Business
Plantation companies to lose Rs 500 mn. due to govt. vacillation on oil palm
Plantation companies will sustain a cumulative loss of more than Rs 500 million within months due to policy inconsistencies and vacillation by the government on a well-regulated expansion of Sri Lanka’s oil palm cultivation, the sector’s apex industry association has warned.
The Palm Oil Industry Association (POIA) said 356,000 oil palm plants imported on the strength of a government decision to expand cultivation have been maturing in nurseries for more than three years, due to the government’s failure to address concerns arising from falsehoods and disinformation spread by misled activists and lobbyists with vested interests.
“About 40 per cent of these trees may already be unviable and we fear that the entire stock may have to be destroyed within the next two months, unless the government resolves this matter expeditiously,” POIA President Dr Rohan Fernando said.
The Palm Oil Industry Association represents cultivators as well as refiners, processors, manufacturers, marketers and sellers of palm oil and other products of the oil palm, who have cumulatively invested Rs 26 billion in the industry.
Sri Lanka has less than 11,000 hectares under oil palm – just over one per cent of the extents under tea, rubber and coconut – and plantation companies had been mandated to increase the total area under oil palm to 20,000 hectares under strictly-enforced guidelines that ensure the industry is environmentally non-invasive, before the government back-pedalled on the plan.
Fernando said the industry’s appeal to the government for permission to plant whatever viable trees are left in the nurseries, would enable the plantation companies to reduce the losses they are faced with and help increase local production of palm oil at a time when imports are being restricted to conserve foreign exchange. He said even if the entire stock of trees had been planted, the country’s extent under oil palm would only have increased by about 2,750 hectares.
“We are also aware that the government is looking at expanding coconut cultivation to which we have absolutely no objection, but experts have calculated that it would take at least 20 years to reach a point where the country’s edible oil requirements can be met by locally-grown coconut,” Fernando said. “There is also concern that coconut oil production is more costly and requires more land than oil palm.”
He pointed out that baseless vilification of the local palm oil industry had resulted in the country producing just 23,000 tonnes of palm oil per annum and the import of a staggering 220,000 tonnes of crude palm oil into the country each year, at a cost of approximately Rs 22 billion.
The government decision to encourage cultivation of oil palm and to increase the country’s extent under the crop to 20,000 hectares was backed by comprehensive conditions and guidelines that would ensure there will be no environmental degradation, no deforestation and no replacement of other viable crops, Fernando added.
However, lobbyists had used the haphazard, unregulated and rapacious early expansion of oil palm cultivation in countries such as Malaysia and Indonesia to create a baseless fear psychosis about the industry, disregarding the fact that Sri Lanka has cultivated less than 11,000 hectares in 50 years.
The Colombo Stock Exchange (CSE) announces the following change in S&P Sri Lanka 20 index constituents made by S&P Dow Jones Indices at the 2026 Mid-Year rebalance.
The exclusion and inclusion as announced by S&P Dow Jones Indices, effective from 22nd June 2026 (after the market close of 19th June 2026) are presented below.
The S&P SL 20 index includes the 20 largest companies, by total market capitalization, listed on the CSE that meet minimum size, liquidity and financial viability thresholds. The constituents are weighted by float-adjusted market capitalization, subject to a single stock cap of 15%, which is employed to reduce single stock concentration.
The S&P SL 20 index has been designed in accordance with international practices and standards. All stocks are classified according to the Global Industry Classification Standard (GICS®), which was co-developed by S&P Dow Jones Indices and MCSI and is widely used by market participants throughout the world.
To be eligible for inclusion, a stock must have a minimum float-adjusted market capitalization of 500 million Sri Lankan rupees (Rs), a six-month median daily value traded of Rs 0.25 million and have positive net income over the 12 months prior to the rebalancing reference date. For information, including the complete methodology, please visit: www.spindices.com
Effective from 22nd June 2026 the stocks in the S&P Sri Lanka 20 in alphabetical order are as above.
The Teejay Group recorded revenue of LKR 60.04 billion during the period, reflecting a 10% year-on-year decline, primarily due to continued softness in global textile demand. This performance was largely impacted by reciprocal tariffs imposed by the United States, intensified pricing pressures across key markets, and the resulting decline in volumes, all of which collectively weighed on topline growth.
Group Gross Profit declined by 36% year-on-year to LKR 5.02 billion, mainly attributable to lower production volumes, underutilization of plant capacity, sustained pricing pressures, and an unfavorable product mix. Together, these factors adversely affected margin performance amid a challenging operating environment.
The Group reported a Profit After Tax (PAT) of LKR 54.7 million, representing a 98% year-on-year decline. This was primarily driven by higher rupee-denominated costs and non-recurring items, provision for doubtful debts, and restructuring costs associated with right-sizing initiatives.
Ajit Gunewardene, Chairman of the Teejay Group said, “The year was marked by persistent global demand softness and pricing pressures, which impacted results. Despite this, we focused on operational efficiency, cost discipline, and strengthening our financial resilience. These actions position the Group to navigate ongoing uncertainty while remaining committed to long-term value creation for our shareholders.”
Despite these near-term challenges, the Teejay Group continues to maintain a strong financial position, supported by disciplined working capital management and a robust liquidity base. As at 31 March 2026, cash and cash equivalents stood at LKR 8.3 billion, while the Group’s net asset base increased by 3% year-on-year to LKR 32.4 billion, reinforcing the resilience of its balance sheet.
Fairfirst Insurance has once again partnered with the Sri Lanka Police K9 Unit, continuing its support for the seventh consecutive year. This partnership reflects the company’s long-standing commitment to giving back to the community.
Through this initiative, Fairfirst will provide comprehensive insurance coverage for the highly trained canines attached to the Sri Lanka Police K9 Unit. These dogs play a critical role in supporting police operations across the country, assisting with crime detection, narcotics investigations, search and rescue missions, and public safety efforts.
As a company that believes business should create a meaningful impact beyond insurance, Fairfirst remains committed to initiatives that support communities and recognise the vital contributions of those who help keep society safe. This shared commitment to protection and responsibility continues to drive the company’s long-standing partnership with the Sri Lanka Police K9 Unit.
Commenting on the continued partnership, Ravishankar Wickneswaran, CEO of Fairfirst Insurance, said, “It is a privilege for us to continue supporting the Sri Lanka Police K9 Unit for the seventh consecutive year. These dogs serve the country with incredible discipline and loyalty, often in challenging situations. Supporting their wellbeing is one small way for us to give back, and it reflects the FairfirstWay of standing by those who protect and serve our communities every day.”
Fairfirst looks forward to continuing this partnership and contributing to the wellbeing of the Sri Lanka Police K9 Unit in the years ahead.
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