Sri Lanka Tea exporters want Tea Hub in Hambantota

Rohan Fernando

In the wake of the ‘Tea Hub’ concept not gaining much acceptance by the government authorities, the Tea Exporters Association (TEA) is to present a fresh set of proposals soon, this time for the formation of a Strategic Business Unit (SBU) in Hambantota, a top official told The Nation Gain last week.

According to the TEA Chairman Rohan Fernando, the new proposals would entail the setting up of a total value addition center for tea in the Southern region which would provide the required space for exporters to compete with any other top brands in the market by not having too many restrictions placed on the SBU.

Sri Lanka President Mahinda Rajapaksa along with Plantations Minister Mahinda Samarasinghe pose for a photo with tea exporters at the AGM held last week

 Fernando made these comments when queried as to why the Association had not highlighted its persistent calls made in the past for the liberalization of selected tea imports into the country at its 14th Annual General Meeting held last week.

“We will be handing over a separate tea export strategy soon after the Budget 2014 which will be aimed towards the realization of the tea export target of US $5 billion by the year 2020,” Fernando pointed out.

Acknowledging that liberalized tea imports will be part of the new strategy to be presented, Fernando, however, advocated that there should be certain controls on quality of imports coming into the SBU.
“It is too early to comment on the finer details of the strategy. But we will announce it soon,” the TEA Chief said adding that the Association had meanwhile handed over its proposals for Budget 2014 to the President at the AGM.

In the past, Sri Lanka’s tea industry has been divided over plans to boost earnings by importing cheaper leaves for blending and re-export, over fears the changes could water down the ‘Pure Ceylon’ brand. Exporters within the industry proclaim that through liberalization, the exports of value-added teas can be maximized given the provision of cheaper orthodox teas used for blending which will enable exporters to reduce the FOB price of their teas.

“Ours is a nation blessed with many natural resources. Our geographic location is unique; to the east of our nation are large tea producing nations. To the north and to the west are also large tea producing nations. From the southern tip of our country it is only a few miles to the world’s busiest sea routes carrying cargo from east to west and west to east. With such natural strengths bestowed upon our country we should think seriously of how to make the best of these resources,” Fernando had mentioned in his speech made at the AGM.

He had pointed out that as the government’s vision in developing the southern port and the airport will before long create economic activity towards a bustling new business center, exporters, especially the ones in the tea industry, stand so much to gain from these developments.

Tea accounts for 15% of the island’s total export earnings in the country and netted in US$ 1.4 billion as revenue in 2012 of which US $500 million came through value addition. The industry also contributes approximately 2% of Sri Lanka’s GDP, generating 65% of agricultural export revenue per year.

- See more at: http://www.nation.lk/edition/biz-news/item/22050-shelving-%E2%80%98tea-hub%E2%80%99-tea-to-moot-sbu-proposal.html#sthash.1yvUKSOq.dpuf

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