Keells Food Products, the processed meat manufacturing subsidiary of the John Keells Holdings group, has succeeded in boosting group turnover during the year ended March 31, 2003 over the rupees one billion benchmark, up 18% from a year earlier, helping to stem the pre-tax loss to Rs. 7.5 million against the previous year’s loss of Rs. 14.2 million.

The company’s Chairman, Mr. V. Lintotawela, said that difficult economic conditions in the country in recent years had hurt the retail market which was the largest market segment for the company’s products.

"However the year under review witnessed the recovery of tourism amidst the peace initiative that helped the company to record a substantial growth of 39% in the hotel catering sector. The exports sector too has shown an encouraging growth of 38% mainly due to the strengthening of the distribution infrastructure in India and UAE," he said.

He was hopeful that the investment in the Indian market could justify long-term prospects available.

The company’s strategic tie-up with the Sathosa Supermarkets had helped market expansion with meat counters operated by Keells Food in the Sathosa Supermarkets "performing as expected."

Lintotawela reported that they continued investing in product development and had launched a successful meat ball biriani. The chicken meat ball biriani had been widely accepted by consumers adding to the convenience and variety offered by the company.

"These new products have helped your company to gain market share and perform better in the last two quarters," Lintotawela said.

He also announced that more new products such as curry sausage have already been launched, and they expected this innovation to rejuvenate the sausage market.

Lintotawela saw brighter prospects for the current year with the anticipated overall economic recovery in the country. They were gearing their operating model to respond more proactively towards future challenges focusing on being more lean and cost effective.

He promised that Keells Foods will emphasize new products development, staff competencies, food safety and product nutrition during the current financial year.

The Keells Food Products group last posted a profit in the financial year ended March 31, 2001 in which year a 25% dividend was paid to shareholders. No dividend has since been paid as the company has suffered continuing losses in subsequent years.

The company which has an issued capital of Rs. 50 million has net assets per share of Rs. 28.04, down from Rs. 28.82 the previous year. The share traded at a high of Rs. 15 and a low of Rs. 12.50 during the year under review compared to a trading range of Rs. 14.75 to Rs. 9 the previous year.

John Keells Holdings (43.8%) and other group companies hold the dominant equity of Keells Food Products Limited.

The directors of the company are Messrs. V. Lintotawela (Chairman), A. D. Gunewardene, S. C. Ratnayake, G. S. A. Gunasekera, Y. Nadaraja (MD), Ms. R. S. Goonewardene, Ms. D. A. R. C. Perera and Ms. D. C. Alagaratnam.