Financial Times

Agalawatte plantations in a diversification drive
Agalawatte Plantations is planning to set up a crude palm oil processing plant at the company’s Mohamedi estate in Kalutara district together with Elpitiya and Namunukula plantations.

It is also looking at expanding its leisure sector portfolio in an aggressive diversification drive. Dr. Chris Nonis, Chairman, Agalawatte Plantations – reporting the company’s highest turnover to date with Rs.1.129 billion for 2005, three percent above 2004 in the latest annual report -- said that construction work of the plant will be commissioned by mid 2006.

Investment in the company’s subsidiary AEN Palm Oil Processing recorded Rs.16 million, while the cultivation of Cinnamon and Vanilla was continued as further crop diversification initiatives last year.

“We presently have a total extent of 37 hectares under Cinnamon and 2.4 hectares under Vanilla, which are two crops with significant export potential, particularly in the organic form,” Dr. Nonis said. He said the first phase of the leisure projects portfolio, which includes the development of several estate bungalows for tourism was completed last year and this portfolio will be further expanded over the coming years.

He said that Mackply Industries, Agalawatte Plantations’ subsidiary in the plywood industry, made significant progress through its further investment in process engineering and the introduction of a premium range of semi-solid doors and specialised plywood products.

The company’s subsidiary, APL Teas continued to pursue its strategy in promoting Ceylon Tea as a niche product rather than as a simple commodity. “In 2005 we expanded our Mackwoods Fine Tea range, and penetrated several new territories by participating in international trade fairs, and also successfully launched Mackwoods Single Estate Teas in Japan,” he said, adding that the first of an exclusive chain of tea cafes under the brand name 'Tea Breeze' was launched in the heart of Colombo, to provide a suitable platform for Mackwoods Fine Ceylon tea.

The company expects 2006 to be a profitable year, provided cost of production can be contained. “This would depend to a great extent on success achieved in the management of key macroeconomic indicators such as containing inflation and stabilising exchange and interest rates, as well as progress towards a productivity-linked wage regime, having regard to Sri Lanka being already a high cost producer,” Dr. Nonis explained.

The report records the death in June 2005 of N.S.O. Nonis, Chairperson of Agalawatte Plantations, the only Sri Lankan female to head a plantation company. She steered the Mackwoods Group as Director, Deputy Chairperson over a period spanning 40 years and she successfully turned around the group within two years of management.

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