Sri Lanka’s Horana Plantations to diversify into more commercially viable crops
Sri Lanka’s Horana Plantations has reportedly announced its decision to diversify into more commercially viable crops, especially oil palm.
The move is aimed at reducing reliance on tea and rubber whose prices remain low.
The Company has announced in a statement that it was using its own and borrowed funds to intensify diversification to phase out unproductive extents with new types of crops capable of supplementing revenue streams and improving resilience to challenges in the tea and rubber industry.
“This strategy helped Horana Plantations PLC to mitigate some of the challenges from the on-going down-turn in the global natural rubber industry,” Horana Plantations Chief Executive Manuja Kariapperuma has been quoted as saying.
“The investments we have made are nearing completion, and we are also looking for innovative ways to build on the progress we have achieved, while generating internal operational synergies between our diversified crops.”
According to the statement, Horana Plantations has a cultivated extent of 4,899 hectares of which 25 percent will be in oil palm, timber and other crops, 44 percent of tea with rubber making up only 30 percent.
Accordingly, Horana Plantations has invested about Rs. 450 million on new projects in oil palm plantations, timber, cinnamon, coconut, pepper and fruits as part of a structured and intensified diversification programme the first phase of which will reach completion by 2020.
Horana Plantations will then have 460 hectares (Ha) of oil palm, and 620 Ha of timber or fuelwood together with 75 Ha of Ceylon Cinnamon and 250 Ha of coconut.
Horana Plantations has also announced plans to establish dedicated extents for pepper cultivation, and fruits of different varieties, having also enjoyed success of intercropping soursop, lemon and pineapple with coconut in selected areas.
OSL take:
The diversification of Horana Plantations into more commercially viable crops is a clear indication of the potential for growth in Sri Lanka’s private sector. There’s massive scope for export crop cultivation in Sri Lanka, especially given the many free trade agreements and trade concessions enjoyed by the island nation. Also, the island’s geographical positioning in the Indian Ocean also makes Sri Lanka the ideal business destination with easy access to many foreign markets. Therefore, foreign businesses/investors could explore business/investment opportunities in Sri Lanka and also look at the possibility of forming joint ventures with local companies.
| Article Code : | VBS/AT/04072019/Z_4 |