NCED tea cluster draws up 10-year plan to boost industry

by Lalin Fernandopulle

The Tea Cluster of the National Council for Economic Development (NCED) is developing a 10-year plan for the tea industry proposed by the stakeholders of the industry which includes the Ceylon Tea Traders' Association, regional plantation companies, stockbrokers, private tea factory owners, Sri Lanka Tea Board, members of the plantation industry and the Central Bank of Sri Lanka, Executive Director NCED, Rohantha Athukorala said.

The plan is to increase the tea export revenue within the next 10 years from Rs. 81.4 billion to Rs.150 billion, to treble the FOB price from its current 2.84 US$ per Kilogram, increase the gross profits of regional plantation companies from 12.1 percent to 24 percent and increase value added tea exports from 36.2 percent to 70 percent.

The Tea Cluster of the NCED also hopes to increase the replanting rate, obtain HACCP certification from factories to be in line with global hygiene standards, improve factory standards, increase investment on research through the Tea Research Institute, improve the quality of the product, focus on a higher yield and develop focused promotions and branding in the global market, Athukorala said.

Branding will focus on the effective use of the Lion Logo, Pure Ceylon Tea image consistently across markets.

The Tea Cluster is considering building strategic alliances on projects such as green tea, instant tea and ready to drink tea.

Some of the issues that the tea industry is facing today are the inadequate liquidity for production, viability of replanting, wages not related to productivity, inability to rationalise workforce, cost of power and energy, lack of brand protection and inadequate funding for promotions.

Athukorala said due to the drought in Kenya there is a supply issue affecting the world tea market.As a result Sri Lanka's tea prices can be slightly higher due to the demand. Though this is a short-term benefit to the tea industry it is the best opportunity for Sri Lanka to take a firm foothold in the world tea market.

Chairman, Ceylon Tea Traders' Association, Tyaeb Akbarali who is also a member of the Tea Cluster said the Sri Lanka's tea industry is benefiting a lot from the drought in Kenya that has affected its supply of tea to the world market. Kenya is one of the major tea exporters to the world market.

The tea industry is performing well. Though tea prices have increased there is a slight drop in crops which concerns the industry. Tea exports to the Middle East have not been affected in spite of the ongoing clashes between Israel and Lebanon, he said.