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| Sunday, 15 August 2004 |
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| News Business Features Editorial
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BSM targets 60% products for exports by Anton Nonis Blue Star Marine (Pvt) Ltd. (BSM), a giant fibreglass boat manufactory in the country for many years, had suddenly faced a financial crisis and was fast dropping in its commercial activities.
Analyses had shown there had been two causes for the near collapse of BSM, viz, the non-recovery of debts on sales made and the rise in the dollar rate. The company is said to have incurred a loss of Rs. 51 million by these two factors. The boatyard of the company is situated at Hendala. Various types of boats are manufactured, including fishing boats, naval dinghies, boats for inland waterway surveillence, work boats and boats for multi-day deep sea fishing. Fernando said that Inshore Patrol Crafts (IPCs) were built for the Navy during the period 1993-1994 and though the company had expected a sale of around 100 crafts, but they could sell only 34. While accepting orders in the future, the company will ensure that there will be a sale of at least 50 boats to the customer. This will be to compensate for the moneys spent for the purchase of moulds needed for the manufacture of the required products.
A majority of the resources, around 60 per cent, of the company were expended to manufacture boats to the local market, while a smaller percentage was spent to meet foreign requirements. Though this plan has proved quite profitable for the company in the long run it was not so. It was realised that large sums of money was lost when the dollar rate rose. Orders that were accepted while the dollar rate was low and it always ended up in losses when the dollar went up. Fernando had to think of a change in the Board of Directors while approaching for a recovery. The remodled company was formed in March and runs under the same name Blue Star Marine (Pvt)Ltd. Its new chairman is Zahid Jafferjee who serves as Managing Director of Lanka Mountcastle (Pvt) Ltd. Jafferjee with wide experience as a entrepreneur, has already succeeded in attracting two Australian investors, Joel Hautala and James Baldwin who also have many years experience in the commercial world. They are directors of the remodeled company with Fernando as director. The present Board of Directors of BSM has devised a new strategy in the running of the business. Unlike earlier, the company will concentrate on up to 60 per cent on exports. The balance would be allocated for the local market. Even if there is a rise in the dollar rate, it will be for the betterment of the company. In that case, the products will bring in increased revenues to the country, the management has equated. The company has already received an order for 30 boats of different types worth around US$ 200,000. BSM was greatly relieved by the assistance rendered to them by the Commercial Bank and the Labour Department during their period of financial crisis. |
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| Editorial | Security Produced by Lake House |
BSM's former chairman Dudley Fernando, said the crisis period lasted
for five years, and all hopes for a recovery were shattered and the
company was at the brink of solvency. However, sheer determination to put
it on track has enabled for a revamping of business once again.
