Haycarb and Activated Carbon

Haycarb on Target Despite Problems

Margins of Haycarb PLC have been under pressure at their local manufacturing facilities in Sri Lanka, but they have been able to cope with it on account of the manufacturing operations that were set up overseas and also higher selling prices. Despite the unfavorable conditions prevailing, the manufacturing process of activated carbon will stay on course.

There is a general shortage in Sri Lanka of coconut shells which are required as the most important raw material for conversion to charcoal. The production did fall 12 per cent in the nine month period ending December 31, 2008 in the Sri Lankan facility, but the Rs 3.4 billion turnovers which the Thailand and Indonesia plants contributed ensured a growth of 12 per cent over the same period of the preceding year.

Cost of sales have grown 17 percent at the local plant and mounted to Rs 2.6 billion, thus eroding margins to a large extent. Despite that there was a improvement of 12 per cent in the profit after tax for the current period over the previous year’s results after discounting the Rs 66 million extraordinary capital gains shown in the previous period.

This was brought about by the company’s ability to cut down on the net finance cost by 71 per cent thus reducing an expenditure of Rs 23 million in the review period. They also managed to reduce administrative expenses and limit it to 5 percent.  We will learn more about the future of manufacturing activated carbon in Sri Lanka soon.