Watawala Plantations is infusing Rs. 158 million through a capital development drive to upgrade its tea and rubber sector, the firm said on Monday. Expansion plans include Rs. 85.93 million to set up a fully automated tea blending and cleaning plant, planting new tea on 13 hectares of land and replanting 25 hectares of rubber.
To reduce its exposure in traditional crops, Watawala has also focussed on diversifying into minor crops such as cinnamon, coconut, areca nut and vanilla.
The company commenced interplanting one hectare of cinnamon with rubber on an experimental basis and with the promise shown the company plans to continue planting cinnamon in the future.
Given the potential for coconut, the company has also decided to pursue replanting at the rate of five hectares per annum.
However, traditional exports continued to be the winning formula, helping the company to report a bumper 303 percent growth in post-tax profits for the financial year ended March 31, 2005.
Watawala, which manufactures and markets the ‘Zesta’ tea brand, reported a post-tax profit of Rs. 161.8 million over a turnover of Rs. 2.72 billion (up 22 percent).
Turnover from exports rose to Rs 689 million, which was a quarter of the total turnover. Profit after tax from exports was Rs 130.95 million.
The total turnover from tea, excluding exports rose 27 percent to Rs 1.67 billion.