The 47 percent acquisition of Pelwatte Sugar Industries PLC in March for Rs.884 million was a strategic investment in terms of reverse recovery, as spirits produced is an essential input for the Distilleries Company’s (DIST) business of manufacturing alcohol, DIST Chairman Harry Jaywardena said in the company’s latest annual report.
“As a result of this acquisition, Pelwatte Sugar Industries PLC and its subsidiaries: Pelwatte Sugar Distilleries (Pvt) Limited; Pelwatte Agriculture & Engineering Services (Pvt) Limited; and Pelwatte Dairy Industries (Pvt) Limited, were ushered into the fold of the DCSL Group” he noted.
He also pointed out that the ethanol market is now in a very volatile state as more and more producers are switching to the relatively less sophisticated but more lucrative bio-fuel industry.
“Therefore, it was essential for the Company to think in terms of producing its own ethanol and reduce its dependence on imported ethanol.
With this acquisition, 1/3 of our requirement of ethanol can now be sourced from Pelwatte, thus enabling the Company to make long -term strategies without the need for price adjustments” Jaywardena stated.
For the financial year 2010/11 DIST posted a turnover of Rs.47 billion which marks an increase of 17 percent YoY.
The Group’s Net Profit after Tax of Rs. 8.3 billion represents a 3 fold increase over the corresponding period last year. However this includes a capital gain on disposal of shares of Rs. 3.9 billion. Thus, profit earned from core business amounts to Rs. 4.4 bn which is an increase of 105%.
“The performance of DCSL is commendable, given the fact that the industry faced several challenges through FY 2010/11. During the year under review, the government took a decision to increase Excise Duty twice over, while the corporate income tax for the alcohol sector was incr
source - www.dailymirror.lk
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