Kotmale Holdings Plc has had a promising first quarter in the 2011/12 financial year with outstanding performance, the company said yesterday.
“The first quarter has been promising for Kotmale Holdings, given that both the external economic environment and the internal initiatives that were implemented featured well for our bottom line performance,” Chairman Stuart Young said in a review accompanying first quarter interim accounts.
The company reported an outstanding performance for the first quarter of the new financial year ending 30 June 2011, with profit before tax of Rs. 25.5 million, up 48% growth when comparing with the same quarter of the last year. The turnover has been recorded as Rs. 481.8 million with 35% net growth from the corresponding period in the previous financial year.
Kotmale, being a company that began on a small, but sturdy foundation three decades ago, on the simple premise of uplifting the Sri Lankan dairy industry and thereby underprivileged dairy farmers, the Kotmale group is now firmly entrenched as a vital player in the local dairy industry and it must be pointed out that its achievements to-date have been impressive.
“The first quarter of the financial year commenced with a great deal of brainstorming and tactical maneuvering with the focal point being on investment on infrastructure,” Chairman Young said.
He said the unanimous effort and sheer determination generated by the Kotmale team was further enhanced by the strategic relationship established through the Cargills Ceylon PLC acquisition, and finally saw fruition when achieving the desired outcome and to further propel Kotmale towards being the foremost dairy company in Sri Lanka.
Noting that Kotmale was very proud to be at the helm of the liquid milk category, Young said “However, the milk powder segment of our business remains suspended, as reported in my previous review. Market dynamics were not conducive for re- entry into the milk powdered market as being a small player; we compete against multi-national milk powder importers and are not equipped to deal with the fluctuations in prices and duty structures.”
“Hence, we are now exiting from the powdered milk business and will focus on the more sustainable liquid milk business segment, especially as it drives the government’s policy of milk sufficiency by 2020,” the Chairman added.
During the first quarter, efforts were made to gear up to meet the increase in demand and higher product volumes envisaged.
“As products were available island wide at retail outlets and supermarkets, we were able to cater to the emerging demand which was further enriched through the Cargills Food City Supermarket chain.
In the current scenario, the company intends to leverage on the synergies within the Cargills group, whilst improving its distribution network for added accessibility.
In addition, by fortifying our distribution network and inculcating relationships with the local retail network, our brand will now be amongst the best known in the liquid milk, ice cream, cheese and yoghurt categories,” Kotmale Holdings Chairman added.