The Distilleries Company of Sri Lanka (DCSL)
is one of the great success stories of privatisation in the
world, the company’s chairman, Mr. Harry Jayawardena has said in
the DCSL’s latest annual report for the year ended March 31,
"A mere liquor manufacturer with an asset value
of Rs.169 million, a Rs.3.6 billion turnover and contributing
Rs.2.9 billion tax income to the state, was sold for Rs.1.6
billion in competitive bidding in the Colombo Stock Exchange (CSE).
This sale in 1992 was termed as the largest ever transaction in
the history of CSE,’’ Jayawardena said.
"In 13 years, the group now records an annual
turnover of Rs.25 billion, with cumulated tax payment of Rs.200
billion and annual tax income to state over Rs.9 billion.’’
Jayawardena pointed out that the company,
through strategic acquisitions, had diversified into many
sectors including food and beverages, tourism, power generation
and infrastructure development, destinations management, cargo
logistics, hotels and hotel management, plantations,
telecommunications, fabric processing, garment s, insurance and
"The DCSL group is now considered as a well
diversified blue chip in the CSE and has been a very popular
share among local and foreign shareholders. DCSL is one of the
most consistent shares in the basket of stocks that is tracked
to compute the Milanka price index of CSE,’’ he said.
DCSL’s subsidiaries include Sri Lanka Insurance
Corporation Limited (DCSL), Balangoda Plantations Limited,
Madulsima Plantations Limited and Lanka Bell (Pvt) Limited while
Aitken Spence & Company Limited is an associate.
Among the unquoted companies under its umbrella,
Milford Holdings is a subsidiary while Periceyl (Pvt) Limited, a
jointly controlled entity and Beruwela Distillery, a subsidiary
as is Texpro Industries and Timpex (Pvt) Limited.
DCSL’s parent company is Milford Exports
(Ceylon) Limited which with 41.49% is the biggest single
shareholder followed by Lanka Milk Foods (12.65%) and members of
the Yaseen family and connected companies. Other Harry
Jayawardena companies too are in the list of 20 largest
Dr. V.P. Vittachi, the chairman of the company
said that the year under review had a successful one in terms of
performance for the company although the group profit of Rs.1.6
billion was down from Rs.1.8 billion the previous year.
Vittachi explained that a share trading profit
of Rs.885 million in the previous financial year due to
portfolio realignment distorted the comparison.
Jayawardena said that the beverage sector had
fared better than expected contributing the major profits of the
group. While several revisions of excise duty and import duty on
rectified spirits had pushed prices up, with an impact on
volumes, stringent cost controls and significant enhancement of
productivity levels enabled this sector to achieve the budgeted
"The consistency of taste, bouquet and quality
has been the main advantage the company has against the cheaper
substitutes available in the market,’’ Jayawardena said.
He also reported that DCSL had done better than
expected through their joint venture to cater to the up-market
beverage sector with additional market share gained in the
locally manufactured foreign liquor segment.
Reporting a post balance sheet development, he
said that DCSL through its investment arm, Milford Holdings, had
acquired 99% of Lanka Bell, the third largest fixed line phone
operator in the country in June/July this year.
This company had pioneered CDMA technology in
the country that will completely change the telecommunications
landscape here, Jayawardena said.
""Long waits for fixed telephone lines are no
longer necessary and a Lanka Bell CDMA phone can be purchased
off the shelf and used immediately,’’ he said.
"With very high voice quality and versatility
Lanka Bell CDMA telephones will provide the level of service in
Sri Lanka that telephony customers from developed countries are
DCSL has an issued capital of Rs.300 million,
capital reserves of Rs.872.9 million and revenue reserves of
Rs.6.7 billion in its books.
Group earnings per one-rupee share at Rs.5.32
was down from Rs.5.97 the previous year while the dividend level
of 50% of the previous year was maintained.
DCSL has nearly 14,500 shareholders in its
register with the vast majority (13,968) owning up to 10,000
The directors of the company are : Dr. V.P.
Vittachi (chairman), Messrs. D.H.S. Jayawardena (MD), R.K.
Obeyesekere, C.R. Jansz, A.N.D. Balasuriya and N. Deva Aditya.