Watawala Plantations PLC (WATA) plans to fully shift its focus to palm oil plantations with plans to improve production volumes and profit margins by adopting good agricultural practices and efficient use of manpower and land base.
Delivering a message to shareholders at the release of the company’s interim financial statements for the quarter ended December 31, 2017 last week, WATA Managing Director, Vish Govindasamy said profitability of palm oil during the quarter had declined due to lower net sales average compared to the corresponding period of the previous year.
“The fluctuations in the import duty component in the sale price and the volatile Malaysian palm oil prices resulted in the lower net sale average for the period. The segment recorded a profit of Rs. 745 mn against Rs. 979 mn made in the corresponding period,” Govindasamy pointed out.
WATA, the highest tea producer in Sri Lanka with a land extent of 4,465 Hectare acres (Ha) incorporated a new company recently by carving out its tea business.
The upcountry tea business was vested, by operation of the law, with Hatton Plantations PLC from September 30, 2017. Hence, WATA’s plantation business now consists of crops such as oil palm, rubber, cinnamon, timber and fuel wood plantations, extents in conservation forestry, other spices, vegetable cultivation, jungle and patana.
Meanwhile, Govindasamy said the group net profit dropped by 7% as a result of the start-up losses of the Watawala Dairy Limited which commenced operations in the current period. On the other hand, WATA recorded a net profit of Rs. 1.05 billion for the nine months ended December 31, 2017, an increase of 4% compared to the corresponding nine months of the previous year.
“The operations of the dairy have now been consolidated with the arrival of the genetically superior second herd of 500 cows from Australia. The existing herd now exceeds 1,000 cows, including 500 milking cows.
“The number of milking cows will increase when the second herd start calving resulting in higher yields. Yields will also be greater when the second lactation cycle of the first herd of 400 cows begins in the ensuing months,” the Managing Director elaborated.
WATA is a subsidiary of Estate Management Services (Pvt) Ltd., a joint venture between Sunshine Holdings PLC, TATA Global Beverages which owns UK’s No. 1 tea brand ‘Tetley’, and Pyramid Wilmar Plantations (Pvt.) Ltd.