Ceylon Leather Products PLC (CLPL) said it had suspended the operations of Palla & Company (Private) Limited, a footwear manufacturing subsidiary, with effect from August 31, 2015.
Though reasons were not given in yesterday’s stock exchange filing, the CLPL annual report noted that Palla & Company “did not meet expectation” due to “uncertain market conditions”.
Palla & Company is a Board of Investment (BoI) company located at the Katunayake Export Processing Zone focused on the European and American markets.
“During the year under review, the company (Palla & Company) made a net loss of Rs.167.3 million. This was the result of low capacity utilization resulting from lack of orders. In view of the above, we have made full impairment for the Investment made by Ceylon Leather Products,” 2014/15 CLPL annual report said.
According to the official website of Palla & Company, the company was setup to manufacture high-quality leather shoes. The website further said the company had a staff of over 550 employees, managed by Italian and Brazilian professionals.