He acknowledged
that going public was the product of last year's structural change aimed at a
long-term strategy. "We found that under the same umbrella, it was
difficult to attract investment to the organisation with similar companies.
Therefore, by offering investors equal or mirrored stakes, we isolated leisure,
energy and eco.
Mr Wegapitiya
clarified that the company last made substantial shipping investments involving
the purchase of ships in Bangladesh. "We will reap the real benefits of
all this in the coming years." Meanwhile, the US dollar's appreciation,
the increase in world market LPG rates, and the failure to achieve the required
price increases have dented their bottom line.
The business is
severely affected by last year's currency depreciation. "Our industry is
heavily dependent on imports. We usually get credit for 30 days. So with the devaluation
of the currency when we purchased, it was one price, and it was a completely
different price when we paid it in 30 days. We suffered a significant currency
loss, "explained Mr Wegapitiya.
LAUGFS Gas will
discuss the introduction of a gas formula similar to the petroleum formula with
the Consumer Affairs Authority and the other authorities. "There has been
a plan, but it has not applied. We are asking for this formula to reactivated.
Hopefully, after the discussions, it will happen, "said Mr Wegapitiya.
OSL Take: The
success story of Sri Lanka’s Laugfs Gas group and its expansion into foreign
markets shows the strength and growth potential of the country’s private
sector. The continuous development recorded by a Sri Lankan company like the
Laugfs Gas Group is indicative of the growth potential of local companies.
Laugfs Group has that commenced business as a supplier of liquid petroleum has
now diversified into many sectors like retail marketing, leisure as wells as
power and energy.
As stated by the
company’s Chairman, the company is engaged in discussions with foreign
investors to expand the LP gas and leisure businesses further. The growth shown
by Laugfs sets an example of the possibility of expansion for other similar
business entities.
Also, the
Company’s move to further invest and expand its solar power generation capacity
indicates the opportunities for projects and investments in Sri Lanka’s
renewable energy sector. All these are indicative of the conducive business
environment in the country. Therefore, foreign businesses/investors could
explore business/investment opportunities in Sri Lanka and also look at the
possibilities of forming partnerships/joint ventures with local companies.
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