May 22, 2012 (LBO) – Sri Lanka’s Hapugastenne and Udapussellawa Plantations, controlled by James Finlays said losses were making it difficult to replant tea but they were trying to improve productivity and was expanding rubber and timber. Hapugastenne Plantations lost 214.00 million rupees in the year to March 2012, reversing a profit of 281 million rupees a year earlier.
Chairman N K H Ratwatte said Colombo’s tea auction average prices fell 10.72 during the year while a 27.0 percent wage hike had pushed up labour by 373.00 million rupees to the firm.
Erratic weather had reduced production and uncertainty in the Middle East had depressed prices.
“Due to the financial burdens created by the drop in revenue, and the shortfall of working capital during the year, we were compelled to cut back on our tea replanting,” Ratwatte told shareholders in the annual report.
However the firm had invested 130.00 million rupees in rubber and other crops like cinnamon, pepper and cocoa to diversify revenues. Eighty five hectares were planted with timber to increase future fuel wood production.
Chief executive Dayan Medawala said average tea prices had fallen by 20.00 rupees a kilo and cost of production had risen to 415.00 rupe