Business

Smallholders hold the key to productivity in Sri Lanka’s tea industry

Published

6 years ago

2020/11/6

Sahan Weerasooriya

Recipe for reform:

By K.L Gunaratne (chairman, Sri Lanka Federation of Tea Smallholders)

With nearly 500,000 smallholders in total, the tea smallholder sector is a significant contributor to the production and output of Ceylon Tea in Sri Lanka, and across the globe. We are often called the ‘backbone’ of our tea industry, and with good reason.

16% of Sri Lanka’s arable land belongs to the tea sector. Of this, tea smallholders operate in 60% of the total tea land and account for more than 70% of the total tea produced. According to the Tea Control Act, tea lands between 20 perches and 10 acres are considered “Tea Small Holdings” across the country.

I am a tea smallholder myself. My journey began in 1977 with a 2-acre tea land. I now operate three small tea lands while simultaneously serving as the chairman of the Sri Lanka Federation of Tea Smallholders. Running a smallholding over the past three decades (or more) has not been an easy feat. No matter how big or small your tea plot is, ensuring that the land is well managed, tea is correctly harvested, and the quality of Ceylon Tea is upheld are challenging standards to meet every day.

Currently, a great deal is being made about the tea industry and tea companies being in hot water over concerns on wages, productivity, output, and quality. As such we felt it was important to share lessons from a tea smallholder perspective to help refine best practices and discover a sustainable way forward. It is essential that the industry – as a collective – ensures a paradigm shift in the way we’ve been managing this sector. While it is true that the industry was introduced by the British in 1867, the challenges we face today are totally different from then, and there is no reason as to why our management practices should not evolve with the times.

Basic industry dynamics

Tea smallholder plantations are found commonly across the island. Most low-country tea comes from plantations in Ratnapura, Galle, Matara and Kalutara. Mid-country smallholdings are widespread across, Kegalle and Kandy. Up-Country tea comes from Nuwara Eliya and Uwa. A majority of tea smallholders are both managers and harvesters of their lands. Small tea plots are easy to manage, and if you own one, you and your family will likely tend to it. The larger the tea plot, the more decentralised management becomes – quite similar to the basics of how the much larger tea companies function. However, unlike the big tea companies – widely known as Regional Plantation Companies (RPCs) – smallholders are not bound by a ‘Collective Agreement’ when it comes to the matter of worker compensation. Sri Lanka’s Industrial Disputes Act of 1950 defines the ‘Collective Agreement’ as an agreement relating to the terms and condition of employment of workmen in any industry. Within the tea industry, this agreement mainly focuses on worker remuneration and is renegotiated every two years.

With wage negotiations approaching early next year, industry actors across the board seem to be at cross-roads on the best way forward. The only point on which there seems to be much agreement is that reform is needed and urgently. This is a battle fought every two years, and unfortunately, there are no winners; only losers. By contrast, smallholders like us who are not bound by such an agreement have the independence to make decisions we feel are best for our workers, the industry and the legacy of Ceylon Tea.

While we use the Collective Agreement as a benchmark for the rate of payment, we have one crucial advantage, which is that we have the freedom to decide on the model of payment. For us, the Collective Agreement is only a guideline. Our main focus is therefore in ensuring that we are able to offer workers a method of payment that is attractive, while still remaining sustainable as a business.

Lesson from tea smallholders

Here’s how we work: As a baseline, tea harvesters are paid a rate of Rs. 30 for every kilo they harvest. Some harvesters pluck up to an average of 30 kgs on a good day. A good day is when the weather, the soil and harvesting practices are all in our favour. Leaves on each tea bush are harvested on rotation every 7-10 days. This means that leaves from each bush are plucked at least three times a month. A tea plot needs more than just the expertise of tea harvesters to yield a successful output. Besides tea harvesters, we also have other fieldworkers who engage in manual labour oriented tasks like weeding, manuring and up-keeping estate infrastructure who are paid a daily wage of Rs. 1000. These fieldworkers work 8 hours a day.

As illustrated above, for tea harvesters, our method of payment is far from an unrewarding, fixed daily wage model. Instead, each harvester is paid for the kilos of tea they yield – which is to say: a productivity linked model of remuneration.

Until the 2000s, like the RPCs, tea smallholders also paid harvesters and tea workers a daily wage. However, we found that this became a real challenge when trying to retain workers and maintain profitability, and so a collective decision was taken by tea smallholders to shift towards a productivity-linked wage, as we saw this to be far more efficient and effective for the industry.

Speaking from direct personal experience, the ability to remunerate tea harvesters based on output has been liberating for them and for myself. While this has helped me manage my tea lands better and yield higher output, it has also given me the time to venture into other areas of work I am passionate about. For instance, I was able to pursue my passion of setting up the National Pre-School Development Foundation; this foundation aims to train pre-school teachers in Early Childhood Development within plantation communities. For tea harvesters, moving out of a daily payment system has opened up a path for them to secure higher earnings while increasing mobility of labour – meaning that workers were freed up to actively pursue work on different smallholder plots in order to boost their earnings even further.

Over the past few years, tea harvesters who work on smallholder plots have evolved into entrepreneurs themselves. Driven by the need to improve efficiency and output, harvesters themselves have become ‘agents of change’. Management and production practices have become smarter, output-oriented and have resulted in improvements in the quality of the tea leaf itself.

A recent study by the International Labour Organisation confirms these observations which I have personally witnessed over the years as a smallholder, namely: that casual workers engaged in tea smallholdings usually earn a higher daily wage compared to the plantation workers and contribute towards more productive work (Future of work for Tea Smallholders in Sri Lanka, ILO, 2018). This is simply due to the fact that the people we contract to work on our plots are paid solely based on their productivity.

Over the years, although the tea smallholder sector has evolved to suit the times, it is unfortunate that the rest of our industry has been held back from progress by forcing the continuation of a basic wage system that does not prioritize or sufficiently reward productivity. RPCs continue to play an important role in our industry – particularly in terms of upholding the international image and reputation of Ceylon Tea through their commitments to securing international standards and certifications.

Hence it is essential that the RPCs are able to continue operations in a sustainable manner. A collapse in the RPC sector would create major risks to the entire industry’s reputation for the highest quality standards and its capacity for innovation – given that more recent advancements in mechanization, climate-friendly factories, use of drone technology and IT to optimize production and supply chain have only been made possible due to their investments. Such advancements can only be scaled down to provide benefits to tea smallholders once a path to implementation has been cleared by RPCs. Failure to facilitate this progress will ultimately jeopardize the sustainability of the entire industry.

Moreover, the first and most pressing solution to this dilemma is obvious to all parties. The wage model must be revised. Our experience as tea smallholders is clear proof of this fact and should not be lightly disregarded. We are all advocates of our tea, and what hurts one sector of our industry will ultimately impact all of us. A paradigm shift is necessary, and it can only start with a long-overdue update to the way in which, workers are paid.

(The writer is the chairman of the Sri Lanka Federation of Tea Small Holders. The Federation of Tea Small Holders is an industry body aimed at promoting the advancement and development of tea smallholdings in the country. In 2018, tea smallholders contributed more than 70% of the overall tea production in the country.)

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Business

President signals priority for domestic economic policy autonomy

Published

12 hours ago

2026/10/14

Sahan Weerasooriya

Govt. in ‘Consideration Mode’ over next IMF programme:

By Sanath Nanayakkare

President Anura Kumara Dissanayake revealed that the government remains in “consideration mode” regarding whether Sri Lanka will enter into a follow-up Extended Fund Facility (EFF) programme with the International Monetary Fund (IMF) once the active facility concludes in March 2027.

Participating in an engaging Fireside Chat at the inauguration of the Sri Lanka Economic and Investment Summit 2026, organised by the Ceylon Chamber of Commerce at the Shangri-La Colombo on October 12, the President emphasised that any future engagement with the IMF must afford adequate policy space for his administration to execute its own sovereign economic vision.

The session, moderated by Bingumal Thewarathanthri, Vice Chairperson of the Ceylon Chamber of Commerce and CEO of Standard Chartered Bank Sri Lanka, saw the Head of State outline a comprehensive roadmap spanning macro-fiscal discipline, port infrastructure expansion, energy sector restructuring, fuel pricing dynamics, and technology training.

Addressing a packed hall of top-tier business leaders, diplomats, and international investors, President Dissanayake noted that while the current IMF arrangement has proceeded without impeding the government’s core economic strategy, a prospective post-March program will undergo rigorous evaluation.

“Our foreign reserve levels are satisfactory for paying our way through the world. However, there is global uncertainty amid the current geopolitical situation. No indicators can say when the war will end or what weather-related disasters could happen,” the President remarked, referencing external vulnerabilities such as Middle Eastern tensions and local climate disruptions like Cyclone Ditwah.

He stressed that while macro-fiscal parameters – including progressive revenue targets and debt-ceiling management – remain fundamental to national stability, the government is acutely conscious of the tax burdens and social costs borne by citizens. Therefore, any future framework proposed by the IMF will be examined through the lens of domestic policy autonomy and social protection.

Turning to critical national assets, President Dissanayake announced bold restructuring plans for the Port of Colombo aimed at elevating Sri Lanka’s position as a dominant regional maritime hub.

East Container Terminal (ECT): The government intends to grant management and operating rights of the ECT to a private sector partner while retaining 100% state ownership. Operating under the Sri Lanka Ports Authority (SLPA), the terminal currently handles approximately 500,000 TEUs against a potential capacity of 3.2 million TEUs. Five to six major global shipping lines have already expressed preliminary interest.

West Container Terminal II (WCT II): A funding requirement of approximately $1.4 billion for breakwater infrastructure is being sought from multilateral development institutions. Preliminary design work, assisted by the Asian Development Bank (ADB), is slated for completion by April 2027, adding another 3.2 million TEUs in annual throughput capacity upon full buildout.

Logistics Hub & Custom Clearance: The SLPA will call fresh tenders for a dedicated logistics center within the Port of Colombo following the resolution of land disputes. Additionally, Cabinet approval has been granted for a Public-Private Partnership (PPP) to establish a 150-container examination facility in Kerawalapitiya to streamline Customs clearance.

Addressing energy security and domestic distribution, the President indicated that existing petroleum agreements with private market participants – including Lanka IOC and Sinopec – would undergo formal review involving the Attorney General.

Expressing concern over distribution bottlenecks in outstation areas where private outlets dominate, President Dissanayake called on private players to balance profit margins with social responsibility during times of price volatility. To guarantee uninterrupted national supply, the Ceylon Petroleum Corporation (CPC) plans to add 75 new filling stations across the island.

Furthermore, to enhance maritime competitiveness, the government is considering lowering the 2.5% tax/levy on bunkering services in Budget 2027 and exploring CPC-private partnerships for bunker fuel storage expansion at the JCT Oil Bank.

In renewable energy, the government will open four major grid transmission lines for private-sector participation and transition away from fixed feed-in tariffs set by the Public Utilities Commission of Sri Lanka (PUCSL) toward competitive bidding to drive down generation costs. Floating solar projects, such as the Ibbankatuwa model, will be prioritised to overcome land availability constraints.

In a bid to address structural workforce shortages in high-tech sectors, the President revealed that Sri Lanka will sign an agreement with Singapore next week to establish a specialized training institute on Wijerama Mawatha in Colombo. The center will focus on rapidly expanding local capacity in Information Communications Technology (ICT) and Artificial Intelligence (AI).

He also highlighted plans to restructure public sector remuneration for highly skilled professionals and proposed an outcome-based procurement model for international promotional campaigns, such as global tourism marketing, where agencies are compensated based on verified growth in tourist arrivals.

Business

‘SL, a top market in region for quality powder coatings’

Published

12 hours ago

2026/10/14

Sahan Weerasooriya

Franck Derouen (L) and Nazru Nizar at the product launch.

By Hiran H. Senewiratne

‘Sri Lanka is a top market in the South Asian region for quality powder coatings, Franck Derouen, Business Director, Industrial MEA – West & Central Asia, Axalta Coating Systems (ME) LLC, said.

‘We see significant long-term potential for powder coatings in Sri Lanka and look forward to working closely with Richardson Holdings to offer Axalta’s technology, expertise and global standards for all customers, Derouen said at a launch of the products in Sri Lanka together with Richardson Holdings recently. The event was held at the ITC Ratnadipa, Colombo.

Derouen added: ‘More than a brand transition, this appointment comes as project volumes and material demand continue to rise across Sri Lanka’s construction and property development sectors, giving developers and specifiers greater access to premium performance powder coatings at a time of renewed industry activity.

‘For architects, engineers, extruders and applicators, Axalta’s powder coatings combine UV resistance, gloss retention and corrosion protection with the technical performance expected for long-term architectural projects.’

Group Managing Director, Richardson Holdings, Nazri Nizar said, ‘A strong global brand might open the door. However long-term customer trust is built locally through dedicated support and reliable delivery. The true measure of a distributor lies in the service, care, and operational execution which follows after the product arrives.

‘Combining Axalta’s 150 years of global coating expertise with Richardson’s two decades of deep local relationships and technical know-how, we are bringing customers the best of both worlds.

‘Bridging global standards with local expertise, Richardson Projects will serve as Axalta’s trusted local powder coatings partner, combining global technology with two decades of on-the-ground experience serving Sri Lanka’s construction ecosystem.’

Pradeep Kahawalage, Chief Executive Officer, Richardson Projects, said, ‘After two decades building trust in Sri Lanka’s powder coatings industry, this marks an important new chapter for Richardson. Axalta gives us a global technology partner that matches the standards we have already built our reputation on. We are excited to bring that expertise to Sri Lanka’s construction and aluminium industries in the years ahead.

‘With a focus on sustainability, technical excellence and long-term partnership, Richardson looks forward to supporting architects, developers, fabricators and applicators throughout Sri Lanka with Axalta powder coating as the industry continues to grow.’

Business

99X Sri Lanka takes lead in product engineering and tech solutions

Published

12 hours ago

2026/10/14

Sahan Weerasooriya

From left: Chrishan de Mel, Chief Marketing and Corporate Affairs Officer, 99x Product Engineering; Odd-Sverre Østlie, Group CEO, 99x Norway; Shehani Seneviratne, Chief Operating Officer, 99x Product Engineering; Kalana Wijesekara, Chief Developer Experience Officer, 99x Product Engineering.

By Steve A. Morrell

Headquartered in Norway, Sri Lanka’s 99x office is emerging as a global leader in digital product engineering and tech solutions.

The above products and their development are prioritized in even local university level digital technology centered courses of study. Priority is increasingly attached to them in the context of career development.

Shehani Seneviratne, Chief Operating Officer of 99x Product Engineering, while reiterating the importance of these subject areas at a recent event stressed their continued centrality in degree level courses of study.

The event brought together members of the 99x leadership team including Odd-Sverre Østlie, Group CEO of 99x, Kalana Wijesekara, Chief Developer Experience Officer, Shehani Seneviratne, Chief Operating Officer, 99x Product Engineering, and Chrishan de Mel, ChiefMarketing and Corporate Affairs Officer of 99x Product Engineering.

Opening the event, Chrishan de Mel shared how 99x’s Agent Control Plane xians.ai was awarded the “Best Agentic AI Solution” at the recently concluded National AI Awards. The platform was also awarded national recognition at the SLASSCOM National Ingenuity Awards as the “Best Innovation in Internal Processes, Technology or Framework” category. Earlier this year, the 99x AI-first initiatives won the overall gold award at the Best Management Practices awards.

As 99x expands its use of AI tools and agents across engineering, support and other functions, the company recognised the need for greater visibility into how these AI-assisted workflows perform. As AI continues to reshape traditional engineering workflows, it also creates new opportunities to improve productivity, quality and speed. This need led to the development of AI Hub, 99x’s new platform for observing and measuring AI assisted workflows.

Speaking at the AI Hub launch, Kalana Wijesekere said, AI adoption is happening at a remarkable pace but adopting more tools does not automatically mean achieving better outcomes. AI Hub gives teams the visibility to understand what is happening within their AI assisted workflows and enables them to make informed decisions about how these workflows should evolve.

Sharing an update on the 99x group’s global journey and market outlook, Odd-Sverre Østlie highlighted the company’s continued expansion across Europe, the Americas and Asia, alongside growing demand from customers seeking to integrate AI into their products and operations. He stated, ‘AI is fundamentally changing the expectations our customers have from their technology partners. They want to move faster, experiment more quickly and increasingly understand how AI can create measurable business value. Our ambition is to be a long-term engineering partner that can help customers navigate this transformation. The launch of AI hub advances 99x’s AI-first strategy moving beyond the adoption of AI tools.’