Haycarb ends FY18 with Rs. 15.5 b turnover; Rs. 926 m pre-tax profit

The Sri Lankan multinational Haycarb PLC reported revenue of Rs. 15.5 billion, profit before tax of Rs. 926 million and profit after tax of Rs. 774 million for financial year2017/18. The earnings per share of equity holders of the company was Rs. 22.63 for the year.

Haycarb PLC and parent company Hayleys PLC Chairman Mohan Pandithage said that the significant growth in the top line in spite of key challenges in the supply chain for raw material has proven Haycarb’s strength and position as a leader in the coconut shell based activated carbon industry. He added that the Environmental Engineering arm, Puritas Ltd. has reported notable growth and contributed positively to the results of the group.  

Haycarb PLC Managing Director Rajitha Kariyawasan explained that the activated carbon business of the company faced significant margin pressure, due to the shortage of supplies and substantial increase in prices of coconut shell charcoal in Sri Lanka, India and Thailand, particularly during the second half of the financial year due to adverse weather conditions, which resulted in lower profits from the carbon business in the current year. The availability of raw material in Indonesia, on the other hand, regained near-normalcy in the last quarter after shortages experienced for two consecutive years, even though the prices remained high due to the scarcity and shortage of the material in other countries. 

Kariyawasan explained that the main objective during the year was to ensure that long standing end customers and distributors were supplied with their product requirements, which compelled Haycarb to absorb majority of raw material cost increases, to allow its global distribution network to average out price increases to customers, and mitigate the panic in the distribution chain.   

Therefore, although Haycarb had to negotiate increase in prices of its activated carbon products, prices were increased with a time lag, as the decision to shield customers against the full impact of charcoal price increases was made in the medium term interest of the business that resulted in the short term erosion of profit margins. On the procurement platform, the efforts were focused on retention of existing suppliers, broad-basing the supply network and supporting low-cost environmental friendly charcoaling methods through the Haritha Angara program in Sri Lanka and the Vertical Charcoaling Kiln Project in Thailand, through technical and financial assistance. The productivity improvement initiatives under the Lean Operational platform accorded priority status to projects to reduce costs across all operational units to safeguard margins.

Kariyawasan further said: “The initiatives launched to acquire new customer accounts, access new geographies and penetrate new market segments, backed by successful and timely new product development projects, showed positive results that contributed to the continued growth momentum in the top line. Haycarb continued to attribute highest priority to maintain its Quality Assurance System and was certified for Good Manufacturing Practices (GMP), HACCP and ISO 22000:2005 from SGS, which will facilitate the positioning of Haycarb products in high value added product segments in human consumption and pharmaceutical applications.” 

He said that Haycarb’s Environmental Engineering business, Puritas, has posted creditable results, backed by growth in its local and regional presence, as a superior provider of water and waste water purification solutions, while the activated carbon end products manufactured and marketed by this sector also showed satisfactory growth.

The expected increase for water and waste water purification systems in Sri Lanka and in the region, coupled with the internal growth initiatives of Puritas, along with its valued collaboration with Veolia Water for large scale projects, augurs well for future growth of this business segment. 

Puritas Sath Diyawara, the CSR Initiative done in partnership with the Hayleys Group, currently providing 160,000 litres of safe drinking water daily to over 33,000 persons across 19 villages at risk of chronic kidney disease in the Central and North Central Provinces of Sri Lanka, won the prestigious Energy Globe World Award 2017 for Water Category . 

Kariyawasan stated that the company remains confident of its position of strength and stability in the activated carbon industry, regeneration services and the environmental engineering segment to continue the growth platform in the background of continued emphasis placed on environmental sustainability, standards and regulations globally. 

Haycarb is the pioneering manufacturer of coconut shell activated carbon in any coconut producing country with manufacturing facilities in Sri Lanka, Thailand and Indonesia, supported by marketing offices in the USA, UK and Australia. The company contributes net foreign exchange revenues with its value adding processes, and is a leading and technologically superior manufacturer in its chosen segment. 

The Board of Directors of Haycarb PLC comprises of Chairman Mohan Pandithage, Managing Director Rajitha Kariyawasan, Dhammika Perera, Arjun Senaratna, Sarath Ganegoda, Jeevani Abeyratne, Dr. Sarath Abayawardana, Sujeewa Rajapakse, M. S. P. Udaya Kumara, Brahman Balaratnarajah, Sharmila Ragunathan, Ali Asgar Munaver Caderbhoy, James Naylor and M. H. Jamaldeen.