Address:
No 10, Gothami Road, Colombo 08, Sri Lanka
Telephone:
+94 11 5700700
Email:
info@ambeongroup.com
Web:
https://ambeonholdings.com/
Q: In your opinion, how will digitalisation impact industries and the economy at large?
A: The changes in consumer preferences – together with rapid changes in how consumerism has evolved – makes digitalisation a critical process for any country, economy or even industry for that matter. The country’s readiness to embrace such change is pivotal to its growth strategy.
With Sri Lanka having the privilege of being a hub to the region in many ways, technology aided economic growth will not only create efficiencies but also new avenues for growth. Possible value added labour through IT professionals is one such possibility.
A well-established digital economy will serve as a nerve centre for all industries to latch on to, and build on their efficiencies and infrastructure to be competitive both domestically and internationally. This will also enhance the quality of life in the local context and attract foreign direct investment into the country.
Q: And could you describe the current state of business in the country?
A: The impact of 4/21 compounded macro issues, which has led to negative impacts in investments and related decisions, both in the short and long terms.
However, the emerging changes and clarity seem promising, after witnessing escalating costs resulting from added taxes, increased interest rates and the rupee’s drastic depreciation over the past couple of years. We expect that the new programmes easing consumer sentiment along with tax incentives offered will generate positive sentiment, and provide greater stability for investments and expansion.
Q: What are Ambeon Holdings’ priorities in the prevailing corporate environment?
A: The group’s main focus is its people and processes at this time. An area we’re looking into is efficiency building across the operational value chain with regard to future centric actions with digitalisation based consumer centric transformation, as well as cost and efficiency centred operational restructuring. This adds greater focus to the overall processes in the current context and from a positive forward-looking perspective, to strengthen the group’s resilience.
Additionally, the group is implementing value based collaborative measures to retain key skills and engage its people for growth.
Q: How has the group grown as a business over the past 12 months or so?
A: Business has grown significantly over the past 12 months. In fact, in the 12 months since 30 September 2018, the group recorded a growth of about 34 percent in revenue. Our strategic decisions to acquire and move into technology, and renewed efforts in export driven industries, paved the way for this positive performance.
The acquisition of Millennium I.T. E.S.P. (Millennium IT ESP) provided an opportunity for the group to be present in a growing industry, which contributed significantly.
Meanwhile, the export sector also supported this growth and was mainly led by the performance of South Asia Textiles, which is a leading manufacturer of high quality weft knitted fabric. The company also specialises in knitting, dyeing, finishing, printing, brushing, ‘sueding’ and preshrunk fabric, for leading global brands such as Victoria’s Secret, Next, Marks & Spencer, Tesco, Calvin Klein, Decathlon and Adidas.
Q: And how do you view Ambeon’s prospects in the medium term?
A: With the renewed vision of reengineering success, the group has realigned itself for the future. The acquisition of technology based businesses, investments in modern and future centric technology based machinery and process upgrades – along with building sustainable business models through greater focus on the Governance, Risk and Compliance (GRC) platform – have added to its resilience.
For instance, the substantial investments in and concentrated focus on areas such as building environmentally sensitive and important infrastructure is one such initiative that has been implemented under the risk and governance mandate.
With the new economic policies, we believe that consumer sentiment will be positive, and expect better cost structures due to reduced taxes and borrowing costs. The group could look to reinvest and expand for greater medium term growth. We believe that the technology business will experience greater growth because of domestic market expansion on account of corporates’ positive mindsets and the recent drive in technology aided economic resurgence.
The Ambeon group also plans to look at markets overseas in the tech space.
Q: To what extent are innovation and technological change impacting the sectors in which the group operates?
A: Ambeon’s technology cluster is affected by impacts at the end customer level and therefore, resulting changes in requirements and direct changes in skill levels – these may change particularly quickly for a technology company. As such, this cluster has a greater sensitivity to technological changes.
As with most businesses today, the rest of the manufacturing and financial services industries are also exposed to changes. However, there is some lag in their impact because of the type of industries in which we operate as they’re somewhat cocooned by nature. For example, while the porcelain sector is benefitting from technology aided developments, the work primarily remains centred on the same core principles.
Q: How have the industries in which the group operates been impacted by the country’s economic climate
? A: The industries we operate in have experienced mixed results. Ambeon’s technology and export clusters have performed well owing to longstanding clients. However overall, every sector has faced serious challenges.
Higher interest rates augmented by the depreciation of the rupee exerted pressure on overall profitability and reinvestment opportunities. These cost challenges were significant largely from a reinvestment perspective.
Furthermore, the retail sector did not display positive signs and was impacted further by the Easter Sunday terrorist attacks, which brought challenges to national sales and related output.
At the moment, the economic climate seems somewhat dampened and progress has been slow. GDP growth has been slower than expected with costs rising in the business sector. However, we believe the new economic direction will uplift sentiment and pave the way for robust growth.
Q: Could you outline the strategy implemented by the group to drive growth?
A: From a corporate strategy point of view, the group is open to mergers and acquisitions while the business strategy is focussed on transforming businesses.
Mergers, acquisitions and transforming distressed companies, as well as divesting or bringing in joint venture partners, are some of the activities Ambeon engages in as part of its strategy to transform opportunities to generate greater value for stakeholders.
The business strategy largely revolves around the matrix of efficiency and effectiveness built on four key frontiers – viz. the effectiveness of people and processes, and efficiency of operations and improved customer touch points. We try to embed future centric solutions aided by technology in these areas.
We believe that challenges in the future are likely to be quite different from what’s been encountered so far. For example, a disruption may be from a completely different source or industry than the traditional competition.
Therefore, our relentless focus is on the customer and his or her changes, and being relevant. These are the areas in which we expend time and effort.