June 3, 2011 (LBO) - Sri Lanka's Dipped Products, a maker of natural and synthetic latex-based gloves said its margins were hit by rising rubber prices but group results were partly hedged by its plantations business.
Managing director Mahesha Ranasoma told shareholders that rubber prices rose 150 percent over two years and 77 percent over the past year.
Pretax profits from gloves had fallen while the contribution from plantations had increased to 374 million from a loss of 26 million rupees. The firm has tea and rubber estates.
Ranasoma warned against an impending rise in plantations worker wages.
The group had invested 146 million rupees in replanting 198 hectares of rubber and maintaining immature areas and 65 million in tea. It also owns Mabroc Tea, a branded retail firm.
Dipped Products claims a 5.0 percent global market share in synthetic and natural latex-based gloves for industrial and domestic use and says it uses 3.0 percent of Sri Lanka's rubber production.
Faced with a stronger rupee Dipped Products was implementing leaner production and improving energy efficiency.
Its Thailand facilities were expanded by 50 percent. Faced with labour shortages the Thai unit was importing workers from Cambodia and Myanmar.
The firm had increased manufacturing capability to cater to the demand for synthetic latex products and was also researching and developing new products for customers.
In the year to March revenues rose 26 percent to 14.8 billion rupees and profits dropped 7.0 percent to 446 million rupees. In the March quarter revenues rose 12 percent to 3.9 billion rupees from a year earlier but profits dropped 40 percent to 122 million rupees.
source - www.lbo.lk
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