Business

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

Published

4 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

Samagi Spice Exports to launch Ceylon Cinnamon based beverage range

Published

8 hours ago

2026/10/16

Priyan

The SPICEUP range of Cinnamon based beverages being launched by Samagi

Samagi Spice Exports (Pvt) Ltd is set to introduce SPICEUP, a new Sri Lankan beverage brand, at its grand launch on Saturday 17 October 2026 at the University of Ruhuna, Matara.

With a history dating back to 1969, Samagi Spice is taking a new step in its business journey by expanding beyond traditional spice exports into value added consumer products.

Through SPICEUP, the company aims to connect Sri Lanka’s internationally recognized cinnamon heritage with contemporary beverage innovation, creating a distinctive identity in the country’s beverage market.

The SPICEUP range will feature a variety of products, including Original, Cream Soda, Power, GO, Cool, Burn, Memo+ and Zingy. Designed to offer consumers a range of refreshment experiences, the products will be available in two packaging formats: cans and plastic bottles, catering to different consumer preferences and occasions.

At the heart of the initiative is the potential of true Ceylon cinnamon as a value-added ingredient in the beverage industry. Rather than limiting cinnamon to its traditional uses, SPICEUP seeks to explore new opportunities for bringing this iconic Sri Lankan spice into everyday consumer experiences.

The initiative also highlights the broader potential of transforming the country’s agricultural resources into innovative products with commercial value.

The launch ceremony will be attended by legendary Sri Lankan cricketer Sanath Jayasuriya as the Chief Guest, alongside representatives from the Export Development Board (EDB), Industrial Development Board (IDB), Cinnamon Research Academy and other industry stakeholders.

A major highlight of the occasion will be the official unveiling of the SPICEUP product range, followed by the launch of the brand’s official website. The event will also feature the signing of a Memorandum of Understanding (MoU) between Samagi Spice Exports and the University of Ruhuna, marking an important step towards strengthening collaboration between industry and academia.

The proposed collaboration will provide a platform for future research, product innovation and value addition involving true Ceylon cinnamon. By bringing together business expertise and university-based knowledge, the initiative aims to support the development of innovative, value-added products and contribute to Sri Lanka’s potential in international markets.

With its roots in the country’s spice industry and its ambitions in the beverage sector, SPICEUP is poised to begin a new chapter in Samagi Spice’s journey—one that seeks to bring the distinctive identity of Ceylon cinnamon to a new generation of consumers.

Business

Indian business leader urges SL entrepreneurs to tap into India’s rapidly expanding consumer market

Published

24 hours ago

2026/10/16

Thilina Walpola

T. Krishnakumar, Chief Executive Officer of Reliance Consumer Products Ltd (RCPL)

By Sanath Nanayakkare

Speaking at the Sri Lanka Economic and Investment Summit 2026, T. Krishnakumar, Chief Executive Officer of Reliance Consumer Products Ltd (RCPL), emphasised that local enterprises can unlock substantial economic benefits by strategically aligning with India’s booming consumer base.

Addressing business leaders and policymakers at the Shangri-La Hotel in Colombo, Krishnakumar highlighted that geographical proximity and rich cultural ties provide a natural foundation for deeper commercial collaboration.

He noted that instead of viewing bilateral trade narrowly, regional partnerships should act as conduits to build robust, scalable enterprises capable of plugging into wide-reaching regional value chains.

“For Sri Lankan exporters dealing in traditional staples as well as value-added goods, accessing India’s rising middle class presents a phenomenal growth window,” he said.

Drawing insights from Reliance Consumer Products’ rapid expansion – which scaled efficiently to thousands of employees and multi-billion-dollar metrics – Krishnakumar stressed that modern corporate success relies on disciplined execution, localised consumer understanding, and smart technology integration.

Furthermore, he underscored that while rapid growth is critical, businesses must consistently anchor their models in affordability and consumer trust.

Concluding his address at the summit, the RCPL chief noted that pairing regional trade integration with resilient business practices and predictable regulatory frameworks will be vital as Sri Lanka transitions firmly toward accelerated economic development.

Addressing the Summit during a subsequent fireside chat, President Anura Kumara Dissanayake underscored that a core concern currently being targeted by the government is developing a critical mass of local entrepreneurs equipped to engage with international enterprise counterparts.

Business

SriLankan Airlines wins prestigious SATA 2026 Visitors’ Choice Award for Leading International Airline

Published

24 hours ago

2026/10/16

Thilina Walpola

SriLankan Airlines has once again been honoured with the prestigious Visitors’ Choice Award for Leading International Airline at the South Asian Travel Awards (SATA) 2026, reaffirming its continued recognition in the regional travel and tourism industry. The airline, which has received this award in previous years, was the only international airline to be recognised in this category at this year’s event. The 10th anniversary edition of the awards ceremony was held earlier this month at Hotel Barcelo Nasandhura in Male, Maldives.

Recognised as one of the key events on the Maldivian tourism and travel industry calendar, SATA celebrated its 10th anniversary on a grand scale, bringing together prominent industry stakeholders, including Government Ministers, distinguished dignitaries, diplomats and senior representatives from leading airlines and their respective head offices.

Commenting on the achievement, Dimuthu Tennakoon, Head of Commercial, SriLankan Airlines, stated, “We are honoured to receive this recognition at the South Asian Travel Awards 2026. Being named the Leading International Airline in the Visitors’ Choice Awards once again is a meaningful acknowledgement of our commitment to serving our passengers and strengthening our presence in the region. This award inspires us to continue enhancing the travel experience we offer and to build stronger connections with the markets and communities we serve.”

Complementing its commitment to service excellence, SriLankan Airlines offers an extensive flight network with convenient connections to destinations across the globe. In South Asia, the airline operates nearly 130 flights each week to 15 destinations across India, Pakistan, the Maldives, Nepal, and Bangladesh. With schedules thoughtfully designed to suit the needs of travellers, SriLankan Airlines provides seamless connectivity for those visiting Colombo for business or leisure, as well as passengers travelling onwards to destinations worldwide.