Sri Lanka tea processor June profits up marginally

Aug 05, 2009 (LBO) – Sri Lanka’s Tea Smallholder Factories, which processes tea grown mainly by small farmers, said net profit for the June 2009 quarter rose four percent to 53 million rupees from a year ago. Sri Lankan tea producers were hit hard by a severe drought earlier this year and the effects of last year’s commodity price collapse which sharply reduced the crop and exports.

But production and exports have now begun to recover along with prices, partly because of the global shortfall in tea output. Revenue fell six percent to 581 million rupees, the company in which the John Keells Holdings group has almost a 38 percent stake, said in a stock exchange filing.

Akbar Brothers, a big tea exporters, owns a 24 percent stake in the tea processor.

The bulk of the earnings of Tea Smallholder Factories came from low grown teas, especially from the southern Galle district.

The company runs several ‘bought leaf’ factories that make black tea from green leaf bought mainly from small farmers in the southern regions, which are known as ‘low grown’ teas.