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STO on a positive trajectory, expansion plans ahead

Malika Shahid
19 April 2024, MVT 10:45
Managing Director of STO, Shimad Ibrahim in an interview with Mihaaru News -- Photo: Nishan Ali
Malika Shahid
19 April 2024, MVT 10:45

Managing Director of State Trading Organization (STO), Shimad Ibrahim, has stated that the Maldives' largest company is on a "positive trajectory," and the next step is to expand it into more business avenues.

"STO's financial position is good," Shimad said in an interview to Mihaaru News last week.

STO generated a revenue of MVR 16 billion last year and made a profit of MVR 800 million.

Shimad said the company's financial situation was heading in a positive trajectory when the current administration took over. However, he emphasized that the company needs other state-owned companies and the country's economy to improve in order to take its financial position to new heights. He elaborated on this point by giving some examples.

“Fenaka Corporation should be improved. Maldives Transport and Contracting Company (MTCC) should be improved. Other SEO's should also be improved,” he said, noting that STO's businesses are also linked to other companies.

He said that he was looking into opportunities to expand STO. Among other things, he said that discussions are underway with Maldives Airports Company Limited (MACL) to find ways to reduce the cost of aviation fuel supply as much as possible. That, too, could greatly improve STO’s revenue, he said.

Income from fuel is the company's largest source of revenue.

"The current situation is that large vessels are coming into the country after refueling with just enough to make the trip back. They will purchase very little from here," he said.

STO is becoming international

Shimad said the company is making special efforts to expand into international businesses in addition to its existing operations. He said the bunkering service is also an international service which will increase the flow of foreign currency into the country. This, he believes, will reduce the economy’s dependence on foreign currency.

"This is a very big vision. Reducing dependence on foreign currency. Bunkering is one avenue. If the agriculture economic zone is successful, a lot will be saved," he said.

Agreement signing for the international bunkering project with Vitol took place in March 2024 -- Photo: Fayaz Moosa

STO is also a part of the main company formed to carry out economic activities in the SEZ.

In addition to these two businesses, the company will also give special priority to online banking projects, he said. Shimad said Maldives has retail banking and corporate banking and it is very important for STO to establish an investment bank.

He added that he would prioritize expanding into international markets and finding ways to attract foreign currency to the Maldives, enhancing the company's financial position in a competitive environment.

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