UML to diversify into vehicle assembly

Hiran H. Senewiratne

United Motors Lanka Plc (UML) is looking at possibilities to diversify into the vehicle assembly business with technical assistance from Mitsubishi Company of Japan.

Currently, UML has started feasibility studies together with Mitsubishi Company to set up a motor vehicle assembly plant in Sri Lanka, Chairman UML Ranjith Fernando told the Daily News Business. He said that once the feasibility study process is completed, they are looking at possibilities to setup the plant either in Colombo or outside Colombo district to manufacture commercial or passenger vehicles initially for the local market.

The company is planning invest a sizeable amount of money for this proposed project with technical assistance from Mitsubishi Company in Japan, Fernando said.

These assembly motor vehicles will be of high standard also fitting to the export market due to the latest Japanese technology from principal company Mitsubishi Japan, he said.

UML will be diversifying into other business ventures as they have found that the motor vehicle sector is not an essential commodity in the competitive business. That have prompted them to diversify into new business ventures, which are in the pipeline, Fernando said.

It is said that high import taxes and other Government levies on motor vehicles inflated inventory values resulting in increased borrowings.

From April to September 2007, interest rates had risen by around 25%, fuelling an escalation in the company's borrowing costs.

Since 1989 and particularly over the last three years, the company has achieved remarkable results and it is today one of the leading Blue Chip companies.