Financial Times

RPCs mull lease extensions, joint marketing
Regional Plantation Companies (RPCs) are seeking to extend their land leases and are planning to come together in a joint marketing effort to promote Ceylon tea under a new force to re-invigorate the industry.

The Regaining Sri Lanka- Tea Task Force announced last week that it had encouraged the RPCs and exporters to jointly promote the Ceylon Tea brand whilst promoting their own brands. Pooling of resources and benefits from economies of scale are expected to be more effective in brand marketing. This venture has the backing of the Asian Development Bank (ADB)

If the RPCs are able to demonstrate plans with assurances of crop and non-crop diversification, the government may revise the existing land lease of 53 years to 99 years. Further steps are being taken to evaluate many other investment enhancing proposals. Some of these proposals include plans for granting full mining rights with simpler approval procedures.

The government is also considering giving approvals for duty free importation of power generation equipment for mini hydro power projects and for the 'wheeling' or transmission of electricity which RPCs do not own or directly use to other projects or other companies.

Eco tourism is also said to be included in these plans. Expediting compensation for land acquired from RPCs, removal of forestry and timber restrictions and upgrading skills of estate workers, especially the younger generation, to create more employment options as well as sustaining the existing workforce, are some of the opportunities the task force has identified to promote as the well being of the tea sector.

The government has obtained loans and partial grant funding facilities from the ADB and the Japanese Bank for International Co-operation (JBIC) commencing from this year. These loans will be available for the next six years. These funds amount to a total of US $ 128.4 million and are allocated to sectors such as tea growing and harvesting.

Significant steps have been taken towards the diversification of RPC's land so that the tea sector could attract the technology and investment it so badly needs in order to become a dominant quality supplier worldwide. Sequentially, to do this there is a crucial need to develop further the infrastructure with regard to dairy farming, vegetables and fruit plantation. ADB and JBIC funds will be used to buy land for this purpose.

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