Raigam Wayamba Salterns records substantial growth despite global challenges

By Randheer Mallawaarachchi

During a period of complete unpredictability, Raigam Wayamba Salterns PLC has recorded a substantial growth throughout the first two quarters of the financial year 2020/2021. 

According to the published interim financial results the group turnover for the first six months of the financial year has increased from Rs. 314 million to Rs. 385 with a growth of 22.6%. This purely represents a sales volume growth due to the stable price levels remained throughout. 

The group has earned an after tax profit of Rs. 50 million on that turnover compared to Rs. 38 million earned in the corresponding period of the previous year, increasing the EPS from Rs. 0.14 to Rs. 0.18. This remarkable growth in performance has finally resulted in growth in net assets per share from Rs. 4.63 reported at the end of previous financial year, to Rs. 4.81 giving a clear indication of asset growth and overall stability of the group. While the macroeconomic vulnerabilities affecting many corporate entities, RWS distributed a dividend of Rs. 0.10 per share in October 2021, which is a twofold increase over previous year.

Despite economic woes, investor confidence is up with share prices touched the highest recorded value of Rs. 11.30 in mid-October and stable at an average price of Rs.7 during the first two weeks of December 2020.

Addressing this grand achievement, Raigam Co-Founder, Chairman and CEO Dr. Ravi Liyanage mentioned with immense pride the manner in which Raigam Wayamba Salterns managed to remain resilient despite the challenges put forth by the unforeseen terror which was the COVID-19 pandemic.

RWS Groups effort to meet corporate targets can be approached through two perspectives. The first is quantity in terms of metric tons and the other is the value generated in terms of rupees. Tight controls have been introduced to maximise capacity utilisation in salterns as well as refineries with an effective logistic and transport operation in order to ensure that target quantities and values are reached.

RWS believes that the approach to success is servicing customer needs with the best quality products and early reaction to ever changing consumer taste. In its efforts to fulfil the quality perspective of consumers, the group adopts the highest standards and the best of practices in full compliance with regulations. While the production facilities operate under ISO 9001-2015 certified quality management systems, the entire product range holds SLS (Sri Lanka Standards) certifications.

RWS operates with an island-wide distribution network which reaches over 90% of the retail, wholesale and modern trade outlets as well as industrial users in the country. As innovative salt manufacturer in Sri Lanka, a variety of products is marketed in order to fulfil the need of each segment in the market

RWS’s brand focused marketing strategy is the key to the growth in operational volume, even under difficult market conditions. Isi, Premium, Welcome and Triple Washed are the popular brands of RWS sold under the umbrella brand ‘Raigam’.

The company put in a great effort to ensure that the primary brand Isi was firmly established in the minds of consumers and the drive ensured that the company enjoys a higher share of the country’s salt market.  Isi PVD the newest addition to product portfolio has shown a steady growth especially in urban areas.  

In 2009/2010 Raigam Wayamba Salterns PLC decided to open up its shares with the general public with a view to raise funds to expand the capacity of salterns and  refineries and also to grant an opportunity to the people of this country to partner this nationally important endeavour focused  to eradicate import of salt to Sri Lanka . 

The total value of the Initial Public Offering was Rs. 200 million which was generated within a single day. The funds began to skyrocket after merely one and a half hours once the IPO was made, and this is indeed a remarkable landmark to achieve. This shows that the public has complete faith in the endeavour.

The theme of the IPO which gained such a landslide triumph is ‘As the Sun and Sea, Live on’ (Hiru Samudura, Pavathinathuru). This is an industry where one is able to demand minute resources and energy from the national grid. The only source of energy which is available free of charge is solar power. This supply of solar energy accounts for around 80% of the total energy requirement. The other requirement is the raw material, sea water; which too, is available free of charge.

The ‘Samudura’ is the sea, which is the source of the raw materials. ‘Hiru’ is the solar energy, which is readily available given the weather conditions. Together, these two elements form the perfect blend of harmony which will reap rewards for a lifetime which is ‘Pavathinathuru’. 

This simple yet effective concept led to the success of the IPO given the fact that the investors were thoroughly convinced that this is an industry that will never cease to exist. The potential is endless. What is normally a buyers’ market converted into a suppliers’ market overnight. Being strategic is a must. The success story of RWS stems from these instances of strategic thinking and planning.

The path up now was not a silky road throughout but there were many obstacles and challenges including unfavourable climatic conditions, economic downfalls and the present pandemic situation, etc.  Despite all Raigam Wayamba Salterns has managed to record substantial growth in the market and has won the respect as the leader in industry innovation and value added salt market in Sri Lanka. It is satisfactory to note the resilience that RWS shown in recent times; quite significantly during the wake of the COVID-19 pandemic threat. 

RWS managed to continue operations whilst adhering to the security and safety guidelines and protocols mandated by the local health authority. The company did not resort to advertising campaigns. Yet, the customer demand did not falter. The distribution was conducted optimally and effectively. Not only did the company become stronger refusing any staff lay-offs or moratorium relieves, it successfully shouldered the national economy by catering to the enhanced demand following the ban on import of salt.

It is noted that RWS was not only able to face these challenges successfully, but in turn was able to sustain its profitability and its integrity as a corporate citizen without being unaffected and impeached. As salt is an essential product, RWS managed to deliver the requested quantities directly to the doorstep of its customers in every corner of the country. This is an achievement which derives immense pride.

Globally, almost all the industries are suffering setbacks due to the COVID-19 pandemic. It was observed that despite several challenges, RWS has recorded very satisfactory financial results discussed above for the first half of FY 2020/2021. 

Dr. Ravi concluded by stating: “Being genuine has brought Raigam Wayamba Salterns this far. It powers the company’s resilience to any challenge that is to come. We know our own strengths and capabilities, and we do not fail to deliver what we promise to the customers. That is the true story of our success.”