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| Sunday, 9 June 2002 |
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Business |  |
| News Business Features Editorial
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Three Acre Farms suffers loss despite turnover growth by Elmo Leonard Three Acre Farms Ltd. (TAFL) suffered a loss of Rs 910 million for the year ended December 2001. The company's main business is hatcheries and the sale of day-old chicks. In 2000, TAFL incurred a loss of Rs 26.4 million, compared with a profit of Rs 51 million in 1999. Last year, the company turnover increased to Rs 575.8 million, up from Rs 544.9 million in 2000. At the company's 40th Annual General Meeting held recently, Chairman Cheng Chih Kwong Primus told shareholders that the company began the year under review on a bullish note, selling broiler chicks at over Rs 30 each. Faced with a glut, it priced its chicks at Rs 15 each, and gave away 30 per cent of extra chicks. It even doled out day-old chicks free of charge, but during the year, over two million day-old chicks had to be destroyed. TAFL Executive Director, Tan Hong Tjioe Henry told shareholders that with the poultry industry having to pay Goods and Services Tax and National Security Levy totalling 19 per cent of sales, it was no exaggeration to say that the majority of poultry farmers are in a state of bankruptcy or facing financial destitution. TAFL holds a near monopoly in all its activities. In 1995, the company sought a public share issue at Rs 40 per share, on the grounds that the poultry industry showed tremendous potential. Shareholders have not received a dividend for more than three years. Three Acre Farms operates one of the largest and most modern poultry hatcheries and breeder farms, and the only grandparent poultry farm in the country. 'Prima' commercial day-old chicks hold the preeminent position in terms of market share and is widely regarded as the best in terms of rapid growth, excellent feed conversion, exceptional liveability and parts yield in the market. The operation of all breeder farms, retail shop operations, eggs and other livestock sales are consolidated under the single TAFL entity. While TAFL put out 22 million day-old chicks in 2001 against 18 million during 2000, the combined increase in the cost of feed, lower prices for day-old chicks and high interest costs of bank borrowings had eroded the company's bottom line, Chairman Primus said. |
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