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Monday June 3rd, 2024

Sri Lanka’s Laugfs Gas in talks with strategic investors in LPG, hotels

ECONOMYNEXT – Sri Lanka’s Laugfs Gas, which has diversified from a domestic cooking gas supplier to regional trader and hotels, is holding talks with strategic investors to bring investments into its energy and leisure businesses, chairman W.K.H. Wegapitiya said.

“We are talking to a few leading companies – foreign partners – who will add a lot of value into our businesses when they invest,” he told economynext.com in an interview.

Wegapitiya declined to identify the potential investors yet, saying Laugfs group has signed non-disclosure agreements with them while talks were going on.

The group’s restructuring spun off the hotels, power and emission testing businesses.

The revamp, which consolidated its core liquid petroleum gas (LPG), shipping and storage units into a pure play energy firm, was aimed at attracting foreign partners with specific knowledge of key sectors.

Some of the strategic partners who were keen on joining up in businesses like leisure had not been willing to come when they saw non-related units in the group.

Laugfs is aiming to be a regional LPG supplier, not only supplying its existing Bangladesh market but to use its position to be an Indian Ocean player, eying opportunities in south Asia and as far as east Africa, Wegapitiya said.

Existing operations include a procurement arm in Dubai, a fleet of three ships and storage and distribution of LPG in Sri Lanka and Bangladesh.

The group’s trading unit in Dubai is handling increasing volumes, the shipping arm is expanding its LPG product vessel fleet and the southern Hambantota port storage terminal commissioned in May will be a blending and supply hub.

Talks on getting strategic partners were temporarily delayed by April’s suicide bombings of churches and hotels by Islamist extremists which killed over 250 people and sharply reduced tourist arrivals and led to travel warnings against visiting the island.

The potential strategic partners of Laugfs Gas had not withdrawn in the aftermath of the attacks, which presented Sri Lanka with renewed security concerns after the end of its 30-year ethnic war 10 years ago.

Representatives of foreign parties were supposed to visit the island for talks in April but the Easter Sunday bombings ruined that plan.

“It was only a few weeks ago that some of those countries where our potential partners are headquartered relaxed travel advisories,” Wegapitiya said. “Talks are going on and we are hopeful.

“Our operation now is mainly focusing on the local market but there is potential in the wider Indian Ocean market, in Asian and African countries.”

Laugfs projects its Hambantota 30,000 metric tonne LPG transhipment terminal will have annual exports of 500 million US dollars, receiving bulk shipments in big vessels and exporting on smaller ships as many regional ports cannot handle big ships.

Wegapitiya said the company expects a strategic partner into the business.

“The first phase of the storage terminal has enough capacity to operate for a couple of years. The strategic partner is coming in as an equity partner, as a minority strategic partner.”

Laugfs group has been making losses in recent quarters which it attributes mainly to rupee depreciation and LPG price controls. At end-2018 it had total assets of 34.4 billion rupees and 14.8 billion rupees debt.

In the March 2019 quarter, the net loss of Laugfs Gas shot up 379 percent to 473.4 million rupees from a year earlier, owing to finance costs and soaring foreign exchange losses.

The group has spoken of expanding in a big way its existing three-ship fleet of LPG ships under Laugfs Maritime.

 “Now we are looking at more ships. When the storage terminal is fully operational, we’ll need more ships, which we will either buy or charter,” Wegapitiya said.

Right now Laugfs has a ship trading LPG between Vietnam and China.

LPG trading volumes by Dubai-based SLOGAL Energy DMCC are “growing slowly and gradually,” Wefapitiya said.

“Our Dubai operation is going to be one of the leading trading and supply chain companies in the Indian Ocean region. Our target for the 2019-20 financial year is to handle one million tonnes for our own and foreign markets.”

Apart from Bangladesh, Laugfs also sees big LPG market potential in Myanmar and Kenya.
(COLOMBO, 15 July, 2019)
 

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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