Chicken meat favourite Bairaha Farms Plc is bullish about growing demand as it is expanding production with a new advanced broiler facility with an investment of Rs. 360 million over the next three years.
The Company yesterday signed an agreement with the Board of Investment (BOI) to set up what it described as a large scale state-of-the-art broiler farm on a 48 acre land in Anamaduwa in the Puttalam District. The new venture will be handled by a wholly owned subsidiary Nature’s Best Industry Ltd.
Under the BOI agreement, the new venture will enjoy a 10 year tax holiday from the first year of making profit or not later than two years from the date of commencement of commercial operations, whichever takes place first. Bairaha Farms Managing Director Yakooth Naleem said the envisaged investment in the first year will be nearly Rs. 120 million whilst two years thereafter will see an additional investment of Rs. 240 million.
“We estimate this project will increase our commercial broiler production capacity by about 20% in the first year, about 20% in the second year followed by 15% in the third year,” Naleem said. The first batch of birds is expected to come out of the new farm by April or May next year.
The new farm will be constructed in line with the prevailing norms and standards of other reputable poultry companies in the world.
The size of each poultry house will be much bigger and the specifications of these buildings will be technically more advanced to enable Bairaha to maintain what Naleem termed as “outstanding hygiene and cleanliness than possible with farms currently operating in Sri Lanka.”
The Managing Director also said that in tandem with market conditions the new venture will boost turnover of Bairaha from next year.
On top of best ever results in 2009/10, Bairaha has managed to maintain the momentum in the new financial year as well.
Its Group revenue in the first of 2010/11 financial year rose by 18% to Rs. 1.17 billion whilst gross profit was up 132% to Rs. 335 million. Profit from operating activities rose by 307% to Rs. 260.4 million and net profit swelled by 484% to Rs. 218.6 million.
Bairaha has been among select stocks to beat the bearish market enjoying gains in its share price. Yesterday it closed up Rs. 2.90 to Rs. 218.30 on top of a Rs. 3.40 gain on Wednesday. It ended the September 2010 quarter at Rs. 197.70. Its all time highest price is Rs. 249.90 whilst in the September quarter the highest was Rs. 205. The Earnings per share as at September 2010 was Rs. 13.66 (Group) up from Rs. 2.34 a year earlier. Net asset per share amounted to Rs. 60.17 as against Rs. 30.77 as at September 2009.
In 2009/10 financial year the Group did outstandingly well in terms of both turnover and profitability, and given an improved political, economic and social environment expects to see much better growth prospects in the next year and the years to come. The turnover of the Group increased from Rs. 1.84 billion in 2008/9 to Rs. 2.06 billion in 2009/10 representing a 12% increase.
Group profit after tax peaked to an all time high of Rs. 134 million, up by a phenomenal 5074% over 2008/9.
Performance of the broiler farms at Bairaha was also outstanding and these according to the Company have in fact performed much better than the contract farmers in terms of productivity and other production parameters.
The production of COBB day-old-chicks not only helped to improve the bottom line but enhanced the performance both at the broiler farms and contract farms. In 2009/10, the Bairaha Group has taken the No. 1 position as the largest broiler day-old-chicks producer, a status achieved through planned, organic growth.
source - www.ft.lk
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