Harrison Malayalam Ltd (HML) expects its bottom-line to shore up by around 35-40% during the current fiscal due to increased exports and domestic sales of tea, Pankaj Kapoor, managing director of HML said.
HML is India?s largest producer of rubber, South India?s largest cultivator of tea and perhaps, the largest farmer of pineapple in the region. Commissioning of two new factories to produce orthodox tea and the global shortage of the commodity is likely to help the company improve its previous performance despite a dip in its rubber production. The company expects its rubber production to dip gradually by around 50% in 3-4 years due to the massive re-plantation effort. Production and distribution of fruits and other spices is expected to bring an additional Rs 30 crore to its kitty in 2009-10, Kapoor said. The company had a turnover of Rs 291 crore in 2008-09 as against Rs 204 crore in 2007-08.
?We expect our tea exports to increase by around 35% in volume and 50% in value in the current fiscal. Cost reduction from the functioning of the new factories and the ability to convert more tea into orthodox should help us increase our revenues,? he said. However, he expects the total tea exports to drop down significantly due to supply shortage. ?The shortage could take the tea prices high by another 15% from the present level. Auction prices are already high by around 30-35% from the level recorded during the same period last year,? he added.
Retail sales of its branded tea are also expected to increase significantly with the company focusing on extending its distribution network to Goa, Orissa and Maharashtra. HML has modernised all its rubber and tea factories and is taking efforts to maximise capacity utilisation. It also buys green leaf and rubber latex from the neighbouring small farmers. The company buys around 5,000 tonne of tea leaf and 6,000 tonne of latex from small holders.
Massive re-plantation efforts undertaken by the company are expected to decrease the production of rubber. HML replanted around 700 ha in 2008-09 and hopes to complete the effort by around 2013. The production is expected to drop to around 4,500 tonne from the present 9,000 tonne and then increase significantly. Productivity of the rubber plantations is projected to be above the industry average from 2015-16.
Sale of pineapple, banana and spices like pepper, clove and cinnamon is also seen increasing significantly, Kapoor added. HML produces around 25,000 tonne of pineapple annually.