Prudent decisions pay dividends:

Plantations industry resilient to global crisis - PAC Chief

Hiran H.SENEWIRATNE

The plantation industry is resilient to the current global crisis due to the prudent decisions taken by the industry, said Chairman The Planters Association of Ceylon (PAC),Dhamitha Perera said.

“The industry, geared to safeguard the continuity of Sri Lanka’s vital foreign exchange provides a considerable number of jobs, both directly and indirectly,” Perera told a media conference to explain the issues facing the tea industry.

He said that Regional Plantation Companies (RPC) have successfully turned around a Rs 1.5 billion loss making venture within a relatively short period of time since its privatization in 1992.

At the time the plantations were privatized the Treasury had to meet a phenomenal cost of Rs. 400 million every month to sustain the industry.

The stimulus package assured by the government for at plantation industry, over the adverse period has brought great relief to the sector and the 12-month moratorium on capital repayment of project loans is poised to offer further relief. The rubber stimulus package did not offer these benefits as it was confined to a floor price of Rs 150 and a Rs 20 subsidy was available, he said. Field development has been undertaken in the plantation sector including replanting and infilling, and it is to the RPCs credit that the corporate sector yield is in the region of 130 kgs/hectare when considering the vintage of the bushes, denuded solid and the impact of two decades of state management as evinced by the yield of state managed estates, which are still in the 500-600 kgs/hectares yield category.

Perera said that in keeping with global trends, factories which are over 75 to 100 years old, were transformed from commodity producing units to food processing plants to satisfy global consumer requirements in compliance with international food safety and certification standards, he said.

He also said that RPCs have invested over Rs 10 billion during the past three years on capital expenditure demonstrating their commitment towards the long-term sustainability of the industry. Tea prices have also recovered to some extent largely due to the low volumes on offer.

Rubber prices have continued to decline sharply as some of the leading exporters have suspended purchases since they hold stocks, he said.

Deputy Chairman PAC Lalith Obeysekera said not a single estate worker laid off during this period, which indicates the resilient nature of the plantation sector despite the adverse conditions in the industry.

He said that on the contrary, wages and statutory payments were met and in addition two festival advances were paid to the estate workers.