Annual Report 2010-2011 - Colombo Stock Exchange

Sector Review - Rubber
The Group’s Rubber Sector provides a wide range of value
added rubber products for the local and export markets.
This sector has traditionally played a large role in the
Group’s reputation for providing products of high quality and
dependability.
This sector is comprised of Richard Pieris Exports, Richard
Pieris Natural Foams Ltd, Arpico Natural Latex Foams,
Arpitalian Compact Soles, Micro Minerals, and Richard Pieris
Rubber Products.
Rubber Sector Performance
Rs. Mn.
2,500
2,000
1,500
1,000
5,00
Rs. Mn.
100
50
0
(50)
(100)
Research and development continues to be a key area for
the entire sector, and Richard Pieris Exports, Richard Pieris
Natural Foams, and Arpitalian have experienced research
personnel who are of international standard.
0
06/07 07/08 08/09 09/10 10/11
Net Turnover Operating Profit
(150)
The Operation and business processes were improved with the
aim of achieving cost reductions and quality enhancements
which enables the companies in this sector to become stronger
and more competitive in the near future.
The sector has been operating under several challenges which
will also be experienced in the future. Rubber prices were
increased due to the higher global demand. The cost of furnace
oil is also of some concern; due to international oil prices being
high. Cost of electricity is also an impediment to the Sector.
Richard Pieris Exports PLC.
Richard Pieris Exports produces and exports rubber mats to
the Europe, USA and Asia Pacific regions from its factory in
Ekala since 1984. In addition to the mats it also produces jar
sealing rings and crutch tips for European markets.
The company’s range of mats include specialized products for
industrial use, entrance, agriculture, playgrounds, gymnasiums
and specialty items such as fire retardant mats, electricity
resistant mats and anti static mats. Every year the company
does innovations with new products with the help of the
Research & Development division. Many new products such
as rubber based fabric mats were introduced to the agricultural
and industrial markets during the year under review.
During the year, the sales volume of jar sealing rings increased
by 30%. Along with the demand the production capacity
increased in the extruder section and washing section in order
to have a smooth production.
In January 2011, the Company participated in the Dometex
exhibition in Germany where there was a good response for
our products with many sales inquiries. Our presence in Europe
is growing well whereas in USA and Asia Pacific regions the
presence is as expected.
The dramatic and unprecedented increase in rubber prices had
a severe impact on the profitability especially in the low end
products. Even though the prices were increased the margins
were not met. With the intense competition being experienced
in the low-end product market, the company is now focusing
more on investing in the latest technology measures to improve
its product quality and yield, in order to maintain its competitive
Richard Pieris and Company PLC | Annual Report 2010/2011 28