Japan’s Bansei gets more bullish on Lanka; invests Rs. 400 m in Hikka resort
Thursday, 27 March 2014 01:43
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Japan’s financial markets specialist Bansei Securities Ltd. has turned more bullish on post-war rebounding Sri Lanka’s tourism sector by investing over Rs. 400 million in a resort in Hikkaduwa.
Bansei’s engagement and commitment in Sri Lanka for the past two years was confined to channelling Japanese investments into Government securities with a portfolio of over Rs. 25 billion whilst last year it acquired a 15% stake in Pan Asia Bank Plc for Rs. 930 million.
Both these major initiatives were on the back of post-war resurgence and opportunity in Sri Lanka as envisioned by Bansei, which is a Tokyo Stock Exchange-member firm specialising in securities trading, asset management and insurance.
Having studied the tourism sector and its prospects, Bansei has now expanded its footprint in Sri Lanka to the hospitality industry as well.
“Tourism is a key sector of Sri Lankan economy and post-war there has been very encouraging high growth. The future potential of tourism is much greater hence our decision to make the first investment in the tourism sector,” Bansei Securities Group Chairman Toyohiko Murakami told the Daily FT yesterday.
“Our investment in tourism is also a perfect manifestation of the friendly ties between Sri Lanka and Japan. This (tourism sector) is the bridge that links us,” he added.
Murakami is in Colombo to witness the listing of the hotel venture Bansei Royal Resorts Ltd., today on the Colombo Stock Exchange via an introduction.
The 34-room hotel was previously known as Coral Rock Hotel Ltd., and is managed by Amaya Resorts and Spas Plc.
Bansei holds a 39% stake in the resort company whilst 51% is held by Channa de Silva and the balance by high net worth investors.
With 53.7 million shares in issue, Bansei Royal Resorts Ltd.’s (BRRL) reference price as determined by CT Capital Ltd., is Rs. 5.60.
Murakami said Bansei has so far invested Rs. 400 million in the venture and has committed a further Rs. 200 million for an upgrade in the next few months which will see facilities and service offerings raised to meet Japanese standards.
“Further investments will be made in tandem with the growth of the resort,” the Bansei Chairman said during the interview along with NWS Holdings Chairman Takashi Igarashi, a seasoned promoter of Japanese investments in to Sri Lanka. The company will also explore options on the 65-perch block the company owns opposite the existing resort.
“Japan is famous for its hospitality known as ‘Omotenashi,’ which is ‘to entertain guests wholeheartedly’ or ‘the spirit of selfless hospitality’. We will endeavour to offer this experience at Bansei Royal Resorts to all our guests,” Murakami said.
The staff of over 60 at the resort is being trained accordingly whilst the company has plans to extend this concept to the community as well.
Murakami said Bansei will work with leading tour operators out of Japan to woo high-spending tourists from different cities of Japan. Colombo and Tokyo are served by SriLankan Airlines via four flights per week whilst Bansei will also promote Japanese tourists to fly Korean Air, which started daily flights between Seoul and Colombo as that carrier serves 10 major cities of Japan daily.
He said that following a step up in destination marketing and awareness in Japan during the past few years, there is growing interest in Sri Lanka. Last year Sri Lanka was ranked as number one destination by the Japan Association of Travel Agents (JATA). Sri Lanka was also featured 14 times last year via a TV program spanning one-and-a-half hours. “The frequency of this program has been increased this year with the first three months alone showing 14 episodes,” Murakami added.
Having travelled across Sri Lanka during his previous visits, (Murakami also sits on the Board of Pan Asia Bank Plc), the Bansei Chairman is of the strong belief Sri Lanka’s tourist attraction is unique with a good blend of heritage, culture, history, beaches and adventure.
“We are keen to make Bansei Royal Resorts a showpiece enriched with high quality Japanese hospitality in an exotic Sri Lankan setting,” he added.
As per audited accounts BRRL has achieved revenue growth of over 160% in FY13 and a gross profit ratio of 63% whilst net profit margin is 7%. Book Value Per Share is Rs. 141, up from Rs. 133 in FY12. Earnings per share was Rs. 7.43 in FY13, as opposed to a negative Rs. 2.
The Board of Directors of the company comprises Bansei Securities President and CEO T. Murakami, M. Nakayama (Managing Director/CEO), Channa De Silva, Viraj Malawana, Hasitha Premaratne and C. Surith J. Perera.
