Sector Reviews
Agriculture
Business Domain
The Sector provides a complete range of agricultural inputs to the local industry, engages with farmers in growing value added agricultural products through extension services, and is also engaged in bio technology and research. The Sector comprises 9 agribusiness groupings, with 8 based locally. Exports accounted for 24.7% of turnover.
Key Performance Indicators
| Indicator | Measure | Unit | FYE 31st March | ||
| 2013 | 2012 | 2011 | |||
| Growth | Revenue | Rs. mn | 7,913 | 8,042 | 7,445 |
| Earnings Before Interest and Tax | Rs. mn | 760 | 1,216 | 681 | |
| Profit After Tax | Rs. mn | 523 | 527 | 387 | |
| Assets (Avg) | Rs. mn | 7,121 | 6,118 | 3,358 | |
| Capital Employed | Rs. mn | 3,716 | 3,689 | 2,636 | |
| Profitability | Return on Average Capital Employed* | % | 22 | 33 | 26 |
| Liquidity | Current Ratio | Times | 1.24 | 1.08 | 1.33 |
| Stability | Gearing | % | 49 | 59 | 41 |
| Asset utilisation | Asset Turnover Ratio | Times | 1.1 | 1.3 | 2.2 |
| Productivity | Ebit per Employee | Rs. mn | 0.5 | 0.8 | 0.6 |
* Excluding Real Estate
Operations
With the goal of becoming the dominant provider of all agri-inputs in Sri Lanka, several areas of which are already being dominated and being the preferred supplier of global companies for value added agricultural produce, the Sector differentiates itself from the rest on several fronts. They include a unique product portfolio that offers competitive advantage to channel partners and customers, superior business processes and agricultural extension capability to provide pre-sale, sale and post-sale services to the agricultural community, and a strong supply chain that facilitates procurement efficiencies and superior margins.
The main challenges faced by the Sector during the year were the impact of adverse weather that affected the total market size for agri-inputs, regulatory changes that resulted in uncertainty and disruption to the supply of crop protection products in particular, and delays in settlements of fertilizer subsidies (which affected all companies in the industry).
It was an eventful and creditable overall performance. Fertilizer distribution and advisory services to the farmers and small holder plantation sector were strengthened, securing a dominant position in the country. New products include the introduction of a more efficient paddy harvesting machine, paddy transplanters, young plant splits for exports, additional processed fruits and vegetables for export and innovative marine-resource based value added products. The range of planting materials was expanded and improved to include big onion seeds, vegetable seeds and high quality seed paddy. Investments were made in seed paddy processing machinery and laboratory facilities which has expanded volumes, quality and enhanced brand value. Our Geographic coverage was expanded, particularly in the Northern and Eastern Provinces.
Strategies in Action
A project to grow seaweed was initiated in the northern waters of Sri Lanka and initial trials show promising results. Applications for the value added products are in the food, plant nutrition and cosmetic industries globally.
A termite protection system, ‘Novithor’, was launched for the urban market. The uniqueness of this product lies with its eco-friendly nature, and its effective lifetime of up to 50 years compared to conventional chemical control methods.
A high yielding potato variety named Daifla was introduced in the Northern Province of Sri Lanka after successful trials. Daifla, developed by Germicopa, France is suited for the climatic conditions of the Northern region. The introduction of this seed potato variety will help Hayleys Agriculture to further increase its dominant position in the seed potato market in Sri Lanka.
HJS Condiments Ltd. received social accountability management System Standard - ‘SA 8000 certification’, a first for a Sri Lankan food-based product company. This has enabled HJS to improve staff morale and workplace relations, attract more reliable business partners and enhance its competitiveness. More value added fruit and vegetable products are in the offing and will add to the increasing global clientele.
Outlook
The Sector aims to further strengthen its core businesses and increase market share, while expanding into related agri-business areas such as aqua culture, fruit drinks and pest control services. We are also investing in branding Hayleys Agriculture for sharper market differentiation. Overall, we expect a vastly improved performance for 2013/14 based on a superior product portfolio, new businesses and new product introductions, expansion of the distribution network and collaborations with farmer groups, NGOs and Government agencies.
