After sometimes we are seeing some sort of increased activity in plantation stocks. Recently we saw sudden rally in KGAL and WATA. TPL also had very steady run due to their strong management and strong performance among plantations companies. It is time to identity next winners in this sector.
I don’t know why some high quality tea producers want to diversity their crops? According to annual report even Bogawantalawa plantations (BOPL) is also into Palm oil.
Iran factor and the USA factor will benefit high quality tea producers in Sri-Lanka.
Following are some old stories but can get some ideas.
The Planters Association of Ceylon (PA) yesterday announced that Regional Plantation Companies (RPCs) were proving their competence at national level.
|CEO of Bogawantalawa Tea Estates Sarath Fernando (centre) receiving the runner up award in the ‘Agriculture and Plantations’ category|
|CEO of Watawala Plantations Dr. Dan Seevaratnam (right) receiving the National Business Excellence award in the ‘Agriculture and Plantations’ category|
This year, two plantation companies – Watawala Plantations Plc and Bogawantalawa Tea Estates – emerged winners at the National Business Excellence Awards of the National Chamber of Commerce. These awards, presented under stringent and independent evaluations, are proof of the growth in competitiveness of plantation companies, said the PA.Watawala Plantations wins with people power
Watawala Plantations Plc, the manufacturers of Zesta and Watawala Kahata brands of tea, won the National Business Excellence Award in the ‘Agriculture and Plantations’ category. Speaking about its award, the plantation company said its achievement was due to people power.
Watawala Plantations manages 20 estates with tea, rubber, oil palm and dendro forestry. The company also operates 15 tea factories, two rubber factories and an oil palm mill and refinery. In addition, Watawala Plantations also employs a workforce of 14,000 people.
“We have a very strong people focus and I believe this was our greatest strength in winning the award. At Watawala Plantations, we are not in the tea business serving people but in the people’s business serving tea,” said Dr. Dan Seevaratnam, CEO of Watawala Plantations.
“In acknowledgement that our workforce is our greatest asset, we refer to our employees as associates. All associates in the company, whether at field level or corporate level, are exposed heavily to coaching and development. We also have pre-defined performance criteria for each associate that are linked to rewards. This concept directly contributes to our financial and business performance,” explained Dr. Seevaratnam.
The RPC which manages one of the most modern and eco friendly tea factories in the world is also strong on technology adaptation. Watawala Plantations’ Waltrim Tea Factory, in Lindula, has already made a name as one of the best tea factories in the world.
“Waltrim is designed on an energy conservation model. It uses natural draughts of air for withering and natural light instead of artificial lighting. We have also introduced modern technology and conveyerised much of the production process,” said Dr. Seevaratnam.
The plantation company’s main tea brands, Zesta and Watawala Kahata, are performing well overseas with strong presence in Australia and New Zealand. To further develop international markets Watawala Plantations has invested strongly in food safety and quality certifications that are vital for food exports into western markets. The factories are also recognised by the Fair Trade movement and the Ethical Tea Partnership, ensuring not just quality of manufacturing but also manufacturing ethics.
With its sustainability focus the RPC is also looking to expand its forestry management programme to become self- sufficient in fuel wood for its tea manufacturing operations. This move is expected to not only benefit the company but also support the environment by increasing forest cover and employees by providing additional income sources through fuel wood harvesting.
“At present we have 500 hectares of managed forest where we have cultivated calliandra, which is a short rotation crop. We plan on extending this coverage to 800 hectares, to become self -sufficient in fuel wood by 2015,” said Dr. Seevaratnam.
Watawala Plantations produces high, mid and low grown tea and also rubber and palm oil. In recent years the company has diversified in to cinnamon and dragon fruit cultivation. Watawala Plantations is also the first plantation company in Sri Lanka to commission its own oil palm refinery to produce edible palm oil. This is the freshest edible oil in the local market, says the company.
“We are looking at expanding the present 3,000 hectares of oil palm by another 1,000 hectares over the next few years. We feel oil palm is a good investment as it is in demand not only by the edible oil market but also by the cosmetics industry. The oil palm crop is also the most efficient oil producer per hectare, yielding 4,200 litres of oil per hectare compared to the mere 700 litres per hectare from coconut oil,” said Dr. Seevaratnam.
With many more growth plans laid out for the future Watawala Plantations says “proud of yesterday, we build for tomorrow with people power.”Bogawantalawa growing in the west
A second plantation company also made a mark at this year’s National Business Excellence Awards. Bogawantalawa Tea Estates become a runner up in the ‘Agriculture and Plantations’ category at the national awards.
The plantation company from the ‘golden valley’ has also achieved international recognition. Bogawantalawa Tea Estates has been selected to provide its golden brew for the prestigious invitees of the Nobel Nightcap party this December, at the Stockholm School of Economics.
The Nobel Nightcap party, which follows the Nobel Prize awards, was inaugurated in 1978. This year the party theme will be ‘fairy tales.’ Bogawantalawa Tea Estates will be among the few select brands, from all over the world, present at this event.
“We have been selected as the official supplier of tea for the Nobel Nightcap event on December 10th, 2010. The company will showcase and distribute specially developed packs of tea at this function,” said Sarath Fernando, CEO of Bogawantalawa Tea Estates.
The National Business Excellence Awards too recognised Bogawantalawa Tea Estates’ competence in international markets. “When analysing the marketing initiatives taken by the company, we can be proud and happy that we are the biggest supplier of Pure Ceylon Tea to the US market. For Europe we are the biggest supplier of private label teas and in Japan we are number one in own brand,” said Fernando.
“We have invested strongly in modernising our manufacturing facilities and in quality certifications. We are certified at the most stringent level, including Social Accountability, Fair Trade and Ethical Tea Partnership certifications. This has helped us enter Japanese, European and US markets,” he added.
The plantation company that manages 14 estates, 12 tea factories and a state of the art tea packaging facility, is the first Sri Lankan tea manufacturer to break into the Dutch market with Fair Trade labelled teas. The company also exports Ceylon Tea under a number of private labels to Holland and other European markets. Ceylon Tea has penetrated the American market, through the biggest beverage brand in the US, with Bogawantalawa tea. In Japan, the company has a presence under the ‘Ceylon Tea Gardens’ brand name and the ‘My Tea’ brand name. Bogawantalawa Tea Estates says further export market growth can be expected over the next few years.
“Our aim is to be the most preferred private label supplier to European and Scandinavian markets. We also expect further growth in Fair Trade tea demand in Europe. In the US too, we expect demand to grow. In addition, we are looking at expansion in Asian countries like China,” said Fernando.
To ensure quality of its tea, Bogawantalawa Tea Estates has invested consistently in replanting and infilling and has provided extensive training and development for its 12,000 workforce. The company has also invested in sustainable forestry management for timber and fuel wood supplies.
To maximise on its potential, the tea manufacturer has diversified into the non-traditional area of tourism.
The company says its tourism initiative, Tea Trails, has been extremely successful and more such products are in the pipeline.
“Our current tourism product, Tea Trails, is a high end tourism product.
It is recognised among the top 10 tourism products in the world. At the moment we are discussing a new tourism product as well,” said Fernando.
Through their performance, Watawala Plantations and Bogawantalawa Tea Estates, have indicated the potential, not just locally but internationally, of Sri Lanka’s plantation companies, said the Planters’ Association. With the continued support of government and other stakeholders plantation companies have the potential of becoming greater contributors to the future growth of Sri Lanka’s economy, said the Planters Association.