ECONOMYNEXT - BPPL Holdings Plc, a Sri Lanka-based brush maker, is focusing on building its own brand in Indonesia and at home, taking a step back from plans to penetrate the Malaysian market.
“We slowed our brand expansion plans and rationalised our strategies by mainly focusing on the Sri Lankan and Indonesian markets whilst parking our expansion into Malaysia for the time-being,” BPPL Managing Director and Chief Executive Anush Amarasinghe said in the firm’s annual report.
He said that BPPL’s own brands Tip Top in Sri Lanka and JAB in Indonesia still account for only 2 percent of group revenue, since brands take some time to establish themselves.
Big investments required to make brands stand out was also a reason to slow down the strategy.
“This was a key reason for slowing our market expansion plans in this category, a decision taken to balance the near-term vs. longer-term returns provided to our shareholders,” Amarasinghe said.
BPPL in the past had said that it sees potential in selling branded goods in Asian markets such as Sri Lanka, Indonesia and Malaysia, since rising disposable income would let consumers buy high quality, reasonably priced branded goods through supermarkets.
BPPL was hoping to compete with cheaper Chinese products with the power of branding.
Currently, BPPL’s branded goods are available in 251 stores in Sri Lanka, and 294 stores in Indonesia.
The switch to Asia is BPPL’s plan to reduce the risks of overexposure to the North American market, from which 81 percent of the company’s revenue comes from, Amarasinghe said.
In the short-term, BPPL has focused on its plastic recycling business. Amarasinghe said that higher sales orders have been coming for synthetic filaments from new customers in North America.
He said that BPPL has invested 180 million rupees on its third filament extrusion plant which will be opened by July/August 2018.
Earlier this year, BPPL opened a polyester yarn spinning plant, and is expecting apparel manufacturers from Sri Lanka and overseas to start placing orders in the two coming months, he said.
The company is also in the process of converting some of its plastic bottle collection points into collection centres which have machinery to compress and bail bottles for cheaper and easy transport to the recycling plants. (Colomob/June09/2018)