Nov 01, 2007 (LBO) – Rising low grown tea prices have helped boost Sri Lanka’s Tea Smallholder Factories’ second quarter profit net profit 151 percent to 33.5 million rupees compared with the same period a year ago.
Revenue for the quarter ended September 30, 2007 shot up 62 percent to 578 million rupees, according to interim results sent to the Colombo Stock Exchange.
The company, in which conglomerate John Keells Holdings and tea exporter Akbar Brothers have big stakes, buys tea from a network of 15,300 suppliers of green leaf, of whom 9,000 are direct suppliers.
Big plantations companies with estates mainly in the high grown regions are still recovering from a strike that crippled production last year.
But small holders who own their plots and sell their leaf to factories were not affected by the labour unrest and also have been benefiting from strong prices for their crop.
Low grown teas are much in demand in the Middle East, Russia and other former Soviet Union states where consumer incomes have risen owing to strong oil prices.
Small holders now produce over half the island’s tea crop and most of them own less than one acre.
Tea Smallholder Factories net profit for the first six months was up 228 percent year-on-year to 72.2 million rupees with revenue rising 60 percent to just over a billion rupees.
Most of the revenue came from the Galle, Ratnapura and Matara districts.