC and TGI Friday’s, “continued to report strong year on year growth driven largely by the KFC franchise operation.”

Page affirms: “We will continue to expand our operations across all categories, and strengthen our back end and processes to ensure the operation remains lean and efficient to deliver our promise to all stakeholders.”

As far as the nation’s leading listed companies go, the big picture is that they have been compelled to bite the bullet and work in isolation without expecting any support from the state – such are the times that both business and the people live in here in precious Sri Lanka.


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