Growing the pool of billion-dollar companies in Sri Lanka

TODAY, Sri Lanka has just three listed companies valued at over a billion dollars: John Keells Holdings (JKH), Commercial Bank of Ceylon, and Ceylon Tobacco PLC.

- Dinesh Weerakkody

This is a sobering statistic for an economy with ambitions of becoming a South Asian hub for trade, services, and investment.

A country of 22 million people, strategically positioned astride major maritime routes, and possessing a strong pool of talent in accounting, IT, and law, should be capable of nurturing multiple billion-dollar firms across diverse sectors. The fact that it has not points to deeper structural barriers inhibiting corporate growth.

Compounding this issue is a corporate culture that often favours organic growth. While inorganic growth through acquisitions can deliver faster results, the perceived complexities and pains of integration make many companies hesitant to pursue it, ultimately limiting their scale and competitive edge. Interestingly Singapore has 77 companies, Vietnam 44 companies and Bangladesh 7 companies valued over $ 1 billion.

The domestic market is simply too small. Many Sri Lankan companies remain overly dependent on local demand and rarely push aggressively into regional or global markets. Revenue ceilings are quickly reached, forcing firms to stay mediumsized. By contrast, Indian and Bangladeshi firms have leveraged large internal markets and Singaporean businesses have built global positions in supply chains. Too often, our companies take a conservative approach, avoid risk taking, preferring to dominate the local market rather than compete regionally or internationally.