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UBP INTEGRATED REPORT 2022
INTRODUCTION ABOUT US
GROUP CEO’S MESSAGE
A YEAR OF OPPORTUNITIES
resumption of infrastructural activities in the region in which we operate. I have to congratulate our teams on site, who rose to the challenge of dealing with plant and machinery that had become somewhat stiff after months of not being in use, enabling them to seize opportunities. As a result, UGPL’s performance during the first three quarters far exceeded our expectations, before being confronted with the sudden and severe institutional crisis that shook Sri Lanka, which once again put a brutal stop to the unexpected revival of activities. Registered revenue in the fourth quarter of the year was almost negligible.
Looking ahead, FY2023 is expected to bring further complications. The import and use of explosives, on which we rely to obtain our raw material from our quarry, are strictly prohibited in Sri Lanka until further notice. As for the search for a buyer, our broker remains on the hunt, but the current environment is not conducive to deal-making.
UBP Madagascar is struggling to recover from the Covid period and continues to operate in a challenging and uncertain economic context. Although our activities for the Ambatovy mine (for which we carry out blasting services) are maintained at satisfactory levels, the manufacturing and sale of construction materials is at a standstill. Ultimately, this reflected poorly on our consolidated figures. As already announced, we have also taken the decision to seek out a buyer for our Malagasy subsidiary.
What conclusions could be drawn from this experience?
After more than 20 years of operations in Sri Lanka and Madagascar, where difficult times overshadowed prosperous ones, I have had the time to reflect on the underlying reasons for our successes and failures, and have come to the following conclusions:
• Firstly, no matter how far developed a company may be in its core expertise, and how well it masters its trade, being an expert in one’s country of origin does not necessarily translate into the successful export of its activities abroad. Relying on one’s core area of expertise is not a guarantee of success as several other factors come into play. For instance, if the export country’s unique specificities and business environment are not properly assessed, even the greatest ‘expert’ could face massive failure, and this despite having local partners on board. I remain convinced that having even the most reliable local partners does not absolve one of the responsibilities to understand local habits and practices.
• Assuming this first condition is fulfilled, the second imperative is to ensure that the foreign subsidiary is being steered by a leader with a strong entrepreneurial background, and proven managerial experience.
In light of this new phase of development, how is the Group preparing for the challenges to come and ensuring it remains one step ahead?
Indeed, several challenges lay ahead. Firstly, the VUCA environment in itself is giving rise to crises of great proportions. Our sector, which is not widely known for its environmental virtues, will have to double down its efforts to reduce its impact on Spaceship Earth, on which we are all passengers. In clear-cut terms, I make a pledge that UBP will change the narrative on sustainability in our sector.
In addition to this, we will have to manage the many challenges related to our acquisition decisions. Realising our ambitions of becoming a major regional player will require us to step out of our comfort zone — and we are more than ready to do so. I am confident in our ability to rise to these challenges because we have an asset whose value outstrips any other: the best team, composed of extraordinary men and women, whose combined energies, talents and efforts move the Group forward each day. If we are to remain leaders, especially in such a dynamic environment, maintaining the quality of our talents will be instrumental. And for this, The Path, as mentioned above, will focus on the development of our teams to ensure they retain their position at the top of the pyramid and in turn, take UBP to greater heights.
MANAGEMENT APPROACH