Pelwatte Sugar Industries PLC has nearly doubled its factory capacity to 4,500 tonnes a day from the 2,500 tonnes earlier during the last quarter, an official said. “We included it in our balance sheet for last year, which is why the property, plants and equipment has increased in the third quarter from Rs. 1.1 billion to Rs. 4 billion,” Ariyaseela Wikramanayake, Managing Director Pelwatte Sugar told the Business Times.
Analysts said the main reason the company has made a loss for the quarter ended December 31, 2009 is that its revenue has declined 1.3% year on year to Rs 2 billion as against the Rs 2.057 million during the same period a year earlier.
“The cost of sales has increased by 12.1% to Rs 1,771.5 million for this third quarter from Rs 1,580.1 million in the corresponding period in 2008. This is why the gross profit has declined by a significant 45.8% to Rs 259 million for this quarter from last year’s Rs 477.4 million,” an analyst said.
Mr. Wikramanayake said the company’s cost of sales increase can be arrested if the government treats the sugar cane farmer the same way as it treats the rice farmer. “The rice farmer pays Rs. 350 per a bag of fertilizer, while the sugar cane farmer pays Rs. 6,500.
If they are given the fertilizer at the same rate, we can arrest the cost of sales situation,” he said. He said the Pelwatte Milk powder factory will be launched immediately after the April 8 election. “It will be listed (in the stock market) around the same time and will produce 150,000 litres a day, which is 20% of the national milk requirement,” he said.
He said that stopping milk imports will see the country save US$ 300 million spent every year, while the dairy farmers will earn this money and the county saves foreign exchange. “According to the Central Bank Annual Report Sri Lanka has over 1.5 million cows although we milk only 250,000 cows and produce 35% of the national requirement for milk,” he said.
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