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.
Pelwatte Dairy conducts O/L Seminars as part of its CSR campaign
Pelwatte, a local dairy brand with international standards and an unwavering promise of delivering quality fresh milk to its customers recently organized a series of seminars for the GCE Ordinary Level students. This was done with the intention of furthering Pelwatte’s corporate philosophy of uplifting livelihoods through sustainable methods. The seminars commenced during the last week of March and concluded in the 1st week of April 2022.
The seminars focused on maths in particular as it was found that many students either struggled in maths or were highly doubtful about it. Pelwatte, being a responsible brand took initiative to help these students in this time of need. With Education being at a critical juncture and O/Ls being a critical stage in a student’s career, this program was initiated. The Managing Director of Pelwatte Mr. Akmal Wickramanayake said “Pelwatte is a brand that goes to every extent to ensure that our communities are treated well. This includes ensuring that the next generation is well versed in their education”.
He said this while commending his in-house experts, Mr Asela Sampath who is a mechanical engineer and Mr. Kavinda Umesh who is a chemical and processing engineer attached to the Pelwatte Engineering and Technical team. These two individuals led the seminar and took the students through not just the entire syllabus but also through several model papers. They made sure to answer and clarify any and all doubts that these students had before they wrapped up.
These series of seminars were conducted mainly in Buttala with the participation of schools such as Pelwatte Mahavidyalaya, Kukuranpola Vidyalaya, Dutugemunu Mahavidyalaya and Pelwatte Ranjan Wijeratna Vidyalaya. Students in the Hundreds attended these seminars which lasted for a day. Students from the respective schools got to learn from two qualified engineers who not only showed them how to solve mathematical problems but also gave them an idea about the type of career they can go into in the future to develop the engineering field in Sri Lanka.
Pelwatte received many blessings from both the students and their parents who were present for carrying out such programs. The current situation of the country is such that many corporates have either completely scrapped their community welfare programs or have limited it. However, Pelwatte aims to continue doing such activities to not only uplift communities but to also boost morale. Education is a very important focus area for Pelwatte as it has continuously done many activities to uplift education especially in rural areas that are in need of programs like this.
‘HNB continues to demonstrate resilience under stressed conditions’
In the backdrop of turbulent market conditions, Hatton National Bank PLC continued to demonstrate resilience, strength and stability, posting a profit before tax of Rs 5.9Bn and a profit after tax of Rs 4.8Bn for the first quarter of 2022 recording a YOY growth of 7% and 3% respectively. At Group level PBT and PAT were at Rs 6.4 Bn and Rs 5.4 Bn respectively.Commenting on the first quarter performance, Aruni Goonetilleke Chairperson of Hatton National Bank PLC, stated that “as Sri Lanka goes through unprecedented times, HNB has yet again demonstrated resilience. At this critical time, I wish to reiterate our commitment to all our stakeholders. As a responsible Domestic Systemically Important bank, ensuring safety, stability and sustainability is our prime focus.”
With the tightening of the monetary policy since August 2021, the AWPLR increased by nearly 400 bps over the 12 months up to March 2022. This enabled the Bank to record a 59% increase in NII during 1Q 2022 compared to the corresponding period of the previous year. The Net Fee income grew by 42% YoY to Rs 3.2 Bn for the first quarter of 2022, driven mainly by improved cards transactions and trade income.The significant devaluation of the rupee as at March 2022, compared to the previous year, resulted in trading gains of approximately Rs 7.5Bn in 1Q 2022. The Bank also, booked an impairment of Rs 7.4Bn against the impact of the currency devaluation on foreign currency denominated loans and investments, which was set-off against the position revaluations.
The Bank’s net stage III loan ratio improved from 2.55% as at December 2021 to 2.41% as at end March 2022 while stage III provision cover increased to 59%, maintaining its position as one of the best in the industry in asset quality. However, considering the significant volatility in macro-economic factors in 1Q 2022, the Bank recognized a higher impairment charge of Rs 13.4Bn. This included an impairment of Rs 6.7Bn on account of investments in foreign currency denominated government securities, subsequent to the announcement made by the Central Bank of Sri Lanka in relation to suspending the repayment of external foreign currency debt obligations of the Government and the sovereign rating downgrade.Operating expenses increased by 21% in 1Q 2022 driven by salary revisions, relatively higher card transaction volumes with the pickup of economic activity and general expenses increasing in line with higher inflation. However, the stronger growth in income, enabled HNB to record a cost to income of 25% during the first quarter of 2022.
HNB’s total tax charge increased by 33% to Rs 2.8Bn for the first quarter. The effective income tax rate increased from 31% in March 2021 to 37% in March 2022 due to the YoY reduction in interest income from foreign currency denominated government securities.Jonathan Alles, Managing Director / Chief Executive Officer of Hatton National Bank PLC stated that, “Sri Lanka has been travelling through a tough terrain over the past few years commencing from adverse weather conditions experienced in 2017-2018 to, unfortunate Easter Sunday attacks in 2019 and then the most unprecedented COVID-19 pandemic which impacted the entire globe. The banking sector of Sri Lanka and HNB has weathered these challenges and emerged strong and stable. Today, Sri Lanka as a nation is facing one of the most challenging times in its history. The next few months would be even more challenging. As such, it is extremely important that we play our part as responsible Sri Lankans at individual, organizational and country level. We believe that the authorities would take necessary steps to ensure political, social, economic and financial stability enabling successful conclusion of discussions with International Monetary Fund, the multilateral organizations and supporting nations to secure much needed funding.”
“It is equally important that we focus on the real economy and sustainable foreign exchange earning avenues that will support us over the medium to long term. Providing necessary support to drive exports, remittances, tourism, manufacturing and industrial development would be key. At the same time, diversifying foreign exchange earning sources would also be important. Focusing on Sri Lanka as an education hub, promoting agri-preneurs, IT, KPO, BPO industries would also be vital in this regard. We need to be cautious about our spending, and purchase local products to support our micro, small and medium enterprises, while at the Government, institutional and corporate level, adopt very tight cost containment measures and slash budgets.”
“As we encounter many obstacles in our day to day life, I would like to place on record my sincere gratitude to each and every member of the HNB team for their continuous commitment and dedication in delivering essential banking services to our valued customers.”(HNB)
SLIIT launches CODE with the country’s first free AI/ML online course
Ushering a new era of online learning, SLIIT unveiled its Centre for Open and Distance Education (CODE), a fully-fledged, independently developed online platform offering a range of self-paced courses. CODE aims to fill skill shortages in the industry by enabling youth to equip themselves with highly sought after skills.The Centre, established by the Industry Engagement Unit of the Faculty of Computing, SLIIT, held its virtual launch event recently under the patronage of Prof. Lalith Gamage, Vice-Chancellor, SLIIT, senior management, and staff from SLIIT with industry professionals and prospective students in attendance.
The inaugural course offered by CODE is ‘Artificial Intelligence/Machine Learning Engineer Stage 1’, which has been developed for anyone aspitring to become an AI/ML Engineer. The next two courses lined up are in Cyber Security and Cloud Computing. . The comprehensive courses, molded with hands-on exposure to cutting-edge technologies, will seek to maximize the employability potential of the youth.Prof. Chandimal Jayawardena, Dean, Faculty of Computing SLIIT, said, “SLIIT developed CODE as a free learning platform designed to offer courses and learning materials for those who wish to develop skills needed by the industry within a short time period. Courses offered by CODE are self-paced and will be equally relevant for school leavers, university students, as well as industry professionals. . The first course in CODE, the AI/ML Engineer stage 1 course can help anyone who wants to develop a career as an AI/ML engineer. This will be followed by two other courses covering stages 2 and 3. We are proud to launch this distance education platform as part of our mission to provide useful and relevant education to a wider audience, reaching beyond traditional university education. Being a platform open for free courses, CODE platform also illustrates SLIIT’s commitment to addressing and contributing to the needs of the society.”
The SLIIT AI Course, which is the first course to be offered to students via the CODE platform, consists of fundamental, intermediate, and expert levels, with the initial Stage 1 covering fundamentals relating to artificial intelligence and machine learning, with an understanding of how each area of expertise is used in the industry related to AI.The course has been designed with a practical and hands-on approach that will introduce the learner to the industry’s most innovative tools and technologies, including TensorFlow and PyTorch. Courses are designed to ensure an individual can gain exposure to programming basics since a certain knowledge of programming basics is required for the course.
Lessons related to the course will be introduced weekly and participants need to study the content, complete the assessment components such as available quizzes and achieve sufficient marks to complete the course and gain the certificate. Upon completing the course, participants will receive a ‘Certificate of Completion’ from SLIIT.CODE invites school leavers, non-IT graduates studying IT-related programmes and IT enthusiasts to enhance their skills and knowledge to enrol in the AI/ML Course. All courses are free of charge, and there is no restriction on the number of participants for each course.SLIIT believe the courses offered via the CODE platform will empower students to maximize their potential for employability while enhancing their capabilities of gaining foreign employment, engaging in remote work, or even working for reputed IT companies in Sri Lanka.
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