Richard Pieris to enter Indian, EU furniture markets

RAVI LADDUWAHETTY

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 collaboration.

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 was imminent.

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.