Finlays Colombo’s new property development and future strategy
View(s):Finlays Colombo Ltd recently entered into a joint venture agreement with two wholly owned subsidiaries of the John Keells Group for the development of its land at 186, Vauxhall Street.
(From left) Naresh Ratwatte – Director – Finlays Colombo Ltd; Hunter Crawford – Chairman & Managing Director – Finlays Colombo; Suresh Rajendra – President – Property Group – John Keells Holdings; and Nayana Mawilmada – Sector Head – Property Group – John Keells Holdings PLC at the signing of the joint venture agreement.
Commencement of the joint venture is subject to satisfaction of conditions precedent (including approvals from or filings with relevant authorities), the company said in a media release.
“We are ready to form a joint venture with the John Keells Group to embark on a very exciting development project in the heart of Colombo,” said Hunter Crawford, Chairman and Managing Director of Finlays Colombo. “We believe that property development in Colombo 2 has significant long-term growth potential. The ultimate parent company of Finlays Colombo, the Swire Group, has a successful track record in property development in several parts of the world and Finlays will undoubtedly benefit from working with the John Keells Group, which has substantial local property development experience, it said.
When the joint venture commences, Finlays Colombo Ltd will hold a 39.72 per cent as against 60.28 per cent by the John Keells Group.
“This is a very exciting addition to our current holdings on Vauxhall Street,” said Suresh Rajendra, President of the John Keells Property Group. “While we are in the process of drawing the masterplan, we will lead with the development of this property in partnership with Finlays Colombo, a reputed business group in Sri Lanka.
The project’s progress will be in conjunction with future developments on the adjoining properties, and will tie in with our other property development projects spread across Colombo.”
Finlays said along with this development, it was embarking on a strategic realignment of its business focus. This realignment will see significantly increased focus on its core tea business (both plantations and export packing) and divestment of its non-tea businesses (insurance, cold store, pest control, hygiene and courier services).
“Our non-tea businesses are all well-run and profitable enterprises in their own right and have done us proud,” said Mr. Crawford, “but with our decision to focus on tea, where Finlays is a global player, we need to find new owners who can take these non-tea businesses to the next level.”
Finlays said it would be investing US$ 3 million in new tea packing equipment for its factory in Welisara. “This is a significant investment in the capacity of our Sri Lankan tea packing business,” said Gihan Jayasinghe, Director of Finlays Colombo Ltd “We are committed to growing our Ceylon Tea business. It is already an important contributor to Finlays’ global product and service portfolio and we have plans for further expansion.”