Financial Times

Profits up for C.W.Mackie on buoyant rubber prices
By Duruthu Edirimuni
C.W. Mackie and Co Ltd. has capitalised on rising rubber prices in the international market to record a 40 million-rupee profit in the first quarter for the financial year of 2004, company officials said.

Company shares are now trading at Rs.17.50 in the market, up from Rs. 3.25 in February. The prices moved up in May this year. Lal Pinto, Executive Director, C.W. Mackie sees a shortage of rubber in the international market as the main reason for rubber prices to soar.

"Rubber production has declined in the international market because prices plummeted during 1995 to 2001," he said. Suddenly when production fell there was a demand, this led to a surge in prices.

Pinto said that a kilo of rubber during that period fluctuated from Rs. 35 to Rs. 40. Currently it is trading at Rs. 115 a kilo. "The petroleum price hike and the artificial rubber price hike had additionally contributed to high rubber prices in the international market," he said.

Pinto also said that stock holding of rubber in the US market has fallen and there is a need for them to replenish their rubber stocks, which in turn has resulted in the increase of rubber prices in the international market.

C.W. Mackie, now 104 years old, trades mainly in rubber with three rubber manufacturing factories producing block rubber, crepe rubber and specialised rubber.

The company is the largest rubber exporter in the country mainly to Europe and have started exporting to Syria, Iran and Ethiopia. Apart from rubber, the company has a profitable subsidiary, Scan Products Holding Company Ltd, manufacturing Sunquick, a bottled fruit drink.

Arhus United AS of Denmark, and IFU (International Fund for Developing Countries) of Denmark are the majority shareholders of the company with the former holding 60 percent and the latter owning 27 percent of shares.

Pinto said that C.W. Mackie's underwent a restructuring two years ago where the company discontinued its loss making lines such as retail sugar trading business. The company at present has no plans for expansion but wants to concentrate on rubber, which is the main profit-making line. "At present we are trying to consolidate on our rubber production as we feel it is the right time," he said.

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