Business

Sri Lanka tea sector stuck in colonial-era model after 75 years of independence

Published

3 years ago

2023/02/6

Thilina Walpola

Due to lack of thrust in the direction of productivity-based revenue share model

By Sanath Nanayakkare

Regional Plantation Companies (RPCs) are encountering difficulty in planning the future of their financial viability due to the slowness of the government and the trade unions in exercising the best choice for the sustainable future of the sector, The Island Financial Review learnt at a recent press briefing called by the The Planters’ Association of Ceylon (PA).

It was revealed during the Q&A session that on the one hand there is a lack of political-will to deviate from the colonial-era daily wage model after 75 years of independence as the matter is politically sensitive to the government, and on the other hand, better earnings and flexi hours enjoyed by operators (tea pluckers) would lead to a loss of influence the trade unions have on their members.

These are seen key stumbling blocks to successfully implementing a productivity-based wages and revenue share model in Regional Plantation Companies (RPCs) which would be a win-win situation for both workers and RPCs.

Throwing numbers in good measure, RPCs pointed out that since privatization the RPCs have never been a burden on the Treasury as they were under the state control, and 22 RPCs are the only private sector stakeholders engaged in producing, processing and marketing of tea, rubber, oil palm and other crops.

RPCs account for over 450 estates, 371 factories/production units cultivating 43.36% of tea, 23.75% of rubber land and other RPC crops account for 33% of RPC land which include: coconut, oil palm, cinnamon and other crops.

According to Dr. Roshan Rajadurai, Media Spokesman of the Planters’ Association, 25%-30% of RPC tea crop is coming from the wages and revenue share model to which the operators have joined on their own volition having experienced the benefit of this system.

“These operators have used their own discretion to join the system because they can work flexible hours while taking care of their families. Others prefer to work independently and more productively without being pushed around. And there are others who have an entrepreneurial mindset in making their wages from tea plucking a second source of income. We have witnessed them taking good care of their plots and do the plucking in a sustainable way. So this system has resulted in more crop being harvested with improved leaf standards which has led to better prices and lower cost of production for the estate. Higher prices eventually result in higher revenue share for operators, but this needs to be widespread and formalized through a proper mechanism without further delay,” he said.

According to RPCs, the cost of production of a kilo of tea currently is Rs. 960 which has significantly increased due to cost of production and devaluation of our currency.

Senaka Alawattegama, Director/CEO Talawakelle Tea Estates PLC said, “We believe that the root cause of our historic economic crisis stemmed from the failure of successive governments to formulate policy based on robust stakeholder consultations. Unfortunately, we allowed cheap politics to hijack our economic policies. 100% organic fertilizer policy overnight compromised food security and plantation crops declined exponentially. Today, the trade unions are talking about 100% daily wage (Rs. 2,000 per day) as a buffer against the high inflation in line with the colonial-era daily wage model. Not only RPCs, the trade union and the government are aware that the productivity-linked wages and revenue model is the only way forward. Increasing wages in line with inflation will undermine the sustainability of RPCs. When workers are paid on how much they pluck and how much that harvest will seize at the auction, then their compensation would be in line with those dynamics. Had the authorities and trade unions implemented this system when RPC tea plantations proposed it years ago, workers would have been better off today. Instead of Rs. 1000 daily wage, workers would be receiving an average of Rs. 50, 000-60, 000 per month; and most productive workers even more than that.”

He said that RPCs have consistently advocated for reforms to the colonial era daily wage model, in favour of a productivity and revenue share model.

“Furthermore, this system will increase total export earnings with increased volumes of good quality tea available for export which would fetch higher prices. We are at a crossroads where every dollar counts. So we urge all stakeholders to fully implement this critical reform considering its multiple benefits, without procrastination,” Alawattegama, said.

RPCs urged the government and trade unions to look beyond their concerns and interests in order to ensure the sector’s continued progressive performance without letting it be another burden on the already reeling economy of the country.

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Business

Salesforce Startup Program targets Sri Lanka’s high-growth tech sector

Published

14 hours ago

2026/01/9

Thilina Walpola

Bhattacharya (L) and Madusanka at the launch

Salesforce, the world’s leading AI-powered CRM platform, is set to expand its presence in Sri Lanka with the launch of the Salesforce Startup Program by the end of January 2026, signalling growing confidence in the country’s technology-led growth potential.

The move comes as Sri Lanka consolidates its position as the second-largest startup ecosystem in South Asia after India, with software, data and artificial intelligence-driven ventures accounting for nearly 60 per cent of the national startup base.

Industry observers say this concentration places Sri Lanka at a decisive stage where global exposure and enterprise access could unlock the next phase of scale.

Under the programme, Sri Lankan startups will gain access to Salesforce’s global ecosystem, including AI-powered platforms, business and technical mentorship, joint go-to-market opportunities and connections to enterprise customers, enabling founders to build globally competitive solutions from Sri Lanka.

“Sri Lanka has developed a strong base of technical talent and entrepreneurial ambition that is increasingly visible regionally and globally,” said Arundhati Bhattacharya, President and CEO of Salesforce South Asia.

“Through the Salesforce Startup Program, we aim to help startups move beyond early momentum to global relevance while delivering long-term economic impact,” he added.

He also said the initiative builds on the success of its Startup Program in India and Singapore, which today supports over 435 startups, including more than 230 AI-first companies. Several participants have expanded across Asia and beyond by building products natively on the Salesforce platform.

Responding to queries, he said Sri Lanka is also emerging as an important enterprise market for Salesforce, with major corporates such as John Keells Holdings and Cinnamon Hotels adopting the platform to modernise customer engagement, sales, marketing and loyalty management operations.

In parallel, Salesforce is strengthening the country’s digital talent pipeline through its Trailhead learning ecosystem, with plans to skill nearly 1,000 learners over the next year via local workforce development partners and community-led cohorts.

Chamil Madusanka, Head of Salesforce Practice and Salesforce Architect, said the programme arrives at a critical juncture for Sri Lanka’s startup ecosystem.

“Sri Lankan founders are increasingly building AI, data and enterprise software solutions with global relevance,” Madusanka told The Island Financial Review.

“What many startups need is structured access to enterprise customers, global mentorship and market exposure. This initiative creates that bridge, enabling local companies to scale faster while remaining rooted in Sri Lanka.”

He said the Startup Program is designed to act as a connective platform, bringing together startups, enterprises, technology partners, universities and developer communities to accelerate collaboration and innovation.

By Ifham Nizam ✍️

Business

Good news on risen foreign reserves exerts buoyant impact on bourse

Published

14 hours ago

2026/01/9

Thilina Walpola

CSE activities were extremely bullish yesterday following Central Bank Governor Dr Nandalal Weerasinghe’s announcement that Sri Lanka’s foreign reserves had risen to US $ 6.8 billion in December 2025, up US$ 791 million from November 2025.

The Governor provided the estimated economic growth while announcing the Central Bank’s policy agenda for this year.

In December Sri Lanka received budget support loans from the Asian Development Bank and the International Monetary Fund.

Dr Nandalal Weerasinghe

Amid these developments both CSE indices moved upwards. The All Share Price Index went up by 226.81 points, while the S and P SL20 rose by 100.01 points. Turnover stood at Rs 12.3 billion with 12 crossings.

Top seven crossings that mainly contributed to the turnover were: Lee Hedges 18.2 million shares crossed to the tune of Rs 3.9 billion; its shares traded at Rs 416, Commercial Bank 2.1 million shares crossed for Rs 467.6 million; its shares traded at Rs 215, Ceylon Hotels 429,000 shares crossed for Rs 128.7 million; its shares traded at Rs 300, LB Finance 650,000 shares crossed for Rs 105 million; its shares sold at Rs 152.50, Ceylinco Holdings 31000 shares crossed for Rs 104.5 million; its shares traded at Rs 3400, Melstacorp 200,000 shares crossed tfor Rs 35.7 million; its shares sold at Rs 178.50 and Three Acres Farm 400,000 shares crossed to the tune of Rs 29.6 million; its shares fetched Rs 740.

In the retail market top seven companies that mainly contributed to the turnover were; Wealth Trust Securities Rs 1.17 billion (55.8 million shares traded), Commercial Bank Rs 509 million (2.4 million shares traded), HNB Rs 370 million (870,000 shares traded), ACL Cables Rs 303 million (three million shares traded), Prime Lands Residencies Rs 283 million (7.9 million shares traded), Lanka Realty Rs 227.5 million (4.7 million shares traded) and HNB Rs 218 million (332,000 shares traded). During the day 223.7 million share volumes changed hands in 55116 transactions.

Yesterday, investor interest in Wealth Trust and banking stocks led to higher activity levels, brokers said. Further, the real estate sector also performed well. Lanka Realty Investments PLC acquired 51 percent of the total number of shares in issue of Lee Hedges, CSE sources said. 13,057,595 ordinary voting shares were bought at Rs 216 each.

Yesterday the rupee opened at Rs 310.12/18 to the US dollar in the spot market, weaker from Rs 310.05/15 the previous day, dealers said, while bond yields opened marginally high.

By Hiran H Senewiratne ✍️

Business

Launch of monograph ‘Development: Not By Economics Alone’

Published

14 hours ago

2026/01/9

Thilina Walpola

The Gamani Corea Foundation (GCF) is pleased to announce the launch of the monograph Development: Not By Economics Alone by Dr. Nimal Sanderatne, Emeritus Chairperson of the Foundation. The foreword to the publication has been written by Dr. Godfrey Gunatilleke, one of Sri Lanka’s most eminent development economists. The launch ceremony will be held on Friday, 9th January 2026, at 4.00 p.m. at the Horton Lodge.

In this monograph, Dr. Sanderatne argues that development cannot be understood through economic indicators alone. He emphasizes that the quality of human capital depends not only on knowledge and skills acquired through formal education, but also on deeper, non-formal processes embedded in a society’s culture and value systems. These influence human behaviour, shaping work ethics, attitudes to work and leisure, capacity for teamwork, preferences between short- and long-term goals, and patterns of saving and consumption.

Dr. Sanderatne is a distinguished economist and academic, holding degrees from the Universities of London, Saskatchewan, and Wisconsin, and was conferred the Doctor of Science (Honoris Causa) by the University of Peradeniya in 2004.