Gearing up for tougher times

Brand Finance’s eighth annual review of Sri Lanka’s most valuable brands, which has now gained wide acceptance, has just been released.

The findings reveal that BOC, which topped the table for the fourth consecutive year, with a value of Rs. 15.2 billion, is still the country’s most valuable brand. At the very top of the brand value table, the battle between the State-owned bank behemoths continues.

BOC, which maintained its lead on People’s Bank by a mere whisker last year, has slightly increased the gap this year despite both brands showing a decline in value primarily driven by their decline in revenues. Meanwhile, within the largest private banks, Commercial Bank has regained the top spot from HNB.The top 10 most valuable brands are dominated by banks and also include the only two listed telecom operators – Dialog and SLT. The retail giant Cargills Food City sits at No. 7, whilst Lion beer takes a leap of 10 slots to move to No. 9 in this year’s table.

Meanwhile, the majority of the hotel brands are found at the bottom of the table. This is a reflection of the opportunities available to this key growth sector. Branding in this sector is still in its infancy and is primarily location focused.

Hotel branding is complex as it requires a confluence of many factors to establish a strong brand which include operating processes, establishing service standards supported by the right training modules, an effective customer relationship management and feedback system, all of which needs to deliver on a defined brand experience.When taken as a whole, the year under review saw a slowing down of value growth which is indicative of what we can expect in 2012. Having achieved significant growths of 17% and 18% in 2009 and 2010 respectively, the growth reduction in 2011 is likely to continue through 2012, which is indicative of the difficult challenges ahead for brands operating in the Sri Lanka market. As markets pose challenges, brand managers need to adopt a more strategic approach to their business in order to sustain growth.When evaluating the main gainers in the year, the two listed telecom brands Dialog and SLT are seen to have been able to turn around and record significant gains in brand value, primarily due to the abatement of the price war which impacted their performance.

Dialog was the highest value gainer amongst all the brands on our list this year. Whilst the regulatory environment and an organisational restructuring in 2009 have helped, the company has embraced an integrated approach to sustainably managing its brand and business, which has yielded significant value in the year under review. It is now one of the few AAA brands on the table.

The main beneficiaries of the revival of the hospitality sector are Lion beer and DCSL. Lion has taken a decision to disinvest from the Indian market and refocus its efforts in Sri Lanka where the brand has a huge competitive advantage. These resources will be used to invest in capacity expansion, whilst the company will also be mindful of the new competitive framework it is about to enter with Cargills, following the latter’s acquisition of Three Coins.

This was also a spectacular year for DIMO, which capitalised on an environment with a highly-conducive motor vehicle imports policy, whilst also significantly strengthening the brand to AAA status. The manner in which they have holistically built the brand through effective management is highly commended. Now that the import policy has changed dramatically, it will be interesting to see if DIMO can sustain its position.

DFCC Bank was one of the few banks which recorded a growth in revenue. This growth would have been driven through a more active investment climate within the corporate sector, which is a key strength of the bank.

After several years of declining value, Singer has bounced back recording a healthy increase driven by a highly-conducive market with minimal duties on electronic items.Cargills Food City, the biggest organised retailer in the country continues to grow in brand value. A key contributor to this increase is the expansion of its store network and the brand now has 163 outlets across 25 districts in the country. Recognising that those consumer brands which are not listed on the CSE should also be evaluated, Brand Finance publishes a supplementary table, which is an index of the top unlisted brands. When taken together, these tables provide a holistic picture of the brand landscape of Sri Lanka.

These annual reviews are published in the Brands Annual supported by an extensive series of articles, and the key highlights can also be found on www.brandirectory.com Brand Finance is an independent global business focused on advising strongly branded organisations on how to maximise value through the effective management of their brands and intangible assets.