LH Plantations (Pvt) Ltd. survived a harsh business environment

12 December 2011 07:30 am - 0 - {{hitsCtrl.values.hits}}

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We congratulate those concerned for successfully continuing with the transformation of the company which we believe was initiated by us. We wish to assert that our term as Managing Agent of Kurunegala Plantations Ltd, unlike the post 2004 period, was beset with problems created by the then Government, Mrs. CBM. There was always the threat of the company in the State and, for the most part, we had to contend with a hostile and unco-operative Board of Directors of KPL. So, when performance is judged these factors need to be kept in mind.
In the article referred to, there is an observation by the writer of that article that Kurunegala Plantations was initially a state owned company and privatized in 1992 in “expectance” of profits and less ‘redundancy” on government fiscals. It needs to be mentioned at this point that Kurunegala Plantations Ltd, at the time, and subsequently, continued to remain as a public entity in the form of a state owned company and only its management was placed in the hands of the private sector.
The writer then quotes Mr. Nillegoda, the (CEO of KPA as saying “the plantation was under the private sector for nearly 14 years and had depicted a continuous downfall in its output. Owing to the conditions, the company was re-organized by the government in 2005. Thee onwards, the plantation indicated a gradual growth with a new record of increasing profit every year.
This is a misleading statement and for that matter, almost everything else stated in the said article relating to the period in which the company was under our management.
The facts are as follows:
LH plantations (Pvt) Ltd was entrusted with the task of functioning as the Managing Agent of the state owned plantation company Kurunegala Plantations (Pvt. Ltd. In 1992 and performed this task till 2004. Successfully meeting all criteria set down by the Government to qualify for a further extension of its management contract.
During this period, it needs to be emphasized the company under our management lost 11.31% or 741.5 Hectares of its entire land holding. An analysis of crop performance during the period and all other criteria need necessarily have to take this factor into serious consideration as the land host comprised of the most fertile sections of the plantation.
We will not go into specifies but the following facts would place the whole issue in its proper perspective.
(1) There most definitely was no continuous down fall in its output” as stated. On the contrary, corps (The results of employing best possible cultivation practices under the circumstances) fluctuated during the period. Quite in line with the annual weather patterns. This is a phenomenon observed in all plantations. A fact that all experienced planters would subscribe to the degree of fluctuation would naturally differ from estate to estate depending on the moisture conservation and other beneficial cultivation practices adopted.
The crop harvested in our final year of management (2004) was 15% greater than that of year 2002. Similarly the crop in year 2000 was 38% higher than that of 1998 while the crop in 2002 (a year of serve drought) fell to 75% of 2001.
(2) During its 12 ½ year of operations under private management (not 14 years as stated in the article) the company achieved profitability in 11 ½ years the only exception being in the year 2000 when despite a substantial increase in the crop by 30% a loss was sustained owing to chronically depressed prices throughout that year as a result of ill conceived import of palm oil into the country.
Kurunegala Plantations Ltd upto the time of privatization of the state plantation companies was only one of two companies out of 23 State plantations companies to have recorded continuous profits from the time state plantations were handed over for private management.
(3) All employees of Kurunegala Plantations Ltd were paid a share of profits during 9 years of our management.
(4) During the period under our management, an aggregate sum of Rs. 101 m was paid by the company to the Treasury by was of lease rentals.
(5) With regard to certain other observations made elsewhere in the article.
(a) The company operated during this entire period within a single overdraft facility of Rs 25m for working capital and met all capital and land development costs exceeding Rs 254m entirely from the internal generation of funds. This included new planting annually. Selected areas of land and the maintenance of under planted areas up to maturity.
(b) New projects products and crops were introduced during our period to maximize the earning potential of the company.
These included the cultivation for the first time of Cinnamon and Sunflower on estates owned by Kurunegala Plantations Ltd and other crops such as Rambuttan, Banana, Pineapple, etc. A timber saw mil was set up on Narammala Estate to saw senile coconut trees for rafters and a nutrition and well received dessert termed. “Nata de Coco” was introduced to the food shelves of Sri Lanka for the first time.
Moreover what we achieved during the period of our management was for the most part achieved in an environment far from conducive to proper and effective management. A situation the present management has been fortunate not to experience!.
We are sincerely pleased with the continued prosperity of Kurunegala Plantations Ltd. and wish all success to the company. Mr. Nillegoda. CEO and all those employed at KPC

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LH Plantations (Pvt) Ltd. survived a harsh business environment

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