Financial Times

Chemanex diversifying into non-chemical areas
Chemanex Limited, manufacturer of value added specialty chemicals and intermediaries, is branching out into plastic- related areas.
Managing Director C.L. de Alwis said the company is actively looking at expanding their chemical business.

“We have sent a director to China to conduct a feasibility study to start a plastic- related business,” he told The Sunday Times FT. He said the new project needs the board’s approval, but the company is presently looking at the viability of the venture.

He said the company’s move in extending its reach into food, pharmaceuticals, ceramic, textile and oil drilling industries with products of similar chemical composition six months ago, have picked up and contributed to the bottom-line. de Alwis said they linked up mainly with China for trading food products such as spices, cocoa and food additives.

The company has developed in-house application technologies using skilled resource personnel from abroad to develop plant configurations and chemical processes to manufacture toothpaste and soups. “We are getting the technology from USA and China,” he said.

However, the commercialisation of these processes has been held back due to competition from Chinese suppliers. “Presently we are reengineering the manufacturing route and the processes to pool all possible economies, enabling us to evaluate the viability before we commit to a fully fledged commercial plant from the pilot plant we have already purchased,” de Alwis said, adding that the Chinese and US technology will help them in this regard.

Chemanex gross turnover grew to Rs.568.9 million last year from Rs.437 million in 2003. “Our last financial year is the best ever with a profit before tax of Rs.170.2 million, mainly because of export growth and local trading,” de Alwis said. He said the company’s strategic investments such as investing in Commercial Insurance Brokers and Commercial Leasing paid them consistent dividends. The profit after tax increased to Rs.125.7 million last year from Rs.115 million in 2003.

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