Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Contribute
Submit Post

Latest topics

» Path to financial freedom - dont skip this
by Junior investor Today at 2:42 pm

» Share your Portfolio
by Junior investor Today at 2:35 pm

» Social Media Marketing in srilanka
by lankaspeaker Today at 2:02 pm

» Meditation and Investing
by ThilinaM Today at 2:00 pm

» THE LANKA HOSPITALS CORPORATION PLC (LHCL.N0000)
by Junior investor Today at 1:16 pm

» DIVIDEND ANNOUNCEMENTS- JAN/MARCH 2020
by liyanaarachchi Today at 12:32 pm

» Investment Advice
by ThilinaM Today at 8:47 am

» Is this true?
by ThilinaM Today at 8:42 am

» Calling Samaritan
by Kipling Today at 6:41 am

» Colombo Stock Exchange to drop older sector categories in favour of GICS
by fireshelter Yesterday at 11:00 pm

» NATION LANKA FINANCE PLC (CSF.N0000)
by lal62 Yesterday at 10:23 pm

» Sri Lanka Economy
by Quibit Yesterday at 10:10 pm

» ACCESS ENGINEERING PLC (AEL.N0000)
by Intrinsicvalue Yesterday at 8:30 pm

» SOFTLOGIC LIFE INSURANCE PLC (AAIC.N0000)
by wisdom79 Yesterday at 5:49 pm

» Perpetual Treasuries to get a most of Treasury Bill-Bond Business of New Government?
by God Father Yesterday at 4:28 pm

» stock portfolio tracking spreadsheet... (google spreadsheet/excel sheet)
by Sajeewa Niranjan Yesterday at 2:43 pm

» HIKKADUWA BEACH RESORT PLC (CITH.N0000)
by snuwan Yesterday at 1:27 pm

» Forum - Reputation System
by ThilinaM Yesterday at 11:41 am

» Share of the year
by Eugine Fernando Yesterday at 8:18 am

» Short Term Targets
by liyanaarachchi Yesterday at 6:15 am

» OVERSEAS REALTY (CEYLON) PLC (OSEA.N000)
by ThilinaM Thu Jan 16, 2020 5:25 pm

» EASTERN MERCHANTS PLC (EMER.N0000)
by KavinduTM Thu Jan 16, 2020 12:35 pm

» VIYATHMAGA – DRIVING CHANGE FOR THE FUTURE
by fireshelter Thu Jan 16, 2020 11:40 am

POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC

Advertise

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » Plantation Sector

Plantation Sector

Go to page : Previous  1, 2, 3, 4, 5, 6, 7, 8

Go down  Message [Page 8 of 8]

141Plantation Sector - Page 8 Empty Re: Plantation Sector on Fri Dec 06, 2019 11:33 pm

PDH


Equity Analytic
Equity Analytic
MASK.............   RS20-30  within 2 month.......

142Plantation Sector - Page 8 Empty Re: Plantation Sector on Sat Dec 07, 2019 10:29 am

Quibit


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Impact of declining Rubber production to the economy

Natural rubber production in Sri Lanka is declining at an alarming rate from 155000 Mt produced in 1967 to 82600 Mt last year. Sri Lanka with over 140 years history as the pioneer rubber grower in the world outside South America, was in the fourth place in the world as a NR producer in late nineteen sixties has already fallen down to the 12th position, overtaken by countries entered into growing rubber much later, such as Vietnam, Cambodia and Myanmar. Rubber industry in Cambodia and Myanmar was developed with the expert assistance given by Sri Lankan scientists. With that technical support they were able to increase their rubber production by three to four times within 6 years. During this half a decade, the productivity of rubber lands in Sri Lanka has dropped down to 774 kg/Ha/ Yr while the same in Cambodia has risen from 450 Kg/Ha/Yr to 1090 kg/Ha/ yr.

At present, the contribution from the rubber industry to the total export value of Sri Lanka is only 5% of which, Rs 4.8 billion comes from the export of raw rubber particularly in the form of Latex crepe rubber. Income from rubber finished product export is US $ 864.4 Million (Rs. 152 Billion).



About 70% of the total rubber and latex production of the country is converted to value added products like solid tyres, foam rubber, surgical, examination and industrial gloves and also for making solid and pneumatic tyres and tubes, rubber floorings, toys etc. Last year, 135,000 Mt of raw rubber and latex have been consumed by the local products industry while the total production of raw rubber in the country was only 82600 Mt. Hence, over 76,000 Mt of both dry rubber and latex have been imported to meet the shortfall in 2018. It is best for the economy of Sri Lanka, if this upward trend in rubber consumption for value addition is continued. But, the danger is that already, the rubber products industry will have to depend largely on the raw rubber supplies from other Asian countries. How long can we rely on these supplies?

Hence, the time has now come for the RPCC to consider converting their estate latex used for the manufacture of latex crepe to good grades of RSS at a lesser cost, but selling at almost at the price of best quality latex crepe to meet the shortfall of RSS for local industries.

One of the major reasons for the drop in productivity of all agricultural crops in the country is the escalating labour wages, which makes the weeding cost very high, particularly after the banning of the use of the weedicide Glyphosate citing health reasons which is an unfounded fear created by fear-mongers. As a result, farmlands are not properly weeded now to minimize the absorption, by weeds, of limited quantities of nutrients, added to the soil as fertilizers, at a very high cost. If this ban is not lifted after a proper review of the health hazards, productivity of all crops including paddy will drop further in the future. However, despite this ban, solid Glyphosate is available anywhere in the country at a very high cost. But, during the past couple of years, urea and MOP fertilizers were very scarce all over the country at the correct time to apply.

Asian countries

At present, over 75% of the total rubber production in the world is consumed in Asian countries converting into end products as the rubber industry has now almost totally shifted from the developed Europe and USA to the developing Asia. The world’s largest consumer of NR today is China, consuming over six times the consumption of rubber by the USA. All the reputed makes of US, and European tyres are made under license in China, Thailand and Malaysia and exported all over the world. That is mainly because of their cheap and disciplined labour. There was a good possibility for Sri Lanka too to attract some of those investors here if our politicians and bureaucrats were smart enough. During the past 5 years, political instability was also another negative factor for the foreign investors to invest in projects in Sri Lanka. But, with the convincing election victory of the just elected President with a huge majority at the presidential election held on November 16, there should be a potential boost for investor confidence which will be an inducement for the investors to come to Sri Lanka for new investments.

Thanks to those who invested in rubber projects in Sri Lanka in early eighties, today, the domestic rubber price in Sri Lanka is maintained above the world market price thereby giving some kind of relief for the survival of the local rubber farmers.

The main reason for the drop-in rubber production in the country is the very low paid for raw rubber in the world market. In 2010, there was a shortfall of 240000 Mt of rubber price in the world market and hence the rubber prices rose up to over US $ 5 per Kg. Then all rubber producing countries expanded their rubber plantations to reap the benefit of this attractive high price. As a result, from 2011 onwards there was a surfeit of rubber in the market an excess was created and hence the rubber price started to decline again. Then most of the plantations neglected rubber fields, or totally abandoned them without tapping. Some lands were even converted to other crops. This change of attitude of rubber growers all over the world again reduced rubber production to create a shortfall in the market starting from 2014. But, the world recession started in 2013 continued to have its effect on the price of rubber thereby keeping it at very low level, below the cost of production.

International Rubber Study Group (IRSG) has carefully analyzed the world rubber consumption and supply situation and have predicted that the raw rubber prices should reach an attractive price within the next couple of years. But, by then, will there be rubber in Sri Lanka to sell at that price? It is very unlikely. Not only that, the rubber end products manufacturers of Sri Lanka will have a tough time to purchase rubber from other Asian countries, by competing with industrial giants like China, India and Japan in this region. Then, what will be the plight of over 30,000 skilled and semi-skilled workers employed in our rubber products industry at present?



Unfortunately, the productivity of most of the estates under private management has now fallen down to below that of rubber small holders’ due to non-adoption of Good Agricultural Practices (GAP) recommended by the RRI. It has been reported that in some of the plantations under RPCC, trees have been over tapped in merciless manner and hence young trees in some revenue areas in estates have been slaughter tapped without leaving bark to continue tapping in next 5 to 10 years. In many estates, over 50% of good trees are affected with Tapping Panel dryness (TPD) due to over extraction of latex. RRI introduced rain guards for rubber plantations to minimize crop losses during rainy months. Annually about 72 days of tapping is lost in Kalutara and Ratnapura districts due to rain interference. According to some reports, some RPCC fix rain guards and conduct double tapping far above the RRI recommendation and hence the whole idea of using a rain guard is lost and tapping panel dried trees in such estates have risen to over 50%.

Action must be taken by the Ministry of PI to stop this destruction of rubber plantations in a degrading manner by some RPCC. In some estates under RPC management, the productivity or the yield per hectare (YPH) has dropped down to about 550 kg/Ha/yr, which is far below the average productivity of 829 kg/Ha/yr in the whole country as reported by the rubber development department. Average productivity of rubber in Sri Lanka in 2013 according to RDD was 1300. This sharp drop in YPH from 1300 to 829 within three years is attributed to poor agronomic practices followed by some RPC managed estates all over the country.

In such poorly managed estates, apart from bad taping practices, replanting has not been done and fertilizer applications have not been carried out according to RRI recommendations for many years. From these facts, it is clear that the maximum crop that can be expected in the country for 2019 is even below 83,000 Mt; even though the RDD expect this figure to go up to 95000 Mt. In order to rectify this anomaly, Ministry of PI must get the assistance of the RRI to get the damage done to the plantation by such RPCC assessed and either to take over such badly managed estates to be managed by the state plantation corporation or to hand them over to more responsible different management company.

RRI and the Plantations

Rubber estates under French management in Cambodia use rain guards and conduct systematic stimulation of the clone Pb 314 and carry out tapping only once in 5 days without a single tree affected with tapping panel dryness and obtain a yield of 3200 kg/ha/ yr. If this tapping system is practiced in Sri Lanka too under strict RRI control, problem of rain interference on the yield can be mitigated; thereby increasing the productivity.

It is very sad to note that the relationship between the Rubber Research Institute (RRI) and the Plantations has deteriorated during the past decade due to unknown reasons. But if the Ministry of PI take appropriate measures to strengthen the interactions between the RRI and the plantations to implement recommended agronomic practices while totally eliminating wrong exploitation practices too for improving productivity at least to the national average level, importation of rubber for BOI companies for value addition can be curtailed to some extent.

It should be emphasized here that the technology developed by the RRI particularly in agronomy is quite enough to convert these badly managed estates to reasonably profitable level by improving productivity within two to three years. It is very clear from the role played by the RRISL scientists to convert rubber plantations in Myanmar and Cambodia even to overtake total rubber production in Sri Lanka in less than a decade. When they first commenced consultancy, in Cambodian plantations under UNDP sponsorship, productivity of rubber in Cambodia was only 420 kg/Ha/Yr. But, they were able to increase it to over 1100 kg/Ha/Yr in five to six years and hence, the total rubber production in Cambodia from 97000 Mt in 2014 to 145200 Mt in 2016 and over 200,000 Mt last year; which is nearly three times the total rubber production of Sri Lanka at present.

Cambodians followed the recommendations of Sri Lankans with good faith and were able to treble their rubber production in less than 8 years. Why not plantation companies in Sri Lanka too, plan to follow the RRI recommendations to increase the rubber production to reap the benefits of the IRSG predicted attractive higher price of rubber after 2019. This is the time that people of SAARC countries to be concerned about the environment; because the world weather forecast centre reported last week that in 2100, the temperature of India, Pakistan, Sri Lanka and Bangladesh will rise by 2 degrees Celsius. If no attempts are made now itself by SAARC countries, what will happen to the productivity of all our agricultural crops and the fish population in the ocean?

It is universally accepted that the contribution from NR plantations to the environment is equal to the contribution from the natural forest. NR plantations help to minimize Green House effect by sequestrating 10 Mt of Carbon dioxide gas per hectare per year unlike other agricultural crops. Hence, those RPCC converting low yielding rubber lands into oil palm, as a result of poor management and bad exploitation techniques followed, should be concerned of the ecological effect of the conversion of rubber estates to oil palm in this small island where we only have 18% forest cover. But, to meet the edible oil requirement, oil palm could be planted in other unused lands in the wet zone; but not in lands reserved for rubber. The Ministry of Environment too should focus more on this potential danger and take adequate measures to rectify this problem to protect the country from turning into a desert.

143Plantation Sector - Page 8 Empty PLANTATION SHARES MIGHT MOVE TOMORROW on Thu Dec 19, 2019 1:07 pm

Eugine Fernando


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
According to Today's Cabinet announcement there are lot of  reliefs have granted to plantation sector. GL

144Plantation Sector - Page 8 Empty Re: Plantation Sector on Thu Dec 19, 2019 9:13 pm

Teller


Moderator
Moderator
Half of the plantation companies dead now. Its too late for the government support.

145Plantation Sector - Page 8 Empty Re: Plantation Sector on Thu Dec 19, 2019 10:00 pm

kasun_gimhana


Senior Equity Analytic
Senior Equity Analytic
Plantation companies are doing only harvesting. When harvesting over government bailout . government take over replating cost or take over the business and replanting using public taxpayers money and again privatize.  Very Happy

kalu351


Manager - Equity Analytics
Manager - Equity Analytics
[size=40]10-year strategic plan in the making to boost tea industry
[/size]

By Charumini de Silva
[size=17]
A 10-year strategic plan and roadmap is in the making under a public-private sector collaboration to boost tea industry. Plantation Sector - Page 8 Image_cb191f61b3

The newly-appointed Sri Lanka Tea Board Chairman Jayampathy Molligoda told the Daily FT that the emphasis of the initiative is to make the tea industry sustainable and boost exports.

“The tea industry has taken the leadership to formulate strategic initiatives to put Ceylon Tea on top of the world map. This is a 10-year road map to support all stakeholders of the sector with an integrated system and consistent policy direction,” Molligoda said.

He said ‘Road Map Ceylon Tea 2030’ will be the main document the industry will depend on going forward once fully formalised.

Since assuming duties two weeks ago, Molligoda said several discussions were held between all stakeholders of the tea industry to understand the issues, challenges, opportunities and share new ideas to develop the 150-year old industry that continues to contribute significantly to the economic development of Sri Lanka.



Sri Lanka produces around 300 million kg of tea annually and earn about $ 1.6 billion in foreign exchange.

Molligoda who was previously the Deputy Chairman of Bogawantalawa Tea Estates PLC noted that Sri Lanka produces about 5.4% of the world tea production, which is inadequate considering the competition hence necessary changes are required.

“Sri Lanka used to supply around 8% of the world’s tea production 10 years ago. Our current supply has come down to 5.4%. For us to be competitive, the current model needs to be changed. The current model consisting of plantations, smallholders, factories and auctions need to be relooked at to improve efficiency, reduce costs to be productive and competitive and more innovative in order to make the industry better, to support the local community to maintain the sustainability of this industry. We need a clear strategy for the industry,” said Molligoda.

Reiterating that Sri Lanka is in the right direction, the new Tea Board Chief who is a chartered accountant and certified management accountant by profession said it was important for the industry to understand global market trends, competitors and develop Pure Ceylon Tea with its exclusivity and value additions to ensure that it can be promoted as a top beverage among the world.



The annual global tea market growth is approximately 5.5%. 

Plantation Sector - Page 8 Image_153fb474fc According to Molligoda the initiative is also supported by the Plantation and Export Agriculture Ministry. 

Tea Exporters Association (TEA) Chairman Jayantha Karunaratne told the Daily FT that the formulation of the policy document was a brainchild by Colombo Tea Traders Association of Sri Lanka (CTTA) where all stakeholders including regional plantation companies, tea factory owners, brokers, tea smallholders are a part of.

“Basic foundation has been set. We have started working on this and the interim report will be submitted to Sri Lanka Tea Board and the Ministry by January,” he added.

It was pointed out that with livelihood of over 2 million people dependent on the tea industry, remaining competitive in the international market was a key challenge.

Last week the Plantation Industries Ministry said the Government will implement a major loan restructuring plan for the tea sector which could include a moratorium on loan repayments and the write-off on interest in some cases. 



The relief measures for the tea sector was approved by Cabinet with the modalities on how the proposed measures are to be implemented to be finalised in the weeks ahead.

The Government will also take Rs. 500 million from the Tea Promotions Fund to give loans to factory owners via a scheme to be implemented through the banks.

The National Sales Average (NSA) for tea during January-November was Rs. 542.34, down Rs. 40.21 from Rs. 582.55 in the corresponding period of last year. The dip was despite the NSA for November improving by Rs. 44.24 per kg to Rs. 569.67 from October but lower by Rs. 14.91 from November last year.

Both the month and cumulative averages show a greater decrease in dollar terms compared to the corresponding period of 2018 due to the devaluation of the rupee.

In October earnings from tea exports declined 1.5% to $ 113.8 million due to lower average export prices in line with the fall in international market prices despite an increase in export volumes. In the first 10 months of 2019, tea exports were down by 5.7% to $ 1.14 billion.

In terms of production, January-October tea crop amounted to 253.7 m/kgs recording a marginal gain of 0.98 m/kgs vis-à-vis 252.7 m/kgs of January-October 2018. In October crop totalled 20.8 m/kgs down by 8.9 m/kgs from a year earlier. All elevations have recorded a decrease YOY, with High and Low Grown elevations showing a fairly significant decline
[/size]

147Plantation Sector - Page 8 Empty Sorry to plantation companies on Tue Jan 14, 2020 11:07 pm

Teller

Teller
Moderator
Moderator
1000 rupees wage hike, of course i agree behalf of innocent people but the pay is very high. In india per day pay 380 rupees sri lankan money, even Thailand and Malasia has cheap labour. We are the highest in the region of course our unit cost will increase

148Plantation Sector - Page 8 Empty Re: Plantation Sector on Tue Jan 14, 2020 11:11 pm

fireshelter

fireshelter
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
bounce bounce bounce bounce bounce

149Plantation Sector - Page 8 Empty Re: Plantation Sector on Wed Jan 15, 2020 1:25 am

Teller

Teller
Moderator
Moderator
I have to revise my WATA and RICH target. You can collect BALA @ 8


_________________




Teller said is said..

150Plantation Sector - Page 8 Empty Re: Plantation Sector on Wed Jan 15, 2020 10:18 am

ThilinaM

ThilinaM
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
plantation sector do not grow fast. SL have to shift for machinery to have big profits (like usa)

151Plantation Sector - Page 8 Empty Re: Plantation Sector on Wed Jan 15, 2020 4:50 pm

fireshelter

fireshelter
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Very Happy

152Plantation Sector - Page 8 Empty Re: Plantation Sector on Wed Jan 15, 2020 4:54 pm

ipo

ipo
Equity Analytic
Equity Analytic
This will delay the hopes for a plantation rally  Sad

153Plantation Sector - Page 8 Empty Re: Plantation Sector on Wed Jan 15, 2020 7:32 pm

KavinduTM

KavinduTM
Manager - Equity Analytics
Manager - Equity Analytics
@Teller wrote:I have to revise my WATA and RICH target. You can collect BALA @ 8

Will it fall that much? even when all time low is 9.20/= Surprised

Sponsored content


Back to top  Message [Page 8 of 8]

Go to page : Previous  1, 2, 3, 4, 5, 6, 7, 8

Permissions in this forum:
You cannot reply to topics in this forum