Top year for Malwatte Valley

Malwatte Valley Plantations Limited, one of the leading plantation companies in both tea and rubber has improved its performance considerably in 2006.

The turnover grew by 15.83% to Rs. 1,756,004,093 and the profit by a remarkable 273%, from Rs. 88.97 mn. to Rs. 243.37 mn!

“We did very well in 2006”, despite the setbacks we encountered, and it looks like 2007 will be even better” W. L. Bogtstra, Managing Director and CEO, said.

The main setback he referred to was the workers’ agitation for higher wages.

This started with a “Go-Slow”, and culminated in a strike of 14 days, causing an estimated loss of revenue of Rs.100 mn.

Further setbacks were the higher wage bill and the steep increase in the price of fertilizer.

“That we managed to overcome these setbacks can be contributed to several factors.

Among them are the stoppage of management fees and the company policy of very tight control over costs of production.

As a result, we have one of the lowest COP in the industry, both in tea and rubber. We have continuously impressed on our staff the necessity of tight cost controls and that awareness has now gradually trickled down to all our employees.

Another factor which has contributed considerably to the impressive performance of our Company is our emphasis on quality.

The result of this can be seen in the marked improvement of the sales price (NSA) of our tea and rubber.”

This is proved by the many awards the company received from its brokers for its outstanding performance during 2006.

Malwatte Valley Plantations Limited received the award for achieving the All Time Record Prices for a liquoring FBOP Uva Tea (Rs.675 per kilo) and for a liquoring FBOP 1 Grade Uva Tea (Rs.370 per kilo) It recorded top prices on 242 occasions for Uva Teas through 2006 and Sarnia Estate achieved the highest price ever obtained to-date for a Uva Mid grown BOP.

“By nature of its business, a plantation company is susceptible to volatile fluctuations of the price of its end product. Long-term survival can only be achieved by stringent cost control and emphasis on quality of the product”, Bogtstra said. “Our Company results for 2006 confirmed by the awards we received, proves that we are on the right track.

Pursuing this policy we feel confident that 2007 will be even a better year! the MD/CEO said.