DIPPED PRODUCTS PLC / ANNUAL REPORT 2008—2009

Managing Director’s Review
“…three of the new
products are believed to
entail innovative features
and attributes or unique
manufacturing processes
leading to the Company
filing patent rights…”
“The pre-tax profit
dropped by 31% to
Rs 300 million following
the collapse of the
commodity markets…”
“Usually, the last quarter
has been the most
rewarding in terms of
both crop and prices…
It was not to be during
the year…”
with high costs and inflationary
environment, followed by a crippling
recession and crumbling global
economic order.
Despite these distractions, DPL
developed 14 new products and
versions to broaden its offer to the
customers. At least three of the
new products are believed to entail
innovative features and attributes
or unique manufacturing processes
leading to the Company filing patent
rights both in Sri Lanka and overseas.
The launch of the electrician gloves
was delayed following product
refinements identified as needed to
meet the very stringent parameters
demanded in the discerning target
markets. The product is now under
testing by independent laboratories
in USA and Europe.
The Group acquired over a dozen
new customers for products
both from Sri Lanka and Thailand
including Eroski, a leading Spanish
supermarket. DPL’s own brand
of products made further inroads
largely in terms of volume. The
growth was however modest
following the slowdown in sales to
industrial sector in the latter half of
the year.
Plantations
The turnover of Kelani Valley
Plantations PLC and its subsidiaries
improved by 10% from Rs 2,828
million to Rs 3,109 million. Revenue
from tea moved up by 13.6%, while
the turnover from rubber increased
by 2.9%.
The pre-tax profit dropped by
31% to Rs 300 million following
the collapse of the commodity
markets in the last quarter of the
year. Plantations recorded a profit
of Rs 310 million by September
2008 but finished the year with a
marginal decline thereon. Usually,
the last quarter has been the most
rewarding in terms of both crop and
prices and boosted the performance
of this sector. It was not to be
during the year under review.
The year started well on an upbeat
note with tea prices at attractive
levels which declined by 35%
in the last three months leaving
large quantities of unsold teas by
November.
Tea crops increased by 10% but the
heavy rainfall in the first half of the
year interrupted harvesting patterns
of rubber depressing crops by 6.8%.
Kelani Valley Green Tea achieved
a profit of Rs 5 million benefitting
from the strong demand for the
product in the first nine months of
the year.
Kalupahana Power Company too
turned in a profit of Rs 4 million
on operational earnings for the
first time since its inception. No
significant contribution to the
Group’s profit was made by our tea
marketing associate, Mabroc Teas.
Their performance was affected
as the company was compelled to
purchase teas at higher prices in a
rising market in the early part of the
year to meet its long term export
orders
The Kelani Valley Instant Tea (Pvt) Ltd
where KVPL owns a 75% stake setup
a new facility in the Nuwara Eliya
estate to produce instant tea. To
supplement the output of green tea
from the Oliphant factory, the black
tea factory at Glassaugh was also
converted to green tea manufacture.
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