Watawala Plantations PLC, a diversified plantations company with 12,441 ha cultivated with palm oil, tea and rubber in 19 estates has turned in what its Chairman, Mr. Sunil Wijesinha called "a commendable performance" in the year ended March 31, 2014 with a profit of Rs.434 million maintaining its position as the regional plantation company (RPC) with the highest profit in the plantation sector.
However, this was below the Rs.681.9 million earned the previous year.
Wijesinha said in the company’s annual report that Watawala had recorded the highest tea production among the RPCs. The company which is also a significant oil palm producer operating one of the two oil palm mills in the country had done well with this crop during the year contributing 23% of the company’s revenue and the major share of its profits.
"Tea recorded a loss of LKR 276 million after tax and other comprehensive income, significantly impacting the overall profitability of the company despite our leading position as the highest tea producer among the regional plantation companies," Wijesinha said.
"This reflects underlying structural issues that need industry wide consensus and action to resolve."
He said that torrential rains in the first half of the financial year had resulted in two factories being flooded with the consequential loss of harvest and production.
Rubber too had performed disappointingly, similarly affected by adverse weather conditions resulting in the reduction of the number of tapping days which contributed to a decrease in production and a net loss of Rs.28 million in the rubber segment.
However, Wijesinha saw promise in diversifying into timber and exports showing potential for the future.
Watawala’s board had unanimously consented to mutually terminate the agreement for management services and payment of management fees between itself and its major shareholder, Estate Management Services (Pvt) Limited.
This agreement which was valid for a period of five years from July 1, 2013, resulting in a big slice of the company’s earnings being paid as management fees to its main shareholder, has been discontinued with the Watawala board agreeing to take over expenses related with the provisions of management services.
Watawala is a subsidiary of Estate Management Services (Pvt) Limited, a joint venture between Sunshine Holdings, Tata Global Beverages and Pyramid Wilmar Plantations (Pvt) Limited which is a partner of Wilmar International.
Tata Global Beverages is the world’s second largest tea company with a brand presence in over 40 countries and interests in tea and coffee.
Wilmar International is Asia’s largest agribusiness group with headquarters in Singapore.
"The joint ventures with two giants in our major areas of interest provide Watawala Plantations with unparalleled access to markets, technology and knowledge providing a strong launching pad for our future growth as we week to take a differentiated path raising the bar on our own performance," the report said.
Of the company’s total land extent, 4,451 ha (36%) is planted in tea, 701 ha (6%) in rubber and 2,921 ha (23%) in oil palm. The remaining extent of 4,367 comprises timber and fuel wood plantations, extents in conservation forestry, spices, vegetable cultivation, jungle and patana, buildings, roads etc.
54,505 people live on Watawala estates which provide livelihoods for over 11,000.
Watawala has also invested in dairy farming and timber planting as well as energy management with none of their factories burning fossil fuel. They have invested in a turbine burning the waste of oil palm milling to generate 500 KWH of electricity and also briquettes from waste of tea factories, the company’s Managing Director, Mr. Vish Govindasamy said in the report.
Watawala has a stated capital of Rs.460 million, retained earnings and other reserves of Rs.3.76 billion and total assets of Rs.7.06 billion. Total liabilities for the group ran at Rs.2.84 billion and for the company Rs.2.83 billion.
The major shareholders of the company are Estate Management Services (75.65%), Ceybank Unit Trust (4.43%) and Aureos South Asia Fund (1.90%).
The directors of the company are: Messrs. Sunil Wijesinha (Chairman), G. Sathasivam (Alternate S.G. Sathasivam), V. Govindasamy (MD), D.V. Seevaratnam (CEO), H.R. Bhat, K. Venkataramanan, A.N. Fernando, M.S. Mawzoon, L. Ramanayake, C.P. Thomas and B.A. Hulangamuwa.
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However, this was below the Rs.681.9 million earned the previous year.
Wijesinha said in the company’s annual report that Watawala had recorded the highest tea production among the RPCs. The company which is also a significant oil palm producer operating one of the two oil palm mills in the country had done well with this crop during the year contributing 23% of the company’s revenue and the major share of its profits.
"Tea recorded a loss of LKR 276 million after tax and other comprehensive income, significantly impacting the overall profitability of the company despite our leading position as the highest tea producer among the regional plantation companies," Wijesinha said.
"This reflects underlying structural issues that need industry wide consensus and action to resolve."
He said that torrential rains in the first half of the financial year had resulted in two factories being flooded with the consequential loss of harvest and production.
Rubber too had performed disappointingly, similarly affected by adverse weather conditions resulting in the reduction of the number of tapping days which contributed to a decrease in production and a net loss of Rs.28 million in the rubber segment.
However, Wijesinha saw promise in diversifying into timber and exports showing potential for the future.
Watawala’s board had unanimously consented to mutually terminate the agreement for management services and payment of management fees between itself and its major shareholder, Estate Management Services (Pvt) Limited.
This agreement which was valid for a period of five years from July 1, 2013, resulting in a big slice of the company’s earnings being paid as management fees to its main shareholder, has been discontinued with the Watawala board agreeing to take over expenses related with the provisions of management services.
Watawala is a subsidiary of Estate Management Services (Pvt) Limited, a joint venture between Sunshine Holdings, Tata Global Beverages and Pyramid Wilmar Plantations (Pvt) Limited which is a partner of Wilmar International.
Tata Global Beverages is the world’s second largest tea company with a brand presence in over 40 countries and interests in tea and coffee.
Wilmar International is Asia’s largest agribusiness group with headquarters in Singapore.
"The joint ventures with two giants in our major areas of interest provide Watawala Plantations with unparalleled access to markets, technology and knowledge providing a strong launching pad for our future growth as we week to take a differentiated path raising the bar on our own performance," the report said.
Of the company’s total land extent, 4,451 ha (36%) is planted in tea, 701 ha (6%) in rubber and 2,921 ha (23%) in oil palm. The remaining extent of 4,367 comprises timber and fuel wood plantations, extents in conservation forestry, spices, vegetable cultivation, jungle and patana, buildings, roads etc.
54,505 people live on Watawala estates which provide livelihoods for over 11,000.
Watawala has also invested in dairy farming and timber planting as well as energy management with none of their factories burning fossil fuel. They have invested in a turbine burning the waste of oil palm milling to generate 500 KWH of electricity and also briquettes from waste of tea factories, the company’s Managing Director, Mr. Vish Govindasamy said in the report.
Watawala has a stated capital of Rs.460 million, retained earnings and other reserves of Rs.3.76 billion and total assets of Rs.7.06 billion. Total liabilities for the group ran at Rs.2.84 billion and for the company Rs.2.83 billion.
The major shareholders of the company are Estate Management Services (75.65%), Ceybank Unit Trust (4.43%) and Aureos South Asia Fund (1.90%).
The directors of the company are: Messrs. Sunil Wijesinha (Chairman), G. Sathasivam (Alternate S.G. Sathasivam), V. Govindasamy (MD), D.V. Seevaratnam (CEO), H.R. Bhat, K. Venkataramanan, A.N. Fernando, M.S. Mawzoon, L. Ramanayake, C.P. Thomas and B.A. Hulangamuwa.
www.island.lk
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