Delmege ventures into Vietnam

Shirajiv Sirimane

Delmege Forsyth and Company will set up a coir product manufacturing factory in Vietnam.

Group Director Delmege Shamil Mendis said the main attraction for them to branch off to Vietnam was the raw material potential in Vietnam. "They are not only available in abundance but are also cheaper there and the labour market in Vietnam too is encouraging," he said.

Delmege is a leading exporter of coir fibre products, coconut products, spices and natural fertiliser to more than 20 countries. The company also exports tea, ethnic foods, handicraft, ornamental pottery, cut flower, ornamental ceramics, wooden and soft toys.

Mendis said the company is planning to service their Far-Eastern markets from this proposed plant.

Vietnam's economy is 49.8 per cent free, according to the World Index of Economic Freedom 2008 assessment, which makes it the world's 13th freest economy. Its overall score is 0.4 percentage points better than last year, mainly reflecting an improvement in trade freedom.

Vietnam is ranked 25th out of 30 countries in the Asia-Pacific region, and its overall score is lower than the regional average.

Mendis said Delmege is also looking at opening a branch in Chennai India. "This is mainly to increase our trading operations to Indian destinations," he said. Delmege Distributors, one of Sri Lanka's leaders in branded packaged food marketing, specialises in retail and wholesale distribution. The company represents many global brands in addition to marketing a few of their own.

India is a huge market and it would be easier for them to operate from a branch office in Chennai. The existing Free Trade Agreement between India and Sri Lanka too would be another advantage for Delmege.

Mendis said while consolidating their operations they are also looking at the local pharmaceutical and personal care markets. "We see opportunities in these areas as well," he said.

Delmege Medical (Pvt) Ltd is already a formidable player in the local medical equipment area. The company has installed equipment in almost every major hospital and medical institution in Sri Lanka.

The local medical industry in the last five years has seen a tremendous growth. While existing health care institutions have made sizable investments many new players both local and foreign too have entered the market.