Lankem Ceylon PLC (Lankem) is expected to exploit export agriculture crops through its subsidiaries Sunagro Farm Ltd to the Middle East and the Maldives, a company official said. “We completed the trial and a pilot run has already begun on cultivating vegetables such as asparagus that will mainly target the export market segment,” K. P. David, Lankem Director Finance told the Business Times. He said in addition to this fruits will also be cultivated and exported in the near future.
Mr. David also said that during the quarter ending 31st December 2009 , the Lankem Group has performed exceptionally well to record a post tax profit of Rs 425 million against a loss of Rs 89.6 million for the corresponding period in 2008.
Revenue increased by 40% to Rs 3.5 billion during the immediate quarter while the cumulative revenue for the nine months increased by 6% to Rs 8.3b billion.
Mr. David said that a strong contribution from the plantations sector that consist of Kotagala Plantations, which mainly cultivates tea, rubber and Agarapathana Plantations that is mainly into tea was the driving factor during December 2009. Analysts said the upward trend in commodity prices will continue with the economic recovery and that in time to come it is anticipated the quantities demanded in these commodities will also increase.
The company’s chemical sector (Agro chemicals, Industrial Chemicals representing around 50% of local market share) and paints which contributes 35% to the cumulative revenue of the company saw a growth in performance during the December-end quarter while the consumer, hardware, constructions and hotels segments have under-performed during the nine months due to the drop in tourist arrivals. The company has three hotels in Sri Lanka: Club Palm Bay- Marawila, Sigiriya Village and Royal Palms in Beruwala.
An analyst said that acquiring the controlling stake of C W Mackie has seen Lankem diversify its product portfolio. “This has strengthened their distribution channels. In addition C W Mackie that has an annual turnover exceeding Rs 4 billion on average which would definitely add value to the earnings of the Lankem Group in the future,” he said.