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By Ravi Ladduwahetty

Form alliances within the Regional Plantation Companies (RPCs) to brand market teas for better prices, The Asian Development Bank funded study on the deregulation of the Plantation Sector done by US Management Consultants A.T. Kerny has recommended.

The study which has been carried out for over one year by the Indian branch of A.T. Kerny, has recommended this strategy so that this would boost the export of Sri Lanka's teas within the major markets in the Middle East, UK, Germany and Japan.

By this measure Sri Lanka's Regional Planation Companies would be forming alliances within themselves to brand market teas.These will be in the form of joint venture companies or separately formed companies which will have large capital infusions to do the same.

Chairman of the Planters' Association of Sri Lanka and Chairman Commercial Bank Mahendra Amerasuriya told the Daily News that this was the most important feature in the recommendations of this deregulation study and that brand marketing would be an integral part of the proposed plans to procure more competitive prices in the international tea market.

This is something that has to be done as a matter of utmost priority if the industry is to progress, he said.

It is important that Sri Lanka proceeds with this proposal so that we could get higher prices for teas from the present US$ 1.50 - US$ 2 per kilo. This system will also assist Sri Lanka to compete with international players such as Unilever, Liptons and others who score over their brand marketing advantages, Mr. Amerasuriya said.

There are a few tea exporters who export under the brand names such as Dilmah teas exported by MJF exporters and Akbar Brothers who have a variety of brands and also the Stassens Group. However, the biggest bugbear for the industry has been that Sri Lanka has been exporting around 60 percent of her teas in bulk form.

The strategy will be to market all teas as Pure Ceylon Teas. Then there can be sub- classifications such as High Grown teas, upcountry teas and North Western teas which will give a specific regional/ product image to the local teas reaching the export markets, he said.

Meanwhile, the formation of the proposed Tea Federation has also run into a thunderstorm with the original proposal to have nominees in all sectors of the industry in the proposed Federation.

Originally, there was one seat each on the Board for the Regional Plantation Companies, the Ceylon Tea Traders' Association, the Tea Exporters' Association, the Colombo Brokers' Association, the Private Tea Factory Owners' Association and the Tea Small Holdings Development Authority.

At the last meeting of the industry chaired by Deputy Minister of Plantation Industries Navin Dissanayake, the CTTA had wanted two additional seats for their nominees so there is no consensus at this stage Mr. Amerasuriya said.

Mr. Amerasuriya said that the deregulation of the tea industry was very vital in the light of the Regional Planation Companies being unable to export directly in the wake of existing regulations permitting the export of 50 percent of their output, as the regulations in the Sri Lanka tea Board were quite archaic.

The system is that when the Plantation Companies get an export order,they have to submit samples to the Tea Board and by the time approval is given, the fundamentals in the market have changed. That is how weak the existing management structures are, he said.

The Task Force on the Deregulation is expected to hand in its report to Plantation Industries Minister Lakshman Kiriella on April 30. Two other task forces which have been appointed for Industry Administration Quality Standards and also for the improvement of quality standards are not operational yet.

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