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Lanka Milk Foods

Lanka Milk Foods (CWE) PLC
Company typePublic
CSE: LMF.N0000
ISINLK0112N00009
IndustryFood
FoundedNovember 12, 1981; 43 years ago (1981-11-12)
Headquarters
Ragama
,
Sri Lanka
Key people
Brands
  • Lakspray
  • Ambewela
  • Daily
  • Daily Activ
  • My Juicee
  • BLU
RevenueIncrease LKR9.772 billion (2022)
Increase LKR1.588 billion (2022)
Increase LKR1.065 billion (2022)
Total assetsIncrease LKR16.734 billion (2022)
Total equityIncrease LKR11.433 billion (2022)
Owners
Number of employees
741 (2022)
SubsidiariesSee text
Websitewww.lmfgroup.lk
Footnotes / references
[1]

Lanka Milk Foods (CWE) PLC is a dairy products manufacturing company in Sri Lanka. Lanka Milk Foods was a subsidiary of the Co-operative Wholesale Establishment (CWE) which later converted to a joint-stock company. The company was incorporated in 1981 and listed on the Colombo Stock Exchange in 1983 with Sri Lankan Government holding the majority of the shares. The Stassen Group acquired a controlling stake of 51% in the company in 1991. Lanka Milk Foods's subsidiary, Lanka Dairies, introduced flavoured ready-to-drink milk to the market in 1996. Ambewela Farm and New Zealand farm were acquired by Lanka Milk Foods in 2001. In 2020, the company planned to invest LKR3 billion in a new dairy farm in Ambewela to expand production. Lanka Milk Foods is one of the LMD 100 companies in Sri Lanka. Lakspray, a Lanka Milk Foods brand listed among the 100 most valuable brands in Sri Lanka in 2020. Lanka Milk Foods stand to benefit from consumers switching from milk powder to fresh milk.

History

Lanka Milk Foods was a subsidiary of the Co-operative Wholesale Establishment which converted to a joint-stock company. Lanka Milk Foods was established to replace the burnt-down CWE milk powder packing plant.[2] The company was incorporated in 1981 and was listed on the Colombo Stock Exchange in 1983, with the majority of shares held by the Government of Sri Lanka.[3] In 1991, the Stassen Group acquired a controlling stake of 51% in the company.[4] Lanka Dairies, a subsidiary of Lanka Milk Foods, commenced operations in 1996. Lanka Dairies introduced flavoured fresh milk to the market.[5] The company acquired Ambewela Farm and New Zealand Farm in 2001. Ambewela Farm has only purebred Ayrshire cattle. The original cattle stock was brought in from Australia in 1941.[6] Pattipola farm received 700 Jersey heifers from New Zealand in 1966. The farm was renamed New Zealand Farm thereafter.[7] Ambewela Products (Pvt) Ltd, a subsidiary of Lanka Milk Foods, invested LKR one billion to build a new dairy plant in 2008. The plant was set up to produce milk packs, cheese and yoghurt. The reduction of dependency on imported milk powder to save foreign exchange reserves was cited as a corporate social responsibility. Since taking over Ambewela Farm and New Zealand Farm, the company has increased the milk per cow yield by 50%.[8]

Lanka Milk Foods invested LKR800 million to expand the capacity of Lanka Dairies in 2013.[9] The company celebrated the 20th anniversary of its Daily product range in 2016 in a function held in Heritance Negombo. At the time of its launch, only 10% of households had refrigerators. Retailers with refrigeration concentrated around Colombo. Due to these challenges, the company had to invest in a UHT plant. The Tetra pack of Daily had six layers with a shelf life of six months.[10] In 2020, Lanka Milk Foods planned to commission a new dairy farm at a cost of LKR3 billion. The plant was planned to be operated under a new subsidiary, United Dairies Lanka (Pvt) Ltd. The farm planned to accommodate 2,000 cows and double the yoghurt production capacity. In 2020, 40% of the demand for milk in Sri Lanka was fulfilled by fresh milk. The rest of the demand was supplied by importing milk powder at a cost of US$293.5 million per annum. The company hoped to capture the market share of consumers who are switching from milk powder to fresh milk.[11]

Operations

New Zealand Farm in Ambewela is the second farm owned by the company

Lanka Milk Foods was ranked 84th on the LMD 100 list in 2023. LMD 100 lists quoted companies in Sri Lanka by revenue annually. The company slipped by five positions from the 2022 rankings.[12] Lanka Milk Foods' brand Lakspray ranked on Brand Finance's 100 most valuable Sri Lankan brands list in 2020. In 2020, Lakspray was ranked 97th with a brand valuation of LKR357 million.[13]

The shortage of milk powder and the shift from milk powder to fresh milk would be beneficial to Lanka Milk Foods, according to stock brokers Nation Lanka Equities. Due to government-imposed price controls, milk powder importers have limited their imports to the country.[14] The Pearl Protectors, a marine conservation group, issued Marine Pollution Brand Audit revealing Lanka Milk Food is among the top eighteen brands contributing to ocean pollution. In 2022, 2% of marine waste washed up ashore came from Lanka Milk Foods packaging, according to the audit.[15] President Ranil Wickremesinghe toured the Ambewela farm on the eve of 2023. President requested 30 acres (12 ha) of unused land to be given to Lanka Milk Foods to grow fodder. Currently, Ambewela farm produces 40,000 litres per day compared to 1,500-litre daily production under state ownership.[16]

Finances

Ten-year financial summary
Year Revenue LKR mns Profit LKR mns Assets LKR mns Equity LKR mns Earnings per share LKR
2022 9,772 1,065 16,734 11,433 26.63
2021 7,597 842 14,501 11,266 21.05
2020 6,704 291 12,954 10,413 7.53
2019 5,386 (127) 10,617 8,857 (3.16)
2018 5,417 581 13,793 12,470 14.52
2017 5,250 542 12,959 11,812 13.56
2016 5,049 121 11,656 10,159 3.17
2015 3,952 (2) 13,307 11,394 0.07
2014 4,572 48 11,587 9,993 1.53
2013 5,437 367 10,572 8,625 9.37

Source: Annual Report (2022, p. 141)[1]

Subsidiaries

Subsidiary Holding Cost LKR (mns) Activity
Ambewela Livestock Company Ltd (Ambewela Farm) 100% 51 Rearing cattle
Ambewela Products (Pvt) Ltd 1,010 Manufacturing and selling dairy products
Indo Lanka Exports (Pvt) Ltd 51% 30.6 Manufacturing and exporting fruit juices. Dormant.
Lanka Dairies (Pvt) Ltd 100% 5 Producing and packaging fresh milk, flavoured milk and fruit juices
Pattipola Livestock Company Ltd (New Zealand Farm) 46 Rearing cattle
United Dairies Lanka (Private) Limited 50 Dairy farming

Source: Annual Report (2022, p. 87, 105)[1]

See also

References

  1. ^ a b c "Annual Report 2021/22" (PDF). cse.lk. Lanka Milk Foods (CWE) PLC. Retrieved 31 January 2023.
  2. ^ Boettke, Peter J. (July 1994). The Collapse of Development Planning. New York: NYU Press. p. 299. ISBN 978-0-8147-1225-2. Retrieved 31 January 2023.
  3. ^ "Marketing a brand without advertising". Daily FT. Wijeya Newspapers. 12 November 2013. Retrieved 31 January 2023.
  4. ^ Ranaweera, N. F. C. (15 October 1999). "Sri Lanka: Opportunities for dairy sector growth". fao.org. Food and Agriculture Organization. Retrieved 31 January 2023.
  5. ^ "Lanka Dairies celebrates World Milk Day". Daily News. Associated Newspapers of Ceylon Limited. 10 June 2016. Retrieved 31 January 2023.
  6. ^ "Products of int'l standard from Ambewela Farm". Sunday Observer. Associated Newspapers of Ceylon Limited. 25 January 2004. Retrieved 31 January 2023.
  7. ^ Wijenayake, Tudor (17 March 2021). "Achieving self-sufficiency in milk". Daily FT. Wijeya Newspapers. Retrieved 1 February 2023.
  8. ^ "Ambewela invests Rs 1 b in dairy plant". Daily News. Associated Newspapers of Ceylon Limited. 28 July 2008. Retrieved 1 February 2023.
  9. ^ "Milford subsidiary goes for Rs.800mn capacity expansion". Daily Mirror. Wijeya Newspapers. 15 February 2013. Retrieved 1 February 2023 – via PressReader.
  10. ^ Dias, Supun (30 August 2016). "Sri Lanka's leading fresh milk producer 'Daily' marks 20 years". Daily Mirror. Wijeya Newspapers. Retrieved 1 February 2023.
  11. ^ Fernando, Nishel (11 September 2020). "LMF Group eyes to double milk production with completion of Rs.3bn dairy farm". Daily Mirror. Wijeya Newspapers. Retrieved 1 February 2023.
  12. ^ "LMD 100". LMD. Media Services. 2023. Retrieved 1 February 2023.
  13. ^ "Sri Lanka 100 2020" (PDF). brandirectory.com. Brand Finance. 2020. p. 23. Retrieved 1 February 2023.
  14. ^ "Shift to liquid milk amid milk powder shortage to benefit local dairy producers". Daily Mirror. Wijeya Newspapers. 8 October 2021. Retrieved 1 February 2023.
  15. ^ "Sri Lanka marine pollution; 18 brands linked to 53-pct of washed-up waste". Economy Next. Echelon Media. 24 December 2022. Retrieved 1 February 2023.
  16. ^ "Sri Lanka's privatized cattle farm an example to follow: President". Economy Next. Echelon Media. 29 December 2022. Retrieved 1 February 2023.
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