By Azhar Razak
Crisis-hit tableware exporter, Dankotuwa Porcelain Limited (DPL) is likely to show an improved performance in its September quarter financials although it will be mainly due to a sudden upsurge in export orders before the removal of a preferential tariff, a senior official of the firm said.
According to him, the firm has seen a gradual improvement in business, beginning from the latter half of 2010, as customers from the European Union requested shipments to be delivered before the GSP plus tax concession was withdrawn.
“We are seeing signs of gradual improvement as we have found new business starting from the latter part of this year. Although I cannot disclose any numbers, we will post an improved performance,” DPL chairman cum chief executive officer Sunil Wijesinghe told The Bottom Line in a recent interview.
He, however, said he could not predict about future performance as the ordering system had completely changed following global recession.
“Following the recession, our customers now prefer to keep stocks to a minimum. So, we do not know how the future orders would look like,” he said.
According to recent financials, DPL made a loss of Rs. 15.6 million in June 2010 quarter, same as a year ago, adding losses in the previous quarters. Losses during the first half doubled to Rs. 32 million, with sales in the first quarter hit by production problems caused by difficulties in importing clay as well as pigments needed for tableware decorations.
Restructuring customers
Wijesinghe also explained that the firm is restructuring its customers by shifting away from the European Union (EU) since the fall of the Euro following the recession and further added by the recent loss of GSP plus did not find the EU market as lucrative as it had used to be.
“I think from now on, the majority of our market is going to be outside the EU although EU, in the past, had accounted for 60 percent of our export business. Presently, exports to US market is like 50 percent and EU is only around 40 percent,” he said.
He, however, said the firm was also concerned about the predicted double dip in the US, in which case they will have to explore new markets.
GSP plus impact
When asked whether the company has lost orders subsequent to the withdrawal of the GSP plus that came into effect on August 15, Wijesinghe clarified that it is impossible to lose orders overnight to a product of DPL’s nature as it had been tailor-made accurately to suit the customers requirements.
“If we are to lose orders due to the loss of GSP plus, it won’t happen this soon as only less than two months has passed. To get a buyer on board, it takes at least a year therefore, the real impact may be known somewhere in the middle of next year,” Wijesinghe pointed out.
Dankotuwa Porcelain had recently shipped its first container of porcelain tableware to UK’s prestigious store, John Lewis.
According to officials, while the surface patterns for the two designs were developed by John Lewis designers, the finalised designs were a joint effort by Dankotuwa design department and the John Lewis designers and the team had worked on it for about one year.
Wijesinghe said the shipment received the GSP plus concession as it was cleared in time before the official withdrawal date.
http://www.thebottomline.lk/2010/10/10/index.html
Crisis-hit tableware exporter, Dankotuwa Porcelain Limited (DPL) is likely to show an improved performance in its September quarter financials although it will be mainly due to a sudden upsurge in export orders before the removal of a preferential tariff, a senior official of the firm said.
According to him, the firm has seen a gradual improvement in business, beginning from the latter half of 2010, as customers from the European Union requested shipments to be delivered before the GSP plus tax concession was withdrawn.
“We are seeing signs of gradual improvement as we have found new business starting from the latter part of this year. Although I cannot disclose any numbers, we will post an improved performance,” DPL chairman cum chief executive officer Sunil Wijesinghe told The Bottom Line in a recent interview.
He, however, said he could not predict about future performance as the ordering system had completely changed following global recession.
“Following the recession, our customers now prefer to keep stocks to a minimum. So, we do not know how the future orders would look like,” he said.
According to recent financials, DPL made a loss of Rs. 15.6 million in June 2010 quarter, same as a year ago, adding losses in the previous quarters. Losses during the first half doubled to Rs. 32 million, with sales in the first quarter hit by production problems caused by difficulties in importing clay as well as pigments needed for tableware decorations.
Restructuring customers
Wijesinghe also explained that the firm is restructuring its customers by shifting away from the European Union (EU) since the fall of the Euro following the recession and further added by the recent loss of GSP plus did not find the EU market as lucrative as it had used to be.
“I think from now on, the majority of our market is going to be outside the EU although EU, in the past, had accounted for 60 percent of our export business. Presently, exports to US market is like 50 percent and EU is only around 40 percent,” he said.
He, however, said the firm was also concerned about the predicted double dip in the US, in which case they will have to explore new markets.
GSP plus impact
When asked whether the company has lost orders subsequent to the withdrawal of the GSP plus that came into effect on August 15, Wijesinghe clarified that it is impossible to lose orders overnight to a product of DPL’s nature as it had been tailor-made accurately to suit the customers requirements.
“If we are to lose orders due to the loss of GSP plus, it won’t happen this soon as only less than two months has passed. To get a buyer on board, it takes at least a year therefore, the real impact may be known somewhere in the middle of next year,” Wijesinghe pointed out.
Dankotuwa Porcelain had recently shipped its first container of porcelain tableware to UK’s prestigious store, John Lewis.
According to officials, while the surface patterns for the two designs were developed by John Lewis designers, the finalised designs were a joint effort by Dankotuwa design department and the John Lewis designers and the team had worked on it for about one year.
Wijesinghe said the shipment received the GSP plus concession as it was cleared in time before the official withdrawal date.
http://www.thebottomline.lk/2010/10/10/index.html
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