Cold chain operator Tess Agro, heavily traded

Hiran H. Senewiratne

OVERSEAS CONTRACTS: Tess Agro is the first cold chain operator in the country to succeed in obtaining many contracts from retail giants in UK and EU member countries, to export tuna fish, its Director Dilshan Fernando said.

Tess being a listed company in the Colombo Stock Exchange, is a heavily traded company in the market and is now improving business avenues despite many challenges.

During the past couple of weeks its share value moved slightly up in the market. The company's cost per share value is around Rs. 1.20, and is one of heavily traded companies in the market, stock market analysts said.

Despite high competitiveness from other Asian countries over the past five years, it has been exporting mostly tuna fish to the European Union (EU) member countries, to the tune of 50 tonnes per week, Fernando said.

At present it is a leading exporter of Tuna fish and non-traditional agricultural produce from Sri Lanka to the EU member countries, Fernando said. Core operations of Tess include the provisioning of cold chain facilities for perishable goods and export of fruits, vegetables & marine products. The cold chain facility comprises pre-cooling, cold storage warehousing, providing of refrigerated transport and temporary storage for clients at their own site.

Fernando said that the company's centralised warehouse at Kelaniya with the newly refurbished fish processing units and equipment are expected to generate more profits from the marine products segment. As the processing is in-house as opposed to the processing carried out at the Colombo port previously by other third parties, the intermediary profits would remain with the company.

The management has been able to obtain EU certified licence for the fish-processing unit at Kelaniya.

This is expected to sustain the revenue from supermarkets in the member countries of EU, who are conscious of food processing standards. The Kelaniya warehouse is currently 500 tonnes in capacity and is 90% utilised at present. This would allow Tess to increase its fish processing capacity even at a marginal profit, he said.

Tess made a revenue growth of 105% for financial year 2007 when compared to 2006 and CAGR of 7% for the last five years.