Diversification delivers for Elpitiya Plantations

Tuesday, 15 July 2014 00:53 - - {{hitsCtrl.values.hits}}

Aitken Spence-managed Elpitiya Plantations PLC recorded a profit-after-tax of Rs. 480 m for the financial year ended 31 March 2014. Elpitiya’s exceptional earnings were mainly driven by an excellent performance in oil palm and return on strategic investments made by the company into joint venture projects. “Profit was commendable as revenue on tea and rubber had declined by around 8% YOY, following the erratic weather conditions and the poor prices released for natural rubber. Increase in cost of production following revision of the workers’ wages by 20% had a significant impact on the company’s profitability. Our strong results are due to the team work by our employees,” said Dr. Rohan M. Fernando, Managing Director of Elpitiya Plantations PLC and Director of Aitken Spence PLC. The company’s net assets had increased to Rs. 2.9 b from Rs. 173 m at the time of taking over of the estates in 1997. Since taking over, the company has invested over Rs. 3.8 b on tea and rubber replanting, factory development, diversification into oil palm and commercial forestry and other capital enhancements. “New Peacock and Nayapane estates have achieved all-time record yields of 2,855 kg per hectare and 1,979 kg per hectare respectively in tea. This was made possible due to the good agricultural practices followed on the estates, with special emphasis on fertiliser inputs and upgrading factory machinery. We thank the Government for the subsidy given to the industry which has helped us maintain fertiliser levels,” said Tony Goonewardena, Executive Director of Elpitiya Plantations PLC. Commenting further, Goonewardena stated that the company’s strategic investments into re-forestation (commercial forestry) and hydro power projects brought in significant income during the financial year under review. The joint venture project with Dianhong International Ltd., to produce Chinese specialty black tea and green tea at the company’s newly -developed Harrow Tea Factory in Pundaluoya also contributed substantially to the company’s profit along with the income derived from the palm oil processing factory, which is jointly owned by Elpitiya Plantations PLC with two other regional plantation companies. “The company’s strategic diversification programme into large scale palm oil cultivation in the low country region has paid dividends by contributing considerably into the company’s profitability. Deviturai Estate recorded the highest-ever yield of 16,281 kg per hectare on oil palm and Talgaswella Estate, a major tea and oil palm plantation in the low country, has made exceptional returns,” said Bhathiya Bulumulla, the Chief Executive Officer of Elpitiya Plantations PLC. The company also has commenced an eco-tourism project in the low country and planning to extend the same concept on Dunsinane, Sheen and Fernlands estates in the upcountry region in the current year. Elpitiya Plantations PLC adopts the stringent food safety standards in the production of tea. Dunsinane, New Peacock, Nayapanetea factories in the up country region and Talgaswella and Deviturai Tea Factories in the Low Country regions have been certified for ISO 22000:HACCP for Food Safety Management Standards and all the tea factories have been certified for Ethical Tea Partnership and Forestry Stewardship Council (FSC) Certification for best practices on health and safety and environment management. The company is currently working towards obtaining rain forest alliance certification to all its up country tea estates. Elpitiya Plantations PLC is committed towards improving the living conditions of the worker population on the plantations. Projects include construction of new housing units, water and sanitation, for more than 50 housing unit for several estates. Further, plans are underway to construct 510 housing units on Dunsinane and Meddecombra Estates with the assistance of the Indian Government during the years 2014-2016. As a pilot project, bank accounts were opened for all employees of Talgaswella Estate while the company also has facilitated to provide scholarship grants to 21 children of the estate workers, who excelled in their studies to pursue their higher education at the universities. Elpitiya Plantations has also pioneered to construct an elders home on Meddecombra Estate, the first of its kind in the plantation sector, to accommodate and look into the wellbeing of 40 retired workers, in collaboration with the French Donor ‘Foundation Adam Pierre’ at a cost of over Rs. 25 m. The company is continuously exploring sustainable avenues for marketing its produce abroad, especially tea and rubber in North and Southeast Asia.