The Hindu Business Line : Kannan Devan recommends 14% dividend

The Director Board of Kannan Devan Hills Plantation Company (KDHPC) has recommended a dividend of 14 per cent for the first year of operation, 2005-06. The company posted a net profit of Rs 2.37 crore on a total turnover of Rs 105.33 crore. The dividend payout will entail an outgo of Rs 1.66 crore.

Over 97 per cent of the 13,124 employees of the company are shareholders, holding 70 per cent of the paid up equity of the company — making KDHPC possibly the largest participatory management company in the world.

Unique Model

"This model, which is unique in the sense that it blends the identity of the employees and shareholders, would result in enhancement of shareholders value by employee-shareholders themselves. Once the belief in the model strengthens, probably many of the current corporate philosophies would become instantaneously redundant and will have to be re-written," the Directors said in the Annual Report.

"The net profit is almost Rs 3 crore less than targeted since almost one million kg production was lost due to severe monsoon and inclement weather conditions. However, productivity has gone up from 41.93 kg of plucked leaf per employee to 44.75 kg," Mr T.V. Alexander, Managing Director of KDHPC, said.

The current year promises to be even better for the company with crop output inching up by 5 per cent and prices showing remarkable recovery. The company has already made inroads into Plantation Tourism by converting six Estate Bungalows for exclusive tourism purposes. The company plans to convert 30 such Estate Bungalows for tourism promotion shortly. KDHPC is also planning an entry into power generation by setting up micro-hydel power plants, which is suitable for the hilly terrain.

The AGM of KDHPC could still be a stormy affair with a section of the workers demanding early payment of bonus and wage revision. However, they constitute a minority of workers from the Kallar Factory Division and Letchmi Middle Division, numbering around 250 from a total workforce of 12,009, Mr Alexander said.

Water Plant

It has also undertaken a survey for starting mineral and packaged water plant. It has located an ideal source from within its hilly terrain and identified samples, which have been tested and analysed. The Taj Group of hotels is expected to market the product. A representation to set up the project has been forwarded to the Government.

More Stories on : Dividend Announcement | Plantations | Diversification | Water | Business Models

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