Tea Board prepares
contingency plan in case of crisis in Middle East


By Hiran H. Senewiratne

Sri Lanka Tea Board is planning to shift the bulk of tea exports to China, India and other un-tapped markets in the event of any tension in the Middle East, as a survival plan, its Chairman Ms. Janaki Kuruppu said.

Kuruppu told The Inland Financial Review; "The tea industry has gone through the worst period during the recent past and it was resilient against any downturn. The main reason was that tea is one of the most popular beverages in the world. If the Middle Eastern crisis erupts we have to be concerned because Iran, Syria and other countries in this region are major tea buyers.

She said their newest strategy or the survival plan was to shift the bulk of tea output to China, India and other untapped markets by offering the right products to them. Therefore, the Sri Lanka Tea Board was looking at the problem case-by-case considering the Middle East issue, she said

To minimize any negative impact of a possible escalation of the Middle East crisis was to avoid logistic problems. They were now in the process of talking to all stakeholders including exporters, Tea Traders association and Planters Association to have a suitable survival plan, Ms. Kuruppu said.

Since the tea consumption pattern, or trends of tea, was in Sri Lanka’s favour, she said the most important factor was to offer the right product to the buyer by fine tuning flavours to suit different tastes.

The Chairman said that Sri Lanka could penetrate into any market "because our unique selling proposition was the flavour, which could not be copied at any cost owing to our soil and geographic condition". But the most important factor was to figure out a proper business model to cater to different markets.

At present, 60 percent of tea was being exported in bulk form while the balance was shipped in value added products/brands. Therefore, the Board encourages tea manufacturers to go for branded products, value addition to penetrate into new markets, she said.

To cater to different markets Ms. Kuruppu noted a three-pronged strategy which was to promote a wide rage of products, catering to different segments and entering to green tea markets which was popular due to health reasons.

She also said that for the long term sustainability of the sector and to make the industry viable, the government had identified priorities and for that purpose they had increased the minimum wage to Rs. 500 per day for plantation workers. Therefore, Plantation Management Companies had signed a collective agreement to increase wages of workers, she said.

The government had also taken the initiative to modernize all tea factories in the country. At present there were 718 factories in the country and the government had allocated funds to modernize 37 of them, she said.

The fertilizer subsidy helped many tea growers to increase their yields. Further, re-planting had also increased due to the government’s assistance, Ms. Kuruppu added.

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