- Malaysian partner setting up a fully-owned local subsidiary to undertake new business operation
Singer Sri Lanka PLC has entered into a joint venture agreement with Malaysia’s largest kitchen cabinet and wardrobe manufacturer, the Signature group, opening up a sprawling marketplace for the company in the modern kitchen segment in Sri Lanka.
Singer Sri Lanka entered into the agreement with Signature Manufacturing Sdn. Bhd. (SMSB), the wholly-owned subsidiary of Signature International Bhd. and the company specialises in manufacturing of kitchen cabinets and built-in wardrobes.
The signing of the agreement took place virtually, last week, with the participation of the top officials of both companies.
The agreement provides Singer with exclusive rights to promote, market and sell Signature’s products, which come under the brands, ‘Signature’ and ‘Signature Kitchen’ and other trade marks of Signature Manufacturing Sdn. Bhd. “SMSB would bring into the venture its kitchen expertise, technical knowledge and ‘know how’ in relation to the distributing and management expertise in the operations of retail and project business of its products and Singer shall set up the products display set at its existing showroom to promote, market and sell the products,” Signature International Bhd. said in a statement.
Singer is expected to import and promote Signature products in Sri Lanka. However, it is unclear how the current controls on imports of non-essential items could affect the execution of the deal, in the present context.
For the three months ended on June 30, Singer Sri Lanka reported earnings of 98 cents a share or Rs.367 million, up from earnings of 7 cents a share or Rs.27.3 million in the comparable period, last year, as lower finance cost and selling and administration expenses helped the bottom line.
The company’s revenues were also up by one percent to Rs.14 billion during the April-June quarter, despite Sri Lanka was under lockdowns till May 11.
Modern kitchens are rapidly gaining popularity as kitchens are now designed and built to provide the dwellers an experience similar to a restaurant or a living room. More space and aesthetics are expected to provide them with a relaxing atmosphere after a hard day’s work. While the joint venture agreement will not require any equity participation from either company or setting up of a joint venture entity at present, SMSD said it is in the midst of setting up a wholly-owned subsidiary under the name, ‘Signature Kitchen Lanka Private Limited’ to undertake the business operations.
The Signature group has presence in 15 countries with its range of products. Signature International Bhd. is listed on Malaysia’s stock exchange.