Labour issues plague plantation sector
Hiran H. Senewiratne
 The country’s plantation sector per se is facing its biggest
challenge due to the migration of workers from the industry with the
opening of other avenues in other fields, President/ Chief Executive
Officer Asia Siyaka Commodities (Pvt) Limited, Anil Cooke said.
He said the migration of labour is happening not only in leading
plantation companies but also in the smallholding sector because the
younger generation is less inclined to work as plantation workers due to
the opening of various avenues in cities.
“With these trends in the sector, we must look at alternative methods
such as the optimum use of lands, mechanical harvesting and more
innovative methods of encouraging the labour force to retain in the
sector in the medium to long term perspective,” he said.
Cooke as the head of Asia Siyaka, a leading tea brokering company in
the country said the current labour laws in the country has no problem
in retaining the labour force in the sector. “But the most important
thing is that all stakeholders in the industry should have a sustainable
plan to keep and retain the labour, in the sector in the future.
He also said with the implementing of proper labour welfare
programmes in the plantation sector, it could help to retain the
existing labour force in the sector.
Q: How do you see the tea industry in Sri Lanka with increasing of
global commodity prices?
Sri Lanka’s tea industry is heading for landmarks in this global
scenario. Production wise it has achieved a figure higher than the
previous records and at the same time earning expenditure had been high.
Exports of Ceylon Tea have reached the highest level in quantity.
Therefore we will be exceeding US$ 1 billion.
Every record we achieved last year i.e. highest quantity country has
shifted 327 million kgs in 2006. In that year by end of July export
volume was 185.9 million kgs while in 2008 end July Sri Lanka has
reached the export of Kg 192.8 million.
Over the next five months from August this year the export
performance will reach all records. On the other hand excessive rain and
other factors such as high cost of fertiliser has affected profitability
in the plantation sector.
Plantation cost has increased not by price of fertiliser but due to
the higher cost of wages, electricity. Therefore virtually the inputs
erode margins of many regional plantation companies significantly and
many of the estates are struggling to break even.
Q: Sri Lankan tea is popular as “Ceylon Tea” with a Lion tag. In
the event of changing the brand name to “Sri Lanka Tea” do you think
that it would have a negative impact to the industry in the global
market?
Sri Lanka is very well recongnised for its brand as “Ceylon Tea”. The
effectiveness of trying to change its brand identity is questionable.
This could well in fact cause confusion in the minds of tea consumers
around the world. Lion logo, a symbol is linked in the mind of consumers
around the world with the “Ceylon Tea” tag.
 Consumers are gradually learning from Ceylon Tea to “Sri Lankan Tea”.
But it is not necessary to substitute one word with another as a
promotional strategy as there are no historic negative associations with
the “Ceylon Tea” tag. Therefore, I don’t see any visible benefit for the
Sri Lankan tea identity.
Q: Sri Lankan tea industry is facing major challenges with the
emergence of new global players to the market. In what way could we face
the future challenges in the market in the global arena?
Sri Lankan tea is continually under threat in the world market. I
learned that a large amount of money is being pumped into the Indian
factories by the Indian Central Government. This is the biggest
challenge now.
To a lesser extent, Vietnam and African nations such as Kenya are
going into Orthodox tea manufacturing. Combined impact of supply
increase of varying quality will chip away at Sri Lanka’s price
advantage. For black orthodox tea in the global commodity market right
now Sri Lanka is identified as being a dominant force and preferred
supplier of black orthodox tea to the world.
The availability of cheaper even if lower quality substitutes keep
increasing. Packers around the world attempt to adjust to optimise the
return as in the case of small leaf tea that Ceylon tea dominated with
taste. They were slowly but steadily pushed out of bigger brands.
Further, value addition in all its dimension primary brands ownership
and lesser external packing third party brand nationally and keeping
with the pure Ceylon Tea is the way forward.
Q: Do you think that Colombo Tea Traders Association (CTTA) needs
reforms or changes to broaden its scope/structure?
CTTA has been looking into needs to broaden its representation of
stakeholders in its structure. These changes cannot be hurried with and
will be carefully considered as it should not in any way undermine one
of Sri Lanka’s main strengths. This is the largest single originated tea
auction in the world. CTTA is a custodian of its national assets and its
laws and efficient management add significant value to the Ceylon tea
while ensuring that Sri Lanka is a reliable transparent and dynamic
place to do business.
Q: How do the high interest rates, inflation and international
currency fluctuations impact the tea industry?
International currency issues are always a challenge being an
export-oriented industry. It becomes a greater challenge once
competitors are not subject to some intensity to face challenges.
Sri Lanka has achieved some advertising from the global rise of
commodities particularly tea. But some of those have eroded through
currency issues and domestic challenges.
Q: The allocation of funds for international tea promotions is
minimal compared to other countries like India. Do you think that it
would impact the tea industry with the intense competition in the global
market?
Sri Lanka never had a large budget for promotions. The Cess is being
employed for administrative functions but we have to look at different
creations in our promotional ideas. Periodically, we are looking to
create events that have media interest such as Ceylon Specialty Tea of
the Year Competition in USA in last June and the Charity Tea Auction
held in Colombo, recently.
Q: One of the problems encountered with Sri Lanka tea sector is
blending with sub-standard tea when reaching overseas. How could this
issue be addressed?
Only solution is to go for value addition. Designer tea and high
specialty are small niches in the specialty tea market. Sri Lanka as a
leader in the field should look to encourage production and markets. It
also could explore innovative ideas, which could be done through
creative packaging and innovation.
Q: What is your philosophy?
Competitiveness, ethics and strong belief in the strength of our tea,
I have always encouraged developing the human resource, in the belief
that we need to continually improve and see ourselves as global player
rather than local.
Q: What is your retirement plan?
Retirement is transition from one game and its set of rules to
another. I haven’t decided my retirement plans yet.
Anil Cooke President/CEO, Asia Siyaka Commodities
Name-: Anil Cooke
School attended -: S. Thomas’ College,
Mt. Lavinia
Educational Qualification -:
Professional - Chartered Institute of
Marketing (CIM) UK.
Civil status - Married, has two children
Present position - President/CEO Asia
Siyaka Commodities (Pvt) Ltd
Past Chairman, Colombo Brokers’
Association
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