Hayleys eyes largest shipping company status

In its quest to become Sri Lanka’s largest shipping and maritime company, the Hayleys group subsidiary, Hayleys Advantis Limited, yesterday announced the 95 percent equity acquisition of Sri Lanka Shipping Company Limited for a mammoth Rs.4.9 billion. 

“This acquisition is in line with the group’s strategy on expanding its maritime operations and paving the way for the establishment of the largest marine and shipping company in Sri Lanka,” Hayleys PLC said in a stock market filing. 

Sri Lanka Shipping Company Limited was incorporated in 1956, according to its official website, to charter, own and operate small cargo vessels on short sea routes to the Indian subcontinent and Middle East. 

Today it offers the local and international shipping community the full range of maritime services such as liner and tramp ship agency, joint venture investment in ship agency companies, stevedoring, customs house agents, clearing and forwarding, heavy lift haulage, towage and salvage, bagging of bulk fertilizer, warehousing and warehouse management and tea blending and other related services to export of tea. 

The current board of directors of the company comprises of Capt. Lester Weinman (Chairman), Sonia Weinman, Mohamed Reza (Managing Director) and Feroza Delpechitrea. 

The shipping industry stakeholders opine that this acquisition by Hayleys will have a lot of implications to the local shipping and maritime sector at a time when the global shipping industry is also seeing consolidation with several large shipping lines forming alliances with counterparts. 

This consolidation is expected to benefit the industry, as it will contribute towards a gradual uptick in rates over the medium to long term. 

The two giants in Sri Lanka’s shipping scene are Hayleys and McLarens Group. They together are said to be controlling over 70 percent of Sri Lanka’s shipping and maritime services market. Sources at Hayleys said the group is eying more shipping sector acquisition in the near future to gain more market share. 

Currently a debate is ongoing whether Sri Lanka should liberalize the shipping and maritime sector in order to prevent cartelization, anti-competitive behaviour and monopoly happening within the trade.
Sri Lanka does not have anti-trust laws and currently the government is formulating a national trade policy, through which many believe such laws should also be introduced among others.

Business tycoon Dhammika Perera owns a little over 50 percent stake in Hayleys PLC and functions as Co-Chairman of the group. 

His Royal Ceramics PLC, through its subsidiaries, which were acquired in 2013, enjoys over 80 percent share of Sri Lanka’s floor tile market. Companies controlled by Perera also have a monopoly in the country’s aluminium industry.