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Dipped Products PLC,
the Hayleys Group’s rubber glove manufacturing company which has
a significant interest in plantations, has reported a turnover
of Rs 2,541 million for the first quarter of 2007-08, following
healthy growth in production by its companies in the hand
protection business.
In results released to the Colombo Stock Exchange this week, the
Group reported that turnover had grown 17 per cent. This was
made possible by the hand protection segment, in which export
volume from Sri Lanka increased by 18 per cent, enabling Dipped
Products to achieve a turnover of Rs 2,036 million from its hand
protection businesses, a healthy 20 per cent increase over the
corresponding quarter. Turnover from the first quarter of its
plantation company Kelani Valley Plantations PLC, (KVPL) grew 3
per cent to Rs 604 million.
“This is a reasonable performance given the conditions under
which it was achieved,” Dipped Products’ Managing Director J. A.
G. Anandarajah commented, disclosing that Dipped Products
Thailand, the Group’s medical glove manufacturing venture had
also increased sales by 14 per cent in Thai Baht terms although
the continuing appreciation of the Baht against the US Dollar
had exerted a negative impact on results from that company.
The profits of the Group’s local operations had also been
affected by several factors including increased fuel and freight
costs and a higher tax provision and finance costs, he said. The
Group’s pre tax profit for the quarter under review at Rs 166
million was down Rs 26 million over the first quarter of last
year, when compared with profit excluding the extraordinary
income of Rs 34 million in the previous year arising from the
surplus on acquisition of Hanwella Rubber Products Ltd.
Significant factors contributing to the profit erosion were an
increase of over 50 per cent in freight costs in the quarter
under review (consequent to a shortage in freight space from
Colombo), a near two third increase in income tax, a twofold
increase in finance costs and substantial crop losses and a
higher wages bill for Kelani Valley Plantations.
One of the notable adverse factors for Kelani Valley Plantations
was the loss of a third of its tea crop compared with the same
period last year following the strikes on the estates late in
2006, which prevented the company from taking full advantage of
its quality season. Compounding this was a 47 per cent increase
in the cost of fertiliser, higher energy costs, and higher wages
to labour, all of which eroded margins.
Looking ahead, Mr Anandarajah said steps have been taken to
control costs internally and manufacturing operations are
expected to be on target by the end of the second quarter of the
year.
Established in 1976, Dipped Products is one of the leading
non-medical rubber glove manufacturers in the world, and
accounts for a 5 per cent share of the global market. The
company’s products now reach sixty-three countries.
The Board of Directors of Dipped Products PLC comprises Messrs
N. G. Wickremeratne (Chairman), J. A. G. Anandarajah (Managing
Director), H. A. Pieris, R. W. Soysa, , Dr. W. S. E. Fernando,
G. K. Seneviratne, N. Y. Fernando, N. B. Weerasekera, R. K.
Witanachchi, A. M. Pandithage (Alternate: R. A. Ebell) and R.
Seevaratnam.
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