Plantation Industries Ministry to launch $100 million loan scheme to modernize Sri Lanka’s tea factories

Addressing the 27th AGM of the Sri Lanka Tea Factory Owners Association (SLTFOA), Minister of Plantation Industries, Navin Dissanayake announced that the ministry is expecting to launch the loan scheme worth of $100 million received from Japan including Japanese government in December or early January next year.

He said that the loan scheme is aimed at modernizing the country’ tea factories. The tea factory owners will be able to access the loan scheme through the People’s Bank at a low interest rate of 4-5 per cent.

The SLTFOA AGM was also graced by Minister of Finance and Media, Mangala Samaraweera, Ministry of Home Affairs, Vajira Abeywardena, Minister of Lands and Parliament Affairs, Gayantha Karunathilaka and Chairman of Sri Lanka Tea Board, Rohan Pethiyagoda. The Minister revealed that the Ceylon Tea global promotional campaign which was delayed for over seven years would finally commence in January next year. He said “We have selected an advertising manager at last and will put it for Cabinet approval.” The Ceylon Tea Promotion Fund currently has an excess of USD 40 million which was funded through the Tea Promotion and Marketing levy of Rs 3.50 for every kilo imposed on tea exporters.

Dissanayake asserted the tea industry was over-regulated, obstructing the growth of the industry. Making a comparison with the regulation of the tea industry and the apparel sector, he pointed out that less regulation had helped the apparel sector to become the top export commodity within a short period of time. Therefore, he urged all stakeholders in the tea industry to agree with a way to de-regulate the tea industry.

The minister urged the tea industry to reduce its dependency on state subsidies by setting buffers to self sustain during crisis periods when global tea prices fall sharply. He revealed that the Government had provided Rs 8 billion as subsidies to the sector, to minimize losses occurred during last tea price fall. Commenting on the number of tea factories, Dissanayake said “there are over 700 tea factories in the country including RPCs which is way too much and it’s should not be a measure of success. Since I became the Minister of Plantation Development, I have stopped issuing new licences to factories. There were too many licences being issued during the past 15 years.” He said that strengthening and consolidation of tea factories while expanding profitability was the urgent need for the country. The minister assured the present and the prime minister is on the line to support the country’s tea industry.