Richard Pieris launches finance company with Arpico brand

By Cheranka Mendis

One of Sri Lanka’s largest and most successful diversified business conglomerates, Richard Pieris and Company ventured into yet another business last Friday, realising a dream of its Chairman Dr. Sena Yaddehige which he envisioned five years ago, by opening up Richard Pieris Arpico Finance Limited (RPAF).

Entering an aggressive market with 93 players, RPAF – a wholly owned subsidiary of the group – looks to ride on the well established parent company’s name and sound shareholder structure to nullify challenges that exist for new entrants in the market. Led by CEO K.M.M. Jabir, the new company focuses on providing much valued finance services through innovative financial products and services soon to be introduced. Jabir has over 28 years of experience in the finance and banking industry.

The customer segments will be closely studied on a regular basis, enabling the company to provide a portfolio which will include microfinance, leasing, hire-purchasing, motor loans, factoring, deposit mobilisation and corporate solutions. Jabir noted that the company will make use of the synergies of the group and utilise them to the maximum to establish itself.

“We will use Arpico Supercentres and showrooms located around the island while setting up branches of our own,” Jabir said. “The customer reach and the financial strength of the group will help us establish ourselves in the market as well. We will uphold regulatory directions of the CBSL and other regulatory bodies and uphold the ethics of the system.”

The target placed by Chairman for the finance company is a turnover of Rs. 500 million. There will also be numerous value additions using the strength of the group in different spheres, he asserted, which will be unparallel to services offered by competitors.

A brainchild of Yaddehige, setting up a finance company was his dream when he stepped down from his position as Chairman of the Asia Capital Group which includes Asia Securities, Asia Asset Management, and Asian Alliance Insurance. “It was a no-brainer,” he said, “This is nothing entrepreneurial. When I stepped down in 2008, I decided I will have my own finance company. This is the realisation of that dream.”

During the past two years, the Richard Pieris Group ventured into the fields of stock-brokering, asset management and investment banking, and insurance. “I now have the trinity of the fundamentals of the financial sector.” He added that the group has progressed in leaps and bounds over the past 12 years, with steady diversification into a wide array of business ventures exploring all avenues of growth.

“Our entry into finance and leasing with the launch of Richard Pieris Arpico Finance is a significant landmark not only for our group but also for the entire nation. As we are the largest tea, rubber and oil palm manufacturer in the country as well as the pioneers and market leaders of tyre retreading, and manufacture mattresses, water tanks, and many other polymer based products, we would also be the largest financial service provider in the country in double quick time.”

Yaddehige, who claimed that he was roped into investing in Sri Lanka when he had no keen interest in doing so, noted that he would step back once the group gains momentum. “When my goal for the company is realised, I will then open a bottle of expensive wine that I have had my eye on. A bottle of the kind I want is approximately Rs. 4 million for its 1986 edition.”

Having registered a turnover of Rs. 32 billion with operating profits in excess of Rs. 3.2 billion, the target is to reach Rs. 50 billion by end this year. The initial plan however was to achieve this number last year: “Maybe I didn’t have the right things in the right places.” The group is now acquiring sites to grow their business into, Yaddehige said. Recently, a Rs. 3 billion worth site was acquired for a vehicle company and four more sites were acquired for a supercentre. “Richard Pieris is dynamic – it is growing and growing.”

Holding a number of patents for radiation processing, contactless sensors and drive by wire systems, and a number of companies here and abroad, he added that he is also looking at reviving his business in UK which deals with electromechanical systems for high speed vehicles. “It is not a bad idea to have an automotive arm for Richard Pieris. If we introduce this to Sri Lanka, we can supply to the likes of Tata and Mahindra. There are other ways for Richard Pieris to grow.”

He is also trying to expand the palm oil business in which the company holds the title as the biggest manufacturer in the country. Due to the long timeframe needed to acquire lands for this purpose in Sri Lanka, he is looking at Burma, Cambodia, Vietnam, Ethiopia and Indonesia for expansion.

The replanting cost for palm oil production is Rs. 400-500 million a year, he said. “We are the biggest manufacturers of the country in the industry. However, we want to become better.” “The key to be successful is not the run to make money,” Yaddehige said, “Rather, it is the drive to achieve your goals and targets. I don’t look at my businesses as a moneymaking machine. If money comes, it is well and good. What I want to do is to service the people.”

He also noted that he does not need any more money: “I have enough. What makes me move forward business-wise is the drive to achieve my goals. I will only stop when I drop dead. For me every day is a win. What counts is not the destination, but the journey,” Yaddehige said.

 Pix by Indraratne Balasuriya