Diversification Delivers for Elpitiya Plantations

11 Jul

Aitken Spence-managed Elpitiya Plantations PLC recorded a profit-after-tax of Rs. 480 mn     for the financial year ended 31st 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 &rubber had declined by around 8 per cent 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 per cent had a significant impact on the Comp any’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 bn from Rs. 173 mn at the time of taking over of the estates in 1997. Since taking over, the company has invested over Rs. 3.8 bn  on tea and rubber replanting, factory development, diversification into oil palm & 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 fertilizer inputs and upgrading factory machinery. We thank the government for the subsidy given to the industry which has helped us maintain fertilizer levels” said Mr. Tony Goonewardena, Executive Director of Elpitiya Plantations PLC.

Commenting further, Mr. 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 Limited,  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 CEO and Director of Elpitiya Plantations PLC - Mr.Goonewardena

Elpitiya Plantations PLC CEO Bhathiya Bulumulla.

“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 & oil palm plantation in the low country, has made exceptional returns.” said Mr. Bhathiya Bulumulla, the Chief Executive Officer of Elpitiya Plantations PLC.

The Company also has commenced aneco-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, Nayapane  tea 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 & 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 & 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 well  being  of 40  retired workers , in collaboration with the French  Donor ‘Foundation Adam Pierre’ at a cost of  over Rs.  25 mn.

The company is continuously exploring sustainable avenues for marketing its produce abroad, especially tea and rubber, in North and Southeast Asia.

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