26 August 2020 09:15 am
The on-going financial year (FY20/21) will be the most challenging one yet, particularly for those engaged in the manufacturing of soy-based food products as the prices of soy beans in processed form are expected to surge.
With Sri Lanka sourcing bulk of its soy requirement from India, the neighbouring giant’s struggle to tackle the COVID-19 is expected to directly impact processed food manufacturers of the island nation.
Acknowledging that the coming months will be the toughest the country has faced in recent history, Convenience Foods PLC (CFL) stressed a key challenge would be to maintain an uninterrupted flow of soy flour. “This will be a challenge given the fact that India’s pandemic situation looks to be dire at present,” said CFL Managing Director E. T. De Zoysa in the company’s latest annual report.
“On top of this, global prices for soy flour can be expected to trend upwards,” he added. However, Zoysa expressed the company is hopeful that the rupee exchange rate fluctuations remain reasonably manageable levels amid the turmoil and uncertainty in the global economy. The annual report also stated that CFL is currently on the lookout for alternative suppliers in different parts of the world. CFL’s Lankasoy has over 33 percent market share in the country’s soy
meat market.
CFL, which ended FY19/20 with 93 percent year-on-year (YoY) increase in its bottom line, said that given the recent changes in the global economy that turned for the worse due to the pandemic, maintaining similar levels of profitability would be a challenge.
In the meantime, the company said that it will continue to strengthen its market position by expanding its distribution network, introducing new, innovative products and building on the strong partnership with distributors and traders.
The non-soy segment of the company will be further boosted to enhance its position in the market focusing on new business opportunities, which according to CFL, may arise as Sri Lanka transforms into a consumer-driven era.
CBL Investments Limited, the investment holding company of Ceylon Biscuits Limited (Munchee) owns over 70 percent of CFL’s issued shares. (SAA)