14th August 2009, www.bloomberg.com
Aitken Spence Plc., Sri Lanka’s biggest operator of resorts, plans to expand its hotel and shipping businesses as the end of a 26-year-old civil war heralds an economic revival in the island nation.
Spence, which runs 27 properties in Sri Lanka and overseas, is “looking at” building a hotel on the northeastern coast, Deputy Chairman J.M.S. Brito said in a telephone interview from his Colombo headquarters. The company also aims to extend its marine agency network to include the area’s deepwater Trincomalee harbor, so far closed to commercial lines, he said.
Tourist arrivals to Sri Lanka’s white-sand beaches, ancient Buddhist sites and hill resorts rose for the first time this year in June, a month after the government defeated the separatist Tamil Tiger rebels. The central bank last month lifted its 2009 growth forecast for the economy to as much as 4.5 percent from an earlier 2.5 percent estimate, citing an increase in investments and
“With its vast portfolio of properties, Spence is well poised to gain from the no-war scenario, despite the global downturn,” said Bimanee Meepagala, an analyst at Eagle NDB Fund Management Co. in Colombo. “Tourism and shipping will be the main drivers.”
Spence shares have more than doubled this year, compared with a 67 percent gain in the benchmark Colombo All-Share Index.
Sri Lanka’s hotels may be fully booked from December to April, the peak period in winter, Ajit Gunewardene, deputy chairman of John Keells Holdings Plc., Spence’s larger rival in the country, said in an Aug. 5 interview.
Sri Lanka, which receives about 500,000 tourists each year, aims to attract 2.5 million visitors by 2016, President Mahinda Rajapaksa said in June. Tourism is the nation’s fourth-biggest revenue earner.
“The prospects are very good and not just in tourism,” Brito said yesterday. “We are seeking opportunities in the north and east.
We’ve had a very good August and the trend is for tourist arrivals to keep picking up.”
HSBC Private Bank in June forecast Sri Lanka’s $41 billion economy will bounce back from its weakest growth in six years and become the “Hong Kong of India” as the end of the civil war boosts business opportunities. Sri Lanka is poised to raise its growth and income levels as it rebuilds after the war, the World Bank’s Sri Lanka Director Naoko Ishii said on July 17.
The Board of Investment of Sri Lanka expects foreign direct investments to quadruple to $4 billion by 2012, led by investments in ports, tourism, telecommunication and textiles.
Aitken Spence has beach resorts and a tea factory converted into a hotel in the hills of central Sri Lanka and runs resorts in the Indian Ocean archipelago of the Maldives, Oman and India.
The group, which reported a 24 percent dip in fiscal first- quarter profit, has added power generation and freight services to the marine insurance agency it started about 140 years ago. Spence joined China Merchants Holdings (International) Co. last month as the sole bidder for a new $400 million terminal at Sri Lanka’s main Colombo port.
To contact the reporter on this story: Anusha Ondaatjie in Colombo at email@example.com.