Price War

Sept 13, 2007 (LBO) – The bunker fuels subsidiary of John Keells Holdings, a top money-spinner of the group, looks set to face heightened competition with a rival supplier in Colombo port threatening to cut prices. The Sri Lanka Shipping Group, which sells ship fuel through its bunkering subsidiary, Lanka Maritime Services, has said it plans to increase supplies to vessels calling at Colombo port and sell at lower prices.

"Lanka Maritime Services has increased their throughput and is directly challenging Lanka Marine Services (owned by JKH) to compete in the bunker market," said Mohamed Reza, Managing Director of Sri Lanka Shipping.

"With the increased capacity of our floating storage and regular supply from BP Marine, we hope to decrease the margins in the bunker fuel in Colombo."

They are aiming taking at least 40 percent of the current bunker market share in Colombo within the next three months.

"If there going to be a price war, we are well prepared for it," he added.

A senior JKH official said the company was ready for competition and could match prices.

The bunker market in Colombo has long been dominated by Lanka Marine Services (LMS), the former state-owned bunker monopoly n