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| Sunday, 1 September 2002 |
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NPL oil palm fields to bear fruit next year Namunukula Plantations Ltd. (NPL) has recorded a loss of Rs 57.5 million for the year ended March 31, 2002. It recorded a profit of Rs 27.2 million for the year ended March 2001, and a profit of Rs 16.6 million for the year ended March 2000. NPL's turnover for the year ended March 31, 2002 was Rs 1.21 billion. The turnover was Rs 1.294 billion for the year ended March 2001, and Rs 1.079 billion for the year ended March 2000. At the ninth annual general meeting of NPL held last week, shareholders voiced concern that they had not received a dividend since the company's Initial Public Offering in 1998. In 1998, the public purchased shares at Rs 20 each. Last week, its shares traded at Rs 6.50 each. According to NPL directors, due to the company's ongoing capital expenditure programme and its liquidity position, the board did not propose a dividend. NPL Chairman Vivendra Lintotawela told shareholders that the reported financial loss was due to reduced tea and coconut crops, consequent to adverse weather, and the decline in rubber prices. Last year, the company's cost of rubber production was higher than its selling price, he said. The high interest expenditure on borrowings for the year amounted to Rs 116 million. The principal activities of the company are the cultivation and processing of tea, rubber, coconut, oil palm and cinnamon. These activities are carried out in 24 estates comprising 11,787 hectares, leased from the government for a period of 53 years commencing 1992. The company's estates are situated in two distinct agro-climatic areas. Operationally, they are divided into four regions - Badulla, Kalutara, Galle and Matara. There are seven tea estates, five rubber estates and six tea cum rubber estates, with 16 operational tea factories and three rubber factories. The estimated annual production of tea is eight million kilos; rubber, 2.3 million kilos; coconuts, one million nuts; oil palm, 1.2 million kilos; and cinnamon, 10 tonnes. Chairman Lintotawela said that during the year under review, the company planted a further 611 hectares of oil palm, increasing the extent of newly planted oil palm to 1,021 hectares. Rs 150 million had now been spent on planting 1021 hectares of oil palm, which he claimed, was the largest diversification exercise undertaken by any company during the year. These fields will start bearing fruit during the second half of 2003. Shareholder M. Wijesinghe questioned the wisdom of oil palm plantations, when there was opposition to the propagation of this crop from environmentalists. Lintotawela said that the pros and cons of the operation had been taken into account. The only constraint was that oil palm used more ground water. The John Keells joint venture company, AEN Oil Palm Processing (Pvt) Ltd. is expected to construct a five to 10 tonne mill during the year 2003/04. The company had invested Rs 515 million in the development of fields and factories. Considering the strategic location of lands available for development in real estate etc, the company was now finalising proposals on a financial re-structure, with emphasis on arresting the mounting debt, thereby obtaining time to benefit from expenses incurred. The managing agent, Keells Plantation Management Services (Pvt) Ltd., was eligible to charge a fee of Rs 54 million, but reduced it to Rs 22.9 million. Answering a query from shareholder and financial consultant M. Thiyagaraja, Lintotawela said the management fee charged in future would be on a profit only basis, and not on turnover as in the past. The cultivation of cinnamon was being expanded, and an extent of 37.45 hectares was planted during the year under review. The productivity of existing cinnamon land was being improved with better agronomic practices and emphasis on timely harvesting and infilling of vacancies. The company had installed the first tempest tea drier in its Baddegama factory. The drier affords an improvement in the hitherto available technology, and was proving to be of much benefit, Chairman Lintotawela said. Mechanised tea harvesting, particularly with the use of hand-held shears was being expanded, and the use of motorised shears was continuing. Motorised pruning was undertaken in the low country estates in view of the acute shortage of workers. Due to financial constraints, plans for real estate and granite mining operations were being delayed, and would be started next year. Existing mining operations were continuing, and generating income. (EL) |
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