Many of Sri Lanka’s Regional Plantation Companies (RPCs) are breaking away from legacy practices of the sector by redefining themselves through innovation. In this week’s, ‘RPC Innovation Series,’ we explore the question: ‘can Pure Ceylon Tea help drive the fight against climate change?’ Having developed innovative, home-grown solutions and leveraged and adapted global best practices to local conditions, the team at Metrocorp subsidiary, Bogawantalawa Tea Estates PLC believe they can help lead the charge.
Renowned management consultant, Peter Drucker is famously quoted as saying that: “if you can’t manage what you can’t measure”. This timeless piece of wisdom emerged in the context of a post-World War II industrial boom, at a time when maximisation of productivity in pursuit of profit was the sole objective of free enterprise.
While this fundamental principle of management pre-dates formalised Environmental, Social and Governance (ESG) standards, it is perhaps more relevant than ever today. In the backdrop of what UN Secretary-General António Guterres has described as a “Code Red for humanity”, the need for a decisive global mobilisation against climate change has never been more urgent.
One Sri Lankan company that has taken responded most effectively to this challenge and is already proving that progress is possible is Metrocorp’s globally celebrated subsidiary, Bogawantalawa Tea Estates PLC. While its core business is in tea, Bogawantalawa is a truly diversified company that also manages managing Agroforestry, rubber, herbs, spices, oil palm and coconut, in addition to renewable energy, a growing eco-tourism business.
“It can certainly be daunting to consider the scale of the challenges we must overcome in order to effectively address the threat of climate change. However, we believe that in the face of such a truly global crisis, even smaller nations, economies and enterprises have the potential to make significant positive contributions. This in turn rests on the commitment of each firm to build a sincere top-to-bottom passion for sustainability in order to take their organisations far beyond the People, Planet, Profit model and into the realm of effective climate action,” says Bogawantalawa Tea Estates PLC Executive Director, Lalith Munasinghe.
“True to our motto, of being passionate growers with sustainability at heart, we have been able to embed these best practices at the core of all our operations, making them a way of life for all our employees,” he added.
Having gone beyond carbon neutral status in 2017, the company officially became Climate Positive in 2019, making Boagawantalawa the worlds’ first and only tea growing, manufacturing and marketing company to offer Gold Certified uncompensated Climate Positive Teas. This means that for every 1 kilogram of made tea purchased from Bogawantalawa Tea Estates, approximately 100g of carbon dioxide is sequestered in the soil.
While a remarkable achievement in its own right, Munasinghe believes that this is only just the beginning. Through a series of ambitious investments over the past decade, the company is also well on track to increase its sinking rate to 300g of carbon per kilo of made tea from Bogawantalawa by 2023; if not sooner.
Leading the implementation of Bogawantalawa Plantations’ pioneering efforts in sustainability is Bogawantalawa Tea Estates PLC Director of Sustainability, Research and Development Thusitha Bandara. “By pursuing innovation, leveraging new technologies, and implementing agricultural best practices, we are able to channel all of our operations towards ensuring the highest level of sustainability.
“As communicated at the last COP26, we know now that the window to keep within the 1.5 degree warming target is closing fast and we realize that our shared planet needs everyone to take responsibility to drive climate action.
“We believe that companies like ours can set the pace not just locally but globally as well. In this manner, we believe that all of us can effectively advance action against climate change. In order to drive change, we have to be able to measure ourselves as accurately and credibly as possible, in order to hold ourselves to the highest standard possible, so that we in turn can be accountable to all of our stakeholders.”
Measure, Verify, Mitigate
Bogawantalawa Plantation is the world’s 1st tea growing, manufacturing, and marketing company to offer Climate Positive Teas, certified for 100% renewables
To that end, Bogawantalawa, set its sights on clearing the highest possible international standard for sustainability (Climate Positive, 100% Renewables, RA, Fairtrade, Organic…etc.) enabling the highest levels of environmental and social integrity aligned to all United Nations Sustainable Development Goals (UNSDGs).
“While adopting Climate Smart Agricultural practices across all Bogawantalawa estates and focusing on overall atmosphere, water, soil and quality of life of our people we are committed to bringing to the world the finest teas ethically produced with the highest level of sustainability. We are committed to making continuous improvements in the management of our social and environmental impacts to further enhance this legacy,” Bandara explained.
As part of the requirements for certification, Bogawantalawa had to accurately measure its carbon footprint across Scope I, Scope II and Scope III emissions. This meant careful, frequent, externally validated audits of the company’s entire carbon emissions. These calculations take into account the entire carbon footprint of all operations directly or indirectly connected to the company’s operations.
This includes everything from direct Green House Gas emissions from sources controlled directly by the company – such as fuel consumption for boilers – to total electricity consumption from the grid, emissions created from the packaging and transport of its produce to end-consumers.
“When pursuing Climate Positive Certifications, it is best to first attempt to optimize emissions as much as possible across the entire supply chain. Once that first round of mitigation was completed, we commenced the first in a series of continuous audits in order to accurately identify and measure our total GHG emissions.” While a difficult and painstaking task, especially on the first attempt, Bandara noted that the auditing processes gets much easier as the new processes get embedded into regular operations.
“By commencing such a detailed carbon footprint audit, we were able to understand what our highest sources of emissions were, and focus our efforts to further optimize critical processes, while offsetting the remaining emissions, leveraging global best practices on emissions mitigation,” Bandara noted.
Bandara stated that Bogawantalawa is also working towards the launch of a block-chain based solution to enable a new paradigm in transparent, real-time traceability across the value chain that goes well beyond traditional frameworks.
Based on the Climate Positive audits, the company identified that it’s largest sources of emissions were from electricity – which accounted for 45% of Bogawantalawa Tea Estates’ total carbon footprint, with the remainder being generated by the manufacture of fertiliser used by the company (18%), fuel (13%), packing materials (8%), fuel-wood transportation (6%) and electricity transmission loss (2%).
With its emissions footprint calculation completed, Bandara explained how the company that began to calculate, and then expand the carbon sinking capacity across its entire value chain. Given the significant contribution of the company’s electricity consumption from the grid, investments into renewable energy were among the first steps implemented by the company to cut down its footprint.
Through these efforts, Bogawantalawa is now generates a total of 15 GWh of clean, renewable energy – accounting for more than 100% of its total energy requirements, and saving GHG emissions equivalent to 11,000 MT annually, delivering social, environmental and financial returns to the company.
“The Sri Lankan experience with renewable energy dates back as far as the time of the British, when the nation’s first mini-hydro power plants were first established. In the subsequent decades, our company has continuously invested in harnessing these hydro resources to the point where today, we have built up 4 MW of internal hydro power capacity while our sister company Eco Power Pvt Ltd has built up a further 37 MW within the country and more than 20MW in overseas he stated.
Meanwhile, the company’s first trial for solar energy in upcountry conditions commenced in 2012 – at a time when few commercial solar power projects had been commissioned. Over the next decade, these efforts have also gathered significant momentum, with over Rs 280 million having been invested in the past 5 years towards the establishment of 2,500 kW of rooftop solar energy capacity, where all but one of the company’s factories are now supported with state-of-the-art solar power systems.
As part of its efforts to scale up renewable energy capacity and further expand its carbon sinking capacity, Bogawantalawa is also evaluating potential for the installation of a further 8.25 MW of wind power across two projects in the Bogawantalawa Valley.
Forestry for the future
Another significant tool in Bogawantalawa’s efforts to drive climate action is forestry. The company cultivates numerous species of commercial and native species, and annually plants thousands of diverse seedlings in order to increase forestry extents within its own plantations.
“There are some strategic locations which we have allocated purely for biodiversity enhancement, particularly in sensitive habitats near water bodies and grass lands. Depending on the unique conditions in each of these zones, we select suitable species for re-foresting or enrichment in order to improve the biodiversity and resilience of these ecosystems,” Bandara explained.
These initiatives have also been expanded out of estates, through partnerships with national organisations, Government agencies – including the Ministry of Environment – and Non-Governmental Organisations (NGOs). Most recently, Bogawantalawa has also signed on as a partner to a major conservation programme in Sri Lanka’s central hills through various initiatives.
Additionally, the company has also initiated a series of social forestry programmes with communities and schools in proximity to its estates. Through these initiatives, Bogawantalawa distributes seedlings and planting materials such as fertilizer, plant protective covers, and other equipment. These are distributed free of charge to school children, who are also educated on proper care of their plants. Each child is then given the responsibility to look after their own plant, thereby encouraging Sri Lanka’s future generations become active and enthusiastic stakeholders in the national effort to conserve the island’s rich natural heritage.
Powering climate smart agriculture
Bogawantalawa Tea Estates is one of several Sri Lankan RPCs that have steadily been scaling its expertise in organic agriculture
“In addition to social mobilisation, science, technology and data are essential in the battle to preserve our environment and drive action against climate change. Given our connection to communities, and our expertise in understanding agriculture and its relationship with nature, we realised we were also ideally positioned to help Sri Lanka improve its resilience to climate change through science,” Bandara notes.
It was with that understanding that Bogawantalawa established its own Climate Smart Agriculture Centre in order to gather vital data about rainfall , air temperature, solar radiation, relative humidity, wind speed, soil conditions, ground water levels, air quality, bio-diversity, and other essential metrics related to climate change. Through various analysis, using different tools / software, Bogawantalawa predicts and identify the trends of climate change and possible impacts the agriculture systems and accordingly alert the estate management to take necessary actions on short, medium and long term basis, to minimize the vulnerability and improve the resiliency of their farming units.
“Armed with this information, we are able to plan out our own operations in a more sustainable manner, while also sharing data so that all stakeholders to the agriculture sector can also have access to this information,” Bandara stated. This in turn enables more strategic interventions in commercial agriculture and animal husbandry, and responses to drought, high intensity rainfall, soil degradation, pest, disease and weed outbreaks.
Moving forward, Bandara stated that such initiatives would help to disseminate agricultural and environmental best practices, thereby improving resiliency of plantations and farming systems to face the challenges of climate change successfully.
Growing expertise in organic agriculture
Bogawantalawa Tea Estates is also one of several Sri Lankan RPCs that have steadily been scaling up their expertise in organic agriculture over the past two decades. “Organic agriculture has been a topic that has gained a lot of positive and negative attention in the recent past. While there is still a lot of debate, we believe that most Sri Lankan RPCs have accumulated a great deal of invaluable knowledge and experience in both cultivation models, which can have a significant positive impact on the broader agriculture sector in future,” Bandara noted.
The Bogawantalawa approach augments conventional farming with strategic organic interventions that are based on four organic farming principles: health, fairness, ecology and care. Crucially, these models have to be geared towards profitable commercial scale cultivation, in order to ensure their continued economic sustainability.
As part of these initiatives, Bogawantalawa has invested Rs. 40 million per annum towards establishment and expansion of sustainable soil development programs. These initiatives leverage drone technology to conduct soil mapping, thereby identifying nutrient deficiencies, which in turn feed into the company’s fertility management, and erosion control strategies.
Additionally, the company also established its own conventional and organic fertilizer manufacturing and blending facilities to blend inorganic fertilizers according to the site specific requirements and production of organic fertilizers for organic projects and soil developments in other areas.
“These techniques help us to optimize use of chemical and organic inputs – which makes sense from an agricultural management perspective, as well as financially, and for the environment..
A sustainable future within reach
The results of Bogawantalawa’s pioneering approach to modernized, climate-smart plantations management speak for themselves. Over the past year, the company recorded a significant increase in profits. These improvements were the result of the combined effect of the company’s holistic approach to plantations management. Since the company first took on management of its estates, its annual Yield Per Hectare (YPH) for tea has increased from 800 kg per hectare to 1,500 kg per hectare. Crucially, the company has continuously re-invested its profits back into the business.
In addition to its superior agricultural and environmental standards – which have enabled the company to charge a premium on its produce, Bogawantalawa has also undertaken ambitious diversifications, expanding to include non-traditional crops like lemongrass, vanilla, cinnamon, cardamom, cloves, turmeric, ginger, pepper and coffee.
Looking ahead, Bogawantalawa has ear-marked a further Rs. 6.2 billion towards such improvements.
“The combined impact of these R&D initiatives have the potential to revolutionize agriculture in Sri Lanka, and potentially around the world, Sustainability is a way of life at Bogawantalawa. We believe the essence of sustainability is encapsulated in a phrase penned century before the word sustainability itself was coined. That is when the Red Indian Chief Seattle conveyed to the American president, “Earth does not belong to us. We belong to Earth”.
“This is our creed at Bogawantalawa Tea Estates and we therefore consider sustainability as a core pillar of our day today business operations. Behind every action we take and each of our operations and processes our attention is on achieving stellar performances in the triple bottom line.” Munasinghe asserted.
Dialog Smart Home Enables Seamless Home Automation via Range of Intuitive Solutions
Dialog Axiata PLC, Sri Lanka’s premier connectivity provider, introduced a range of convenient and integrated solutions via ‘Dialog Smart Home’ to enable intelligent automation and intuitive control of homes.
The newly introduced range of future-fit smart home solutions by Dialog Smart Home ranges from Home Automation, Home Security & Surveillance and Home Connectivity, and are designed to enable any home to work as one harmonious system where all elements work in tandem together to create a truly intelligent home.
The Home Automation solutions offer homeowners seamless and convenient control of their electronic appliances through their smartphones anytime, anywhere. With the Smart Touch Wall Switches, Smart Power Strips and Smart Fan Controllers, homeowners can take control of existing light bulbs, table fans, rice cookers, chargers, ceiling fans and more appliances. Additionally, the Artificial Intelligence (AI) powered TeDi Alexa Solution enables users to control connected smart devices including TVs, air conditioners, home security systems and more through voice commands.
Home Security & Surveillance solutions transform basic cameras into high-powered CCTV solutions. Baby and house monitoring smart cameras can be placed inside homes to keep a 360-degree eye on children and pets. The Indoor Security Camera has the ability to sound a siren and notify users if a stranger enters their home. Dialog Smart Home has also partnered with Singer to offer customers world-renowned Dahua CCTV solutions.
The Home Connectivity solutions offers consumers Wi-Fi extenders to facilitate uninterrupted internet connectivity across the house to fit the homeowner’s lifestyle and requirements.
CBSL implements extraordinary measures to support banking sector
The Central Bank of Sri Lanka, considering the prevailing macroeconomic conditions and its impact on the banking sector, has decided to implement the following regulatory measures to support the banking sector to facilitate effective financial intermediation and the flow of credit to the economy, whilst ensuring the soundness of the banking sector.
• Sri Lankan banking sector maintains a Capital Conservation Buffer (CCB) of 2.5% to ensure that banks have an additional layer of usable capital that can be drawn down during stress times. An industry wide flexibility is granted for banks to drawdown the CCB (up to 2.5%), if needed, subject to restrictions on distribution to shareholders/ repatriation of profits and submission of a capital augmentation plan to rebuild CCB during a period up to three years.
• The current deadline for licensed banks to meet the enhanced minimum capital requirement (31.12.2022) is extended up to 31.12.2023. Licensed banks which are unable to meet the minimum capital requirement by 31.12.2022, need to submit their capital augmentation plan, including plans to consolidate or merge with suitable financial institutions, by 31.12.2022 and these licensed banks too shall refrain from distribution of dividends/ repatriation of profits until the minimum capital requirement is met.
• Licensed banks are encouraged to move to approaches such as The Standardised Approach (TSA) or alternative TSA for computation of risk weighted assets for operational risk for the purposes of computing the Capital Adequacy Ratio, subject to supervisory review.
• Licensed banks are given the flexibility to stagger the unrealised mark to market loss on Government Securities denominated in LKR on account of the recent interest rate hike for Capital Adequacy purposes until Q2 of 2024, subject to conditions.
• Licensed banks are granted flexibility on the treatment for Other Comprehensive Income (OCI) for Capital Adequacy purpose in line with the International Standards.
• The deadline for licensed banks to submit the document on Internal Capital Adequacy Assessment Process (ICAAP) for 2022, to the Central Bank of Sri Lanka is extended by one month, until 30.06.2022.
• As a short-term measure to support licensed banks to adjust their liquidity profiles, licensed banks are provided with the flexibility to operate maintaining the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) not lower than 90% up to 30.09.2022. Furthermore, the Central Bank of Sri Lanka, on 06 May 2022 decided to restrict certain discretionary payments of licensed banks, such as declaring cash dividends and repatriation of profits, until the financial statements for the year 2022 are audited by its External Auditor, engaging in share buy backs, increasing management allowances and payments to the Board of Directors until 31 December 2022 with a view to strengthening the liquidity and capital positions of licensed banks under these exceptional circumstances.
The above measures were introduced with the aim of providing the licensed banks with more flexibility and opportunities to operate in these challenging conditions and support economic recovery, while taking measures to improve their safety and soundness. The Central Bank of Sri Lanka will periodically review the implementation of these policy measures and expects licensed banks to avail these measures in the best interest of the customers and the economy at large, while supporting the banking sector to remain resilient.
CEAT official tyre supplier for locally assembled Tata Ace HT
CEAT Kelani Holdings has been appointed as the official tyre supplier for Tata Ace HT series compact trucks which are assembled in Sri Lanka by DIMO in collaboration with India’s largest automobile manufacturer TATA Motors.
CEAT RHINO PLUS TL tyres in the size of 155R12 8PR, manufactured at the CEAT Kelani plant in Kelaniya are used for the TATA Ace HT series vehicles, popularly known in Sri Lanka as “DIMO Batta” under this project. The locally manufactured CEAT RHINO PLUS TL tyre features a zig zag pattern on its circumference and ribs with lateral notches that contribute towards uniformity and better wear and tear on local roads.
Commenting on this latest OEM agreement of the company, CEAT Kelani Holdings Managing Director Mr. Ravi Dadlani said: “As a brand that has been at the forefront of local value addition in Sri Lanka, CEAT is excited to contribute further to the process through its association with this assembly operation. This is particularly relevant in the prevailing situation in the domestic market. We are able to provide high-quality tyres engineered for local conditions at competitive prices and ensure uninterrupted supply, while at the same time helping to conserve foreign exchange.”
In January this year, CEAT was appointed as an OEM for a range of heavy-duty trucks, tippers and light commercial vehicles assembled in Sri Lanka by Lanka Ashok Leyland PLC (LAL), a joint venture company of Ashok Leyland India. In November 2021 the brand was chosen as the OEM for Bolero City Pik-up vehicles assembled in Sri Lanka by Mahindra & Mahindra India in collaboration with Ideal Motors.
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