Revenue drop at Dipped Products after residents force factory closure
View(s):The Dipped Products Group’s Hand Protection Sector posted a decline in revenue due to the closure of its production operations at Nedungamuwa, Rathupaswala following protests by villagers, the company said this week.
“These protests were based on the misconception that the low pH in the wells of the area was caused by the treated effluent from the glove factory. The DPL management was required to voluntarily suspend the production operations in order to appease the villagers while the Government authorities commissioned several institutions to investigate the cause for low pH in the groundwater in the area. We have thus far not had any indication that the treated factory effluent is responsible for the low pH in the water sources in the area. Despite this fact, the factory operations continue to remain suspended,” it said in a statement announcing its first half 2013/14 results.
Group turnover was affected by a 6 per cent drop in Hand Protection turnover, down to Rs 6.9 billion from Rs. 7.3 billion in 1H of 2012/13. Plantations, on the other hand, lifted turnover by 15 per cent to Rs. 5.4 billion from Rs. 4.7 billion.
Overall the group recorded a marginal increase in turnover amounting to 3 per cent for 1stH 2013/14.
The statement said group pre-tax proft was Rs. 837 million for the period under review, down by 13 per cent.
Dipped Products Managing Director Dr. Mahesha Ranasoma said the closure of the Weliveriya production facility strained hand protection capacity, prompting an overall reduction in the group’s profitability.
He said group post-tax profit fell by 16 per cent to Rs. 639 million.
“He also noted that despite the re-distribution of capacities to alternative production facilities and despite the support of long-standing customers, the current operating circumstances of the Hand Protection Sector has served to decelerate the growth momentum of the group,” the statement said.
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