The report titled ‘The long term profitability and productivity of Sri Lanka’s regional plantation companies in tea and rubber sectors’ has been compiled by an independent consultant for the Employers' Federation of Ceylon (EFC) with the objective of looking at the industry in terms of its current status and future sustainability.
“From what we have found out, the picture is not rosy at all. These regions have been making losses from 1995 to 2009,” said Ravi Pieris, director general at the EFC.
The report looks at Sri Lanka’s tea and rubber sector performance during the last ten years. Wages account for 60 to 70 percent of cost at factories in the sector.
Sri Lanka’s 140 year old tea industry is fighting a long drawn battle with the highest production costs in the global industry.
Most listed plantations companies cultivate teas in the high and mid-grown elevations where labor on estates are also highly unionized.
In September 2009, the three main unions won a 40 percent wage hike in which a worker's daily wage was increased to 405 rupees from 290 previously. The industry is currently in discussions with plantation firms and trade unions on another wage hike.
“Some of the companies are finding it extremely difficult to pay an increased wage, especially the high grown estates are struggling but the workers have to be given a wage hike,” said Lalith Obeysekara, the chairman of the island’s Planters’ Association.
Up to 65 percent of Sri Lanka’s tea production comes from the low grown elevation where small growers dominate production. But industrialists reiterate the importance of sustaining plantation companies that grow the classic, high grown Ceylon teas.
Low grown tea prices have risen but they go mainly to the Middle East and are not the hallmark of Ceylon tea.
Obeysekara said the report published in March was handed to the ministry as well as unions and will soon be publicly available.
“The report was presented to the government and the unions as well and they are quite happy with the findings of the research.
http://lbr.lk/fullstory.php?nid=201105091727331460
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