|DCSL invests Rs. 151 mn. in quality fabric producer
The Distilleries Company of Sri Lanka Limited (DCSL), diversifying out of its core liquor business, had invested Rs. 151 million last year to acquire a 51% of Timpex (Pvt) Limited, the holding company of Texpro Industries Limited (TIL), one of the countrys few high quality fabric processors.
DCSL Chairman V. P. Vittachi has told shareholders of the company that over 90% of fabric requirements of the garment industry are imported resulting in lower value addition.
Texpro had the skills and equipment "to match the quality of any fabric manufactured in the region," he claimed.
He said that after DCSL had acquired the controlling interest of TIL, the company had secured orders from well known garment companies but an industrial action by the staff forced a three-month closure of operations.
"(This) resulted in losing a large portion of the order book," Vittachi said. "TIL now functions with a reduced workforce and is likely to return to profitability from orders for the coming summer season."
He said that the formal acquisition of Timpex was only finalised on balance sheet date of DCSL and the resulting goodwill will only be amortised from the current financial year.
Vittachi said that as conditions in the liquor industry in the country were "not conducive to progress," DCSL has continued to invest in non-liquor sectors to ensure future profitability of the group.
It was therefore necessary to retain a portion of the profits earned to ensure that the company had sufficient funds for investment when opportunities arose.
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