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Due to increased allocation to developmental works, the net profit of Harrisons Malayalam Ltd has declined 12 per cent to Rs 5.57 crore during October-December 2010. However, the total income grew by 12 per cent to Rs 95.03 crore (Rs 85.15 crore).
The company could not reap the full benefit of the record price of rubber which grew to an average of Rs 209.87 this quarter against Rs 119.57 last year on account of lower crop.
Incessant rains into December had resulted in a significant fall in production, Mr Pankaj Kapoor, Managing Director of HML, said. But the situation has turned around and production for December and January has been good and the prices have ruled even higher, he added.
Diversion of rubber acreage for replanting has also reduced production. A sharp fall in tea prices by over 18 per cent and a drop in tea production by five per cent during the quarter offset the gains made in rubber. Tea prices fell from Rs 93 per kg in Q3 last year to Rs 69 this year. But the prices have begun to look up as the country expects a lower production this year. Prices have also risen handsomely to Rs 79 per kg in January.
Replanting expenditure
Developmental activities such as replanting of rubber and infilling and replanting in tea have been taken up on a war footing. An amount of Rs 3.38 crore has been expended on these activities against Rs 1.37 crore last year. The benefits of these exercises are expected to manifest in the coming years. Given the firm price trends for both rubber and tea, the company expected to do better during the current quarter.
The company is exploring investment in plantations and allied industries overseas. It has visited and evaluated possibilities in African countries such as Ethiopia, Ghana and Cameroon and South-East Asian countries such as Indonesia, Laos and Vietnam. The company which is expected to firm up its investment plans in 3-4 months is likely to make its maiden foray into rubber plantations before following up with tea. Although the company has been exploring the possibility of setting up rubber plantations in North East Tripura, the process is on hold at the moment.
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