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22 News Tea Estates continued... Sri Lanka News continued... John Keells Awards Finlay Tea Estates Sri Lanka swept the board with nine awards at the annual ceremony held in Colombo on 15 July by tea brokers John Keells to recognize the top performing estates in the plantation industry for the year 2005. Shawlands Estate which, over the years, has consistently produced top liquoring OP grade teas, achieved no less than 110 top prices in the category Uva Teas. Shawlands achieved two all-time record prices, RS.1200/- and RS 1060/- for a liquoring OP1 Grade in the same category. Demodera Estate achieved the highest quantity of tea produced by a single Tea Factory in the category Uva Teas, having sold 1,020,312 kgs of pure orthodox teas. Both Shawlands and Demodera have obtained ISO 9001 and HACCP Certification. Adawatte Estate, in Lunugala, was also recognized for its high sale average of Rs.179.71 in the John Keells’ Catalogue Uva Teas category. The above three estates are managed by Hapugastenne Plantations. Madulkelle Estate, under Udupussellawa Plantations, achieved the third highest average in the category Western Medium Grown Teas. Tea Trading Update Richard Darlington As usual there is much to report from the FTS Leaf Tea Division. Mombasa continues to have a good year in difficult trading conditions. At the time of writing demand remains closely balanced to supply though there are signs that more tea will come onto the market from now on, so trading conditions should become easier. The senior managers in Mombasa have undertaken a number of business trips to new markets and hopes are high that business will commence soon to these new areas. The Malawi tea growing season is about to start and the prospects look good for both the Malawi tea market as a whole and for our trading business in Blantyre. The installation of a modern automated tea blending and packing system is complete and we are now in a position to offer our clients the use of this service. Shareholders Tour Concordia On 19 May 2006 Concordia Tea Estate in Nuwara Eliya played host to shareholders of Hapugastenne (HPL) and Udapussellawa Plantations (UPL). Eleven luxury coaches brought 371 shareholders on the five-hour journey from Finlay House in Colombo, to Kandapola. From here, they travelled to the chilly heights of Concordia Estate where they were welcomed with a refreshing cup of ginger tea. Tony Perera, Ranjan Kulatunga, Stewart Joseph, Roshini Ranaweera and Dalrene Thirukumar acted as tour guides, explaining the tea manufacturing process in detail for the groups of shareholders. On the ground floor the guests saw made tea in bags awaiting transport out of the factory; on the first floor, the roller and tea processing machinery; then, one flight up, came what one described as ‘The most pleasing sight of golden green: two leaves and a bud, in vast quantities, spread out on a drier’. Finlay Gulf is now in its third full year of trading and is performing well ahead of our expectations. Business has been concluded to buyers in many of the countries that surround the UAE. The branch has been able to put our Hanoi, Mombasa and Colombo offices in touch with new clients for Vietnamese, Kenyan and Sri Lankan teas. The branch is certainly seeing the benefit of being a prominent sponsor at the Dubai Tea Forum at the end of February. In Hanoi our new trader, James Paling, is settling into the Finlay family. Our General Manager, Iain Lang, is spending much of his time at the Van Hung factory guiding its owners through the process of converting the factory from orthodox to CTC production. Finlays is a sizeable investor in this project and tea will be available from the factory by the time this magazine goes to print. In the next issue we will give readers a full report on the project. Under Chris Luckhurst in our Morristown office the United States business is doing Guests were highly appreciative of the sumptuous lunch prepared for them, a feast accompanied by beautiful floral arrangements, a live saxophonist and, later, a troupe of dancers. They thanked all the staff of Concordia Factory for making the tour a warm and unforgettable learning experience. Appointment Rasika Perera joined Finlay Plantations Sri Lanka as Marketing Manager from 1 August 2006. Previously, Rasika had spent nearly 10 years with John Keells, the leading tea brokers arm in Sri Lanka, latterly as Manager Tea. Rasika brings vast experience in tea marketing; we welcome him to our team and wish him all the best. Retirements From Hapugastenne Estate: M.Ramasamy, after 29 years’ service and R.K.K.Joseph, after 26 years; from Bibile Estate, G.A. Manatunga, after 27 years of service. well and is busily preparing for the start of the new Argentine season. Our tea decaffeination business in Hull continues to have a good year. Of the many challenges faced by the team this year the removal of a 100ft brick lined, wrought iron chimney stack was perhaps the most interesting. Put up in 1900 it survived a fire in 1932 that destroyed the rest of the factory. Its safe removal was made more complicated by its position but the team managed the dismantling without any problems. The old chimney has been replaced by a new one which we hope will last for as long as the last one though, also, that it will not have to survive a fire!
Tea Extracts Update Tony Barcroft The tea extracts business is doing very well worldwide, with excellent volume growth in North America and Europe. The cause of this is quite simple. Ready to drink (RTD) teas are seen as a natural and healthier alternative to carbonated drinks and so, each year, as demand grows at the consumer end, it filters back to increased demand for our products. This is likely to accelerate even further as the major beverage companies have started to push this trend even harder, with a record number of new products being launched this year. Additionally, the range of speciality tea products is increasing, with green, white and Rooibos teas being particular favourites amongst the launches this year. Another trend that you might have seen is the steady growth in what we call “functional” teas – those that make health claims. Obesity is a major and growing Beverages UK Update Neil Willsher I am delighted to report that a year of varied challenges for Finlay Beverages, has continued to progress well. The company’s main raw inputs, tea and coffee, saw prices moving higher during the year, albeit for entirely different reasons. Tea purchased under a traditional auction system saw prices doubling at the end of 2005, as a result of the well publicised drought experienced in Kenya. These increases were passed on in part to the customer in August, when tea prices rose throughout the UK retail industry. These moves assisted in resolving an unsustainable situation which was negatively affecting our bottom line. Simply put, tea was being sold to our customers at a lower price than the price for which it was purchased. The situation has improved although prices remain stubbornly high with, at the time of writing, all eyes on whether the Kenyan short rains would arrive in November. The coffee market rose to seven year highs in September for entirely different reasons. Coffee is traded as a commodity on the futures markets. As such its price is subject to speculation which may or may not be based on accurate information. In 2006, fund speculation, issue in the Western world and tea contains a group of chemicals called Catechins that accelerate fat burning. Thus it is no surprise that we are seeing RTD tea products with high Catechin content coming onto the market, claiming weight reducing properties. We expect this trend to continue and gather momentum. We are working hard to develop our technology to be able to give our customers products which are rich in these “functional” chemicals. Historically, Finlays has focused on Western markets, with a strong and growing business in North America and Europe. However, it is imperative that we start to move our sights more towards markets in Asia. The reason is quite simple. By 2010, China and Japan will together consume eight times the volume of RTD tea as North America and ten times the volume of Europe. In the next issue of Finlays Magazine, I will be explaining more about what we are doing in Asia to accelerate our progress. As this is my first review of the Tea Extracts business since becoming Managing based upon dubious volume estimates from Vietnam and Brazil, in combination with huge rises in oil and copper positions, drove prices higher. The UK market for private label packing in which we operate, consolidated in late 2005 with Apeejay becoming the new owners of Typhoo tea and subsequently joining forces with Gold Crown. These changes will result in further challenges due to the alteration in the competitive dynamic within the industry, especially when the continued battle of the brands is taken into account. It is pleasing to report that Sainsbury’s, our largest customer, continue to reap the just rewards resulting from the successful implementation of their turnaround plans. The new Asda business, which commenced in April, progressed well following its seamless integration into our normal operations. The growth achieved in 2006 has established Finlay Beverages as the largest packer of private label tea in the UK retail market. We continue to work with our employees and customers in striving to remain the partner of choice within the industry. This growth in our business, combined with a fundamental belief in the need for continual change and improvement in order to sustain our operations, resulted in a decision being taken earlier this year to re- Director in April 2006, I should like to take the opportunity to introduce myself and explain something of my background. After studying Chemistry at the University of Sheffield I spent the early years of my career as a scientist with Glaxo Smith-Kline (pharmaceuticals) and Courtaulds (paints). I then moved over to marketing, spending nine years with Procter & Gamble, running businesses ranging from detergents to beauty care products, in the UK and Europe. This was followed by 14 years in the retail bakery business, as Managing Director of a large UK business, turning it from a loss-maker into a solid, profitable concern. After a spell in consulting for Wolseley (an International building products company) I joined Finlay Tea Extracts as Managing Director. In conclusion, I want to say that I am very proud to be involved with Finlays. I think we have a great business, with excellent hard working people and good future prospects. Our best years are yet to come. organise the tea factory. The project, due for completion in 2007, will increase capacities and efficiencies, whilst introducing innovative flexibility to both our processes and product. Underpinning all the progress achieved to date are the changes brought about within our culture. Key focus has been placed upon teamwork, support and respect for one another, knowledge sharing, communication and expertise. The positive consequences of our actions to date have seen improved employee motivation and morale. There have been some interesting developments during the course of the year within the areas of Corporate Social Responsibility and Ethical Trading, where greater consumer awareness has been reflected in initiatives by our retail partners. This has always been at the heart of the Group’s businesses, with commitment to employees, communities and the environment paramount; they are areas we feel well placed to address. The changing environment in which we operate with both its competitive and ethical dimensions will remain a key challenge, creating in turn both new and diverse opportunities for both Finlay Beverages and the group as a whole. 23
Page 1: Autumn/Winter ’06 Volume 42/No.2
Page 4 and 5: 4 View from the MD’s Desk Rupert
Page 6 and 7: 6 Rethinking the Brand Simon Large
Page 8 and 9: 8 Pullout to go in here lorem ipsum
Page 10 and 11: 10 Project Lily Nev Harries In 1996
Page 12 and 13: 12 Designing an open plan office to
Page 14 and 15: Clockwise: Colombian farmer, Orland
Page 16 and 17: 16 ‘A Special Place in the Heart
Page 18 and 19: 18 Pensioners’ Reunion The lunch
Page 20 and 21: 20 News Tea Estates continued... Ke
Page 24 and 25: 24 News Beverages continued... UK N
Page 26 and 27: 26 News Flowers Update Tim Blackbur
Page 28 and 29: 28 News Sri Lanka continued... Twic
Page 30 and 31: 30 Announcements Births Adil On May

News - Finlays

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