LWL considers overseas investments

Lanka Walltile Limited (LWL) is considering investing overseas in view of the problems Sri Lanka is going through in the construction industry, its top official said.

"We are looked at investing abroad because of the problems … here. As a supplier for building construction, we should have a lot more opportunities," Managing Director Lucky de Chickera told The Sunday Times FT.

The company, which has seen steady growth in its domestic and overseas markets, says government policies should be 'more investor friendly.

“At the moment, there is some hesitancy in the investment climate," De Chickera said, adding that he hopes government support can be more forthcoming. LWL has also been contemplating an expansion scheme for its Meepe factory with feasibility studies currently being conducted. "We have been playing around with this for about a year," he said.

The company is urging the government to 'send out more investment friendly signals' particularly to the mining company as the majority of the LWL's raw materials are indigenous minerals mined in Sri Lanka.

De Chickera said the company is hoping to expand by 75 – 100% but will require approximately a year and a half to put plans into place. LWL is also looking into diversification but as De Chickera reiterated, this hinges on the direction of the government. "There is so much opportunity here. For one thing, building construction has been taking off in leaps and bounds. The tsunami reconstruction helped the industry." Tiles are in increased demand due to the revamping and renovation of hotels, houses and new projects. According to De Chickera, 100,000 houses are coming up per year. "It appears we are going in the right direction.”
The construction industry in the rest of the country still looks good despite the uncertainty created by fighting in the North and East, which has effectively blocked out any building activity of note in those areas. "We are extremely hopeful of a very strong fourth quarter which should see the company growing its sales volumes to intensively high levels," he said. De Chickera told the paper that the company had three or four distributors in the North and East but that sales have failed to matriculate.

LWL registered a nine month un-audited group profit after tax of Rs.374million as at 31 December 2006, indicating a 54% increase during the corresponding period for the previous year. Furthermore for the quarter ending 31 December 2006, the Group Profit after tax (un-audited) is Rs.107.8 million, up from Rs.106.4 million for the same period in 2006.

Similarly, the basic earnings per share by the increased earnings (un-audited) for the nine-month period were Rs.6.55, up from Rs.4.80 in 2005. Revenue of the LWL Group increased from Rs.3.5 billion in 2005 to Rs.4.1 billion (un-audited) in 2006. (NG)