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by Ravi Ladduwahetty

Strategic investor in the Colombo Stock Exchange Dhammika Perera said that he will play an active role in strengthening the management of Connaisance De Ceylan Ltd and will provide the strategic direction for the hotel company.

Dhammika Perera

"We will be an active investor in the Group and will be getting actively involved in the company," he said. He said that he was not interested in plantation stocks. " Though, in the past I have bought plantations stocks as short-term investments, at present we are not looking at the plantations as a strategic investment sector," he said.

Q: Now that you invested in Connaisance, will you be interested in managing the hotel as well or will you retain it as a mere investment and get others to manage it?

A: We will play an active role in strengthening the management of the company and will provide the strategic direction. We will be an active investor in the Group and will be getting actively involved in the company. It does not mean that we will get involved in the daily operations, but will give it a strategic direction to the company.

Q: How do you see the hotel stocks with the peace prospects and with the Government's peace initiatives widely believed to be on the right track?

A: I am confident that the country is certainly on the correct path to peace. We have seen tourism rebound since the peace initiatives and hopefully prospects for the 2002/3 winter season look excellent. Some of the recent regional developments have also made tour operators look more favourably towards Sri Lanka as a safer destination for their clients. Sri Lanka is by far the best in terms of diversity within a small land area and value for money for the global traveller.

We need to focus on attracting more high-end and up market tourists, both in the leisure and business sectors as opposed to the low end budget traveller. This depends a lot on our infrastructure to support the needs of the high end traveller.

The industry is working together to improve growth while the government has also appointed a top task force to ensure that the right policy and programs are in place to harness the tourism industry's full potential with peace returning to the country.

Peace will also bring in a lot of confidence in the global traveller. This would stop him from going to other competing destinations. The other emphasis is on the attraction on the up market and budget tourists.

Q: There is a protracted effort of the Government to bring in Chinese tourists into Sri Lanka. Minister Gamini Lokuge told this newspaper (Daily News - July 2, 2002), that there are 12 million Chinese tourists who visit Thailand annually. It is said that the absence of a direct non stop over air link between Bejing and Colombo was the inhibitory factor. Your comments?

A: This program is good. Whether it is the Chinese and the Indian tourists, we will be going in for the up market tourists.

Q: The Keells Group which owns Coral Gardens Hotel was advertised for sale, but there were no buyers. Will you be interested?

A: I am happy with my existing investments in the hotel sector. There are so many hotels which are very well run and the Keells Group is managing the business very well.

Q: You have invested in banking and finance, manufacturing and hotels. Will the next sector be plantations?

A: No, we already own a plantation company. Though, in the past I have bought plantations stocks as short-term investments, at present we are not looking at the plantations as a strategic investment sector.

Q: Why?

A: We have bought plantation stocks in the past and the market is rife with speculation as to whether we will be continuing to get into that as well. These were short term investments. Within two years, we will not be looking at the plantation sector as a strategic sector. We will consolidate in the sections those we are in.

Q: How do you see the growth of the plantation stocks in the light of the tea industry unable to get higher prices without value addition and in the context of the recent plantation wages, which Mahendra Amarasuriya told this newspaper (Daily News - August 15, 2002) that only three companies will be able to afford?

A: Sri Lanka has high growth potential for tea. Plantation stocks are good and they are undervalued, considering the Net Asset Value. We would think that the plantation sector would be good.

Q: Now that you are the single largest shareholder of the NDB, what are your views of the proposed NDB-NDB Bank merger which will combine the fund strength of NDB and the commercial banking products of NDB Bank?

A: I only own 10% Development banks in the country are lending long-term funds obtained from bilateral and multi-lateral sources through government guarantees.

There are also several state agencies which own shares, therefore the controlling shareholder of NDB is the Government. With regard to your second question NDB has issued a statement on the matter and I do not wish to comment further since I am a member of the NDB Board. Further developments would be made public by the Bank.

Q: Coming to Royal Ceramics, what are your plans to reactivating the loss making Interbatch manufacturing plant which was recently acquired by RCL?

A:The Interbatch manufacturing plant, which is under the name - Royal Porcelain Ltd , has already turnaround. We have already done the required modifications and improvements to the plant and it is in production and making operational profits.

We have done the modifications to the plant. Now, the plant is almost at full production capacity. We are producing new designs from the plant.

Q: Royal Ceramics CEO Sarath Ganegoda was quoted in this newspaper (Daily News - September 12, 2002) that the cheap imported tiles from India and China were a threat to the company's product sales. How will you combat that?

A: It is true that cheap tiles are coming to the market. That is the bottom end of the market. Those tiles cannot compete with the tiles that we produce in Sri Lanka. We are competing in the open economy and we cannot prevent imports.

Q: On the other hand, don't you think that the Government is obliged to protect the local industry?

A: The Government cannot be pampering industries all the time. Local manufacturers should be able to improve the products so that they can compete with the imported products. Any manufacturer should operate within the scales of production in terms of efficiency and productivity.

Under those circumstances, we are confident that we can withstand the competition from substandard Indian/ Chinese products.

Q: What are your views on the Insurance Corporation privatisation?

A: I welcome privatisation since it is beneficial to the country and the people. I also believe that the private sector should be the engine of growth. It is always good to privatise. This will create the competition which will create a healthy market economy.

Q: How did you get involved in the shipping industry? Is it the agency business?

A: We have two cargo vessels. One is 'Induruwa Valley'. The other is 'Badulu Valley'. They are cargo ships. One sails from Colombo to India and the other is India-Dubai.

Q: What about the expansion of the gaming and investment business?

A: We have decided to go with investments for another two years. Now we find that this is the best opportunity to invest in the Colombo Stock Exchange with the peace process. We are looking at growth opportunities from within. In addition to the investment and earnings from the Colombo Stock Exchange, we are going to enter other business of our own. Gaming and entertainment complexes are one of our major strengths. There are long term plans and this is one area which is going to develop.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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