Sunshine aggressive in pharma manufacturing
Mr. Shyam Sathasivam
Sunshine Holdings PLC is aggressively expanding into the pharmaceutical sector and consolidating its superior position while aiming to collaborate with international partners to look at other new products.
“We are looking for products of complexity (international partnerships) where there could be technology transfer, as in biosimilars, such as insulin, Sunshine Holdings PLC Group CEO, Shyam Sathasivam, told The Sunday Times Business in an interview on Wednesday in Colombo.
Broadly, the company has taken the call that healthcare is its lead sector to drive growth. Within that, pharmaceutical manufacturing is going to be the lead driver for the company. “As the country switches from import to domestic in the pharmaceutical sector, Sunshine will also take the opportunity,” Mr. Sathasivam added. The company is focused on respiratory products and manufacturing metered dose inhalers and capsules.
“Over time, we will look for opportunities beyond Sri Lanka. However, there is a significant opportunity within Sri Lanka. The consumption per capita in Sri Lanka is still very low, and there is a lot of growth and opportunity there,” Mr. Sathasivam explained further.
The healthcare business was the primary driver for last year’s profit after tax of Rs. 6 billion, he noted. “We were able to manage our costs quite well, and our farmer manufacturing investments, which we started three years ago, are paying off. Last year was the first year in which we met the government’s requirement, and we ran at full capacity.”
In FMCG, the company aims to grow beyond the three tea brands they own, into other consumer products. The company has nearly 50 per cent market share in their tea brands. “In the FMCG vertical, we will not be going across too many sectors. We continue to look at export opportunities. As we are doing cinnamon planting in our states, we are looking at cinnamon exports,” Mr. Sathasivam added. He said the company will be focusing on natural products, and where Sri Lanka has a natural advantage in natural products such as Ceylon tea, Ceylon cinnamon, etc. “We will focus on a space where we think we can create more value.”
Since the Sri Lankan market is too small for them to have long-term sustainability, they need to be open to other markets, he noted.
In terms of the key drivers for FMCG, he added, “Consumers will keep looking for value. They will pay for what they see value in. Across food and beverages, they will make choices. That understanding of the consumer is what will drive our business. Also, innovation is something consumers are looking for. Consumers are looking for us to solve their needs. Functional food, high nutrition at a reasonable value, is what many are looking for,” he said, noting that this is a space they will concentrate on.
In plantations, Sunshine Holdings has oil palm, the dairy business, and some investments in cinnamon. “We have to do creative agriculture due to the land size. We have great natural resources, and we have products that maybe few of us have grown up with that are now consumed the world over. We are going to see a lot of interest in wellness-related products. People are going to eat a lot healthier, but will also look for variety. But it is going to be an opportunity.”
On the dairy farm gate investment of Sunshine Holdings, it invested a few years ago, currently, in the red, Mr. Sathasivam said the company now has 1800 cows, and at any given time, thousands are milking. “As part of the dairy business, after five or six lactations, if productivity starts dropping, we are more than willing to sell it. Today, we are one of the largest producers of single-sourced milk. We have excellent business from Nestle, Fonterra, and Ambewela.”
Feed cost is very high in the dairy business, and consumers are not willing to pay a significant premium for fresh milk, he noted, adding that also, there is reasonably priced powdered milk available, which the consumers will more often than not opt for. Investing in this business has to be a business case scenario, mainly because the consumers have taken a shock, during the train crisis. “Will we be converting to high-value liquid milk in the medium term? Probably not. Consumer affordability is going to be key. Most of our future investments will be in three key sectors such as health care, consumer, and agriculture.”
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