Financial Times

Hemas helps rebuild retail network
By Duruthu Edirimuni
Hemas Holdings wants to assist the tsunami affected retail network promoting the group's healthcare and consumer items by providing extended credit. Husein Esufally, CEO, Hemas said all the distributors of the company have restarted their operations, but the retailers are dysfunctional. "Some of our retailers such as pharmacies and groceries have been affected and we are planning to help them start up their operations," he said.

Analysts said the company's performance in the general fast moving consumer goods (FMCGs) will depend largely on how fast the people bounce back to their normal life styles in the affected areas.

However, Hemas is not looking at mobile marketing -- a new marketing strategy suggested by experts in affected areas -- and is not worried about 'top of the mind' brand consciousness among their customer base in the affected areas. An analyst said the company is concentrating on strengthening their distributorships across those areas and further inland.

Hemas personal care sector growth already had a dent due to inflation, as consumption had slowed down. "Even without the tsunami, the market outlook was not that great for their personal care sector this year," an analyst said.

Hemas' healthcare sector earnings received a boost due to the growing demand for pharmaceuticals immediately after the tsunami. However, analysts said it will even out considerably due to the aid flowing in. The group's power project, which started operations two months prior to the initial target date, is also likely to make a significant contribution to this year's bottomline.

Aritha de Silva, Head of Research, Asha Phillip Securities Ltd., said the company is expecting to make profits similar to 2003 because of the power project commissioned last year. Hemas profits for the first six months during 2004 was Rs. 257.8 million and the corresponding figure for the same period the previous year was Rs. 260 million.

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