Annual Report 2010 - Ministry of Finance and Planning

4 | State Owned Enterprises (SOE)Performance Issues ChallengesCeylon Fertilizer Company Ltd. (CFC)/Colombo Commercial Fertilizer Company Ltd (CCFC)/Janatha FertilizerEnterprise Ltd (JFE)• Fertilizer subsidy scheme on paddy ishandled entirely by Ceylon Fertilizer CoLtd and Colombo Commercial FertilizerCompany Ltd.• Lack of proper logistical planningto transport fertilizer• Pilferage of fertilizer• Fund flow issues• CCFC, CFC and JFE to operateas one unit and implement strictquality control and monitoringprocesses• Implement efficient and effectivelogistical arrangements forfertilizer transportationRegional Plantation Companies (23 RPCs)During the period 2006 – 2010 for all RPCs• Cumulative profit was Rs. 10,800 MnCompanies with profit over- Rs. 1,000 Mn – 6• Inadequate investment inreplanting and new planting• Lower productivity in Teaproduction compared to Tea Small• Improve land productivity in asustainable manner• Productive use of uncultivatedlands- Rs. 400 Mn –4- Rs. 20 Mn – 9Companies with losses over- Rs. 15 Mn - 4• Lease rental income to the Treasuryamounted to Rs. 2,192 Mn• Management fees to the managingcompanies was Rs 4,990 Mn• Payment of taxes was Rs. 539 Mn• Investment in capital development wasRs. 19,550 Mn• Total turnover is about Rs. 40,000 Mnper annumHolders• Availability of non-cultivated landsKalubowitiyana Tea Factory Ltd• Revenue in 2010 was Rs. 498.9 Mn• Company paid Rs 6.26 Mn as dividendsin 2009/10• Continuous drop in production • Infusion of capital to modernizethe factory whereby fetchinga better price for the finishedproduct to ensure a continuoussupply of green leavesChilaw Plantations Ltd• Continuous growth in the coconutproduction in the last 5 years• Turnover increased to Rs. 422 Mn by 35• Not fully utilized the land forcoconut cultivation• Lending to other SOEs which is• Cater to the demand in the market• Integration with properdistribution channels% compared to 2009• Declared Rs.75 Mn as dividend in 2010outside their mandate withoutinvesting to expand their ownoperationsJanatha Estate Development Board• Annual tea production is 3 Mn Kg whichis 1% of the market share• Incurred an average loss of Rs. 100 Mnper annum during the past five years• Poor management of existing lands• Mismatch of skills of the existinglabour force and the required skills• Weak financial management• Existence of less fertile land withlow yields• Raising capital to modernizefactories with new technology• Improve the quality of theproducts236