CIC to set up Sri Lanka's first ever vinery in Kilinochchi

CIC Agri Businesses Sri Lanka's only seed to shelf agriculture company which manages over 10,000 acres of its own farm land and works directly with over 20,000 farmers and produces a variety of agriculture and livestock products like seed paddy, rice, fruits, ,vegetables, eggs, yoghurt, curd under its own brand name for the local and export market. As a part of CIC Agri Businesses' aggressive regional expansion plan, it is geared to make a substantial investment to set up Sri Lanka's first ever vinery in Kilinochchi district. CIC Agri Businesses MD/CEO Keerthi Kotagama in an interview with Daily News Business shared his thoughts on the concept behind CIC Agri Businesses, its expansion plans, future prospects of local Agri businesses and industry related issues.

Here are the excerpts of the interview

Indunil Hewage

Q: What is the role of CIC Agri Businesses regarding Agri business Development in Sri Lanka?

A: Sri Lanka is predominantly an agricultural country, where 70% of the population lives in rural areas; of which 95% of the peoples livelihood depends on agriculture. It is a well-known fact that the local agricultural industry hasn't got into its sound footing over the last 30-40 years due to various reasons.

Up to 2005, agriculture sector annual growth rate was around 1.2-2% whereas industry and service sectors posted a growth rate of 8-9%. This is due to our focus towards agriculture development and rural sector still remains poor as a result of this.

Low crop productivity level has been identified as the main impediment that the agricultural industry is facing today and Sri Lanka is far behind in this area compared to other paddy cultivating countries like India, Thailand and Malaysia.

CIC Agri Businesses MD/CEO Keerthi Kotagama Picture by- Saliya Rupasinghe

Currently, local paddy production is about 4.3 metric tons per hectare where as China and India generate about 8-10 metric tons per hectare.

The maize production of Sri Lanka is also about two metric tones per hectare whereas countries such as Thailand, Vietnam get about five metric tons per hectare. Average tea yield production in Sri Lanka is about 1,645 kg per hectare and Kenya is getting about 3,000 Kg per hectare. Surveys done by CIC Agri found that the lack of application of proper technologies to crop cultivation, insufficient management skills of farmers as the major reasons associated with abject poverty and low productivity levels in the rural paddy cultivating areas.

Even though Sri Lanka has the potential to become self sufficient in various crop segments, low productivity level has been the major issue to achieve this target.

Local farmers aren't really applying innovative technologies and proper management skills to agriculture sector development ,therefore we entered into this field as a technical supplier of agricultural technologies which is mainly to supply agricultural inputs such as quality seeds, proper plant nutrition management ,proper water conservation ,crop management, post harvest management technology with extension services .

We teach farmers on how to manage these new technologies whilst providing them innovative technology with extension services to get the farmer productivity up.

Q: How does your company contribute to Gross National Product of the country?

A: CIC Agri Businesses was established in 1993 primarily as an Agri input supplier. Over the years the company has diversified rapidly and is today involved in the production of many key Agri Food products while supplying several Agri inputs to local farmers.

Sri Lanka is currently spending around Rs 200 billion annually as a national food bill to import wheat, potatoes, wheat, big onions, green grams, soya beans and other agri products.

Sri Lanka currently imports 70% of the local milk requirement by spending Rs 35 billion annually and 90 % of local sugar requirement being imported with a total value of Rs 55 billion.

CIC Agri businesses philosophy is to support rural farmers to improve their productivity and increase their income levels. With this, CIC intends to support the improvement of rural living standards while contributing towards national agriculture development.

The Sri Lankan government has also been implementing various programmes to accelerate domestic food production and to discourage food imports to the country as the world food crisis emerged in 2008. Today, the country is very optimistic of the pressing need to attain food security through self sufficiency.

The general public has a special interest on the agricultural sector and I think the industry is moving towards the correct direction at the moment.

Q: What do you think are the main challenges to achieve global food security?

A: Every year the world has to feed and additional 55 million people and over the last 10 years a demand for food has increased in a speedy manner in the face of China and India becoming the global economic powers. The world has to grow more corn, sugar, maize, wheat to produce bio-fuels rather than consumption requirements. As people get richer, food habits of the people are rapidly changing and they tend to eat meat and other related food items. As a result of this, more and more lands will be needed to produce food in the future. As an example, you will need eight kg of grains to produce one kg of meet.

On global basis, prices of food items have doubled following the crisis in 2008 and this trend is expected to continue another 100-200 years due to these above reasons.

Q: What are the key focus areas and growth potential for CIC Agri in Sri Lanka ?

A: CIC Agri will invest a substantial amount of money to set up a vinery in the liberated area of Kilinochchi area. In addition, we recently entered into a strategic partnership with a Dubai based company to expand our export market presence in the Middle East countries and is initially looking at possibilities to export rice to the Ethiopian market in the near future.

Q: What are the key growth segments for CIC Agri Businesses, on which CIC Agri Businesses can leverage?

A:The recent drought had a huge impact on company profitability this year, CIC Agri however enjoys the market leadership position in various segments which we operate in. CIC Agri Businesses currently enjoy 40% market share in Fertilizer Manufacturing and Distribution, 35% in Seed Paddy Production. Today CIC has expanded its service to the food sector thereby producing fruits and vegetable and poultry products, dairy products to cater to both local and intentional demand.

Q:What is the role of CIC Agri Businesses regarding improving the nutritional status of the people of the country?

A: We are now self sufficient in rice and maize and should find immediate measures to export these excess products. However, Sri Lanka still face daunting issues related to nutritional security, especially protein, iodine deficiencies and malnutrition.

To address the nutritional status of the people of the country, CIC is further maximizing most agricultural produce and make it available at a reasonable price. We also address the issue of low productivity, high post harvest losses and affordability of agricultural commodities.

Improved availability and affordability of agricultural commodities can be achieved through the usage of technological advancement. Under CIC Agri Businesses strategic plan for the next ten years. The company will focus on adding value to its wide range of products and the Research and Development unit of company is currently doing various experiments to further introduce traditional and nutritional rice varieties to address the nutrition related health problems among Sri Lankans.

The general public will definitely have the opportunity to witness and enjoy more nutritious products coming under the CIC brand name in the near future.

Q: Could you elaborate on CIC's online framing initiative titled Navagoviya Trilingual Website?

A:This was launched to develop knowledge of farmers on modern agriculture entrepreneurship accessed through the world-wide web at www.navagoviya.org.To,also avail technological knowledge in agriculture production in English, Sinhala and Tamil mediums and to create interactions among farming communities ,agricultural academics, professionals. The website also won the e-Swarnabami and e-India Awards. Twenty thousand out- grower farmers who grow cereals, fruits, vegetables or supply dairy milk can get technical knowledge from the CIC field officers who are deployed island wide.

Q: What measures taken by CIC Agri Businesses to revitalize rural farm economies while popularizing farming as an acceptable and dignified profession for local youth?

A: A programme titled family farming was developed to ensure that farming is passed down from generation to generation using both traditional and modern know-how. This programme helps to retain youth in the farming sector whilst increasing attractiveness and profitability as opposed to any other industry.

We in addition designed the Shoora Goviya programme to attract and popularize farming among youth.

To create competitiveness and encourage youth farmers the Shoora Goviya is held annually under the supervision of Agri experts to reward the best farmers and also crown overall winners.

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