Sri Lanka's Richard Pieris to Enter Leisure Business. Business and Agriculture Tourism on the Cards

18th July 2010, www.nation.lk, By Indika Sakalasooriya

Sri Lanka’s plantation-rich Richard Pieris Company PLC (RPC) will shortly enter the leisure business aimed at developing five hotels, RPC’ Swiss based Chairman, Dr. Sena Yaddehige told The Bottom Line.

“If we have a joint-venture partner to come with us for the development cost we will go immediately in a big way. If not, we would go slowly. But definitely we will go into the leisure sector in the near future,” Dr. Yaddehige said. As he elaborated, RPC is looking at developing five hotels including one city hotel.

“We have earmarked four sites out of Colombo and one in the heart of Colombo which will be developed into a 100 room city hotel. The land and the building we are planning the hotel belongs to a friendly party. We expect to renovate the building and to build the hotel,” he remarked.

The investment for the city hotel alone is estimated at Rs.1.1 to 1.2 billion and RPC expects to fund the project though both internally generated funds as well as bank borrowings.

Yaddehige further said that at the moment RPC is in the process of obtaining approval for the hotel from relevant authorities and it has already got the nod from the Board of Investment (BoI).

“This hotel will be designed as a business hotel under the 3to 4 star category,” he added.

Asked about the other four sites where the conglomerate is planning to put up hotels without disclosing the exact locations, Yaddehige said that the group owns prime land almost everywhere in the country out of which a few are located in key tourist attractions.

“We have a 50 acre land in Tangalle between lagoon and the sea. And we have lands in Dambulla and Trincomalee. Now we are looking at the possibility of acquiring a land in Kalpitiya,” he said.

Touching on the type of hotels the firm intends building in the selected locations, he said, “the concept today is high margin top end hotels; then they have to be boutique hotels”.

RPC also expects to enter into agriculture tourism in the near future as the bungalows in the group’s plantations are now under renovation.

“We have very fine ten plantation bungalows. We even have one original bungalow designed by Geoffrey Bawa. We will be converting these into boutique hotels once our entrance to the leisure sector is sealed,” he said.

As to whether the group has the expertise in managing hotels, Yaddehige responded negatively, but said that there ‘won’t be a better time than this for us to intrude into the business given the country’s positive macro-economic outlook.’

Richard Pieiris Group is a diversified conglomerate with interests in plantation, retail, plastics and logistics. With a recent history of a nearly Rs.9 billion debt burden, the firm seems to be now in a recovering process with the buoyancy in the international commodity markets and coming down of interest rates locally.