Pelwatte Dairy records 148% increase in profits before tax surmounting COVID challenges

Pelwatte Dairy, one of the leading dairy brands in Sri Lanka that locally produces a range of dairy products and saves foreign exchange for the country, has made a significant financial turnaround in 2020/21 recording a huge profits before tax (PBT) that year-on-year (YoY) surged by 148 percent.

In 2020/21 the company has made a profit falling short of the budgeted profit target.  The company’s gross profits grew by a strong 180 percent. In the same period, the profits before tax (PBT) increased by a huge 148 percent. This in fact is a major turnaround for Pelwatte since in FY 2019/20 the company recorded a PBT loss. 

Significantly, amid COVID restraints, the company succeeded in YoY increasing the total farmers’ base by 16 percent to 6500. The company also paid Rs.3.18 billion to the farmers in 2020/21, which is a 70 percent YoY increase. 

Of the top 10 highest sold product lines, except for three, seven products have shown YoY growth in 2020/21. 
The product line with the highest sale in 2020/21 was Pelwatte Full Cream Milk Powder, with a YoY growth of 76 percent. The product line with the second highest sale was butter, which showed a 42 percent YoY growth while the product line with the third highest sale was yoghurt, indicating a 49 percent YoY growth. 

Other product lines too indicated a YoY growth rate exceeding 100 percent. Ghee oil, though was at the sixth place among the largest product lines of sale, showed the highest growth among all products in 2020/21, growing by tenfold (a 1070 percent YoY increase). 

Seen from an operational point of view, the company strengthened its automation by introducing SAP, the Enterprise Resource Planning (ERP) solution, which boosted its operational efficiencies thus strengthening its bottom line in 2020/21.

Having set up in 2006, Pelwatte Dairy, which specialises in milk processing, animal feed and dairy products, is one of the Sri Lankan brands that successfully saves the outflow of foreign exchange for dairy product imports from abroad. The company is ambitious to develop the dairy cattle husbandry in Sri Lanka with a view to establish a continuous and trustworthy flow of quality raw materials to the dairy industry. 

An ISO 22000:2018 certified company, Pelwatte Dairy owns one of the most modern dairy factories (designed around Danish technology) that operates in Sri Lankan dairy sector at present.