Sri Lanka conglomerates are investment brands

May 21, 2013 (LBO) - Sri Lankan conglomerates that had attracted strong foreign investor interest had built resilient investment brands, top executives involved in managing multi-national companies said.

Punters in international markets also react like consumers do to brand, as conglomerates which are not easy analyze, Lalith de Mel, chairman Hemas Plc and former board member of Reckitt Benckizer Plc Uk said.
"In conglomerates investors see very little of the bits and parts that make it up," de Mel told the LBR-LBO conference on 'Building Resilient Brands.'

"They believe that managers of the brand have the ability to keep moving things along. So JKH, Aitken Spence, Hemas are also brands in a way. They give the same value and keep increasing shareholder value."

Brands help pull up a product or service up from commodities by giving an enhanced user experience but they also have to deliver the promised user experience.

De Mel said a brand like Dettol antiseptic had survived for 75 years around the world, changing with the consumer as their habits changed, after beginning its life when medical practitioners were trying to encourage people to be more cleaner.

Dettol had developed products to suit bathtubs in the west, buckets in the East and had evolved to shower gel as habits changed.

"It is about perception. Nobody has seen a germ," de Mel said. "Nobody has seen Dettol kill a germ. It still continues to generate millions of dollars of revenue."

Amal Cabraal head of Unilever said brands were about a user experience, but they had to deliver on the promises made to users.
Sunlight for example was targeted at washing which was chore. But through its aroma, packaging and lathering it delivered an experience. But it also delivered on the promise of being a cleaning product.

Cabraal said though the value of brands was not captured in the financial accounts, it was captured in the market capitalization of a firm.

Potential future earnings, that was captured in a share price of a firm reflected the value of the brands, he said.