Spotlighting on LMD - January 2024 Edition

Q: What is the recipe for success that led to your group becoming a household name in the country?

A: The success of St. Anthony’s Industries Group in becoming a household name in the country can be attributed to a strategic combination of continuous innovation, unwavering commitment to top tier product quality and visionary leadership.

Our focus on introducing pioneering local products ensures a consistent flow of valuable offerings to the market. Dedication to upholding high product quality, implementing effective marketing strategies and maintaining an unwavering focus on customer satisfaction has firmly established us as a trusted and recognisable brand.

Q: The local construction industry faced several headwinds due to the economic crisis and tax regime. How is it faring today?

A: The construction industry in Sri Lanka is currently facing an unprecedented contraction with a projected decline of 14.9 percent in real terms for 2023. It is grappling with a multitude of challenges stemming from the ongoing economic and political crisis.

The steep depreciation of the national currency, coupled with a surge in inflation and the imposition of a higher interest rate regime, has created a highly unfavourable operating environment.

Notably, the primary lending rate witnessed an alarming increase of more than 25 percent from October onward in 2022, intensifying the financial strain on construction-related activities.

In addition to economic factors, recent tax changes have added to the industry’s burdens. Adjustments in personal tax rates, corporate tax structures, value added tax (VAT) and the introduction of the Social Security Contribution Levy have collectively exacerbated the challenges faced by construction firms.

These changes have significant financial implications for businesses operating in the construction industry, impacting their bottom lines and financial viability.

Navigating through this complex landscape requires strategic resilience and adaptability from industry stakeholders, as they seek ways to mitigate the impacts of economic instability, currency devaluation, inflation, higher interest rates and shifts in tax policies.

Q: How does the group exhibit resilience in overcoming contemporary challenges – and what strategic measures does it employ to effectively manage these adversities?

A: St. Anthony’s Industries demonstrates resilience in the face of contemporary challenges through a strategic focus on key stakeholders.

The group places significant emphasis on fostering strong relationships with business partners including distributors, dealers, and public and private organisations that have been integral to our operations for many years. By nurturing these partnerships, we ensure a stable and supportive network that contributes to our overall business sustainability.

Our commitment to a customer focussed approach stands as a cornerstone in providing excellent customer service. This approach not only enhances customer satisfaction but also plays a crucial role in bolstering our brand visibility across the country.

Moreover, we actively explore export opportunities, aiming to expand our presence in international markets and diversify revenue streams.

The group has implemented a well thought out plan to optimise the cost structure in managing adversities. This includes prudent cost management strategies that safeguard the interests of employees and other stakeholders.

St. Anthony’s Industries prioritises employee wellbeing and stakeholder satisfaction, recognising their importance in the overall resilience and success of the group.

Q: How does your group capitalise on tech advancements to enhance your offering?

A: Our group strategically leverages technological advancements to enhance its product offering and operational efficiency.

A pivotal step in this direction involves the full-scale implementation of the SAP system, a robust enterprise resource planning (ERP) solution. This comprehensive system streamlines various business processes, ensuring seamless operations across the group.

In addition to ERP, the group is actively revamping its Sales Force Automation System and Human Resource Information System. These initiatives underscore a commitment to staying ahead of digitalisation trends, optimising sales operations and enhancing human resource management.

St. Anthony’s Industries Group incorporates robotic technology into its moulding production process, embracing automated methods for precision and efficiency. The integration of machine-oriented processes reflects a dedication to innovative manufacturing practices.

Furthermore, the group harnesses the power of business intelligence (BI) software for comprehensive data analytics, aligning with the principles of the Fourth Industrial Revolution.

This tech driven approach positions us at the forefront of industry innovation and reinforces our commitment to delivering high quality products and services.

Q: What are your expectations for Sri Lanka’s construction industry in 2024 and beyond?

A: The expectations for the Sri Lankan construction industry in 2024 and beyond are influenced by various economic factors.

The positive sign of economic recovery is reflected in the gross domestic product (GDP) expansion of 1.6 percent in the third quarter of 2023 compared to the same quarter of the previous year.

A significant contributing factor to the industry’s outlook is the reduction of the primary lending rate from a high of 28 percent to below 13 percent, which is expected to stimulate investment and economic activity in the construction arena.

Despite these positive indicators however, challenges persist. The increase in VAT to 18 percent and other tax hikes are anticipated to hurt the construction industry. Such tax changes may lead to increased costs for construction projects, potentially affecting demand and profitability.

INTERVIEWEE DETAILS

Lahiru Jayasinghe
Chief Operating Officer