DHI plans to accelerate growth and contribute twice as much as in the first decade
The net worth of Druk Holding and Investments (DHI) grew from Nu 22,253mn in 2008 to Nu 79,338mn in 2016, thus establishing itself as the largest and only government-owned holding company with investments in energy and resources, communications and transportation, financial services, construction and trading.
According to DHI, DHI’s decade of journey of was an episode of consolidation.
From 12 companies in 2007, its portfolio companies have expanded to 19, of which nine are fully owned. In five companies it has more than 50% share holding and in another five companies it has less than 50% holdings.
One of DHI’s most important mandates is providing predictable revenues to the government and since its interception DHI has met this obligation from the dividend it receives from its subsidiaries, which forms its primary income, states the DHI report titled “DHI’s Journey –The first 10 Years”.
DHI also contributed in terms of corporate tax, paid by its companies and by itself as a corporate entity. Its last dividend to the government was Nu 3.78bn in 2016.
“Since 2016, the dividend to be transferred was agreed on as a percentage on the consolidated account of DHI, at 63% of dividend to the government from its consolidated account annually. The remaining 37% is spread among DHI companies with each entity holding 2-3%,” states the report.
DHI’s dividend and tax contribution to the government since 2008 also show an increasing trend, indicating better financial performance over the years.
From Nu 1.46bn in 2008 to Nu 3.78bn in 2017 was the dividend paid to the Ministry of Finance (MoF), while tax remittance to MoF was Nu .64bn in 2008 to Nu 2.18bn in 2017 by DHI.
Almost 80% of DHI’s remittance comes from the energy sector, better performance of its other portfolio companies in banking, and the Telco and transport sectors have also contributed to the higher taxes and dividends despite the entry of private players.
Meanwhile, after 2010, seven new companies became part of DHI, such as Dungsam Cement Corporation Limited (DCCL), Construction Development Corporation Limited (CDCL) and Thimphu TechPark Limited.
According to the report, DHI had to make substantial investments in these companies, which were not yet generating returns.
Three companies – Thimphu TechPark were new investment ventures and Woodcraft and CDCL were state-owned enterprises – DHI took over from the government.
In the coming decade, the report states that DHI will continue with corporatization to make its companies more efficient for greater revenue and reduced wastage.
Stepping into the next decade, DHI plans to accelerate growth and contribute twice as much as in the first decade.
As a part of review and consultation process for the roadmap to 2030, some of the companies are also recommended to be brought under DHI’s hold in the coming few years. DHI believes better synergies can be achieved by bringing some of the State-owned Enterprises (SoEs) under it.
Hence, it plans to propose to MoF to transfer under DHI’s hold some of the companies/SoEs under MoF. Meanwhile, the number of DHI employees has also from increased from two in 2007 to 61 in 2017.
Chencho Dema from Thimphu