Vol 47, No 2 Autumn/Winter 2011 - Finlays

News
Sri Lanka Update
Kumar Jayasuriya
Chairman
We have had an interesting nine
months, when we have had to sharpen
our focus and our responsiveness in
dealing with the vast economic and
political changes that have swept the
world since the beginning of this year.
These have inevitably had an impact
on our business in general and on our
Tea Export business in particular.
In the light of the Arab Spring, we
have been obliged to be mindful of
the enhanced risks of doing business in
the Middle East and have had to devise
strategies to mitigate them. Japan,
another important tea market, has not
been the same since their devastating
earthquake and tsunami, and we have
had to carefully monitor our market
position and to maintain a close dialogue
with our customers.
However, the biggest challenge our
Tea Export business has had to face is
with respect to the exchange rate. Over
the nine month period the Sri Lankan
Rupee has strengthened by 1.3%, while
the currencies of our competing
producing countries, namely Kenya and
India, have depreciated by 21.3% and
4.3% respectively. Compounding this
problem is the fact that most Middle
Eastern countries have seen a similar
depreciation of their currencies. All this
has made Ceylon tea significantly more
expensive at the point of consumption.
In these circumstances it is a credit
that we have maintained our volume
of exports, but our margins have borne
the brunt.
On the positive side, the Sri Lankan
economy has been strong and this
has helped our domestic businesses.
Insurance has forged ahead and is
in expansion mode with several new
branches being opened including
one in the Maldive Islands where,
to conform with local regulations,
we have set up a wholly owned
subsidiary.
Environmental Services, especially
Pest Control and Sterifirst, have had
an excellent nine months. There have
been some management changes:
Nishantha Mohotti, the former General
Manager of our Pest Control Division
who has taken over as the CEO of the
whole sector, has streamlined procedures
and strengthened the total quality
management systems.
In Temperature Controlled Logistics we
have decided to discontinue the storage
of commodities such as potatoes and
garlic in bulk, a move which we hope will
be temporary as the increase in capacity
with the Stage III expansion will again
allow us to service this segment.
There is good news on the horizon.
Cathay is in the final stages of
confirming a weekly freighter between
Hong Kong, Bangalore and Colombo; this
will operate from December to cater to
the significant demand for
air cargo space out of Colombo.
We have continued our focus on Health &
Safety and sustainable development
through the responsible management of
water, energy and waste and the
minimising of our carbon footprint. We
have used our monthly team briefings to
highlight the importance the Company
attaches to these initiatives.
The second Routes to Grow programme
has been well received by the participants
from the Middle Management grades.
Sri Lanka News
Alwazah Tea Talks
Ron Mathison and a team from Finlays Colombo comprising
Kumar Jayasuriya, Romesh Croos Moraes and Nishan
Wickramaratna visited Kuwait on 7 – 8 June. Kuwait is the
home of Alwazah Tea, one of the premium brands targeting
the Arabic community throughout the tea-drinking world.
Discussions were held with the family of M/s. Sulaiman Al
Abdul Karim & Bros. on how we might increase our market
share for the Alwazah brand which is now available across
the globe from Australia to the US.
The Abdul Karim family with the Finlay team: (l-r) Abdul Karim S. Al Abdul Karim,
Romesh Croos Moraes, Abdul Aziz Al Abdul Karim (Abu Assad), Ron Mathison,
Dawood S. Al Abdul Karim, Kumar Jayasuriya, Omar S. Al Abdul Karim and Nishan
Wickramaratna.
42 Autumn/Winter ’11