Sri Lanka’s President tells plantations to thrive with agro business model
Daily FT: President Ranil Wickremesinghe has called on the plantation industry to abandon the traditional ways and shift to a thriving agro business model to maximise earnings.
Delivering the keynote address at the inaugural session of the Colombo International Tea Convention 2024, themed ‘Tea, a lifestyle and a livelihood’, he outlined the critical role of the tea industry in economic transformation and the broader challenges facing the country.
The two-day convention saw over 750 participants including 150 foreign delegates.
“Let’s be realistic. We are a country that broke up our capital formations which came out of land plantations about 30 to 40 years ago. Now we are trying to replace that and bring plantations up to play a role in the future. Thus, I do not think we need plantations; rather we need a thriving agro business, both small and large management companies who will look at the highest earnings possible. So that is the beginning. We have to start reforming from inside,” he stressed.
He underscored the importance of re-evaluating Sri Lanka’s traditional agricultural practices, particularly within the tea industry and posed critical questions about the future trajectory of the sector, urging stakeholders to consider diversification beyond tea and embrace smart agriculture practices. Highlighting the potential of forestry and upcoming opportunities in agro business across different regions of the country, he emphasised the need for innovation and exploration.
Wickremesinghe underscored the importance of embracing smart agriculture and expanding agro business opportunities across the country.
“What is the model for our businesses? We have smallholders. How can the plantation industry transition into agro business? Will we focus solely on tea, or will we embrace smart agriculture in our regions? You have the means to decide, which could include forestry. In the future, new lands will open in other parts of the country for agro business growth, offering opportunities to explore,” he added.
He noted the success of Sri Lankan companies establishing themselves abroad.
“Some of our companies have expanded abroad and established themselves successfully. I have no objections to this. This isn’t an issue for the Government as long as we maintain our dominant role in the market. Given that condition, we can proceed because Sri Lanka must lead in the market,” he said.
Wickremesinghe asserted that the tea industry must innovate to meet the expectations of millennials and Gen Zs.
“Considering the future of tea, will people consume tea as we do? What will millennials, Gen Z and others prefer? This future lies beyond Sri Lanka. The challenge lies in penetrating markets like Europe and America. Will they prefer iced tea or other tea drinks? It’s uncertain,” he stressed.
He claimed that except for the promotional and research and development efforts in Sri Lanka, the industry has not come up with innovative solutions to cater for the new generation.
President also addressed the pivotal role of research and development, particularly through institutions like the Tea Research Institute (TRI).
He called for collaborative efforts between the Government and the private sector to bolster research capabilities and drive innovation in the tea industry and beyond.
Touching upon environmental concerns, the President announced forthcoming climate change legislation and environmental laws aimed at achieving net-zero emissions ahead of schedule.
These initiatives, he noted, would support sustainable practices in agriculture and enhance Sri Lanka’s environmental stewardship.
Referring to international trade and market access, Wickremesinghe highlighted the difficulties posed by international sanctions, particularly those affecting trade with Russia.
He urged the tea industry to find innovative ways to maintain access to these crucial markets despite geopolitical constraints.
OSL take:
Sri Lanka’s agriculture industry is fast becoming a hotspot for business/investment opportunities in the country given the growing demand. With Sri Lanka working towards becoming a hub in the South Asian region and the overall economic expansion in the country, there would be an expansion in demand in the agriculture industry, especially in consumption agriculture and export crop production. Sri Lanka’s strong trade ties have helped boost the export crop sector. All these developments have resulted in the expansion of business/investment opportunities in all sectors in the country’s agriculture industry. Local authorities are also focused on developing the country’s agriculture sector through aggressive promotion of agribusinesses. Realizing the growth potential in Sri Lanka’s agriculture industry, many multilateral financial institutions have pledged funds for the further development of the industry while assisting small and micro enterprises (SMEs) in the industry to expand operations. Given the growth and business potential in Sri Lanka’s agriculture industry, foreign businesses/investors could confidently explore the growing business/investment opportunities in the industry. Local businesses in the agriculture industry could also look at forming partnerships or joint ventures with foreign businesses/investors in order to further expand operations.