Wednesday, 28 May 2014 00:00
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By Shabiya Ali Ahlam
Eastern Merchants Plc is expanding in the spice business given the high potential and recent revival in country’s exports.
The company has floated a new subsidiary, Spice Lane Ltd., for the purpose of further developing the trade of spices conducted by the Group.
The official announcement was made in a filing to the Colombo Stock Exchange on 26 May.
While in 2012 the company under the category of traditional and non traditional commodities (category where spices are listed) recorded a value Rs. 4.64 billion on sales through exports, within the first quarter of 2014 it has recorded Rs. 2.46 billion.
In 2013 it was observed that spices led the revival with exports earnings up 39% to $ 355 million whilst other minor agricultural products exports saw a 33% jump to $ 101.3 million, according to Central Bank data for 2013.
The Central Bank in its latest Annual Report said that export earnings from other agricultural products such as spices, vegetables, unmanufactured tobacco, minor agricultural products increased substantially in 2013, contributing to the overall growth in agricultural exports.
Spice Lane will be the fourth subsidiary for the listed company since incorporated under its group are three other entities which are Eamel Exports, Asia Brush, and Asian Woodware. While Eamel Exports deals with the exports of local spices and handicrafts, the latter two handles manufacturing and exports of industrial brushes and brooms, and furniture and other wooden products.
The Board of Directors of this new subsidy comprises six of the 10 Executive Directors of Eastern Merchants. The Board of Directors for Eastern Merchant are H.J de Silva, N. K.L. Tilakaratna, S.A. Chandraratne, S. Jayakody, C.I Tilakaratna, C.S.L. De Silva, I.P. De Zoysa, T. de Zoysa, R.L. Nanayakkara (Non Executive Independent Director) and H.P.J de Silva (Non Executive Independent Director).
The registered office of the new company will be the same as that for the other three subsidiaries which is located at 341 Union Place, Colombo 2.
Eastern Merchants was established on 1946 and was listed in 1982. While for the 2011-2012 financial year the company recorded a profit of RS 114 million after tax, for the 2012-2013 it recorded a loss of Rs. 33 million.
Eastern Merchants Chairman J. B. L. De Silva calling the last financial year a “challenging one” in the company’s latest annual report said: “The 2012/13 financial year was a challenging one where market conditions for our business activities deteriorated and company earnings fell short of expectations. However, our agility as an organisation and increased fiscal discipline meant that we were able to limit the loss in earnings.”
