Sep 12, 2013 (LBO) - Sri Lanka's Horana Plantations Plc, said it was moving into rubber cultivations by initially planting 300 hectares in the crop, while also adding cinnamon and forestry to the mix.
"Making note of the changing fortunes of tea and rubber in the international market, the company made a concerted effort to diversify our crops," chief executive Rajive Casie Chitty told shareholders in the annual report.
"In this regard the company made a strategic move to invest in oil palm considering the tremendous potential of the crop.
"This is also expected to offset the constraints facing the rubber sector in the years to come with the sector projected to see price fluctuations, high labour costs and irregular weather patterns."
Horana Plantations had imported 10,000 preheated seeds from Papua New Guinea and started a nursery at Neuchatel Estate. It will be enough to plant 55 acres.
The firm wanted to have 300 hectares of oil palm by 2015, in Nechatel, Mirishena and Halwatura estates.
The company had also invested in Cinnamon and Coconut.
"Sri Lankan cinnamon continues to be the best in the world and is a highly lucrative crop given the high prices it commands in the world export market," Casie Chitty said.
"There is also a significant demand for coconuts in both the domestic and international maket due to constraints in supply."
In the year to March the firm had 14.4 hectares of cinnamon and 24 hectares of coconut being harvested.
Horana had also replanted 17.1 hectares of tea and 112.9 hectares of rubber in the period.
The company now had 2,116 hectares in tea, 1,726 in rubber, 33 in coconut, 18 in cinnamon, 350 in timber and fuelwood.
Eucalyptus trees had been planted in seven up country estates.
Critics say expansion in timber plantations in large plantations is being discouraged in Sri Lanka due to state interventions in making it difficult to harvest them, once trees mature.
Some plantations have also grown trees to fire tea dryers but face restrictions.