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Sri Lanka glass firm to sell prime property

Post Time:Jul 15,2008Classify:Company NewsView:391

July 15, 2008 (LBO) - Ceylon Glass Company, a unit of India's Gujarat Glass, has revealed it plans to sell a prime property valued at 700 million rupees near Colombo from where it has just shifted its production plant.

"The company plans to sell the 21 acre land located in the heart of Colombo in Ratmalana," a company statement said.

"The land is strategically located, surrounded by roads on three sides and its proximity to the Galle Road (the main road into Colombo) gives an advantage to any potential developer or industrialist."

The carrying value of investment property in the accounts is given as 703 million rupees.

Ceylon Glass net profit for the year ended 31st March 2008 fell to 35 million rupees from a re-stated profit of 104 million last year but exports have soared.

The profit came after capitalising 176.8 million rupees of interest relating to the relocation of the production plant to Horana, south of Colombo, from the Ratmalana site, according to the firm's annual report.

The relocation cost is to be written off over the years.

The statement said that although turnover rose 8.5 percent to 2,014 million rupees gross margins fell to 23 percent from 25 percent the previous year, partly because the firm had to import bottles.

"Due to capacity constraints in the early part of the year, this year too the company was compelled to import bottles at negligible or even negative margin rates in order to satisfy domestic customers and retain customer loyalty.

"Thus, the increase in the top line is not reflected in the improvement of the bottom line."

Sales growth came not only in the domestic market but also in the export market, Ceylon Glass chief executive Sanjay Tiwari said.

Exports shot up 160 percent last year and now constitute 10 percent of turnover, more than double the four percent of the previous year.

"Having more than doubled capacity (with the new plant), the company is now able to meet the demands of the local market as well as to pursue lucrative exports market," the statement said.

"In exports, the company will be focusing on specialty beverage and food bottles, i.e. short run food and beverage bottles with colouring or decoration for value addition."

The company said it is well positioned in the Asian market exporting boutique wine and specialty liquor bottles for leading brands in India.

It is also increasing sales of such products to markets like the UK and Australia.

The statement said the new factory in Horana has a capacity of 250 tonnes per day with five manufacturing lines of which four are already in operation and the fifth line in operation in July.

Two of the production lines have the colouring facility to manufacture different colours, shapes and sizes of bottles and are supported by the latest quality inspection machines, packing machines, and glass laboratory equipment, it said.

Source: Lanka Business OnlineAuthor: admin

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