Thursday Dec 12, 2024
Thursday Dec 12, 2024
Saturday, 12 November 2011 00:00 - - {{hitsCtrl.values.hits}}
Pelwatte Sugar Industries Plc said yesterday that it was awaiting instructions on the way forward from Secretary to the Treasury following the Parliament passing the Revival of Underperforming Enterprises and Underutilised Assets on Wednesday.
“At this moment we are unable to comment on the implications on the ruling as we await instructions by the Secretary to the Treasury,” Pelwatte Sugar Industries Plc said in a filing yesterday.
Following suspension shares of the company didn’t trade yesterday, the first day since the passing of the bill with Thursday being a market holiday on account of Poya. Trading of shares of Hotel Developers Lanka Plc, the sole underperforming enterprise in the bill, was also suspended.
Since Pelwatte Sugar Industries is listed in Schedule 2 of the bill, land alienated hitherto to the company will be vested with the State.
The bill listed land in extent of 6,300 hectares for takeover by a Competent Authority which is to be established.
According to Pelwatte Sugar, the 6,300 hectares comprises settler estate whilst the company has 4,300 hectares as nucleus estate. Over 3,000 private outgrowers cultivate sugar cane for the company.
A spokesman for Pelwatte Sugar Industries told the Daily FT yesterday that although the land would be vested with the State, production on these lands would carry on as before and profitability and efficiency would not be affected.
The company is a part of the business tycoon-controlled Distilleries Company of Sri Lanka Plc, which acquired a 47.02 % stake in March 2011
The outgrower community of over 3,209 cultivate produce in Buttala, Pelwatte, Wellawaya, Badalkumbura, Moneragala and Siyambalanduwa. This segment is the highest number of farmers that supply sugarcane to the company. In the year 2010/2011, the outgrower community has supplied over 130,947 MT of sugarcane. The Pelwatte Group posted a turnover of Rs. 2.36 b during the year 2010/11, which marks a 13% increase over last year. However, the bottom line was further eroded due to a loss of Rs. 724 m, a 40% drop from the previous year.
In the second quarter ending September 2011 the company’s revenue declined 8% to Rs. 1.4 billion while net profit rose 90% to Rs.778 million compared to last year.
The entity comprises Pelwatte Sugar Distilleries (Pvt) Limited, an 83.3% owned subsidiary; Pelwatte Dairy Industries Limited, a 50% subsidiary; and Pelwatte Agriculture and Engineering Services (Private) Limited, a fully-owned subsidiary which processes ethyl alcohol and bio-compost from molasses as by-products of the sugar manufacturing process.
The Pelwatte sugar mill was operating at 50% of its actual capacity and had plans to increase the yield per hectares of the existing company lands along with the settler and out-grower community and by reorganising the defunct Agronomy Division, along with professional inputs from the Sugar Research Institute, the company stated in its 2010/11 annual review.
Approximately 95% of Sri Lanka’s demand for sugar is fulfilled by imports. The annual requirement of sugar is 590,000 MT, of which 559,000 MT is imported. Sugar production was reported at 31,000 MT in 2010, a marginal decline of 3% from 2009. Total sugar imports in terms of volumes too increased to 559,000 MT in 2010 in comparison to 467,000 MT the previous year.
