Financial Times

Talawakelle planning on timber exports
Talawakelle Plantations Ltd. is exploring the possibility of exporting timber harvested from its forestry resources, the exploitation of which made a significant contribution to the company's bottom line last year.

Although turnover fell marginally to Rs. 1.3 billion in the year which ended in December 31, 2003, profit after tax rose by 44 percent to Rs. 60 million. Proceeds from non-tea activities such as controlled harvesting of timber made a significant contribution to the company's bottom line, its chairman Sunil Mendis said in the firm's annual report.

Profits were boosted by significant contributions from timber and lease rental income. Mendis said the company was trying to identify potential export orders for timber and that sample shipments had been sent.

"It is however necessary that the authorities streamline procedures to allow value addition, and the industry and government work together to obtain international funding and expertise to reap the full benefits from our forestry resources," he said.

The company's performance was below original expectations owing to the adverse impact of the Iraq war, which disrupted exports, the damage caused by floods in the south, and dry weather that affected high grow teas.

Gains made by producing quality teas were eroded by higher production costs, with the wage increase given to workers continuing to affect the company's profitability. The company also benefited from a reduction in management fees charged by Hayleys Plantation Services Ltd.

Forthcoming wage talks in July will increase already high production costs, Mendis said, adding that wage hikes should be linked to productivity increases.
Talawakelle was ranked No.1 among all RPCs on overall sales averages for the second consecutive year.

Back to Business