LAUGFS Gas PLC, more than a year after its Initial Public Offering (IPO) is bullish on the leisure sector and once their Chilaw resort hotel is completed, will scout for other sites for more connected projects, officials said.
“The Chilaw hotel was originally a Rs. 700 million, 100-room hotel, but now the costs have risen to Rs. 1 billion. We will start operations on this hotel this December. After completing this, we’ll look for more sites to build hotels,” W.H. Wegapitiya, Chairman LAUGFS Holdings Ltd told the Business Times.
He added that the company has plans to complete some leisure projects in time for the 2016/17 season and also expand into managing hotels that fall under the “Small Luxury Sector” category. The company at present manages Emerald Bay Hotel, a 50 room property and also Temple Tree and Spa, a small luxury hotel consisting of 10 rooms - both in Induruwa.
LAUGFS Gas’s Maya Avenue building complex which was initially planned as a condominium complex will be converted to an office complex as the demand for the latter was greater. "This town is being developed as a commercial area and it was prudent to change it to a commercial complex and this will be completed in 2013,” Mr. Wegapitiya said, adding that this will cost Rs. 450 million.
LAUGFS subsidiary, LAUGFS Eco Systems Ltd was supposed to go public this year, but Mr. Wegapitiya noted that the share market isn’t quite encouraging at present for the company to list.
He also noted that their investments in Reefcomber, Colombo Pharmacy and Grain Elevators which have crashed at the stock market (which the company was getting a lot of criticism for) but they are long term investments. “These are long term in our opinion and we see potential in these shares,” he added.
Mr. Wegapitiya said that this year LAUGFS, whose main business is in import, storage and distribution of Liquefied Petroleum Gas (LPG) and related products expects a 20% growth in the gas market. LAUGFS currently has a distributor network of 1,600 dealers across the island.
The Government aims to double per capita income by 2016 yielding a 12% yearly growth over the same period and according to Mr. Wegapitiya there’s a shift in cooking methods in the country, where a greater household income enables lower income consumers to shift their cooking fuel from wood to LPG, thereby greatly increasing air quality and reliability.
He said that LPG is still at a low penetration with only 25-30% of the households currently using LP Gas (with the preferred alternative being firewood). “This provides substantial upside for the industry and now we have 550,000 cylinders in circulation," he added.
By 2015, the company expects 50 supermarkets and hopes to increase it up to 100 by 2020.
Mr. Wegapitiya added that LAUGFS will change their supermarket segment to a different arena such as standalone large units. “We see immense growth here,” he said. He said LAUGFS has grown into some 18 firms in diversified sectors within the last 15 years since it started. “This year we’ll only go for consolidation,” he said. |
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