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| Wednesday, 9 July 2003 |
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Ceylon Leather IPO to open tomorrow The proposed Initial Public Offering (IPO) of 2.5 million shares to the value of Rs. 25 million of the Ceylon Leather Products Limited (CLPL) will be opene dtomorrow, a company official told the Daily News yesterday. The Colombo Stock Exchange has listed the company on its main board to facilitate the proposed issue, following an application for a listing by the company. Merchant Bank of Sri Lanka will act as the managers to the issue. The company known for its flagship shoe products of DI brand announced the company's plans to go for an IPO in order to expand speciality export market and to settle a loan taken from two banks to increase its production facility. "We are confident that the IPO will be a success since investors have much regard for the company," DI CEO, V. Gomez told the Daily News yesterday. With increased production capacity, DI plans to further strengthen its export markets by launching an up market shoe range. "We have a unique advantage in the export market as we are cost competitive. Our facilities now based in Bata-Atha have ISO 14000 certification. This facility is unique in South Asia," Gomez said. The company has already set up the new production line to manufacture up market designer shoes. Currently it has three production facilities: tannery where leather is made from raw hides and skins, shoe factory which produces leather footwear and leather goods and a factory which manufactures all types of leather products other than footwear. CLPL currently exports leather and leather goods to seven overseas markets. Finished leather is shipped to the UK, Italy and India while footwear and leather goods are exported to Japan and the Netherlands. "Recently, we launched a special range of crafted ladies shoes made of pure leather. However, the biggest drawback to expanding exports is the inferior quality of raw material. Product quality can be improved with the infusion of new technology and know-how but the main impediment is the limited availability of good quality raw hides," a spokesman for DI said. The short-term solution to this problem is through imports of raw material. CLPL is currently testing the imported raw material from a variety of sources. Despite these drawbacks, CLPL has achieved a remarkable 230% growth in exports during the last three years, the spokesman said. |
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