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Sunday, January 24, 2010

HORANA PLANTATION IN TO NEW BUSINESS ACTIVITIES

Horana Plantations PLC (HPP), owning nearly 7,500 hectares (Ha) of land is in the process of obtaining approvals from the Central Environmental Authority (CEA) to develop its first mini hydro plant and is developing its bungalows for tourism, according to an official.

“We have got a Letter of Intent (from the government) to build a 1 mega watt (MW) plant in Maskeliya,” Rajiv Casie Chitty, Managing Director/CEO HPP told the Business Times. He said this is Rs.150 million plant and the company will build another 1MW plant in time to come in the same stream that they are building the first plant in. “We should start construction of the first plant by the middle of the year,” he added.

He said that HPP has 4,000 Ha in planting the main crops whereas the rest are unutilized. “We have opportunities in tourism, diversified crops, mineral resources in the lands which are still not utilized,” he added. Mr. Casie Chitty said that HPP will rent about two bungalows for tourism. “We put in about Rs. 6 to Rs. 7 million for these two bungalows and we are progressively investing to upgrade other bungalows – especially with the potential increase in tourism,” he said.

He said that the Tempo Bungalow of Neuchatal Estate, Neboda and the Tillcountry Bungalow in Lindula are now fully functional holiday bungalows available to both local and foreign holidaymakers and tourists looking for uniquely Sri Lankan experience.

He said HPP manages these bungalows and the company wants to increase the number of bungalows to a critical mass to get better returns. “We are looking at an internal rate of return (IRR) of more than 20% in terms of returns from this project,” he said.

He said that the company achieved a post tax profit of Rs. 55.23 million in 2008/9. “Although this is lower than the figure of Rs. 151.98 million recorded in the previous year, the performance was satisfactory given the challenges experienced during the year. In the third quarter of the year the company and the industry experienced a collapse of the commodity market following the global economic downturn.

The situation was worsened by a severe drought that prevailed during the last quarter of the financial year, resulting in a sharp decline in output,” he added.

source - www.sundaytimes.lk