"Company’s stability matter of choice, not chance"
LMF posts superior performance, doubles production in two dairy farms

Lanka Milk Foods (CWE) Limited (LMF), has posted a superior performance in the year ended March 31, 2003 with group turnover up to Rs. 2.4 billion from Rs. 2.2 billion a year earlier and the after-tax profit up to Rs. 127.4 million from Rs. 1.4 million the previous year.

At company level, turnover was up to Rs. 2.2 billion from the previous year’s Rs. 2.1 billion and the bottom line read Rs. 100.3 million from Rs. 66.1 million a year earlier.

"The stability and the economic growth of your company is not a matter of chance but a matter of choice. Global experience earned by the Stassen conglomerate, both in business matters and world class food technology will continue to steer your company to success," the company’s Chairman, Mr. V. P. Vittachi said.

"LAKSPRAY will continue to be a household name in Sri Lanka as the milk powder of its people."

The directors have recommended a first and final dividend of 15% for the year under review absorbing Rs. 45 million, up from Rs. 30 million the previous year and a 5-year high for the company.

Vittachi reported that their Ambewela and New Zealand Dairy Farms, two 90% LMF-owned subsidiaries, had successfully doubled the quantity of milk produced from 3,0900 litres per day to 6,000 litres during the first year of operations.

"While as at today, the quality of milk produced is undoubtedly the best milk produced in Sri Lanka, the bacterial count in milk is being further reduced to achieve European standards," Vittachi said.

He also said that the quality of their Ambewela cheese produced on the farm has improved to match international standards and is now available for sale in all supermarkets and other grade one outlets in the country.

The company is also selling bottled goat milk and Ambewela Yoghurt which they process and market.

"The management, having identified the main requirements of the farms as improving the breed of cattle and improving the pasture land, has already imported the best quality semen of Friesian, Ayrshire and Jersey cattle from New Zealand," the chairman said.

"The best of grass seeds such as Rye and Clover were imported from Australia and as at today the grass fields in the two farms have been converted to luscious green fields, where cattle graze freely and happily, thus yielding increased quantities of quality milk."

He said that the long term vision of the company was to bring back the age-old habit of drinking liquid milk, processed from best quality fresh milk collected from our own dairy farms in Sri Lanka.

Lanka Dairies (Pvt) limited, a fully owned subsidiary of LMF, continues to pack and sell the ultra-heated treated milk pack branded Daily . It has also launched a food drink branded Suntop.

Danish Dairy Products Lanka (Pvt) Limited, also a fully owned LMF subsidiary packs and sells the Darno premium milk powder.

The two livestock companies, Ambewela and Pattipola, rear cattle, goats and rabbits. The company said that it was producing best quality fresh liquid milk, partly used to produce two kinds of cheese as well as yoghurt and goat’s milk.

A consortium of investors under the Stassen conglomerate was controlling 51.33% of the company’s issued capital as at March 31, 2003. The annual report does not identify the company’s 20 largest shareholders as usually done by quoted companies.

LMF owns 12.65% of the Distilleries Company of Sri Lanka, also controlled by Stassen/Harry Jayawardena interests.

The directors of the company are: Messrs. V. P. Vittachi (Chairman), D. H. S. Jayawardena, R. K. Obeyesekere, Z. Alif and C. R. Jansz.