Sierra cables diversifying business into hydro electric generation

Tuesday, Mar 09, 2010

Sierra Cables Limited (SCL) is diversifying its business into hydro electric generation and will be investing Rs. 250 million to set up two hydro power stations in the Central Province.

SCL Executive Director D.S. Panditha told Daily FT that diversification into power generation was another strategy launched by the company to consolidate its position in the energy industry.

"In the hydro power generation sector, we will be investing Rs.100 million from the company and the balance will be secured via a commercial loan. Venturing into power generation is a strategic move by the company. In the case of the cable manufacturing business, we are now looking into diversify in terms of higher value addition," he said.

According to Panditha, the company is now gearing itself to manufacture value-added products such as wire harnesses for automobiles and speciality products such as enamel wires.

"Currently we are engaged in manufacturing a range of electrical cables for the local and international markets. We have realised that by adding more value for our products we can bring in more revenue and expand our business into new dimensions. One area that we have looked in to is to manufacture of the automobile electrical harnesses.

Currently we are negotiating with a leading car manufacturer based in Europe and we hope to strike a deal soon. Our diversification initiative also included manufacturing of speciality products such as enamel wire. In this aspect we are having discussion with a Norwegian cable manufacturing company to start a new value added product range."

Commenting on the local electric cable market, he pointed out that Sri Lanka's industry was valued at Rs.10 billion. "We hold 20% of the market share in the country and we have already invested Rs. 350 million in cable manufacturing. Our main buyer is the Ceylon Electricity Board," he added.

The company is actively engaged in exporting its products to India, Australia, Dubai, Tanzania and Maldives.

Source: Daily Mirror