April 16, 2007 (LBO) â€“ Regnis, a Sri Lankan refrigerator maker, has ramped up production to be among the ten largest plants in South Asia as more households sign up for electricity usage, the company told shareholders.
“We have done everything possible to stabilize our business operations after the said detection and we regret this unfortunate turn of events.”
Regnis Lanka, a listed subsidiary of Singer Sri Lanka which makes ‘Singer’ and ‘Sisil’ branded refrigerators, says it can now make 100,000 units at its expanded plant which will now operate in two shifts.
“This places us as the ninth largest refrigerator factory in South Asia behind, Whirlpool, LG, Samsung, Videocon and Godrej in India and Dawlance, Wheels and PEL in Pakistan with potential to expand capacity further when necessary,” Chairman Hemaka Amarasuriya said.
Regnis bought ‘Sisil’ (which means ‘cool’), a domestic brand famed for its ruggedness, when the manufacturer closed operations in the face of cheaper imports from East Asia.
The firm says it has systematically improved its production processes and now has computer-aided testing and quality assurance in place.
“We are now of the view that the ‘Made in Sri Lanka’ stamp now supersedes the quality of imported products which may vary from batch to batch,” Amarasuriya claimed.
The company says it sees more potential for refrigerator use in the country.
“In a market of 4.8 million households, 75 percent of which are electrified, a 35 percent to 40 percent penetration level for refrigerators in unrealistic,” Amarasuriya said.
“We have a responsibility as the single manufacturer to grow this market rapidly.”
However, critics point out that in Sri Lanka top bureaucrats and politicians who probably already own refrigerators have labeled them a ‘luxury good’ and slapped a 10 percent excise duty on it, making it more difficult for ordinary citizens to buy one.
Meanwhile, Regnis says it had persuaded the finance ministry to lift a 10 percent excise duty because its products have more than 50 percent value addition.
The company’s revenues rose to 1,282 million rupees in 2006 from 952 million but it made a loss of 77.8 million rupees.
A loss of 24 million rupees came from the consolidation of associate company First Capital, which has since been sold.
The company also had to correct its financial statements after errors were found last year and made provisions.
“The manager responsible has been removed and several meaningful measures have been taken to ensure the future accuracy of the financial statements,” Amarasuriya said.