At a time when even the century-old indigenous industries are failing to build the local brands competing with global giants, a Sri Lankan brushwear maker is slowly making inroads into the global market with its own branded products.
BPPL Holdings PLC, Sri Lanka’s leading brush manufacturer, which sells over 70 percent of its products in the US market, is now pushing for its own branded brushes and other cleaning products into the Southeast Asian region.
The company has recently set up a sales office in Malaysia, which might act as a central point for the Southeast Asian window. BPPL ranks among the top three brushwear manufacturers in Asia.
“The company also continued to roll out its own brand of products in Southeast Asia with a sales office being opened in Malaysia during the quarter. This office will also support Brunei,” BPPL CEO Dr. Anush Amarasinghe said.
BPPL this April sold slightly under 31 million shares or a 10 percent stake to the public on the Colombo Stock Exchange at Rs.12 a share, raising a total of Rs.372 million.
For the first quarter ended June 30, 2017 (1Q18), the company made a profit after tax of Rs.78.5 million, largely unchanged from the profit earned during the same period last year.
The margins were squeezed by the higher costs as the irregular timber supplies increased overtime payments, Dr. Amarasinghe said in an earnings release.
“Costs were also higher due to temporary worker hiring in order to process orders as and when timber was received. The gross profit margin fell to 37 percent from 40 percent during the three-month period ended June 2017. Approximately 2 percent of this 3 percent drop was due to the higher temporary wages. The balance one percent was due to the short-term increase in timber prices,” he explained.
Sales were recorded at Rs.552 million for the quarter compared to Rs.513 million reported for the corresponding period last year with the bulk of the revenue coming from the US.
The North American region accounts for 83 percent of sales of BPPL and sales in the region grew by 10 percent.
Meanwhile, the sales growth had been impacted by the floods in May, affecting the timber supplies.
“The situation, however, has normalized now. As a result, we expect higher levels of sales growth in the July 2017 to September 2017 quarter,” he added.
Two years ago, Dr. Amarasinghe hinted at his ambitions to foray into the Southeast Asian market under its own brands and products customized to the requirements of those markets, targeting their affluent and growing middle-income classes.
“So, there is an opportunity there for us to grab. We will come up with a new range mainly targeting those markets,” Dr. Amarasinghe then said.
The company’s products are already sold in India, Bangladesh and Indonesia.
“In the meantime, coverage continued to grow in Indonesia with three national hypermarket chains and seven local stores in the Jakarta region carrying our products. The total active store count was 180 at the end of June 2017,” he said.
BPPL is also poised to set up its synthetic yarn extrusion facility and the machinery is expected towards December this year.
“Yarn production is set to commence in the January to March quarter of 2018 and contribute to revenue from April 2018,” Dr. Amarasinghe confided.
As at June 31, 2017, Infinity Capital (Pvt.) Ltd held 50.31 percent of the company, while LOLC Investments Limited held a 26.25 percent stake. A 13.44 percent stake was held by Hirdaramani Investment Holdings (Pvt.) Ltd.