Agarapatana Plantations Ltd, (APL) has unveiled plans to raise capital of Rs. 747 million for equipment purchase and rest to retire debt, through a listing on the Diri Savi Board of the Colombo Stock Exchange.
The funds raised will be utilised to upgrade machinery at their factories and retire high-cost loans, aiming to enhance operational efficiency and reduce financial burden.
The decision to go public was announced at the Capital Alliance Analysts Forum on July 21.
Chairman of APL, S.D. R. Arudpragasam, highlighted the company’s proactive approach towards mechanisation, stating that APL has successfully cut down its employee count from 9,000 to 6,000 while operating profitably.
The company plans to increase production to 7.5 million kgs with the existing 6,000 employees through further mechanized plucking. This move is aimed at reclaiming regions previously left unharvested due to a shortage of pluckers.
The company will explore the potential of capitalizing on the ownership of Lipton’s Seat, to increase revenue for the company.
Heritage Teas (Pvt) Ltd currently stands as the top customer for APL, reflecting the company’s diverse customer base. In the current financial year, APL has 180 buyers, with no single buyer accounting for more than 10% of the total quantity sold. Major buyers include prominent names such as Unilever Lipton Ceylon Ltd, Akbar Brothers (Pvt) Ltd, and Sunshine Consumer Lanka Ltd.
Diversification has been a strategic focus for APL, as it aims to reduce dependency on individual buyers and ensure robust revenue streams. To mitigate operational risks, the company sources major inputs like fertilizers, chemicals, and packing materials from a range of reputed suppliers, reducing reliance on any single supplier.
Looking to the future, APL has outlined strategic replanting and infilling initiatives to enhance tea production volumes and leaf quality. The company’s tea plantation is currently divided into approximately 60% seedling tea and 40% vegetatively propagated tea.
Under the proposed plan, 2% of the cultivable extent will be replanted with vegetatively propagated tea annually, with the expectation of significant improvements in production volumes and leaf quality. A major infilling program will also be implemented to increase the number of bushes, ultimately leading to higher yields per hectare.
Originally planted by Thomas Lipton, the estate is the birthplace of Lipton Tea, making it a significant asset for Agarapatana Plantations today. - TP