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Rs 2.8m loss at Udapussellawa Plantations "small" - Chairman

by Elmo Leonard

Udapussellawa Plantations Ltd. (UPL) suffered a loss of Rs 2.8 million for the year ended December 2001, compared to a profit of Rs 47.1 million in the previous year. UPL Chairman Dickie Juriansz described the loss as "small" at the company's ninth Annual General Meeting (AGM) held recently. UPL's turnover for the year ended December 2001 was Rs 658 million, as against Rs 688 million in 2000. The company's carried forward loss at end-2001 was Rs 303 million. No dividend was paid to shareholders, and at the AGM, some shareholders appealed for an interim dividend.

Udapussellawa was trading at Rs 8 per share. In 1997, the company went public, offering shares at Rs 15 each. Shortly after, when UPL shares started trading, they reached the Rs 60 per share mark, but consequently declined.

The company had obtained the leasehold rights for 6091 hectares of land, of 13 tea estates and a rubber estate located in Nuwara Eliya, Matale and Udapussellawa.

UPL directors said the company's turnover was down by four per cent, compared to the 2000 turnover, mainly due to less bought leaf production during the year under review.

UPL's intake of bought tea during 2001 amounted to 424,791 kilograms, against 650,444 kilograms during 2000. The drop in the intake of bought leaf was due to the prolonged dry spell having an effect on suppliers. The company's Blairlomond factory was closed for three months for the re-sitting of machinery.

The company recorded a sales average of Rs 122.58 per kilogram against an average of Rs 121.40 in 2000.

There was a sudden surge in crop in April and May after the strike and 'go slow', and the company could not cope with the extra leaf bought in. This resulted in a drop in quality and an adverse impact on price, Chairman Juriansz said.

Plantation companies were compelled to make further concessions to the agreed wage package in March 2001, notwithstanding the collective agreement in force. This impacted on the year's profit to the extent of Rs 17 million, he said.

During the year under review, the company invested Rs 120 million - Rs 107 million in replanting, in-filling, maintenance of immature plantations and development of factories.

The company's re-forestation programme covered 46.5 hectares. Since 1997 the company had planted 224 hectares of Eucalyptus, Grandis and Toralliana, utilising grants obtained from the Plantation Reform Project.

Sampath Bank

Crescat Development Ltd.

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