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Sat, 01 November 2014 04:11:32
Sri Lanka's Dhammika Perera extends business empire
06 May, 2013 18:31:50
May 06, 2013 (LBO) - Dhammika Perera, head of Sri Lanka's Vallibel group who has made a series of daring acquisitions says he has effective control of nearly a tenth of listed firms in the island after buying over the latest clutch of five companies.
On Monday, Royal Ceramics Plc, a unit of listed Vallibel One Plc in which Perera owns 63.5 percent, bought a 76 percent stake in Lanka Ceramics from listed Ceylon Theatres group for 2.9 billion rupees.

In addition to Lanka Ceramics, the holding company, the acquisition brought in operating units, Lanka Walltiles, Lanka Tiles, Swisstek, an aluminum company and Horana Plantations, a tea estate.

"We now have a monopoly in ceramic tiles and aluminum industries," Perera said.

Sri Lanka's listed Hayleys group in which Perera has 44 percent, gained control of an unlisted aluminum extrusion firm Alumex, in 2010 for 2.1 billion rupees. Hayleys said at the time it had a 55 percent market share.

Perera personally owns a 29 percent stake in Lanka Alluminium, another listed company.

Royal Ceramics also owns the country's only sanitary wear producer, which is unlisted.

Perera said Horana Plantations would be a strategic fit with Talawakele and Kelani Valley Plantations of the Hayleys group.

Perera said he now had control of 28 out of 280 odd listed companies in the market.

Vallibel One has seven listed companies under its umbrella with the latest acquisitions and Hayleys group nine.

Perera also controls Vallibel Finance and Vallibel Power Erathne.

Among the more widely known material stakes in listed companies include Fortress Resorts, Pan Asia Bank and Sampath Bank.

He also owns stakes in unlisted companies in power generation and gaming.

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READER COMMENT(S)
7. mighty May 07
I see such developments as a boost to the country's advancement. Countries like Japan have improved this much mainly due to the strong position of few large organizations (such as Toyota) whose stability would enables them to compete effectively in global marketplace. Given the small local market we have, believe amalgamation of small firms would facilitate quick and strong development.
6. sedrik May 07
You mean that its actually owned by the King!
5. Mono May 07
There is no harm in monopolies provided they use their economies of scale to cut prices. Remember that most state interventions against monopolies were anti consumer in Western Countries. The US acted against Standard Oil not because they raised prices but they cut prices and put inefficient rivals out of business.

But in any country especially a small free trading nation there cannot be a monopoly if free trade is allowed. The problem is not that Mr Perera has controls of domestic production - good luck to him if he is a good business manager - he should be given the freedom to do so. But the problem comes when the monopoly is created by the state at the expense of the poorest of the poor through high import duties.

4. garawi May 07
This is not a good situation. One person owning so much wealthand majority shares in companies and creating monopolies buying out competitors kiil the market price flucuations due to supplyand demandfor he can control the price. Also owing so much of the listed companies can will allow him manipulating the stock exchange itself. In a develpoed country this is controlled by the government. Even large companies like Microsoft were scrutinized and stopped from monopolizining in the US and the West.
3. sting2music May 07
Dhammika Perera gives us a model for business owners on moving from a false vision of chaotic conglomeration, to a more accurate one: that life is an methodical collection of individual linear systems each of which can be improved and perfected.
2. seberet May 06
Advanced countries have strong anti-trust laws to break monopolies because monopolists creat deadweight loss...high prices, low production.....consumer loses out
1. VISA May 06
What about LB finance ?