6 December, 2020

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SL Teas Must Meet The Challenges Of Stringent Quality

By Rohan Fernando

Rohan Fernando

Hon. Minister of Plantation Industries, Mr. Mahinda Samarasinghe, Hon. Deputy Minister of Plantations, Mr. Earl Gunesekera, Secretary, Ministry of Plantation Industries Mrs. Sudharma Karunaratne, Chairperson Sri Lanka Tea Board, Mrs. Janaki Kuruppu, Vice President TEA – Mr. Anslem Perera, Vice President TEA – Mr. Jayantha Karunaratne, Secretary General  TEA – Mr. Niraj De Mel, Hon Deputy Ministers, Members of Parliament, Secretaries, Distinguished invitees, ladies and gentlemen.

Firstly, it is my great pleasure and honour to inform that His Excellency the President will join us shortly to be with the members. It’s a rare occasion when a President of a country accepts an invitation to attend an Annual General Meeting. We welcome His Excellency’s decision and take pride in the belief that his decision to grace this occasion would be because our Trade is an important one for the country.

The TEA or the Tea Exporters Association of Sri Lanka was activated by a few exporters in 1999 to address specific issues inhibiting growth of the tea export sector, later expanded to incorporate a majority of active exporters from this country and today it is a strong organization working towards a common goal of improving the tea export sector whilst maintaining cordial relationships with the plantation companies, tea small holders, tea factory owners and the brokers. Member companies of the TEA account for around 87% of the total tea exports in terms of volume and value. The strategy, the Tea Exporters Association put forward 10 years ago to expand the export revenue from 750 million dollars to surpass the 1 billion dollars per annum was readily accepted and mentioned in the budget of 2000 ,recognizing for the first time the importance of value addition through indigenous branding. The strategy document submitted that time also stressed on R&D, backward integration to the tea farmer, introduction of specific curriculum in the universities directly related to the tea industry and induction of latest technologies at factory level to improve quality and product efficiency.

We are glad that some of those proposals are now being implemented,despite there being a few awaiting implementation. Today we are happy to note that the export earnings from tea exceed 1.4 billion USD and this is now considered as the minimum revenue target for our industry. It is our intention and desire to drive this particular segment of the tea industry to reach 5 billion dollars by 2020 and support the government’s ambitious target of export revenue expanding to 20 billion USD by this time.

The overall tea industry which covers broad sectors such as plantation companies, tea smallholders, factory owners and brokers, contribute to the national economy in terms of job creation, development of rural infrastructure and support industries as well as service sectors such as packaging, shipping, insurance and banking. Tea as a product, which has a weekly cycle of manufacturing and exporting, contribute approximately 170 million rupees monthly to the exchequer as duty and cess on export. The value of tea produced in Sri Lanka and sold through the auction system is on average, 900 million USD, annually. The esteemed tea exporters of our Nation, add a further value of approximately 500 million USD, by way of processing as commercially ready goods taking the total export income to around 1.4 billion USD. This value addition at the time of export represents a multitude of functions attended to locally and internationally. Tea export companies operate large factories of food grade to comply with stringent international standards and employ thousands of people in the processing lines. Introduction of technology, top of the line machinery, laboratory facilities and a considerable spend on promotions and marketing, having to laboriously travel to the four corners of the globe, are tasks undertaken by our exporters which are largely unnoticed.

Ladies and gentlemen, the tea industry, like the tea tree itself is strong and resilient. The simple beverage accidentally discovered in the bathwater of a Chinese emperor some five thousand years ago has revolutionized the human civilization. The brew which made its entry as a curative restricted to Royalty, later expanded across the wide oceans creating history on its path of sailing and even political turmoil as witnessed at the Boston tea party giving credence to the independence struggle of the Americans from the British rule. Tea has created such a stir in world politics and history, the popular dictum ‘a storm in a teacup’ does not do justice to its real potential. It is this simple but highly potent brew that we have made our entire productive life revolve around.

In developing the tea exports industry, our exporters have in true entrepreneurial fashion faced numerous challenges and taken profits as well as losses in the same stride in the sheer belief in the product they deal in. All investments made by them exceeding billions of dollars have been done through tremendous efforts in cash flows generated in the business. Some of our high tech machinery to manufacture packets and tea bags represent the latest technology in the world. Most companies have now invested in laboratories for testing facilities and in addition spent large sums of money in marketing and branding teas to establish global sales networks.

Ladies and Gentlemen, we all know that Sri Lanka became world famous for Ceylon tea.

Although cricket, terrorism and the tsunami were often referred to activities when talking about Sri Lanka, tea has persistently remained in the minds of the global population as a positive imagery of a truly exotic island Nation .

Ceylon tea is still drunk with confidence by the connoisseurs of tea in the world. Of the entire consumption of tea in the world exceeding 3 billion kilos, Ceylon Tea comprises of roughly 10%. When compared with the world export market of about 1.5 billion kilos, Sri Lankan share is approximately 20%. This gives us room to grow and to be optimistic of expanding our presence as well as climb up the value chain. Tea being globally accepted as a natural and health supportive drink, enhancing the consumer affiliation to the product is not a difficult task. However, with the world becoming highly concerned about food safety in terms of residual materials and hygiene, teas from our country now have to meet stringent quality parameters introduced by international quality control agencies. This is a challenge we the exporters face on a regular basis and we have through the Ministry of Plantation Industries and the Sri Lanka Tea Board regularly interacted with the planters and factories to ensure good manufacturing practices are applied at plantation and factory level. With such potential inbuilt in the industry and a well mature and experienced crop of entrepreneurs in the tea export industry we would like to power His Excellency’s vision of making Sri Lanka the “Wonder of Asia” and attract the focus of multinational businesses teaming up with our exporters to improve our stake in the world tea export market.

The theme we have selected this year, “Sri Lanka – The Tea Nation of the World” is with a purpose and a vision to make our country the centre of the tea world.  Ours is a nation blessed with many natural resources. Our geographic location is unique; to the east of our nation are large tea producing nations. To the north and to the west are also large tea producing nations. From the southern tip of our country it is only a few miles to the world’s busiest sea routes carrying cargo from east to west and west to east. With such natural strengths bestowed upon our country we should think seriously of how to make the best of these resources. The government’s vision in developing the southern port and the airport will before long create economic activity towards a bustling new business centre. Hence our exporters, especially the ones in the tea industry stand so much to gain from these developments.

Most of you have been privy to witnessing our own tea brands in most respected chains of supermarkets in the world and perhaps have visited some of our tea cafes in developed countries. This we believe is the tip of the iceberg. The potential we possess is much bigger than what is realized today. However the industry needs to put in place a careful strategy with long term goals and the full endorsement of the government to implement the plan.

We were very encouraged by the invitation extended to us by His Excellency the President, to participate in the pre-budget discussions on the tea export industry. Although this was the first time we were invited, we believe that our participation will clear some of the

mis-conceptions about an industry, which was always considered traditional and left with its own devices to survive. The tea exporters of this country under the banner of the TEA are ever ready to join hands with the government and the relevant departments to charter a new vision for Sri Lanka through exports and services. We are very proud and honored that we could play a significant role in this drive forward.

The exporters of today though not complaining, face a multitude of problems in attending to their routine business. When they visit foreign countries, most of them have experienced at some stage and now more regularly visa related problems at borders. This is perhaps due to the unscrupulous persons trying to migrate as economic refugees, which affects even the genuine travelers and businessmen. In this regard we appeal to His Excellency to look at a scheme for issuing business passports for genuine businessmen through a system of screening and selection. We believe this is not too much to ask from the government as it will help immensely to take on global marketing campaigns. The people who are here today in this hall have been involved with this industry for several decades and most of them have stood by this industry and the country even during the worst times like the 30 year civil war we faced in the recent past. Sometimes it is sad how people have forgotten how difficult the times were. Before May 2009 traveling in the country,convening at gatherings like this and even attending to day to day mattershad a certain risk to life and limb. We are ever more grateful to the leadership of Your Excellency and the gallant forces under the direction of the Defense Secretary Mr. Gotabaya Rajapaksa for clearing this scourge from our society and working towards building a multi ethnic and multi religious society to strengthen the future of our motherland.

Tea, like Cricket has all the ingredients to make the different segments of people part of a common dream. Hence we are happy that we could play a major role in Nation building not only through exporting of tea to other countries but by engaging people of different social levels, different ethnicities and religious beliefs to one common thread – Tea.

In conclusion of my presentation I would like to thank the Honorable Minister of Plantation of Industries and the Ministry of Plantation Industries for the excellent support we, the Tea Exporters have received. Our Minister with a smile on his face even in distress is approachable and we truly appreciate that. We are usually called up by the honorable minister for urgent discussions when the prices at the tea auction fluctuate downwards. However, in the recent past we have not received any such calling from our minister obviously the prices realized at the auctions are healthy and perhaps reached a record level in rupee terms. On behalf of the TEA I would also like to express our sincere appreciation to the Secretary of the Ministry of Plantation Industries, Chairperson of the Sri Lanka Tea Board, and the other line ministries with whom we have regular interaction for the time they afford us when required. The Sri Lanka Tea Board which has performed a creditable task in surveillance activities always getting the brick backs and very rarely a bouquet. From the TEA we most sincerely appreciate the difficult task performed by the officials attached to the Sri Lanka Tea Board although some of us do experience when the decisions are not favorable.

This year in particular we have had the good fortune of our service providers and close associates coming to our aid in sponsoring this event. Our sincere thanks for their magnanimous gesture for the support extended to the tea export industry. Finally in appreciation of the enormous task undertaken by the members of our association I salute them and encourage them to continue working towards our cherished goal of making Sri Lanka “The tea Nation of the World”

Thank you and please enjoy your evening!   

*Rohan Fernando, President, TEA – Speech given at the 14th Annual General Meeting of the Tea Exporters’ Association (TEA), held on October 15, 2013 at the Colombo Hilton

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Latest comments

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    “Tea, like Cricket has all the ingredients to make the different segments of people part of a common dream. “”Sri Lanka “The tea Nation of the World”
    Over 200years of tea- Nothing is permanent the world is moving- Gautama.

    You cant win cricket lovely cricket its all political by Ape shit King kong.

    They way you treat the poor tea pluckers is one of the biggest disgraces we see so please dont harp we won the 30 war and due to that we are in this mess- konde badela naha mehe.

    “10 years ago to expand the export revenue from 750 million dollars to surpass the 1 billion dollars per annum was readily accepted and mentioned in the budget of 2000 …
    “2013- Today we are happy to note that the export earnings from tea exceed 1.4 billion USD “
    “By 2020 to reach 5 billion dollars by 2020 “ So in 13 years increased by 0.7billion and expect to increase in 7 years by another 3.5 billion.

    Are you being realistic?

    Cheap Black tea goes to the Arabs and the eastern block so have they run short oil to drink more tea?

    The expensive teas comes to the west but most now frequent Costa, Nero, Starbuck for a great cup of Latte, Americano, coffee ( most sprinkle Cinnamon or chocolate rather than sugar)

    Even the Chinese who drink green are following suit along with its MacDonalds.

    Added to this now most are drinking flowers like Camomile, Peppermint, Strawberry mango infusions which gives them that slim look.

    Tea from Dera Dun and Kenya are known to be world class thanks to the “uduran kanna pakshaya lefty party starting with Mathini”

    Time you have plan B rather than the boru show.
    Good Luck

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      BTW regarding the increase by $3.5 billion in 6 years is worrying. Are you envisaging in the devaluation of the rupee to the actual level . I doubt it because all those backhanders are converted to dollars and the importers won’t let that happen either now that they have a taste of cheap skunk. It is the poor housemaid and sewing girls and tea plucker’s who bring all that exchange.

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    Thank you Rohan for your thoughts and your commitment to quality. I hope the the commitment to quality receives the support of the state. That has sometimes failed, not in any direct sense but due to what is generally called politicization. I know that if the business community that you represent is left alone it will do a splendid job of maintaining quality. But unfortunately it has not been the case. The first great blow to quality in the tea industry came with the “take over” of tea estates by the government. That banished the entrepreneurial talent that first earned Ceylon Tea its worldwide fame. Those planters left Ceylon and opened up tea in Kenya, whose tea is now challenging the quality of our tea.

    It is true that the tea industry of the time needed some reforms. But nationalisation was not the answer. It led to the standard ills of political control, like corruption, inefficiency and mismanagement. The tea industry has not yet recovered from that blow. In fact today, with the politicisation of everything, the tea industry is under renewed threat, as the recent murder of a tea superintendent attests, apparently for no reason but standing up for honesty and propriety. There have been press reports of adulterating tea by various means, for example, by mixing it with coloured coconut husk grains, the dyes used possibly posing health risks to consumers. Practices such as these will drain away quickly the good image of Ceylon Tea, laboriously built for over a century.
    I think TEA should take up issues of maintaining a good and thriving industry with the state, and assert its right to contribute unfettered to the productivity of the nation and the welfare of the people. I hope you and your colleagues will take this as a friendly and patriotic comment, and do everything within your power to achieve your goal of maintaining and improving quality. Good luck to you and TEA.

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    As President, TEA. Rohan makes a speech befitting the event. It would not be appropriate however, to highlight that unless estate workers continue to live impoverished lives, Sri Lankan tea does not become competitive in the international market. The political representation of these workers are in cahoots with whichever government that assumes office and both conspire to keep these workers is abject conditions.

    Therefore, what of the future of the Tea industry in SL? With SL approaching middle income status will the Tea industry be able to retain the cheap labour it relies on? Are yet another generation of upcountry Sri Lankans destined to live in ‘line’ houses(rooms really)? There are many such dark question that lurk behind the SL’s famous ‘tea idustry’. Answers are hopefully forthcoming.

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    So TEA is supposed to uplift SL and bring the different communities together yet the estate workers are treated like crap and thousands were ethnically cleansed from SL because they were Indian Tamils, even though it was their hard work that built up the Tea sector.

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    This guy living in his plush air conditioned office in Colombo counting his billions of chickens before they are hatched, did not see it fit, to expend a few words of thanks to the hapless lechchimi’s slaving away in the slopes of up country. The legacy of the ‘Periya Dorai’ lives on in the Kalu Suddas.

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      A B;
      what about killings of Plantation managers by the Rajapassa’s goons and occupying plantation land by force to get bogus deeds.

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    So the tea trade joins the garments and other assorted trades in prostrating themselves in front of the Rajapaksa regime !

    What happened to the CTTA ( Colombo Tea Traders Association) an organization that pre-dates the TEA by about 50 years ? !

    Have the brain dead never retire-ring morons who hold office there, finally self destructed ?

    Once known as a “Gentleman’s trade” I guess all the gentlemen have left ?

    • 0
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      What a pathetic opening statement at a meeting of a so called professional body representing a vital segment of the Sri Lankan economy !

  • 0
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    A question to whoever has good knowledge of Tea industry.

    Thereare certain good brands of Tea who use to blend tea from countries like Kenya, CHina, Malaysia etc. yet try to stay dominant in international tea market.

    How could Sri Lankan tea meet this challenge?

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      Of course we should use international teas, in fact we should have an international auction here in Sri Lanka to replace Mincing Lane in London !

      However this kind of thinking will never find a place among the aforesaid brain dead morons who run the trade.

      Since they have been replaced now by sycophants I guess it will depend on what his lordship says and who gets the highest commission !

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    Now this guy has become the Maestro of the Tea Trade that has been in this Country from the time the Britishers introduced Tea into Sri Lanka and managed by true Professional Planters…not the blenders or Iced Tea Produces OR Advertizing Agencies..and certainly not by clowns.. hik..hik..hik…blessed are those who marry into Political families..they receive favours ..flavours…abundantly.

    The Exporters make huge Profits the reason why the Plantation Companies with all the assistance provided by the Govt. They continue to hold on to the Clustered Tea Estates on an annual lease payment not worth mentioning ( £ 3.0 per acre.) retain their Export Income in off shore Accounts. Now instead of ploughing those profits the suckers now have clustered and ganged up for the want the Public Funds for promotion.!!! Are these kindergarten children that demand everything from the parents..?

    This is a Master Plan to rob the CESS of Rs.3.5 bn …who will manage the Advertizing & Promotions..? you know who no..the Try and Ad clan.

    THANKS TO BRITISHERS ” CEYLON TEA ” IS A WORLD RENOWNED BRAND AND NEED NO PROMOTION..IT SELLS ON ITS OWN LIKE SUNLIGHT…WHAT NEEDS IS TO STOP SELLING KENYAN BLENDS UNDER THIS BRAND.. ACTION WITH PATIENCE..NOT TO GOBBLE PUBLIC FUNDS…

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    para # 2 should read ” the exporters make huge profits the reason why they continue to hold on to such clustered companies on an annual lease rent not worth mentioning ( £ 3.0 per acre ) Yet the Govt has to cough up public funds for improvements in the plantations communities…they retain profits in off shore Banks and borrow against from the Public Funds of the Country…. Who are these Devils clustered and ganged up for want of further Public Funds..? “

  • 0
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    Rohan Fernando,

    Why have you not mentioned anything about Thondaman and his harassment towards the tea planters via his selected groups of estate worker gangs. You know the ones who instigate strikes, etc when they want a pay hike or certain benefits from the government. The tea industry is hanging in threads because of corruption, killings etc. Why have you not even mentioned about Nihal Perera who was brutally murdered by certain political thugs. Have you no heart?

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    The problem with the tea industry is that the producer does not get an adequate price to pay good wages and put by some for investment within. The auction price in Colombo is the highest in the world, so we cannot say we get lower prices to Kenyan or Indian teas. A good tea will command a good price within the dictates of the market.

    A major portion of Sri Lankan tea is sold in bulk form as loose tea. This is one of the reasons for
    unsatisfactory price. Therefore Rohan Fernando’s assertion that value addition is the answer, is right. But the question is who adds the value? The producer does not do so, except for a nominal investment in the local market (there are one or two exceptions). The value addition in product development such as blending, packeting and tea bagging is done mainly by trading companies which buy the tea at the weekly auction. Some of these companies are affiliated to the producers but are owned and operated independently. Others are totally independent. So the producer does not benefit by way of increased income. There is money making but nothing for those toiling in the fields.
    The answer is to get the producer to invest by facilitating long term credit at concessional rates. This is where the government must intervene. Reaching an annual target of $5 billion is not difficult but there will be little for the producer ( which includes the smallholder base) unless a serious intervention takes place.

    In the past few years the TEA has been in the forefront agitating for import of low priced teas for value addition. This was ostensibly to meet the target of $ 5 billion. That money will go only to the few in the tea trade, the state too will benefit by way of duty, and cesses but the producer will not.

    The government must act as a catalyst here. There is enough expertise in the country. There is room for another local multinational that can compete with Liptons, Dilmah,and Tata Tetleys of this world. Perhaps what is needed is a Government/Private partnership.

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