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| Sunday, 20 October 2002 |
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Tess Agro to go public by SUREKHA GALAGODA Tess Agro Ltd., the operator of Sri Lanka's first cold chain and a leading exporter of fruits, vegetables and fish to Europe, is planning to go for a public share issue in mid-November.
He said the cold chain system includes pre-cooling, cold storage warehousing and the provision of refrigerated transport to the perishable industry. A future plan of the company is the establishment of Export Processing Villages (EPV) under an initiative of the Ministry of Rural Economy and the Export Development Board (EDB). The first EPV will be established in Dambulla. At present the company has 250 farmers producing cantaloup melons exclusively for the company while plans are afoot to involve more farmers. Plans are also under way to start a pack house - a collection centre with pre-cooling facilities - also in Dambulla. At present the company has such facilities in Polonnaruwa and Kelaniya. Establishing EPVs will enable Tess Agro to boost its supplies of quality, low country vegetables, said Fernando. In the fruit and vegetable export sector, the company will continue to play a lead role in exports to Europe from Sri Lanka and maintain high quality and price for its products overseas. The company and its subsidiaries recorded a turnover of one billion rupees during the financial year ended March 31, 2002. The issued share capital of the company is Rs 70 million. The company exports about five tonnes of perishables by air while another 10-15 tonnes of melons are exported weekly by sea to Hong Kong and Singapore. Five to seven tonnes of this product is indirectly exported each week. 'Shashimi tuna' exports to Japan and Europe from the company's subsidiary, Tropic Fishery, is valued at Rs 25 million per month. Fernando said Tess Agro went for a private placement of shares in 1995. It was oversubscribed and the company raised Rs 21 million, which was mainly invested in the deep sea fishing project and to build a cold storage warehouse in Kelaniya. Traditionally, Sri Lankan exports have been destined to nearby countries such as Maldives and the Middle East. But with the company's infrastructure in post-harvest handling and cooling facilities, it has been able to extend the shelf-life of the produce. This has enabled the company to export Sri Lankan produce to European markets, thus becoming a leading exporter to the European Union during the last five years. The company predominantly caters to the Asian segment of the European market. Therefore, most of its clients include Indians and Sri Lankans residing in this region. Tess Agro Ltd. was incorporated in 1992. It is approved by the Board of Investment of Sri Lanka and enjoys a 15-year tax holiday. "The company was formed by my father, Oliver Fernando and the three of us. It was established to cater to the pressing need of farmers in the Mahaweli System B area for a central place to sell their produce so that the produce could reach markets in peak condition, thus bringing the best price for the farmers," he said. Speaking of the fruit and vegetable export industry, he said that it emerged only 20 years ago, but now contributes to 10 per cent of the national production of Sri Lanka while future prospects are brighter. "The reason is that Sri Lanka is one of the lowest cost producers of high value horticultural crops for the world markets. " The advantages we have are low cost labour, strategic location and the seasonal advantage, because there is the possibility of growing and harvesting throughout the year due to the climatic conditions of the country," he said. |
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Director and CEO Dilshan Fernando said: "The main aim of going
public is expanding the company's exports by infusing capital and retiring
some of the short-term debt," he added.
