By Chandeepa Wettasinghe
Melstacorp PLC, (MELS) the latest entrant to the Colombo Stock Exchange, and the new parent of the blue chip Distilleries Company of Sri Lanka PLC (DCSL), is planning to focus on the three core areas of niche tourism, energy and financial services, for future growth, company officials said.
“There are a lot of other sectors that we have investments in. one of the largest sectors is the hotel and leisure industry. We have direct investments and we have investments through Aitken Spence. So that is a sector that we see has enormous potential,” MELS Managing Director Amitha Goonaratne said.
Speaking at a ceremony held at the Colombo Stock Exchange to mark the trading of MELS shares for first time, he said that the group is hoping to make its non-alcoholic beverage segments as profitable as its alcoholic beverage segment, which will mainly be achieved through tourism and hospitality. This is despite analysts recently casting doubts on the Aitken Spence Hotels’ expansion plans both in Sri Lanka and overseas during a period of volatility in the company’s main tourism source markets.
Further, the formal tourism sector has seen its market share increasingly being captured by the informal sector and budget accommodation operators in recent years.
However, Gooneratne said that the MELS Group will focus on niche markets for future growth.
“It (tourism) has done well and going forward there’s room to identify different niche markets in this particular sector and to develop this. So I feel that it is the largest sector where we will try to grow our revenue,” he said.
Further, in view of an impending power crisis, which could affect Sri Lanka for the next two years unless the government takes swift action, MELS is also hoping to make further investments into the energy sector.
“We have the energy sector, which we feel, in the years to come there would be more potential, we have investments, that also should grow,” Gooneratne said.
Aitken Spence group owned ACE Embilipitiya thermal power plant, which had been retired due to being an expensive power source for the government, was re-commissioned this year following major blackouts.
The group however burnt its fingers this year during an overseas expansion of its energy sector, when two projects totalling 200MW in Bangladesh had to be abandoned due to delays.
However, MELS officials said if attractive overseas energy projects are pitched, it would be willing to consider investments.
The rebranding and restructuring exercise of DCSL into MELS has been done in order to pursue major overseas investments, according to company sources.
Meanwhile, Gooneratne also said that finance and insurance, the group’s latest diversification attempts, will also see major growth.
“These are the two newest companies on the Melstacorp Group which we are spending our attention on. Taking on a medium term view we feel that there is a lot of potential in these two areas as well,” he said.
MELS also has interests in textiles, logistics, trading, plantations and telecommunications.