Touchwood looking to expand in N/E
Requests 20,000 acres from government
By Deepal V. Perera
Touchwood Investments PLC, a company involved in the planting of trees for commercial harvesting purposes, announced its plans of expanding its business in the Eastern Province of Sri Lanka by 20, 000 acres
“We have already requested an extent of land of 20,000 acres on a long-term lease from the government. We have foreign investors looking for a minimum investment of over 1000 acres,” said Director-General Manger, Touchwood Investments Limited, Channa Abeygunawardene.
He said during its past ten years of operation, the company has grown 600,000 trees in 2,500 acres, to the value of Rs.3.1 billion.It had also extended its operations in 11 other countries.
According to Mr. Abeygunawardene, despite the global economic downturn, the value of biological assets such as trees remained un changed. For this reason, investors are now eyeing biological investment opportunities.
“The Sakwithy money scam and the fall of Golden key ruined our reputation with Sri Lankan investors and we experienced a reduction in local investment. In spite of that, we saw strong growth in our business and not a single investor left us due to these factors. The main reason for such investor loyalty is that our risk management methods are far ahead of other industry standards,” Mr. Abeygunawardene said.
According to Touchwood, the company views effective risk management as a tool of good business strategy, and therefore does not limit its scope only to compliance requirements.
“We started our company with three employees and now have grown to be a 900-employee company. When we started our business in 1999, there were many companies involved in this business in the country. But we really mastered the knowhow of the industry. Today, we have grown trees in 2,500 acres in Sri Lanka and in 5,000 acres globally. We have proved that we are number one in this business in this part of the world. We are now being closely watched by other international companies, particularly from the UK,” he said.
According to the company, the revenue of the company in its operations for the last financial year increased by 22% to Rs.727 million, showing a 63% year on year growth. The company ‘s asset base also increased by 20% to Rs.3.1 billion during the year
“When we started our business in 1999, many companies attempted to compete with us. They not only failed, but even brought a bad reputation to the industry. We adopted a different strategy. We decided that for every tree we sell, we will plant three trees for use as a buffer stock. So, at any given time, we have a significant buffer stock available to us. As you are aware, the growth span of a tree stands at about 14 years. There are many things thatcould happen in that time. For that, we have adopted exceptional risk management methods,” he said.
Mr. Abeygunawardene said that company constantly strives to update and improve controls and procedures in order to identifying, measuring , monitoring and controlling of risks. This also boosted with annual independent evaluation carried out by industry experts and academics including ISO audits, existing long term collaboration s within universities and other institutions.
According to Touchwood the financial risk on the price of assets, the carries out valuation of its assets annually in order to minimizing the risk occurring at the end of harvesting cycle.
Because of this reason investor know the exact assets value without having to wait till harvest. A very high discount rate of 12.5% is accounted in view of providing adequate security for future financial risks.
We have very strong presence in 11 countries and out of that we see strong potential in Thailand we see wide opportunities. Our company have become success story in the
As lives in the North and East of the country is fast heading in to recovery the corporate sector is now in the
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