Expolanka venturing overseas in logistics and travel
Expolanka Holdings PLC, focused on its core competencies in logistics and leisure, is aiming to aggressively expand overseas in both these sectors.
In an interview with the Business Times this week, Hanif Yusoof, Group CEO Expolanka Holdings PLC noted that the company is in the growth mode in both the sectors. As a result of the expanding logistics, the company opened its Malaysian office last November. Expolanka already has offices in the logistics sector in Vietnam, Cambodia, Philippines, Hong Kong, Myanmar and China.
Mr. Hanif Yusoof
There is a reason for this. Most apparel buyers, which Expolanka services are moving towards Southeast Asia. With the shifting exports, it makes sense for the company to open offices in the intra-Asia region.
“We will continue to expand internationally serving intra-Asia, Europe and a fair share of the North American market,” Mr. Yusoof added. He noted that Expolanka’s strategy has always been to follow international brands to wherever they carry out sourcing. “Our focus is to service brands from multiple origins and ship to their main distribution centres globally.” He explained that as the European and US brands are opening stores in Asia, Sri Lanka is well positioned with its freeport operations based out of Katunayake to maximise this development.
The equity holder’s profit of Expolanka Holdings increased by 40 per cent YoY to Rs. 469.6 million in 3QFY19 and managed to sustain its net profit margin at 2 per cent, predominantly owing to increased profitability in the freight forwarding and logistics business.
Mr. Yusoof said that they have moved into other verticals in export logistics such as electronics. “The company is servicing areas such as electronics and are into accounts like Fitbit and Home Depot.”
The company earnings for 9MFY19 surged by a significant 165 per cent YoY to Rs.1,065.3 million driven by logistics. The logistics sector was up by 90 per cent YoY to Rs.1.6 billion for this period. Mr. Yusoof added that due to its active presence in the Far East, especially in China and Vietnam, the company is well-positioned to service its global portfolio of customers. He noted that Expolanka’s aim is to set up in Central America and Europe within the next three to five years. The company is also planning to expand its warehousing and take the learning experiences in Sri Lanka to the Indian subcontinent. “Our vision is to become an Asian global player,” he said adding that Expolanka will be centralised in Sri Lanka.
Expolanka’s outbound travel operator, Classic Travels is the dominant player in their leisure sector. Mr. Yusoof added that this company has plans to increase its visibility in inbound tourism. It also aims to set up international operations following in the footsteps of Expolanka’s logistics arm. “In this regard we have already opened an office in Bangladesh,” Mr. Yusoof said. The leisure sector’s net profit was up 35 per cent YoY to Rs. 198.9 million.
The company’s total revenue rose by 32 per cent YoY to Rs.27.8 billion in 3QFY19 driven by higher logistics revenue. The group gross profit margin improved to 19 per cent (against the 18 per cent in 3Q’18) owing to slower growth in cost of sales.