Annual Report 2010-2011 - Colombo Stock Exchange

Sector Review - Rubber
advantage. Further new moulds will be made in order to suit the
current demands for new products by the customers.
Richard Pieris Natural Foams Ltd.
Richard Pieris Natural Foams Limited (RPNF) manufactures
and market all natural latex foam blocks, sheets and pillows for
international market from the factory located in free trade zone,
Biyagama.
The company’s focus on sales growth, operational excellence
and quality improvements showed commendable results in the
financial year under review.
Sales picked up from the second quarter due to aggressive
sales campaign carried out in multiple markets. RPNF achieved
the highest export volume since year 2006 in the 3rd quarter of
the year.
The value added products launched to the local market have
shown positive results showing the program’s potential to
become a significant contributor to the profitability of the
company in the medium and long run.
Strategic investments on continuous waste reduction
and quality improvements have made the business more
competitive whilst enhancing customer satisfaction during the
year. Focus on maintaining and reducing the cost of energy
despite the challenges faced by the company has made us
achieve commendable results during the year.
Natural latex prices were considerably high throughout the
year and were at the peak in the fourth quarter of the year.
This unexpected increase in critical raw material together with
the increases of other raw material prices had a significant
negative impact on the profitability of the business.
US dollar devaluation and raw material price increase have
compelled the business to raise the market prices of products
significantly, destabilizing the narrow market segment “all
natural latex mattresses”
Arpitalian Compact Soles ( Pvt) Limited
Arpitalian Compact Soles manufactures shoes soling sheets for
the International shoe manufacturers. The Company is a joint
venture with Davos SPA, a globally reputed manufacturer for
shoe soles.
During the year a Director of Davos Spa-Italy took over the
responsibility to manage the operations of the Company as
the CEO in June 2010 which enables the sharing of Italian
technology and market knowledge to improve the productivity
and profitability of the Company.
During the year the Company took over the control of the
rubber mixing plant which is a critical component of the
manufacturing process which enables the Company to directly
control the compound manufacturing process.
The Company implemented several cost reduction measures
during the year under review, which assisted in mitigating the
challenges posed with the rising prices of synthetic rubber
which is a major component in its production process.
The Company’s emphasis on research and development
enabled the Company to experience continuous cost reductions
throughout the year, with the introduction of new formulas.
The Company is now targeting to enter new markets in
Bangladesh and Vietnam. Even though the demand from the
European markets is decreasing to some extent, the Company
managed to increase the total sales volumes by 8% during
the year under review mainly due to higher sales to the Asian
market.
With the imminent turnaround of the Italian market and the
emergence of new markets within the South East Asia and
South Asian regions a significant improvement in Company
performance is expected in the upcoming financial year.
Micro Minerals (Pvt.) Ltd
Micro Minerals (Pvt.) Ltd produces mineral products which
are essential as fillers for rubber compounds. This company
mainly supplies Arpitalian compact soles and Richard Pieris
Exports. The production plant of the Company is located in
Bandaragama.
Due to the scarcity of raw materials for calcite and ball clay, the
Company was unable to have a significant sales growth in the
current financial year. The Company had to increase the selling
prices in order to recover the increase in purchase price of the
raw material.
Richard Pieris Rubber Products Ltd.
The main activity of Richard Pieris Rubber Products is the
manufacturing of rubber garden hoses, vehicle floor mats,
specialized Industrial Products and re-rubberized printing
rollers.
With the intense competition being experienced in the product
market, the Company focused to improve its product quality
and yield, in order to maintain its competitive advantage.
Competitive prices along with timely and appropriate
promotions helped maintain market share for garden hoses and
vehicle floor mats, where the Company has being established
as the market leader.
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Annual Report 2010/2011 | Richard Pieris and Company PLC