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| Sunday, 21 March 2004 |
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| News Business Features Editorial
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Caltex records a profit of Rs 833m in 2003 Caltex has created history again by recording the highest ever profits since 1994, Rs 833 million in 2003 Vs 811 million last year despite the growing challenges in the operating environment. The company further undertook new initiatives to bring down the overall operating costs further. In the supply, manufacturing and distribution division another 44 employees accepted the VRS. Outsourcing of the warehouse operations and plastic manufacturing plant are expected to bring about further cost reductions, states the Managing director of the company Kishu Gomes in his annual review for 2003. Improved sales from the North and East of the island and increase in two and three wheel vehicle registration helped improve the retail channel which resulted in the retail volumes recording a significant growth, but industrial volumes showed no recovery for the second year. The contribution from the power generation sector continued to be depressed due to heavy monsoon rains resulting in greater dependence on hydropower generation. On account of these two factors the market could not sustain the same growth levels witnessed last year and showed a lacklustre growth of 2.5% over last year. Despite these setbacks the lubricant industry continues to show a 3.4% compounded average growth rate over the last five years states the managing Director in his review for 2003. The company distribution channel was further strengthened with major changes to the depot operations, this was done to bring in efficiency, transport related cost reductions and availability to our customers. The main warehouse at Wellampitiya was outsourced while the depots belonging to CPC in Haputale, Kotagala, Galle and Badulla were closed and volumes channelled to our third party regional depots. Two more regional depots were opened in Negombo and Panadura while one more is planned for Kadawatha. With these additions the company would have 13 third party regional depots and two sub depots in Moneragala and Trincomalee in its distribution network to serve the retail and commercial demand in the country. In the traditional retail fuels channel we have continued to defend the market share through our partnership with CPC several sales and marketing incentives and promotions were executed targeting our dealer network that has helped us to defend a significant portion of our market share in 2003. The non traditional market development strategy continues to deliver promising results. Apart from speciality products such as Caltex brake oil and Caltex greases we have now introduced the full range of the lubricant portfolio to the channel. The members of the board are Ken Balendra, Daham Wimalasena, M.T.L. Fernando, M.B. Southern, Kishu Gomes and Anura Perera. |
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