Financial Times

Dankotuwa's change in business and management
After a disappointing first half of 2004 where the company made a loss of Rs. 8.5 million, Dankotuwa's change of business model and style of management has resulted in good results in the second half, the company said last week.

The after tax profit of Rs. 38.5 for the year 2004 has been earned without any "exchange gains" unlike in the past few years where a significant portion of profits were made through "exchange gains".

Furthermore the profit in 2004 is without the benefit of extraordinary amounts unlike in 2003 where Rs. 15.7 out of the total net profit of Rs. 27.4 came from a reversal of taxation provision. 2004 also saw Dankotuwa reaching the One Billion Rupee turnover milestone. Shareholders will receive a 10% dividend after the formal resolution is passed at the AGM on 31 March 2005, the company said.

As a state enterprise in its early years, the company almost closed down but later recovered well in a sellers market. After privatisation and becoming an associate company of International Ceramics Incorporated of Japan in December 1990, it improved and made a name as one of the world's finest producers of high quality heavy gold and platinum decorated tableware which was very difficult to produce. With the decline in demand for such formal tableware and with an increasing trend for easily produced casual-ware, the company's fortunes declined.

More recently Dankotuwa embarked on a drive to produce trendy shapes, commissioning world renowned designers and simultaneously launching an aggressive branding campaign. While the turnover improved significantly, profits were not forthcoming while administrative costs skyrocketed and teamwork declined, he said.

Acting CEO Sarath Mallawa Arachchi says, "We have rationalised our exports, giving priority to the most profitable markets. We may not be able to satisfy all our buyers with the volumes they require but we hope to develop relations with more buyers in more countries and sell more under our own brand. We will continue with foreign designers on a different basis; more on royalty and less upfront costs.

We are also trying to match our strong points in production with certain market niches without trying to produce a massive range creating huge logistic and production problems. We may even cut down on the range of shapes we now have."

Sunil Wijesinha, new Chairman/MD at Dankotuwa Porcelain
Sunil G. Wijesinha was last week appointed Chairman and Managing Director of Dankotuwa Porcelain Ltd with effect from July 1.

Wijesinha will resign from his current job as Managing Director of the Merchant Bank of Sri Lanka (MBSL) Ltd to take up the Dankotuwa appointment. Sarath Mallawa Arachchi was concurrently appointed Chief Operating Officer (COO) at Dankotuwa Porcelain with effect from April 1.

Wijesinha who has been non-executive Chairman at DPL from February 1990 to September 1994, and again from December 1999 to date, has been a former General Manager of the Ceylon Ceramics Corporation, a former Chairman of the Employees' Trust Fund Board and a consultant on productivity to the Ministry of Industrial Development.

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