Business
‘Diversification vital for the long-term stability of the RPCs’
Should optimise assets, not limit themselves to being solely agriculture businesses
By Bhathiya Bulumulla
Over the past three decades, the Regional Plantation Companies (RPCs) have established themselves as a critical stakeholder of Sri Lanka’s plantation industry.
The RPCs were formed in 1992, primarily with the intention of bringing in the private sector, to improve the efficiency of the country’s large-scale estates involved in the cultivation of tea, rubber and other plantation crops. However, it is evident that the RPCs have gone beyond this mandate and that their actions have elevated Sri Lanka’s entire plantation sector.
This is evidenced by the numerous global certifications obtained by the RPCs, which have been critical in enabling Ceylon Tea to earn a premium over its competitors in the international market. The RPCs also contribute significantly to the country’s economy, both as a major employer and a generator of export earnings.
However, the RPCs are now facing challenges on multiple fronts. It is evident that the RPCs cannot focus solely on the production of commodities, especially given Sri Lanka’s high production costs. To be financially sustainable and to continue to contribute to the country’s economy, the RPCs must adopt a different business model.
In order to do so, firstly, RPCs must no longer see themselves as being solely agriculture businesses nor should they limit themselves to the plantation sector alone. They should instead diversify in a manner that optimises the economic benefit of the assets under their management. Many forward-thinking RPCs were quick to come to this realisation, diversifying into sectors like renewable energy, other profitable plantation crops and commercial forestry, as far back as early 2000s.
RPC-led vertical and horizontal integration
The RPCs must consider the feasibility of both horizontal and vertical integration, as well as product and market diversification. Prudent use of this approach has already yielded lucrative dividends for several RPCs. For instance, some have diversified within the plantation sector, successfully tapping into the high-value market for spices. Others have diversified into other industries, with many RPCs investing in hydro and solar energy projects.
The RPCs should also think out-of-the-box in these instances. For examples my company, Elpitiya Plantations PLC, partnered with a foreign company, to develop a state-of-the art adventure park as well as to cultivate and market strawberries. We are also testing the feasibility of growing several other types of berries in Sri Lanka, given the lucrative market for the product. Similarly, we are also establishing cultivations for hass avocado, which has a relatively long shelf life and hence is suitable for exports, pineapple and as well as bamboo – both edible types and those which can be used for fabric production.
Such diversification is vital to improve long-term business sustainability and avoid the proverbial risk of ‘putting all eggs in one basket’. These are strategies which will not only benefit RPCs but also their employees and the wider economy. Diversification would create new employment opportunities which are more aligned with the aspirations of the youth, who do not wish to engage in tea plucking or other similar activities. Addition of new high-value exports can assist in diversifying Sri Lanka’s export portfolio, which has been largely stagnant.
In addition to diversification, adoption of mechanisation is also important, particularly in addressing the labour shortage and high production costs in RPC estates. While mechanical harvesting cannot be used in all areas, given especially that many tea fields are located on elevations/slopes, the RPCs are cultivating new tea fields in a manner that would make them well-suited for mechanised plucking. Besides plucking, mechanisation has been used widely in field activities to overcome labour shortage and to increase productivity.
Broad stakeholder collaboration essential
RPCs cannot make such sweeping changes unilaterally. We require the total support of policymakers and all industry stakeholders – including the trade unions and local politicians. We must work together to develop a visionary framework for these reforms. Crucially, these measures must also be presented to employees, and the general public, so that further reforms are undertaken on the basis of an informed majority consensus.
Policy consistency is critical to enable the RPCs to make business decisions with confidence. This has been an area of concern in the recent past – particularly in terms of policies on importation and usage of agro-chemicals, synthetic fertilizers and the cultivation of oil palm.
A game-changer for Sri Lanka’s capital market
As the global community convened for the World Bank Group’s 2025 Spring Meetings under the timely theme “Jobs: The Path to Prosperity,” one message stood out: prosperity in the developing world depends not only on physical infrastructure but also on strong financial systems.
Among the influential voices at this year’s gathering was Douglas L. Peterson, Special Advisor to S&P Global and a longstanding advocate of resilient market economies.
Drawing from a decade-long tenure as CEO of S&P Global, Peterson delivered key insights that resonate deeply with the challenges and opportunities facing emerging economies such as Sri Lanka.
Peterson stressed that while global capital is abundant, it doesn’t move indiscriminately. “It follows signals, namely, data, transparency, regulatory certainty, labour and market stability.”
“When investors look to deploy capital in developing markets, they’re seeking a solid financial infrastructure,” Peterson said. “That includes reliable data, transparent pricing mechanisms, independent credit rating agencies, and clearly defined bankruptcy laws.”
These factors may not make headlines, but Peterson underscored their essential role.
“Financial infrastructure enables confidence, and confidence attracts investment,” he said.
A key initiative Peterson is championing in collaboration with the World Bank is titled ‘Originate to Distribute’, a structured finance approach where loans are created by institutions like the World Bank but sold to private investors.
Traditionally, loans from development banks remain on their balance sheets for decades. This initiative proposes standardising and structuring such loans so that private investors can purchase, pool, and trade them – essentially converting infrastructure loans into a new, tradable asset class.
“This is about creating velocity and scale,” Peterson said. “If the World Bank can originate loans and distribute them to the private sector, every dollar stretches further. It helps close the multi-trillion-dollar infrastructure investment gap.”
For countries like Sri Lanka, where public finances are under pressure, such a model could unlock significant private capital provided the regulatory environment and financial infrastructure are prepared to support it.
In alignment with the World Bank’s focus on job creation, Peterson prioritised five sectors he believes are pivotal for employment growth in developing nations: infrastructure (both physical and digital), agri-business, healthcare, tourism, and manufacturing. The common thread across all these sectors, he asserted, is infrastructure.
“Build an airport and you get hotels, transport services and even carbon savings,” Peterson said. “A bridge not only connects communities but also cuts costs, travel time, and emissions.”
According to Peterson, infrastructure investment yields a multiplier effect, often generating an additional $1.40 to $1.60 for every dollar spent. It also catalyses other industries. Manufacturing depends on roads and ports; tourism needs transport and energy; agriculture requires logistics and storage; and healthcare relies on reliable access and communication systems.
Peterson’s reflections also touched on a more structural issue that Sri Lanka is currently facing; the need to develop robust domestic capital markets. He emphasised moving beyond a banking-dominated financial system toward one that includes institutional investors like insurance companies and pension funds.
“These institutions become long-term investors,” he noted. “They form the foundation for sustainable infrastructure investment. Homegrown capital reduces reliance on external debt and increases financial resilience.”
Peterson’s remarks serve as a timely reminder as job creation and long-term prosperity in Sri Lanka will not come through piecemeal efforts. Instead, they require coordinated investments in both physical and financial infrastructure, from better roads and ports to regulatory frameworks that inspire investor confidence.
Unlocking private capital through trust, transparency, and smart financial engineering is the way forward. And as leaders like Peterson have shown, the tools and models already exist. It is now up to policymakers and financial leaders in Sri Lanka to ensure Sri Lanka is ready to embrace them.
Douglas L. Peterson currently serves on the board of the UN Global Compact and was formerly CEO of S&P Global, where he expanded the company’s market capitalisation from $16 billion to over $150 billion. He also led the G7 task force on sustainable finance in 2021.
By Sanath Nanayakkare
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) successfully organized a visitor delegation to Intersolar Europe 2025, held from 7 – 9 May in Munich, Germany. Recognized globally as one of the most significant and comprehensive trade fairs dedicated to the solar industry, Intersolar serves as a premier platform for showcasing the latest innovations in renewable energy and sustainable technologies.
The Sri Lankan delegation comprised senior representatives from prominent companies in the sector, including Mega Solar, Micro PC Systems, Eco Solar Rays, and Puwakaramba Building Solutions, reflecting the country’s growing commitment to advancing renewable energy solutions.
The primary objective of this visit was to provide Sri Lankan companies direct access to the latest developments in solar technology, including sustainable energy solutions, energy storage systems, e-mobility, floating solar applications, agrivoltaics and recycling solutions. By connecting local enterprises with cutting-edge technologies and global industry leaders, AHK Sri Lanka aims to facilitate the adoption of modern energy solutions in Sri Lanka and support the nation’s broader transition to a more sustainable and energy-secure future.
A key highlight of the delegation’s agenda was a strategic meeting with the organizers of Intersolar Europe. This engagement provided valuable insights into the exhibition’s future vision and fostered discussions on potential collaboration opportunities between German and Sri Lankan stakeholders in the renewable energy sector.
Further amplifying the value of the delegation, AHK Sri Lanka coordinated over 25 tailored B2B meetings between Sri Lankan companies and German/European industry counterparts. These curated matchmaking sessions enabled participants to explore commercial opportunities, initiate technical partnerships, and lay the groundwork for future investments and joint ventures.
Prime Group, Sri Lanka’s leading real estate brand with a 30-year legacy and international branches in Australia and Dubai, has named celebrated Sri Lankan music icon Umaria Sinhawansa as its Global Brand Ambassador. This partnership unites two Sri Lankan powerhouses to showcase local talent and excellence worldwide.
The collaboration aims to strengthen Prime Group’s global expansion while promoting Sri Lankan culture. Umaria, who bought her first property from Prime Group a decade ago, expressed pride in representing the brand. Prime Group’s Co-Chairperson, Sandamini Perera, highlighted Umaria’s embodiment of Sri Lankan heritage and global appeal, aligning with their mission to elevate the country’s real estate innovation.
Together, they aim to inspire trust, connect with international markets, and celebrate Sri Lanka’s cultural richness on a global scale.
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