Financial Times

Export-led growth adds zest to Watawala results
Watawala Plantations, manufacturer and marketer of Zesta tea, has achieved a record turnover of Rs 2.2 billion for the year ended March 31, 2004, and converted its 2002-03 net loss of Rs 25.9 million to a post tax profit of Rs 40 million.

The company's annual report released to shareholders and the Colombo Stock Exchange this week, says that despite a drop in production of tea, its main source of revenue, better net sales averages, a healthy growth in export volumes and improved rubber prices had raised Watawala's bottom line.

The company said in a statement that it has also reported a record Rs 181 million in revenue from retail marketing following a 47 per cent growth in domestic sales of its two flagship branded teas 'Zesta' and 'Watawala Kahata' achieved by taking distribution island-wide.

A stronger focus on quality through various strategies including compromising on volume, enabled the company to achieve a 10 per cent improvement on its net selling average in tea, from Rs 136.53 per kg last year to Rs 149.85 per kg in the year under review.

On the back of these achievements, the board of directors of Watawala Plantations has recommended the payment of a 7.5 per cent dividend. Watawala's annual report also disclosed that the company spent Rs 137 million during the year on capital development, bringing cumulative capital expenditure since privatization to Rs 1.54 billion. Key areas for investment included replanting oil palm, maintenance of tea, rubber clearings, rehabilitating tea lands, planting of fuel wood and expanding areas under minor crops.

The company also invested in new machinery such as energy efficient heaters for tea driers, generators, tea plucking machines, green leaf transport vehicles and new equipment for refining kernel oil at its oil palm mill.

The Board of Directors of Watawala Plantations comprises Messrs G. Sathasivam (Chairman), Vish Govindasamy (CEO) R. K. Krishna Kumar, Anil Goel, Percy Siganporia, D. S. Ratnasingham and B. A. Hulangamuwa.

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