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by Ravi Ladduwahetty

The Lanka Walltile Group, the Stock Exchange listed blue chip manufacturers of ceramic tiles, has reported a 10 percent increase in local sales for the year ended March 31, 2002 while exports have dipped by 16 percent for the same period.

The Lanka Walltile Group comprising Lanka Walltile Ltd and wholly owned subsidiary Lanka Walltile Meepe (Pvt) Ltd have increased their consolidated turnover to Rs. 1,176,318 for 2002, up 10 percent from the Rs. 1,012,725 a year ago, but exports sales in the two companies have dipped 16 percent to Rs.488,970 during 2002 from Rs. 608,366 the previous year.

Lanka Walltiles Group Chairman Baku Mahadeva has told shareholders in his annual report for the year ended March 31, 2002 that it was mandatory to increase the sales of the companies in order to exploit the considerably unutilised production capacity at the Meepe factory which is currently running at around 65 percent of production capacity.

He expects the local sales of the company to increase significantly in the light of the sound environment for business following the Government's peace initiatives and also the sound macro-economic policies.

In order to increase local sales, the company has increased the dealer network to 22 and 10 Agents, in sharp contrast to the absence of a dealer network of the subsidiary company. It was a total dependence of the parent company for the distribution of the products of both companies, Mahadeva has told shareholders.

He has also drawn attention of the shareholders to the cheap and low quality imports from India and China flooding the market and said that the Directors of the company have reduced the sales prices of the products of the two companies in a bid to remain competitive.

This strategy has not only enabled the company to increase local sales, but also better utilisation of the production facilities of the factory. Production costs have also declined with this new strategy. The company hopes to make price adjustments in the future as well if the need arises, he said.

Mahadeva has attributed the dip in the export volumes to the reduction in exports to Singapore, which is one of the core markets. The exports volumes to Singapore which was Rs. 73.8 million for 2000/2001, drastically plummeted to Rs. 12.8 million during 2001/2002. However, the exports to non Asian countries had increased marginally to Rs.359 million, up from the Rs. 352 million the previous year.

The Group, in a bid to increase exports to North America and Europe, participated in two major international exhibitions which was Orlando, USA in May 2001 and Bologna, Italy in October 2001, which facilitated the meeting of new buyers. This was followed by the meeting of new buyers in the Netherlands which has become as a strong emerging market for the company. There had been two visits to Bangladesh and Hong Kong, two of the major buyers of the company.

The Indian market which was very difficult to penetrate, is now east following the signing of the Indo Lanka Free Trade Agreement which saw the import duty on tiles, drastically reduced. The three months May to July 2002 saw orders for 16 containers from India and we expect the exports to India to increase substantially during the current financial year, he told shareholders.

Mahadeva envisages that the year 2002-2003 would be significantly better, which has been evidenced by the performance of the company during the first five months - April to August 2002. Sales during the period have increased to Rs. 425 million, up from the 348 million for the corresponding period a year ago.

The financial performance of the Lanka Walltile Group saw the turnover dipping to Rs. 488.9 million, down from the Rs. 608.3 million a year ago. The Gross turnover of the Group (which is inclusive of the plantation products of the subsidiaries Horana Plantations Ltd, Ceytea Plantation Management Services Ltd and Unidil Packaging Ltd ) was Rs. 2.86 billion during the year, up from Rs. 2.78 billion, the previous year.

The turnover net of tax was Rs. 2.784 billion, up from the Rs. 2.713 billion the previous year. The Gross Profits increased to Rs. 559.2 million, up from the 538.4 million the previous year.

The Board of Directors of Lanka Walltiles Ltd comprises: B. Mahadeva ( Chairman), Prof.C.L.V. Jayatilleke, T. De Zoysa, J.A.P.M. Jayasekera, G.V. Divitotawela, A.A. Page,M.I. Wahid and M.W.L. De Silva.

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Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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