Hapugastenne to packet teas

Having posted the best ever results, Hapugastenne Plantations Plc (HPP), a Finlays’ company is gearing to launch value added tea by packeting them for both local and overseas markets, according to a top official of the company.

“Presently we sell tea in bulk form, but we want to packet it, add value to it and sell both locally and abroad,” Dhayan Madawala, CEO HPP told The Sunday Times FT.

He said the company is exploring many options of what to call the brand and when to launch it. “We have not decided on a name as yet, but the process is on and we want to launch it both locally and overseas,” he explained. He added that the company is looking at manufacturing organic and green tea.

He added that HPP wants to go into the direct system of selling bulk tea and doing direct sales, rather than selling tea at the traditional tea auction.

The company is increasing the capacities of its tea factories in a bid to meet the Commonwealth of Independent State (CIS which was former Russian Republic) and the Middle East. “We are targeting 80 percent of our production to reach the CIS and Middle East countries, which have a high purchasing power. We have converted most of the factories to produce leafy grades to meet this demand,” he explained. Madawala noted that seven factories in Hali-Ela and Passara areas which were small leaf grades were converted in to leafy grades. “We are also replacing five driers (Hatteliya, Demodara, Hadawatte, Shawlands and Madulkelle state) this year in order to enhance efficiency. The driers will come with boilers which will enhance productivity rather than the traditional furnace system we now have,” he explained.

Madawala said HPP this year too will divest estates in Passara and Lunugala areas into rubber, fuel wood and timber like they did last year. “Some of these estates are 100 years old and no longer suitable for recultivation of tea,” he said.

He added this will bring about high levels of productivity, improved land utilisation and self sufficiency in fuel wood. Naresh Ratwatte, Chairman HPP in his annual review has noted this saying that during the next 10 years, the company expects the cultivated land area from tea, rubber and timber to be one third each. “Our strategy to achieve this includes a 40 percent increase in the area under rubber, a 25 percent increase in the area under timber and fuel wood and a 30 percent reduction in the area under tea,” he has said. He has pointed out that despite the cultivated extent being on the decline year on year, HPP’s production levels will be sustained in the medium and long term by 2012.