Business

Bitter Aftertaste: How a Wage Hike Could Brew Disaster for the Ceylon Tea Industry

Published

2 years ago

2024/06/9

The Ceylon tea industry, a vital component of the national economy, is under immense pressure from the proposed 700 Rupee wage increase for tea estate workers. While it is said that the intention behind the wage hike is to improve worker livelihoods, industry experts refer this as a pure political move aimed at gaining the estate worker’s vote and does next to nothing to address the real issues at hand. The potential repercussions could be catastrophic for the industry and its workforce, resulting in severe unemployment and economic instability.

Currently, the tea industry employs over one million people and significantly contributes to Sri Lanka’s GDP. However, many tea plantations already operate on razor-thin or negative margins due to fluctuating global market prices and rising production costs. Imposing a mandatory wage hike could push these plantations over the edge, leading to widespread financial distress and potential closures. Profits of a handful of companies from non-tea sources have been highlighted whereas the majority of companies are loss making. Furthermore, there was a one-time exchange gain from the dramatic currency devaluation last year. Ceylon tea already has the highest costs and the lowest productivity in the tea growing world.

The immediate concern is the financial strain this wage increase would place on the 21+ plantation companies. These businesses, particularly small to medium-sized ones, may struggle to absorb the additional costs. Faced with higher labour expenses, companies might be forced to cut costs elsewhere, potentially reducing worker benefits, delaying essential maintenance, or scaling back investments in sustainable farming practices. This could result in a decline in the quality of tea, making Ceylon tea less competitive internationally and leading to decreased sales and revenue.

The fear of industry collapse is not unfounded. If the tea industry crumbles, the ripple effects would be felt nationwide. Thousands of workers could lose their jobs, and the economic fallout could extend to other sectors, creating a significant national crisis. The proposed wage increase, while well-intentioned, risks becoming the catalyst for widespread economic hardship.

More alarmingly, the proposed wage hike could trigger a wave of unemployment. Smaller plantations that cannot afford the increased wages may be forced to downsize or shut down entirely, resulting in thousands of job losses. The very workers the wage increase aims to help could find themselves without any income, worsening poverty and economic instability in rural communities dependent on tea production.

Rather than focusing on a short-term wage increase, a more sustainable approach is needed. Comprehensive strategies should be implemented to improve worker livelihoods without jeopardizing the industry’s stability. This includes investing in worker training and development, enhancing healthcare and housing facilities and promoting sustainable agricultural practices.

While the proposed 700 Rupee wage hike is aimed at uplifting tea estate workers, the potential for industry collapse and mass unemployment cannot be ignored. It is crucial to consider the broader implications and adopt a balanced approach that ensures the long-term sustainability of the Ceylon tea industry. Without careful consideration and strategic planning, the wage increase could lead to greater economic problems, leaving workers worse off than before. After all, decisions made for one’s political gains could end up destroying one of Sri Lanka’s largest forex earners.

**This article is written by an industry analyst who prefers to remain anonymous

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Business

SLT-MOBITEL driving Sri Lanka’s economic resilience through digital infrastructure

Published

22 hours ago

2026/09/10

Sahan Weerasooriya

SLT-MOBITEL marks its triple triumph at the National Business Excellence Awards 2026

Corporate accolades underscore the alignment between its operational excellence and national development

In an era where national competitiveness is intrinsically tied to digital connectivity, strengthening the country’s digital backbone has become an urgent priority. Within this context, the evolving role of Sri Lanka’s leading telecommunications provider, SLT-MOBITEL, offers valuable insight into how technological infrastructure can underpin broader economic resilience.

Telecommunications and digital networks are foundational to economic transformation. By expanding high-speed broadband access, upgrading enterprise cloud capabilities, and bridging the urban-rural connectivity divide, SLT-MOBITEL helps reduce business transaction costs, streamline supply chains, and enable micro, small, and medium enterprises to reach global markets.

Recent corporate accolades further underscore this alignment between operational excellence and national development. SLT-MOBITEL’s triple triumph at the National Business Excellence Awards 2026 – winning in the Infrastructure and Utilities sector, Performance Management, and ICT Services categories – highlights its growing impact. Notably, the recognition of eChannelling’s contributions to digital healthcare reflects a broader strategic pivot toward integrated technology solutions.

“Institutional efficiency of this nature is critical for attracting foreign direct investment, as global partners increasingly assess a country’s digital maturity and systemic stability before committing capital,” noted industry observers.

Moreover, the company’s transition from a conventional telecom utility to a comprehensive digital solutions provider aligns seamlessly with Sri Lanka’s national digitalisation agenda. As the country pursues public sector modernisation, enhanced e-governance, and a competitive knowledge economy, the private sector must step up to deliver secure, scalable, and future-ready networks. Investments in data centres, cybersecurity frameworks, and advanced ICT infrastructure act as strategic buffers, ensuring that Sri Lanka’s economic apparatus remains agile and resilient amid future global uncertainties.

However, industry experts caution that while these achievements are commendable, SLT-MOBITEL still has a considerable distance to cover in fully enabling a truly digital economy.

Business

Port City Colombo strengthens Gulf investment ties at Dubai diplomatic engagement

Published

22 hours ago

2026/09/10

Sahan Weerasooriya

The panel discussion at the engagement

Port City Colombo (PCC) took a prominent role as Platinum Sponsor at the second edition of Sri Lanka Beyond Your Dreams, a high-level diplomatic and investment engagement hosted by the Consulate General of Sri Lanka in Dubai and the Northern Emirates. The event, held on 2nd September 2026 at the Hilton Dubai Al Habtoor City, brought together over 400 senior UAE-based business leaders, investors, diplomats, and institutional stakeholders, alongside Sri Lanka’s most senior government representatives.

The gathering was graced by Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of Foreign Trade, as Guest of Honour, and Vijitha Herath, Sri Lanka’s Minister of Foreign Affairs, Foreign Employment and Tourism. A high-level Sri Lankan delegation – including the Secretary to the Prime Minister, the Chairman of the Board of Investment, the Chairman of the Export Development Board, and the Director General of Commerce – underscored the government’s strong commitment to deepening economic diplomacy with the UAE.

In his keynote address, Minister Herath reaffirmed the centuries-old ties between Sri Lanka and the Arab region, emphasising the UAE’s vital role as a key economic partner. He stressed the urgency of finalising a Comprehensive Economic Partnership Agreement (CEPA) with the UAE, which would establish a robust framework to elevate trade, investment, and bilateral cooperation. Declaring Sri Lanka “open and ready for business,” he positioned Port City Colombo as the physical embodiment of this economic mission – a modern Special Economic Zone (SEZ) with a dedicated legal framework and competitive incentives, offering UAE investors a natural gateway to South Asia while maintaining strong Gulf connectivity.

Business

American Premium Water strikes Gold at Dragons of Sri Lanka 2026

Published

22 hours ago

2026/09/10

Sahan Weerasooriya

The achievements are particularly significant given that the company’s debut at the Dragons awards has resulted in four Dragons across four categories.

American Premium Water has secured four wins at Dragons of Sri Lanka Awards 2026, including three Gold Dragons and one Black Dragon, marking a significant milestone for the brand following its relaunch last year.

Part of the prestigious Dragons of Asia awards, Dragons of Sri Lanka brings the program’s regional platform to the local market, celebrating creative and effective marketing communications, with entries evaluated on strategic thinking, creativity, execution and impact. Established in 2000, Dragons of Asia is one of Asia’s premier results-driven marketing awards programs.

For American Premium Water, the achievements are particularly significant given that the company’s debut at the Dragons awards has resulted in four Dragons across four categories. In the distinction of Gold Dragons, American Premium Water was recognized across three categories including Product Launch or Re Launch, Cause, Environment or Sustainability and Creative Excellence while the Black Dragon was awarded in recognition of Small Budget.

Competing alongside leading brands and agencies in Sri Lanka, American Premium Water’s four wins demonstrate the strength and effectiveness of its recent work. Winning three Gold Dragons across three distinct categories highlights the breadth of the brand’s achievements, while the Black Dragon for Small Budget further emphasizes its ability to create meaningful impact through focused and efficient investment.