Three production lines in new Biyagama factory operational

DPL profitable despite Rathupaswela disaster

A.M. Pandithage, Chairman

Dipped Products PLC, one of the world’s leading manufacturers and distributors of protective gloves, has completed what its Chairman called "the most challenging period the company ever endured" as a result of the forced closure of its Rathupaswala factory.

DPL Chairman A.M. Pandithage, has told shareholders in the company’s recently released annual report, that their hand was forced despite independent investigations confirming that the factory’s treated effluents were not the cause of alleged ground water quality issue.

Despite the factory closure costing the company tidily, DPL saw group revenue down only by a marginal 2% to Rs.23.1 million although the group’s after-tax profit was down 35% to Rs.1.16 billion and the profit attributable to equity holders of the parent down 44% to Rs.795.1 million.

Focusing on overcoming multitude of challenges that followed the closure of the factory, DPL took a strategic decision to incorporate a new glove manufacturing facility at the BOI’s Biyagama industrial zone.

"The closure of the factory unfortunately led to severe losses across the value chain, from rubber farmers to our global customers, apart from the loss of foreign exchange to the country," Pandithage and DPL’s Managing Director K.I.M. Ranasoma said in a joint statement in the annual report.

The contribution by the group’s hand protection sector to the bottom line was down to Rs.910 million during the year under review from Rs.1.34 billion a year earlier.

Profits from plantations too were down to Rs.747 million from Rs.962 million a year earlier, the statement said. This was as a result of the depressed rubber market, adverse weather conditions and a 20% wage increase effective during the year under review.

"Profit before tax decreased by 32% at Kelani Valley Plantations PLC compared to the previous year, while Talawakelle Tea Estates PLC recorded its second highest earnings since inception," the statement said.

Mabroc Teas, a branded tea exporter, had delivered improved results during the year with revenue up 7% to Rs.2.47 billion and the pre-tax profit up to Rs.49 million.

Pandithage and Ranasoma said that the new factory at Biyagama involved a total investment of Rs.1 billion and this fast tracked project had seen three manufacturing plants already into commercial production.

"This strategic investment decision also supports adding new capacity to cater to DPL’s future growth," they said.

DPL expressed its gratitude for the understanding and cooperation extended by their customers worldwide during a difficult period and thanked them for the trust placed on the company. Their endurance in continuing with DPL despite the tremendous pressures within their own business operations, arising from supply disruptions for more than 10 consecutive months, was highly appreciated.

The new Biyagama factory owned by DPL Premier Glove Manufacturing Limited, approved by the BOI, was expected to reach steady production by the third quarter of the current financial year.

　

"In the medium term, DPL Premier Gloves factory will add new production capacity for unsupported latex gloves with a view to expanding DPL’s market footprint in this segment. Likewise, we will gear up to expand our supported glove output in order to improve our product portfolio to cater to the industrial sector hand protection needs," the report said.

DPL accounts for approximately 5% of global production of non-medical rubber gloves. A predominantly Sri Lankan owned company it has many overseas shareholders, a production facility manufacturing medical examination gloves among others in Thailand and a marketing company based in Italy.

DPL has a stated capital of Rs.598.6 million, capital reserves of Rs.457.3 million and revenue reserves of Rs.6.3 billion in its books. Total assets ran at Rs.20 billion and total liabilities at Rs.10.4 billion.

Hayleys with 41.61% followed by the EPF with 13.06% and Volanka (Pvt) Ltd (a Hayleys company) with 8.14% are the other major shareholders. Haycarb, a subsidiary of Hayleys owns 6.8%.

Earnings per share during the year under review were down to Rs.13.28 from Rs.25.53 the previous year with net assets per share growing to Rs.122.40 from Rs.114.34 a year earlier.

The directors have proposed a final dividend of Rs.3 per share for the year under review on top of an interim Rs.2.50 per share paid in March.

The directors of the company are: Messrs. A.M. Pandithage (Chairman), Dr. K.I.M. Ranasoma (MD), R.K. Witanachchi (Deputy MD w.e.f. 01.01.2014), N.Y. Fernando (Retired 12.12.2013), R. Seevaratnam (Resigned 30.07.2013), F. Maiden, K.A. Fernando, L.G.S. Gunawardena (Resigned 28.02.2014), S.C. Ganegoda, Dhammika Perera, M. Bottino, R.M.T. Premarathna (Resigned 20.11.2013),V.R. Gunasekara, S. Rajapakse (w.e.f. 30.07.2013), G.K. Seneviratne (Retired 08.04.2013) and Ms. D.S.N. Weerasooriya (Alternate to Dhammika Perera - appointed on 01.12.2013).

www.island.lk