Richard Pieris to enter Indian, EU furniture markets
Rubber rich diversified blue chip Richard Pieris will shortly enter
Indian and European Union domestic furniture markets through the
restructure of two of its subsidiaries with foreign joint venture
The two Richard Peiris member-companies Hameefa Kegalle Ltd and
Timberline Ltd, which have been manufacturing furniture for local and
export markets through its Kegalle and Horana factories, but have been
incurring operational losses will be turned around by this exercise.
"What we will be effectively doing will be to forge strategic
alliances for these two troubled companies through backward integration
and existing operational synergies, Richard Peiris Group Chief Operating
Officer (GCOO) Pravir Samarasinghe told the Daily News Business.
"The RPC is conducting negotiations with a Malaysian party which will
infuse capital, technology and export marketing into Hameefa to enter
the giant Indian subcontinent, while the Group, through the other
subsidiary- Timberline Ltd is negotiating with a local furniture
manufacturer to expand both the local market for furniture and toys, the
latter to selected Continental markets," he said.
He was tightlipped about the joint venture partners and the
investment figures as the negotiations were yet going on.
However, he conceded that the signing of the joint venture agreements
However, the Richard Peiris Group and the two furniture companies
will not be infusing any capital into these two joint ventures but the
contribution will be through the existing infrastructure in the two
companies such as the factories and the human resources.
A further synergy which will augment the process will be through the
Richard Peiris Group's other sister companies Kegalle Plantations and
Maskeliya Plantations which have substantial quantities of rubber wood
which go into the finished product.
Despite Maskeliya Plantations being a predominantly tea manufacturing
company, it also has substantial extents of rubber in its forest areas
of the company which will contribute positively towards the joint
ventures. However, one drawback in procuring the raw materials from
Maskeliya Plantations is the excessive transport costs, he noted.
"The special and salient feature in this manufacturing process is
that we use Forestry Stewardship Certified 35 quality Timber which will
be going into these products which is essentially for rubber but the
Group also has outsourced its supply of other timbers such as teak and
mahogany to the domestic suppliers which go into the products.