Hemas upbeat on pharma and logistics with new plants
Hemas Holdings PLC (Hemas) is bullish on two new plants – a pharmaceutical manufacturing and warehousing factories - to enhance the bottom-line in the years to come.
Hemas' pharmaceutical plant at Homagama with an EU and GMP compliant manufacturing facility will be commissioned early next year. The logistics park at Muthurajawela is already commissioned.
Steven Enderby, CEO Hemas in an interview with the Business Times noted that the Rs. 2.8 billion manufacturing facility at Homagama can deliver 3 billion tablets per annum. He added that the manufacturing of pharmaceuticals require site specific regulation which is a complex process and is slated to take a few years to get the specific manufacturing approvals. Sri Lanka has seen trends of local manufacturing of pharmaceuticals with many firms investing in this business. Mr. Enderby acknowledged this noting that the market structure is shifting towards homemade medicines.
Hemas' logistics park container yard is now operational. Mr. Enderby noted that some of Hemas' own operations are now in this plant. "We are trying to implement the value added services which we can give the specific clients," he said noting that as the highway network across and around this area is developed, the potential for this Rs. 2.6 billion facility will be immense.
The company, unlike all other manufacturers and importers of pharmaceuticals want a clear-cut pricing formula for pharmaceuticals. "It is critical for the doctor to have access to choice and also being cost-effective. We would love to see a pricing formula. It's difficult to see the relative uncertainty that is on right now," Mr. Enderby noted.
Having sold Hemas’ 34 bed hospital in Galle in November last year, the company now is consolidating its Colombo suburbs hospitals. Mr. Enderby said, “Now we are concentrating on how we can broaden the services and the surgical interventions at our Wattala and Thalawathugoda hospitals."
Last year Hemas Holdings acquired 75.1 per cent stake in Atlas Axillia (Pvt) Ltd, formerly known as Ceylon Pencils Pvt. Ltd.
Its Bangladesh fast-moving manufacturing goods (FMCG) business is doing well and now the company is planning to introduce other products into that market. Hemas has also taken its pharmaceutical distribution business to Myanmar as well.
In other overseas expansion, Hemas has taken its Kumarika hair oil to West Bengal in North India.
In its leisure sector the company is now concentrating more on its boutique properties. Serendib Hotels PLC, a subsidiary of Hemas Holdings PLC and a part of the Leisure, Travel and Aviation Group, has a 48.85 per cent stake of the Frontier Capital Lanka (Pvt) Ltd, the owning company of the Lantern Beach Collection a year ago. At the time of acquisition, Serendib Hotels PLC had a stake of 51.15 per cent in the Lantern Group, now increased to 100 per cent. "We are managing smaller hotels now. There is an increasing number of discerning travellers who are looking for authentic experiences in a more intimate setting, and we felt we should capitalise on it. We have invested in our Anantara brand as well," Mr. Enderby noted. He added that the company is now focusing on categories which can deliver a better piece of the pie. "In FMCG we are concentrating on skin care and how we can deliver products in this area that are value for money."
He noted it was a difficult operating environment last year and the rupee depreciation negatively affected bottom lines - which was the case with many companies. "There was a lot of pressure in Q3 and it was a challenge. We saw it still feeding through to the system but the consumer sentiment is much better over the last two months. The political hiatus last year has faded and now it's behind (us)."
He added that Hemas has a strong focus on technology and how it can enable the businesses. The company is working with two start- ups - Ayubo. Life and HealthNetBuy - and is discussing with some others to rope them in. Having launched Ayubo.Life in March, it has acquired over 50,000 users to its platform. Working with 32 leading corporates in sri lanka, ayubo.life is touching over 5000 corporate employees' lives.
Recognising that physical activations is a key mitigation for the risks non communicable disease battle, ayubo.life took an innovative approach introducing virtual steps challenges to the mass community, moving over 30,000 people across the country, receiving over 1000 comments on the positive impact on their lifestyle with the ayubo.life proposition.
Healthnet is Sri Lanka’s first online pharmacy where authenticity of medicine is guaranteed and delivered home in a safe and secure manner. Healthnet is currently servicing a user base of 13,000 and growing steadily, Mr. Enderby noted.
He added that the biggest challenge is how to improve margins in a tough condition. "To my mind it creates possible avenues. We have started profit improvement programmes in pharmaceuticals, homecare and wellness, etc."