JKH’s transportation business is one of the most diversified sectors even within the conglomerate – from Lanka Marine Services (LMS) bunkering and the South Asia Gateway Terminals (SAGT) terminal in Colombo port, to logistics centres and the Cinnamon Air domestic amphibious aircraft service.
“We remain diversified to explore potential opportunities that emerge in the transportation and logistics space,” explains Zafir Hashim. The transportation business is among the top contributors to JKH group sales, profits and return on capital. “JKH owes its success to identifying growth opportunities at the right time and not being shy to make big investments,” says Hashim, noting how investments in LMS and SAGT help position the island as a maritime hub.
“A well-thought-out strategy and solid execution is needed. The private sector must take the lead, with the government creating a conducive environment.”
SAGT handles two million containers a year, twice its original designed capacity and has won international recognition for terminal productivity. “JKH will always look for further opportunities in expanding into port, aviation, logistics and related businesses.”
A new international logistics centre at Kerawalapitiya was scheduled to be commissioned by 2020 to serve as a multi-user warehousing facility catering to third party customers. A master’s degree in chemical engineering made Hashim the natural choice to become chief executive of LMS after JKH bought the state ship fuel monopoly when it was privatised, in one of its early, big investments in the sector.
“LMS is where I kind-of grew up within JKH,” he fondly recalls, as part of the team who introduced new products and practices, including the ‘380cst’ fuel type, the largest selling bunkering product. Improvements to delivery infrastructure came with the acquisition of double-hulled tankers, which significantly increased the safety standards adopted locally.
LMS remains the largest physical bunker supplier in the island and the largest non-state supplier in South Asia. While Sri Lanka’s geographical position is critical in becoming a maritime and aviation hub, location alone is not enough, Hashim feels. “A well-thought-out strategy and solid execution is needed. The private sector must take the lead, with the government creating a conducive environment.
Modern infrastructure needs large investments, so the government could partner with the private sector. Not having proper infrastructure can be a huge dampener on businesses competing globally.” Sponsoring a program to improve the English skills of Moratuwa University logistics undergraduates and granting internships are key contributors towards producing the skilled people Hashim believes the island needs to achieve its logistics hub ambition, along with government backing to encourage youth to aspire to maritime and transportation careers.