Dipped Products surges into FY 2012 with improved growth

Similar contributions from Hand Protection and Plantations in the first quarter of 2011-12 have generated noteworthy growth for Dipped Products PLC, (DPL) the Hayleys Group’s globally-significant rubber glove manufacturing business.

Turnover increased by a solid 43% to Rs. 4.7 billion in the quarter reviewed, with the Hand Protection segment contributing Rs. 3.4 billion following top line growth of 33%, and Plantations, which achieved revenue growth of 62% in the sector’s first quarter, chipping in with Rs. 1.5 billion.

Releasing its financial statements to the Colombo Stock Exchange, the DPL Group comprising of Dipped Products owned manufacturing subsidiaries in Sri Lanka and Thailand, a marketing company in Italy and its plantations companies Kelani Valley Plantations PLC (KVPL) and Hayleys Plantation Services (owners of Talawakelle Tea Estates PLC), reported consolidated profit before tax of Rs. 586 million and profit after tax of Rs. 486 million for the first three months.

DPL’s local manufacturing operations turned in a substantially improved performance, increasing turnover to Rs. 2 billion on a volume growth of 8%, and converting a pre-tax loss of Rs. 39 million in the corresponding quarter of the previous year to a profit of Rs 205 million before tax.

Dipped Products Thailand, the Group’s medical glove manufacturing operation, increased FOB turnover to Rs. 603 million but posted a nominal loss due to poor margins. Sales of ICOGUANTI S.p.A., DPL’s Italian marketing company, rose 7% to Rs. 968 million.

Elaborating on some of the factors that helped these results, DPL Managing Director Dr. Mahesha Ranasoma said rubber prices in the quarter reviewed had played a pivotal role, levelling off somewhat to ease pressure on cost of production in the Hand Protection segment, but remaining strong enough to generate adequate margins for KVPL. “Our continued emphasis on lean manufacturing also helped keep cost elements in control,” he said, disclosing that as natural rubber prices ease, the Group would progressively pass on the corresponding cost reductions to buyers.

“In this process, one strong point in DPL’s favour is the fact that it does not ever compromise on quality or service delivery,” Dr. Ranasoma said.

Looking ahead, the Plantation sector’s substantially increased commitments for worker wages along with increased gratuity provisions following the new collective agreement that came into force on 1st April 2011 would bring margins under heavy pressure, he said.

Established in 1976, Dipped Products is one of the leading non-medical rubber glove manufacturers in the world, and accounts for a five per cent share of the global market. The company’s products now reach 68 countries.

The Board of Directors of Dipped Products PLC comprises A.M. Pandithage (Chairman), Dr. M. Ranasoma (Managing Director) J.A.G. Anandarajah,  G.K. Seneviratne, N.Y. Fernando, R. Seevaratnam, F. Mohideen, K.A.L.S. Fernando, L.G.S. Gunawardena, S.C. Ganegoda, K.D.D. Perera and M. Bottino.