The Company

Hemas Holdings is a diversified conglomerate, established as a family-owned entity in 1948, and listed on the Colombo Stock Exchange in 2003. The group’s operations are aligned into four main business streams: Health care, with a 42% contribution to company revenues, fast-moving consumer goods (FMCG), at 35%, leisure (9%) and transportation (5%). In terms of earnings before interest and tax (EBIT), FMCG and health care dominate, contributing 40% and 47%, respectively, while the leisure and transportation arms of the business contribute 13% and 12%. Hemas also has a number of new ventures ongoing, which currently contribute a negative EBIT.

During the past couple of years, Hemas has been going through a restructuring process, divesting its stakes in the power sector and placing greater focus on its four main business lines. Hemas Power, the group’s power sector subsidiary, which was listed on the Colombo Stock Exchange during FY 2009 was fully divested during FY 2014.

Development Strategy

Hemas’ FMCG portfolio consists of the manufacture and marketing of personal care, personal wash and home care branded products. The group has been investing heavily in its FMCG business as a result of rapid segment growth in line with Sri Lanka’s rising per capita GDP. FMCG revenue and EBIT displayed a compound annual growth rate (CAGR) of 23% and 16%, respectively, over FY 2011-15. In a bid to expand its consumer portfolio, Hemas acquired J L Morison Son & Jones (Ceylon) in FY 2014. Further investments have also been made to increase both plant capacity and product portfolio. The group has also realigned its product portfolio, divesting its tissue and toilet paper business with the sale of Nimex Brand. In FY 2011 Hemas entered Bangladesh’s FMCG market by setting up manufacturing facilities in the country with a view to exploit rapidly growing consumer demand. Its entry into the market has been a success story, with Bangladesh-based sales growing at a rapid pace: A 90% growth in revenues was recorded for FY 2015, with the business currently contributing 9% to the FMCG top line. During FY 2015 Hemas invested in the installation of a fully fledged sales and distribution network in Bangladesh.

The group’s health care business has also shown accelerated growth, reaching a CAGR of 29% in revenue from FY 2011-15, while EBIT grew 43% over the same period. Hemas’ operations consist of hospitals, pharmaceuticals distribution and pharmaceuticals manufacturing businesses. Hemas’ hospitals business has been identified as having high growth potential, and the bulk of the group’s investments are focused towards this business. Hemas owns and manages three hospitals, which have a total capacity of 205 beds. The latest addition to the group’s portfolio was the Thalawathugoda hospital in FY 2014.

The leisure component of Hemas’ business comprises four hotels and Diethelm Travels Sri Lanka, which handles inbound tour operations. Hemas also has a partnership with Minor Hotel Group to manage the international brand, AVANI. Leisure sector revenue and EBIT grew at a CAGR of 42% and 59%, respectively, over FY 2011-15. The group is constructing two more five-star hotels under the AVANI brand in Tangalle and Kalutara, which will add a further 293 rooms to the group’s inventory.


FMCG EBIT is fully expected to grow at a CAGR of 20% from the end of FY 2016 to the end of FY 2018, backed by the significant growth in middle income consumer spending.

The private sector health care segment is one of the most under penetrated segments in Sri Lanka and has considerable growth opportunity due to higher disposable income levels. Therefore, EBIT for the sector is likely to reach a CAGR of 24% between the end of FY 2016 and the end of FY 2018.