Dipped Products, Sri Lanka’s biggest medical gloves exporters, heading for worst-ever year?
View(s):Dipped Products, once the Hayleys Group’s best performers, is going through one of its worst years with the first quarter (April-June) in the new 2016/17 financial year showing a post-tax loss of Rs. 54 million compared to a profit of Rs. 144 million in the same 2015 quarter. Group turnover was not as bad at Rs. 5.4 billion against Rs. 5.7 billion in April-June 2015. But pre-tax profits were a dismal Rs. 12.5 million from Rs. 176 million in the same 2015 quarter, the results released this week showed. In the 12-months ending March 31, 2016, the company reported a post-tax profit drop to Rs. 434 million from Rs.1.4 billion in the earlier year while revenue was recorded at Rs. 22 billion, down from Rs. 28 billion.
The issues that the company faced in 2014/15 like the Rathupaswala debacle and falling tea prices, appeared to spill over into the new financial year though no reasons were given for the poor April-June 2016 quarter performance. The company faced accusations that the water table in the village had been polluted triggering bloody protests. The tax figures may have also got affected by the May 2016 investment of 3.24 million Euros (Rs. 535 million) in ICOGUANTI S.p.A, a company in which DPL had a 60 per cent stake. With the new investment, DPL has taken full control of the company. Established in 1976, Dipped Products is one of the leading non-medical rubber glove manufacturers in the world, and accounts for a 5 per cent share of the global market.
The company’s products now reach 68 countries. In the last financial year report, the company said that, “Positioned as the leading ethical glove manufacturer in the world, we are cognizant of the need to maintain high standards in social and environmental aspects. Our disclosures throughout this report are testimony to our commitment in this regard and one that keeps evolving as we raise the bar each year. It is pertinent to note that Dipped Products Group has been cleared of all accusations relating to discharge of effluents at DPL’s factory in Rathupaswala, where the Central Environment Authority submitted a report to the Courts. These developments nevertheless have strengthened our risk management processes as a safeguard against similar events in the future.”