Singer sewing machine unit diversifies product portfolio
„Excess production capacity allows firm to take subcontracts from group companies „Now produces refrigerator doors, washing machine tubs
Sewing machine producer Singer Industries (Ceylon) PLC is diversifying its manufacturing into components and accessories manufactured and marketed by the Singer Group due to falling demand for traditional sewing machines and resultant excess production capacities.
“In order to use the available resources the company commenced making refrigerator doors and washing machine tubs,” Singer Sri Lanka Group CEO Asoka Peiris said.
These components are being manufactured under subcontracts for the group company Regnis (Lanka) PLC and its subsidiaries, which manufacture refrigerators and washing machines.
Further, Singer Industries will be entering into sub-contracting arrangements for the production of accessories for televisions and air conditioners marketed by Singer Sri Lanka PLC. “These revenue streams are expected to deliver promising results for the company and reduce dependence on traditional product portfolios,” the firm said.
According to Peiris, Singer Industries is diversifying because the last 5 years have witnessed a fall in domestic sewing machines in favour of artisan machines, with a 21 percent fall in domestic sewing machine sales in 2017.
The fall was mainly in traditional machines instead of portable sewing machines, which also led to a 24 percent fall in cabinets and stands used to mount the machines.
This is further corroborating with the information gathered by the government, which showed that there are tens of thousands of jobs for sewing machine operators in Sri Lanka, with little interest among locals to take up such jobs.
However, Singer Industries is hoping for a rejuvenation of the sewing machine business in the current financial year.
“In the coming year, two new portable domestic sewing machines are expected to be introduced in order to capture existing market voids and thereby rejuvenate the company’s traditional product portfolio,” the firm said.
The falling sales of the traditional portfolio contributed to Singer Industries revenue for 2017 falling to Rs. 646.6 million from Rs. 743.2 million year-onyear (YOY) leading to a gross loss of Rs. 4.5 million compared to a gross profit of Rs.18 million YOY.
Howevr, a change in fair value of investment property and share of profit of equity accounted investees helped boost the net profits to Rs. 68.4 million from Rs. 42 million YOY.
Singer (Sri Lanka) PLC owns 87.72 percent of the shares in Singer Industries.