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Business


Saving the cup that cheers from tears

By an industry analyst
The high cost of fuel, electricity and fertiliser has a negative impact on all industries, but, most significantly, on Sri Lanka’s Tea industry. This is because Sri Lanka is, yet, very dependent on the Plantation sector to generate foreign exchange essential for the nation’s progress. Ceylon Tea has been Sri Lanka’s most prestigious Brand Ambassador since the 1870s, when commercial production of the orthodox Black Tea commenced.

The Plantation sector is still limping back from the devastating result of the Land Reform Act of the early 1970s that dipped the country’s biggest foreign exchange earner, Tea exports, from 37% of GDP in the 1950s to 1.2 % of GDP in 2007. (Source: Central Bank Annual Report 2007).

In 1970, Plantation crops contributed 93% of exports. (Source: http://en.wikipedia.org/wiki/Sri_Lanka). In 2007, with textiles and garments contributing 76.5%, agricultural exports had reduced to 19.5%. However, an important fact is that, unlike textiles and garments, agricultural exports do not contain imported raw materials. 2007 was favourable for Tea, the largest source of export earnings among agricultural commodities, passing the US$ 1 billion value barrier in the history of Tea exports. (Source: Central Bank Annual Report 2007)

All this shows that, it is vital that we protect and nurture the Plantation sector, particularly, our Tea exports; not burden it with costs that would hamper the productivity of Ceylon Tea, renowned the world over for unsurpassed quality and flavour. Not only is Sri Lanka the world’s largest exporter of Tea, exporting 95% of what we produce, the sector provides direct and indirect employment to over 1.5 million (Source: Sunday Observer, August 12, 2007). Counting smallholders and ancillary industries, those who depend on the Tea industry, would be over 2 million people. If policymakers could imagine a situation where so many are affected by a dwindling Plantation industry, perhaps they may be galvanized into activity to safeguard the sector.

The Plantation sector is particularly vulnerable to rising production costs, because it is heavily dependent on urea-based fertiliser, to maintain quality and yield of the leaf, energy to operate the factories and fuel to transport the produce from the Plantations. Although the cost of fertiliser, fuel and electricity has, overall, increased around 40%, the world out there is extremely competitive and the increase cannot be passed on to the international customer, unlike in the case of products for domestic customers, who are bludgeoned by ever increasing price of goods.

Tea is a perennial Plantation crop harvested weekly, with regular and timely fertiliser application playing a critical role in sustaining both quality and yields. Any delay or reduction in fertiliser application will directly impact both on quality and yield of Tea, which will adversely impact on the country’s scarce foreign exchange earnings and our losses in quality and yield will give an opportunity for our competitors to erode into our market share.

Fertiliser Subsidy Essential

Other forms of fertiliser such as compost, green manuring, addition of organic matter is not viable on a large scale, because of the economies of scale of the land area in the Plantation sector and the long duration it takes to create an impact, particularly for perennial Plantation crops. There are 222,000 hectares under Tea cultivation (Source: Central Bank Annual Report 2007).

What then is the solution? Perhaps there is only one, if we were to safeguard our most precious export commodity and that is for the government to fully understand and appreciate the seriousness of the repercussions that will follow, if fertiliser becomes ill-affordable for the industry and offer a realistic subsidy, for the sake of the national economy to save this foreign exchange earner. However, it is vital that any subsidy offered must be efficiently organised and managed, so that, there is absolutely no misuse. Only then, will the Plantation sector benefit and the industry sustained and enhanced.

Unfortunately, fertilizer is just one of three increasing costs plaguing the Plantation sector. Equally dismal is the cost of electricity required to operate the Tea factories. Recently, Chairman, National Chamber of Industries (NCI), A.K. Ratnarajah, stated that the electricity tariff is higher than those in other countries that Sri Lanka competes with. “Ceylon Electricity Board and the country as a whole is called upon to bear this burden due to short sighted policies of successive governments” he said. (Source: Sunday Times, March 2, 2008).

Rather than increasing costs, policymakers should take urgent steps to expand the utilisation of hydropower and introduce alternative forms of power such as micro hydropower and reduce dependence on the national grid for domestic consumption and instead, keep it free for essential industrial use. Chairman, NCI has also suggested that the use of incandescent electric bulbs should be discouraged and the use of CFL bulbs and energy saving projects encouraged by removing duties and taxes including VAT. (Source: Sunday Times, March 2, 2008).

Innovative Alternatives Required

The third cost increase that has shattered the Plantation companies is the dramatic midnight fuel price hike on May 24, increasing petrol and diesel by Rs. 30 a litre and kerosene by Rs. 10 a litre. Sri Lanka, annually consumes four million tonnes of imported fuel products. Rather than shrug away the responsibility, as due to unavoidable circumstances, the Minister of Plantation Industries would do well to take immediate steps to offer relief to the country’s most vital exchange earner. There are many measures that can be launched: A major initiative to cultivate fuel-wood plantations such as Gliricidia for “Dendro” thermal power generation would be one important, viable long term solution. Generating “Dendro” thermal power and bio-gas power for domestic consumption are innovative and urgent solutions that would help ease the burden by confining energy from the national grid only for the use of vital Plantation industries. More importantly, a carefully structured tariff system specifically designed to encourage the efficient use of energy for industries is becoming an absolute necessity, if the nation is to face the impending crisis and become future-ready.

Sri Lanka certainly cannot be complacent, because our competition in the world Tea market is very aggressive, continuously fine-tuning their products and marketing strategies. India, China and Sri Lanka have dominated the production of Tea for over a 100 years, but, in recent times, Kenya has been gearing itself, achieving higher productivity, while Indonesia too, is recording increases, with Vietnam also becoming a force to be reckoned with in the world Tea industry. Last year, Kenya displaced Sri Lanka from No.1 position, with an all time high crop of 369 million kg against our 304.6 million kg.
This is while the cost of plucking in Sri Lanka is double that of South India and the cost of production is 35% higher than Kenya and 40% higher than Indonesia.

Last year, Sri Lanka’s Tea production declined by 2%, attributed to drought, ‘go-slow’ by Plantation workers and reduced application of fertiliser. (Source: Central Bank Annual Report 2007).
Now, with the triple headed monster of high fuel-fertilizer-energy costs, the Tea industry faces the biggest challenge in its 140-year history. Decision makers must decide before it is too late to save the nation’s traditional foreign exchange earner from strangulation and tears.

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 Designing for Inclusion of Everyone                                                                                                                                    

‘Achievers recognised and appreciated

The last Wednesday evening in May the Taj Samudra Crystal Room was packed to capacity with a distinguished audience - chief executives of many business establishments and professional bodies.

The occasion was a programme designed and organised by IDIRIYA - a registered organisation of professionals working voluntarily that continues to be exceptionally responsive towards ‘Designing for Inclusion’ and has the aim of emPowering people through increased opportunities in day-to-day life.

It was a successful effort by a team of competent speakers that included Professor Carlo Fonseka and Mr Palitha Fernando, Additional Solicitor General. It was admirably led by Dr. Ajith C. S. Perera to make the decision makers realise we need to take an important step forward in dispelling stereotypes and removing the hang-ups that continue to surround dis-Ability.
From darkness to light

Dr. Ajith Perera in his presentation convinced the audience that the chances run high today that ANYONE could be the next afflicted with mobility problems and EVERYONE could be physically disadvantaged for some time in life for different reasons. Speaking with passion, he was so convincing that Professor Carlo Fonseka in his address remarked that “if anyone was not convinced by Dr. Ajith Perera’s persuasive ‘Eye Opener’, he or she could never be so”. The Professor also reminded us that the path to the grave falls through inevitable disabilities.

Dr. Perera further explained how the situation worsens into a grave social problem. “It is the way we design public buildings, with ‘man continuing to create physical barriers to man’, that makes increasing numbers turn into ‘wounded horses’ at the mercy of others. The statistics and figures are much under-estimated and thereby decision makers do not see how important it is to arrest this problem,” explained Dr. Perera. “Our limited resources can NO MORE be ‘wasted by Man’ through building physical barriers to Man”.

Action speaks louder than words

The KEY ACTIVITY on the agenda was recognising seventeen ACHIEVERS and seven more ‘Initiators’ who, with the support of IDIRIYA, have empathetically modified FIFTEEN built environments to be ‘Accessible to EVERYONE’ including the partially blind, with dignity and without hindrance.

Although simple in nature, it was indeed a significant moment to cherish in the annals of building construction here, as the achievers were welcomed to the stage, recognised and congratulated by the Board of Directors of IDIRIYA.
At a time when ‘real’ ACHIEVERS are left in the dark and the precious potential of the human resource allowed to go waste, IDIRIYA’s thoughtful and timely action received warm appreciation by everyone.

The esteemed endeavours of these organisations and individuals were recognised by Dr. Ajith Perera as contributions towards empowering the society in which they live and do business through creating enhanced opportunities for everyone in daily life. He further listed fifteen benefits’ Enabling Environments’ could bring to make ‘EVERYONE a WINNER’ and six reasons why businesses that embrace diversity will thrive.

Dr. Perera said: “These are many examples of how people just like you in similar positions and circumstances, believed in our words, followed our guidance, adopted our strategies and became winners. If any organisation needs that help for ‘Enabling Environments’, then please remember IDIRIYA is there as a trusted friend.”

The chief guest, Mr Oscar Braganza, MD / CEO CEAT Sri Lanka, identified his company’s support to unlock productive potential. Mr. Pravir Samarasighe, Director / C.O.O. of ARPICO, recognised these efforts towards integration of diverse sectors of population who become equal partners in development - an opinion expressed earlier by Mrs Viji Jegarasasingam. Mr. Saurab Ratan, General Manager Taj Samudra said that accessibility empowers everyone and brings self-confidence along with greater independence to life.

The following were recognised:
ACHIEVERS: M. A. Allam (National Council), Michael Andree (GSK), Marise Deckker (Astron), Trevine Fernandopulle (HSBC), Dr. Prathap Ramanujam (UDA), Lional Ranaweera (Dhakshinarama Temple), Saurab Ratan (Taj Samudra), Sanjay Singh (Air Port Garden), Eng. H. N. P. Wanigasuriya (Dehiwala Municipality) and Dr. A. R. L. Wijesekera (Sri Lanka Standards Institution).

INITIATORS: Brigadier Nimal Fernando (Superior Court Complex), Architect V. N. C. Gunasekera and Elmo Perera (O.P.A.), Pravir Samarasinghe (ARPICO), Gill Westaway (British Council) and Captain Asitha Wijesekera (CINEC).
Others in the photograph: IDIRIYA Board of Directors - Professor Wilfred Perera, Dr. Fred. Perera, Professor Laal Jayakody, Asoka Jayawardena, Sabry Ibrahim and Dr. Ajith C. S. Perera. (S. Skandakumar was missing for the photo.)
The following achievers were absent:

Viji Jegarasasingam (Social Services Ministry), Kesarralal Gunasekera (Dehiwala Municipality), Kushil Gunasekera (Foundation of Goodness), Mancius Paiva (H.N.B.), Ravi Dias (Commercial Bank), Lalith Fernando (RDA), Prasanna Silva (UDA) and Anura Serasingha (Gothami Viharaya).

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