Haycarb surpasses Rs. 1 b PAT in 2012/13

Haycarb PLC, the world class coconut shell-based activated carbon manufacturer and exporter, posted a record performance in the financial year 2012/13.

Outpacing growing challenges in traditional markets and rising costs of production, the Hayleys Group’s multinational activated carbon business noted significant achievement of several key performance milestones in an interim statement filed with the Colombo Stock Exchange.

Haycarb in 2012/13 recorded revenue of Rs. 10.1 billion, up from Rs. 8.5 billion in the previous financial year. Significantly, the Company posted profit before tax of Rs. 1.22 billion and profit after tax of Rs. 1.03 billion compared to Rs. 657 million and Rs. 523 million in the preceding year. Earnings per share of equity holders of the company doubled to Rs. 31.50, compared to the previous financial year.

Haycarb, the pioneer manufacturer of activated carbon in any coconut producing country, with manufacturing facilities in Sri Lanka, Thailand and Indonesia supported by marketing offices in the UK, Australia and USA, contributed significantly to the national economy through foreign exchange earnings in excess of Rs. 5 billion whilst increasing emphasis in product innovation, market development and substantial investments in expanding its global manufacturing footprint.

Haycarb PLC and Hayleys PLC Chairman Mohan Pandithage stated that the company has posted exceptional results to surpass Rs. 1 billion in profit after tax in spite of the economic slowdown that affected some of the major export markets.

“The strong customer relationships we have nurtured based on mutual trust and our good governance principles assisted the company to retain key customers, and the successful market penetration strategies, enabled the company to operate at full capacity, a key driver that contributed to sustain and grow its performance,” he said.

Haycarb PLC Managing Director Rajitha Kariyawasan attributed concentrated efforts on marketing, sales and new business development, emphasis on driving high margin and value added products, full capacity operations together with extensive programs on waste reduction and productivity enhancements as key to the year-end performance.

“Despite contraction and stagnation of demand from our traditional markets, our sales teams and active distributorships worked aggressively   to expand our market share. We also had to overcome other external challenges of rising fuel costs, wage costs and overheads.” During the year, Haycarb manufacturing operations in Sri Lanka, Indonesia and Thailand recorded exceptional performances, with some achieving the best results in their history. “Our marketing subsidiaries in Europe, Australia and in the USA brought in worthwhile contributions to both top and bottom lines,” Kariyawasan stated.

“The relative stability of pricing of our key raw material coconut shell charcoal, and the devaluation of the currencies in Sri Lanka and that of our other Asian manufacturing locations helped us favourably, where the net benefits could be passed on to customers through price adjustments  to protect and grow our sales base,” he added.  

During the year, Haycarb PLC through its joint venture in Thailand, Carbokarn Company Ltd., purchased 100% equity of Shizuka Company Ltd. Thailand, expanding the activated carbon manufacturing capacity of the Group. In Sri Lanka, it incorporated Haycarb Value Added Products Ltd. as a fully owned subsidiary to manufacture and export value-added activated carbon products. The plant is expected to be commissioned in the financial year 2013/14.

In January 2013, PT Haycarb Palu Mitra Company was incorporated as a joint venture to build a green field activated carbon plant in Central Sulawesi, Indonesia and is expected to come into commercial operation in the early part of 2014.

A key value added carbon project of the company, to develop and market a range of Energy Storage Carbons, made significant strides in 2012/13, with successful qualifications by a number of customers. The new investment in this sphere to have a dedicated manufacturing capability for a range of Energy Storage Carbons, Ultracarb Ltd., is expected to contribute steadily in the ensuing financial years.

Puritas Ltd., the environmental engineering systems arm of the Group, made significant headway in both financial and operational fronts in 2012/13, and is positioned to achieve success in medium to large raw and waste water treatment systems in Sri Lanka and in the region, through the development of internal capabilities and strong strategic alliances.

“To supplement our growth plans in marketing, capacity expansion and value addition, we have enhanced our marketing, technical, engineering, manufacturing and other support service resources globally, giving priority to acquisition of specific product application and technical knowledge whilst systematically building the leadership team,” stated Kariyawasan. “At the same time we are consciously working towards ensuring the sustainable supply of our key raw material, coconut charcoal through strong backward linkages,” he added. However, challenging external conditions such as spiralling energy costs, strengthening of currencies in some of the key manufacturing bases, and increases in wage costs and overheads could impact the company’s margin potential, he said. “The price stability and availability of coconut charcoal, which is a primary driver of growth and stability of earnings faces challenging times with significant increases in pricing experienced in recent months in India and Sri Lanka,” he cautioned.

The Board of Directors of Haycarb PLC comprises Mohan Pandithage – Chairman, Rajitha Kariyawasan – Managing Director, Arjun Senaratna, Ranjeevan Seevaratnam, Sarath Ganegoda, Dhammika Perera, Jeevani Abeyratne, Dushantha Ranaraja, Nimal Perera, Dr. Sarath Abayawardana and Sujeewa Rajapakse.