ceylon tea – Tea Biz

Built on Beneficence

Romesh Walpola, Chief Executive Officer of Tea Smallholder Factories, Ltd. (TSFL) in Sri Lanka, explains how the Colombo-based firm taps the output of one to 10-acre farms to produce approximately three million kilos of tea annually. Investing in smallholder training, wellness, and educational programs, including internships for second-generation farmers, earns the loyalty of thousands of small tea growers and top dollar for teas sold at auction.

See: Tea Smallholder Factories

Caption: One way that Tea Smallholders Factories, a division of John Keells Group, invests in smallholders is by hosting events, including free health checkups pictured above, at which healthcare providers prescribe medicine to 1,021 factory employees and nearby community members supporting the Neluwa Tea Factory.

Romesh Walpola, CEO, Tea Smallholder Factories

John Keells sponsored Health camp at Halwitigala Tea Factory — Health camp Halwitigala Factory

Tea Smallholder Factories Earn Loyalty that Maintains Competitive Quality Teas

By Dan Bolton

In aggregate, farms of 10 acres or less contribute 77% of Sri Lanka’s total tea crop, according to Plantations Minister Ramesh Pathirana. That percentage has increased over time. Bought leaf factories purchase an estimated 70% of the tea grown by smallholders.

Large estates own 56% of the 202,985 hectares under tea, according to the Sri Lanka Tea Board’s annual report, but contribute only a quarter of the 250 to 300 million kilos of tea processed annually. Sri Lankan smallholders cultivate about 44% of the land under tea, selling to large estates and bought-leaf factories. Only 18% of Sri Lanka’s factories process tea exclusively grown on their estate.

All sectors compete at the weekly Colombo Tea Auction, under the aegis of the Ceylon Chamber of Commerce. Around 6.5 million kilos of tea are sold weekly at this global marketplace where quality is rewarded with the world’s highest average auction prices for black tea.

Tea Smallholders Factories, Ltd. is an example of a successful public-private partnership, explains CEO Romesh Walpola. The company, which employs 411 workers, processes green leaf procured from 8,698 tea smallholders and green leaf collectors. In the fiscal year ending March 31, 2023, TSFL reported an 85% increase in revenue totaling LKRs. 3.74 billion compared to 2021-22 and a profit before taxes of Rs. 440 million (growth of 1,845% YOY with a dividend per share of Rs. 6.67). TSFL accomplished these strong results during a year in which Sri Lanka’s total gross domestic product (GDP) contracted by 7.8%.

Tea Smallholder Factories Output
Neluwa Tea Factory: annual production 883,000 kgs | 1,413 suppliers
Halwitigala Tea Factory: annual production 888,000 kgs | 956 suppliers
Hingalgoda Tea Factory: annual production 1,075,000 kgs. | 892 suppliers
Kurupanawa Tea Factory: annual production 888,000 kgs | 925 suppliers
New Panawenna Tea Factory: annual production 1,115,000 kgs | 1,473 suppliers
Broadlands Tea Factory: annual production 952,000 kgs. | 3,100 suppliers
Link to 2022 Annual Report | 2023 Annual Report

Dan Bolton: Romesh, how competitive are bought-leaf factories in a premium black tea market like Sri Lanka?

Romesh Walpola: We compete heads-up with some of the key private factories. Competition is fierce, as you would know. We are located mainly in Galle and Ratnapura and have one factory in Ginigathhena. The competition is in Galle, and Ratnapura is quite tenacious and very competitive. Most are private factories owned and operated by listed companies.

Dan: The Sri Lanka Tea Board estimates growers earn about $6,000 (LKRs 2 million) per hectare annually. Yields average 4,000 to 5,000 kilograms per hectare. Input costs vary, and labor expenses are far lower for smallholders. Will you describe the typical smallholders that sell your factories green leaf?

Romesh: On average, they own about an acre or less outright.

Romesh Walpola, CEO Tea Smallholder Group — Romesh Walpola, CEO of the Tea Smallholders Factory, a division of John Keells Group

Dan: May I summarize the basics? Tea is grown as a cash crop mainly for export. Plantations and smallholders alike plant at a density of 5,000 to 6,000 bushes per acre. Smallholders manage a mixed use property acquiring and apply fertilizer and inputs for tea as well as home-grown food. Smallholders often involve their children and extended families in farming to lower labor expenses.

Do the thousands of growers you work with produce tea in disciplined rounds? Or do they pluck on occasions when they’re not doing something else?

Romesh: Yeah, they maintain between seven to 10 days of plucking rounds.

Dan: Are they third-party certified? Organic?

Romesh: Not really, not organic. There are a few smallholders who own organic acres as well. But very few.

Regeneration is the process of renewal, restoration, and growth that makes cells, organisms, and ecosystems resilient to natural fluctuations and damaging events. Sea stars, or starfish, exhibit this behaviour – displaying incredible resilience in the face of change.

Dan: You explained that training and quality control are a big part of your contribution to their success.

Romesh: Yes. We have our extension officers in the field on a daily basis. And they have little pocket groups that are educated on basic soil management, the type of fertilizer to apply, pruning cycles, and recommended plucking rounds, all that is needed to maintain their plots. We give that service to the smallholders, but apart from that, they do their own thing as well.

Dan: It sounds like you are empowering these growers to become rural entrepreneurs, right? They control their fate. As growers, they maintain leaf quality. They must deliver a high percentage of fine-plucked leaves from each round.

Romesh: That is one area that we are very particular. I mean, we don’t take just any leaf. We are very selective. We encourage them to bring a decent standard because, as you know, if you put some garbage in, you get garbage out, right, so you have to make sure your raw material is good for you to have an end product so we’re very picky in terms of you know, selecting a reasonably good standard of leaf.

Dan: Do you incentivize quality.

Romesh: Yes. We give them a small incentive for what we call super leaf. Let’s say the current standard of fine leaf pluck (two leaves and a bud) is at about 50 to 55% of what they pluck when you get something over 60 to 65%; then, we give them an incentive for that amount of leaf they bring.

So that it’s, you know, encouraging them to raise the bar for themselves and get something back in turn. We teach them that the higher the tea price at the auctions, the higher the green leaf payment according to the tea board’s formula. So that’s the positive of this vicious cycle, we keep telling them.

Dan: Have you established a minimum rate for green leaf, a price floor?

Romesh: Most of the time, but there are instances we are not during the rush period. We look at what the competition is doing when there are lean months. And we try not to overpay because we don’t believe in, you know, just because the neighbor pays X, you go and try to match that? Because it has to make sense financially.

Dan: It’s a business.

Romesh: Exactly.

Dan: And the nature of the business is that your costs fluctuate, as does the price at auction.

Romesh: In the long run, if you go down that path of paying a rate based on what the neighbor is paying, it doesn’t make real business sense.

What we do is add a lot of value to their livelihoods.

The Smallholder Tea Factories process 3 million kilos annually
Neluwa Tea Factory weigh station
Smallholder at Neluwa Tea Factory weigh station
Modern sorters ensure consistency in finished tea

Key Performance Indicators (2023 Annual Report)

	2023	2022	2021
Tea production in kilos	2,463,000	2,966,000	3,631,000
Net sale average USD \| Rs./kg	$4.82 \| 1,554.58	$2.03 \| 653.67	$2.06 \| 664.54
Revenue from Customers (USD)	$11,614,000	$6,262,000	$7,278,000
Profit after Tax (PAT) (USD)	$864,000	$47,500	$206,400

TSFL reported a 17.2% return on equity for the year ending March 31, 2023. Bought leaf is the single highest cost of sales, increasing by 96% YOY in line with the increase in the tea auction price. The price payable for green leaf is regulated by the Tea Board through the Tea Commissioner’s formula. TSFL purchased 12 million kilograms of green leaf during the fiscal year year while paying Rs. 2.88 billion to the green leaf suppliers. In 2021/22, TSFL incurred a cost of Rs. 1.47 billion to capture a green leaf supply of 14.5 million kilograms.

Loyal Smallholders

Romesh: We’ve identified that group of loyal smallholders who don’t go to any competition if they offer a few more rupees.

I will give you some examples of what we are doing for them. Last year we completed 20 projects and initiatives to positively impact the communities surrounding our business operations.

Just a month ago, we arranged the region’s largest health camp on our premises, so we had roughly 1,000 plus villagers and smallholders coming in to get their health checks. And that was a huge deal for them because some of them had never even had a simple blood sugar test so you could detect problems. Then this is what we do for the community.

They are concerned about the next generation in tea, their children.

There are scholarship programs that we are conducting for the schoolchildren in the vicinity, and for the next generation of smallholders, we offer internships to study the whole factory process and learn about manufacturing. Plus, we explain what happens after the dispatch so that they understand the sampling and laboratory testing that happens between the broker and buyer. Then we take them to a buyer and give them that full experience and exposure. And after completing that cycle, we will find them employment within the industry. They could eventually become a buyer or brokers — even own their own factories. So that’s the educational part that we’re doing.

We do this on a regular basis training 11 interns last year. And once they finish, we give them a certificate. Young people leave our farms otherwise.

Smallholder Profile

Smallholder Mrs. Chandra Jayasingha, 62, farms an acre of tea on land where she and her husband also grow several cash crops, including spices, pepper, coconut, and bananas. The approximately 5,000 tea plants (Cultivar D2026) are not certified organic but are cultivated using organic practices.

Neluwa Tea Factories Smallholder Supplier Mrs. Chandra Jayasingha. Photo by Dan Bolton

“The significance of social and relationship capital as a valuable
asset for creating value will continue into the future, playing a
crucial role in driving the sustainable growth and performance. Accordingly TSFL’s primary focus will be on sustaining our green leaf suppliers, especially small holder partners by providing value-added services to support sustainable agricultural practices and environmentally friendly approaches.”
– TSFL 2023 Annual Report

Dan: Sri Lanka’s tea industry, led by the tea board, plantation owners, and growers’ associations, have signaled their intent to make tea production sustainable.

Romesh: Sustainability is something that we are also looking at. Smallholders are fully aware of, you know, its importance. Sustainable practices at the factories and by the company contribute to stickiness amongst loyal smallholders.

So for us, it’s not about paying something a little bit more than the competition when taking leaf; it’s about actually deep diving into, you know, looking at enhancing the livelihood of the community and the smallholders.

Smallholder Profile

Dayananda Matarage, 67, owns the 10-acre Gulanahena Estate in Thiniyawala in the foothills of the Sinharaja Rainforest. The son of a planter, he produces 3,000 kilos of green leaves on six acres planted in TRI 2022-27 and 4042-49 cultivars. He first planted tea on 1.5 acres in 2001, expanding gradually, recently adding two acres. The main fertilizer is an organic compost, to which he adds bioliquids to enhance micronutrients. He does not use plant protection chemicals or herbicides. He hires local field workers part-time to pluck tea and harvest coconut, pepper, pineapple, sopa, rubber, papaya, and bananas, and he offers a homestay through Sinharaja Holiday Bungalows. Tea generates 75% of the farm’s revenue. A retired engineer, he makes a delicious homemade kombucha he shared with us in his kitchen with rice and coconut milk welithalapa and oil cakes.

“The COVID-19 pandemic and the worst economic crisis in Sri Lanka’s post-independence history resulted in an increase in poverty rates of up to 25% in 2022, a dramatic increase from 11.3% in 2019. Although one fourth of the country’s population has fallen into poverty, many do not receive monetary support from the government, largely due to the weaknesses of social welfare schemes. More than 50% of Sri Lanka’s poorest population is not covered by the government welfare programs”
– The World Bank

The International Labour Organization describes Sri Lanka smallholders as farming 10 acres (four hectares) or less. As defined in the Tea Control Act, Small Tea Holdings produced approximately 95% of the low-country tea, 59% of the middle-country tea, and 15% of Sri Lanka’s up-country tea in 2014.

Dan Dines on Local Delicacy — Dan snacks on local delicacies

Related:
Visit Neluwa, Sri Lanka (Wikipedia)
John Keells Plantations Services
John Keells Holdings

Dan traveled more than 1,500 kilometers during a 10–day visit to Sri Lanka in May 2023. My travels were sponsored by the Sri Lanka Tea Board, chaired by Naraj de Mel, with accommodations at the Tea Research Institute courtesy of Dr. K.M. Mohotti. “I’m deeply grateful for the joyful days spent with Pavithri Peiris, the tea board’s Director of Promotion, Gayan Samaraweera, Market Promotion Officer, and Chathura Fernando, Market Analyst. Gayan and Chathura photographed the scenes above.

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Neluwa Tea Factories Smallholder Supplier Mrs. Chandra Jayasingha

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July 21, 2023

•

Dan Bolton

•

Featured

ceylon tea, John Keells Holdings, John Keells Plantation Services, small holdings farmers, sri lanka, Tea, Tea Biz Podcast, Tea Smallholder Factories

Tea & Empire, James Taylor in Victorian Ceylon

“…had merely provided the first seeds and then ‘entrusted the tea experiment’ to Taylor.

It is undeniable, then, that Taylor led the way in many developments within the Ceylon tea economy…”

And that’s a quote from Tea & Empire, James Taylor in Victorian Ceylon by Angela McCarthy & T.M. Devine.

Caption: Tea & Empire Co-Author Angela McCarthy

TeaBookClub Founder Kyle Whittington Reviews Tea & Empire

Rediscovering the Legacy of James Taylor

By Kyle Whittington | TeaBookClub

This fascinating book illuminates the all too often overlooked tea region of Ceylon, present-day Sri Lanka. The authors draw on the letters of James Taylor, pioneer and founding father of the Ceylon tea industry, to explore the life of a Scottish migrant who, through experimentation and determination, forged a new industry out of the ruins of the coffee blight. This uniquely complete collection of correspondence reveals this pivotal time in tea history through the eyes, thoughts, and actions of a key player. Some of the standards (two leaves and a bud) and machines that Taylor developed are still in use worldwide today.

We learn about the decline of the former plantation crops over several years and the fight to find a viable replacement: tea. James Taylor’s letters home to family, to local friends, and newspaper articles of the time are explored and expounded upon by the authors to offer a historical account by someone for whom the creation of tea was not just a vocation but an avocation too. Uniquely the story is told “as is.” That is to say, it is told in and of its time with explanation and exploration of the who, how, and why things were as they were, centered around the direct views, thoughts, and experiences of James Taylor. Unlike other works that look at this period, this book seeks not to offer judgment or rear-view mirror thinking but merely to show us what was happening at the time and why. First-hand accounts serve to explain and illuminate the period and the people as they were, as they lived, as they thought and spoke. This is the story and experiences of one man who lived through and shaped the birth of an industry. Not because he set out to change the world or get rich but because he was there because he worked with and in response to the situations, the place, and the time in which he found himself.

More broadly, this book also explores the legacy of Scottish education and the thought that the Scottish diaspora played such a significant role in the colonial world, particularly in Ceylon. It also looks at the legacy and, indeed, rediscovery of the legacy of James Taylor and his place in both the history of Sri Lanka and the Ceylon tea industry.

Although interesting, thought-provoking, and generally engaging to read, there are times when the reading can be a bit dry. Perhaps a case of two different writing styles. But push through those dry bits, and you’ll be riveted by the fascinating history within. TeaBookClub members agree that this is an essential book on your tea bookshelf that explores important tea history.

See: Loolcondera Tea Estate (planted by James Taylor in 1867)

Here’s what some TeaBookClub members thought:

I’m really glad I read as much as I did, it seems like it’s very important history in the history of tea. – Audrey, USA

It being a first-hand account is what really made it interesting – Michaela, Austria.

I found it refreshing that the authors didn’t give Lipton much airspace. This was a book about James and what he did, achieved, and his life. I really appreciated that within the context of Ceylon at that time. – Taraya, Canada

It had very interesting and very boring parts but overall very good to read. Some parts were easier to read than others, maybe because there were two different writers. – Mariella, Netherlands

Fascinating that some of his machine designs are still being used today – Mariella, Netherlands

Based in the UK, The Tea Book Club is an international group of tea lovers and readers who meet up virtually every month to discuss tea books. If you’d like to join us for the next read, visit teabookclub.org or @joinTeaBookClub on Instagram.

Tea & Empire

Goodreads: This book brings to life for the first time the remarkable story of James Taylor, ‘father of the Ceylon tea enterprise’ in the nineteenth century. Publicly celebrated in Sri Lanka for his efforts in transforming the country’s economy and shaping the world’s drinking habits, Taylor died in disgrace and remains unknown to the present day in his native Scotland. Using a unique archive of Taylor’s letters written over a 40-year period, Angela McCarthy and Tom Devine provide an unusually detailed reconstruction of a British planter’s life in Asia at the high noon of empire.

Amazon | Hardcover, 272 pages | Kindle $29.90

Published September 1, 2017
Manchester University Press

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December 2, 2022

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Kyle Whittington

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Uncategorized

ceylon tea, james taylor, sri lanka, Tea, Tea Biz Podcast, tea retail, teabookclub
Q|A Roshan Rajadurai
Sri Lanka is facing its worst economic crisis since gaining independence. Following the pandemic, many industries on the island ceased to exist due to political and financial difficulties. However, the island’s tea industry continues to battle on. Tea Biz correspondent and PMD Tea MD Dananjaya Silva discusses with Dr. Roshan Rajadurai, the Managing Director of Hayleys’ plantations how Hayleys’ plantations have adapted and continue to produce tea, given the economic hardships.

Caption: Dr. Roshan Rajadurai, the Managing Director of Hayleys Plantations, left, discusses with Tea Biz correspondent and PMD Tea MD Dananjaya Silva how organizational discipline and adaptations enabled tea production to continue during the pandemic and recent economic hardships.

Listen to the Interview

Dr. Roshan Rajadurai, MD, Hayleys Plantations

Founded in 1992, there are 25 estates in the valley covering 13,000 hectares. Photo courtesy Kelani Valley Plantations

How Sri Lanka’s Tea Industry is Coping with Continual Crisis

By Dananjaya Silva | PMD Tea

Production is down and export volume declined compared to last year but auction prices are at a high mark and Ceylon tea remains in demand. I traveled to Sri Lanka to assess the condition of a resilient tea industry following an unsettling spring marred by high unemployment in the aftermath of the COVID pandemic. For several months tens of thousands protested the inflation-driven cost of food and shortages of basics, including fuel, cooking gas, and electrical power. The upheaval led to the resignations of both the prime minister in May and the nation’s president, who fled the country in July.

Dananjaya Silva – How did the COVID pandemic restrictions show Sri Lanka’s plantation sector to be resilient and adaptive?

Roshan Rajadurai – The plantation sector has a legacy of 150 years of very well-organized, centralized management structure, so when this pandemic situation suddenly came up the government imposed a three-day curfew which we had to abide by. But on the fourth day onwards, we quickly got on board, and made things as normal as normal could be.

The moment we caught wind of this pandemic situation, we put in place a series of measures at our 60 tea and rubber plantations. First, of course, we made our people aware of what this is all about.

There was an influx of people from Colombo and outstations, flowing back to the estates. So, we made sure their names were recorded, and if they showed signs of infection, we had isolation quarters. We isolated them for 14 days, and kept the medical and other authorities informed when they returned to the community. The organized sector has one million people living in a village-style setups in close confines. The measure we took were effective. Up to about the end of last year, we didn’t have a single casualty arising out of COVID. That is because we identified and limited exposure to the people who were coming from outside.

In addition, we did fumigating and provided simple medicines. And most importantly, we ensured that people didn’t have to congregate and that they didn’t have to go to bazaars and townships.

We organized distribution with the large food suppliers, like the government warehouse system, and brought in food in lorries. And we had stocks for two or three months. We delivered food packets practically to their doorstep. What is important is that we ensure that the workers did not spread this COVID.

There was also a group of people who had no other means of earning more income. Although last year was not a good year financially, we ensured that their wages were paid. And as a means of helping the people in this situation, we opened our industry to those who arrived from Colombo and elsewhere, and gave them work in areas that we could not manage with our regular workforce. So, their family unit had more opportunities to earn more when sons and daughters returned.

We already had in place a revenue share model, so we expanded it. There were a lot of people who didn’t want to be registered workers but they still got into the earning pool for their family and were able to enhance their family income.

So we had a very, very tough and a very well disciplined control system and to the credit of workers, I must say they cooperated fully.

They listen to the management; they follow the advice of health departments. So that’s an example of success and how after long years of practice the plantation sector was able to manage a crisis like this.

Dananjaya Silva – How did adaptations forced by the pandemic help Hayleys prepare for the political turmoil of 2022?

Roshan – After COVID came the financial crisis. There was no work to go back to in the construction industry as it had crashed, and also the eateries and small hotels. So, all the people came back to the estates and we made available opportunities for employment. One example is paying workers to remove weeds. We said we will pay you by the kilo and that was a very good intervention as people who don’t want to return to sort of plucking or harvesting work, they go to the field, remove the weeds and we pay them. This was essential because of the limitations on fertilizer. We convert the weeds to compost. Soil augers were given to each division and placement of holes tracked. Once the compost is made, we filled the holes and incorporated the bulk material and the compost into the soil so that it enhances the soil fertility.

Dananjaya – What you’re saying is that this 150-year-old industry, that has been the backbone of the Sri Lanka economy, continues to be that because workers who are from plantation backgrounds who’ve worked in hotels, construction, they once again come back to live on the estate.

Roshan – Actually, Dananjaya employment is only part of the solution that we provided, because there was an influx of workers. And it’s actually stretched our services. But we made sure that we accommodated them, that we looked after them in terms of food supply, because there was no food because the COVID curfew and restrictions. So our managers went out and bought curfew passes, they really did a great job on the ground. I mean, they volunteered – they could have waited and said, look, we don’t want to expose ourselves. But every company, every manager, every planter, took it upon himself to look after his community on the discharge of food, medicine or the wherewithal. Everything was provided and absolutely no breakdown. And ours is the only industry right now maintaining the industry as it was before a lot of challenges, a lot of stress, a lot of issues, but we still maintained the industry as it was.

Dananjaya Silva – Fertilizer was banned last year then the government subsequently reversed the policy. How is this affected Hayleys estates?

Roshan – Well, on the whole, banning of fertilizer was a shock and surprise to all of us due to the ill effect and the consequences of this hasty, unscientific and illogical strategy. We made significant protests, voicing opposition in media and TV talk shows and whatever but to no avail.

We are a large organization and we stock sufficient fertilizer for one or two applications ahead. Last year I did not plan for the banning, but I thought that we learned some lessons on logistical problems, with fewer ships coming, curfews on crews and the slowed movement of goods. So we gave instructions to our managers to store fertilizer for six months, anticipating a breakdown of logistics. Then, in the meantime, they banned the fertilizer, and therefore we had some stocks. Uncertain supply and high prices completely changed the way we apply fertilizer now because we know that for a year or two, we might not get cost effective fertilizer.

In the past we used to broadcast fertilizer but we quickly reverted to a system called placement where we dig a hole and put in a measured 24 grams of fertilizer per bush. In this way, you’re reducing the wastage from volatilization, and leaching while improving efficiency by a significant level. We are also stretching the fertilizer as one application done in this manner means we can sit out two or three future applications. Fortunately for Haley’s group, although we didn’t plan for the ban, we had planned for something else. It also gave us sufficient fertilizer and for food crops raised by workers, so they could infuse some so that they are not going to go without food.

Tea factory at Tallawakelle Tea Estate. Photo courtesy Hayleys Plantations.

Dananjaya – When you talk about ensuring food for workers, that’s a stark contrast to the situation for someone living in an urban area, isn’t it? People there don’t have the opportunity to stock food, and are relying on retail supply. There is no guarantee for them, as they might find themselves standing in a queue for days, and not be guaranteed any food at the end of it.

Roshan – The plantations you know, care for not only the direct workers, but all dependent family members. So if someone has got COVID, we say, don’t worry, we have given the family food over the year in some cases, we can recover it. So by that action, people have confidence in the management that we have looked after them in a very, very critical time. And when they were sick, we made sure that the government medical authorities or personal care management were involved. We offer a holistic total system of care for our people.

In towns, as you said, we all have to stand in queues, and those who do are not sure there’s stocks, but in our case, we bagged provisions and dry rations and brought it to their home so that they don’t have to come and interact or mix with people and spread COVID. So that way, I think we got a huge boost in terms of human resources. When we gave very tough guidelines and instructions, they followed the advice like keeping a distance while working whereas traditionally they were together in a row. We said you have to separate immediately and without any protest they showed wholehearted obedience and support for us.

Dananjaya Silva – Fuel shortages have crippled and decimated many sectors of the country what provisions and adaptations Hayleys have made to ensure the smooth running of operations.

Roshan – After the crisis came on, definitely we have taken radical measures to reduce the running of unnecessary trips and vehicles. We have mapped out all the roads in each division and compared distances and identified the shortest routes to make transport more efficient.

We also introduced some innovations like ziplines. These were built before the crisis, but came in handy. We can save about 90 kilometers a day on trips to the factory because the tea otherwise has to be driven along a circuitous route. It’s eco-friendly and does not use fossil fuel. We have instituted several eco-friendly practices. Now our managers and assistant managers are provided with good Push bicycles, and they have resorted to more walking,

“ We are maintaining the tea industry as it was before in spite of a lot of challenges, a lot of stress, a lot of issues.”
– Roshan Rajadurai

Dananjaya – One area that you touched on was moving tea from estates down to Colombo, there has been some disruption. How are you working through that situation because because the logistics are provided from from outside of the estate.

Roshan – Normally, we manufactured and made arrangements to send our produce to Colombo, and to ship it out. What we do is provide measured fuel to take the tea down to Colombo and even for firewood suppliers because we need firewood to run our dryers. So we assist them in some form. Because of the fuel shortage we are trying to harvest wood that is already grown on the estate for this purpose and adding branches cut to reduce some excessive shade.

All those initiatives and energy efficient measures add up. We are relying more on hydropower and we are trying to put almost 60 to 70% of our roofs in solar. So all those things can happen after the crisis. These are interventions that happened before COVID and the financial crisis, which have a beneficial use for us right at this moment.

Dananjaya Silva is the managing director of London-based PMD Tea and a third-generation tea man whose family business, P.M. David Silva & Sons, dates to 1945 during the Plantation Raj in Ceylon’s Maskeliya Valley.

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September 18, 2022

•

Dananjaya Silva

•

Expertise

ceylon tea, crisis, foreign currency crisis, kelani valley, loose leaf tea, orthodox tea, sri lanka, Sri Lanka Tea Board, talawakelle teas, Tea, Tea Biz Podcast
Q|A Niraj de Mel
Sri Lanka is in turmoil politically and financially; the country of 22 million is struggling as widespread demonstrations continue. Unrest is tied to food inflation exceeding 50%, with critical shortages of cooking gas, fuel, and reliable electricity. The country has defaulted on its foreign debt, and its currency devalues with a credit rating that discourages outside investment. Government bankers are at an impasse in negotiating a bailout from the International Monetary Fund that will depend on difficult reforms, including higher taxes and governance changes. Tea producers are confronting all the above challenges, yet the Ceylon tea brand remains resilient. Last year, the industry generated $1.32 billion in US foreign currency, exporting 300 million tons of tea, of which 270 million was high-value orthodox tea.

Export earnings increased 6.72% during the 2021 calendar year compared to 2020. Every subcategory reported growth, with exports of tea bags growing 84%, tea packets up 10%, sales of bulk tea up 2.5%, instant tea sales of 19.5%, and green tea up 22.8% through December, according to the Export Development Board.

Industry veteran Niraj De Mel was named Chairman of the Sri Lankan Tea Board in June 2022, his second appointment to a position that he previously held in 2004. In this discussion with correspondent Dananjaya Silva, Managing Director at PMD Tea, de Mel explains the challenges and solutions facing Sri Lanka’s tea industry.

Listen to the Interview

Sri Lanka Tea Board Chair Niraj de Mel discusses challenges for the tea industry.

Niraj de Mel with Bigelow Tea CEO Cindi Bigelow and Prasanna Panabrooke. Photo via Bigelow Blog

Sri Lanka Relies on a Resilient Tea Industry

By Dananjaya Silva | PMD Tea

During his 45 years in tea, Niraj de Mel has worked as a taster, broker, exporter, and educator. He is past chairman of the Tea Exporter’s Association and the Colombo Brokers Association and served as vice chairman of the Colombo Tea Traders Association. He is the founder and director of The Mel’s Tea Academy in Colombo.

Dananjaya Silva – Tea professionals globally say they are happy to see a safe and steady hand on the tiller as you return to steer the Sri Lanka Tea Board. Given the current political situation, how secure is your position?

Niraj de Mel – Well, to start, let me tell you a bit about the developments before my appointment [on June 20]. Come the middle of May, the industry got together, and because they thought it was time, we told the authorities what we knew best and what was best for the industry.

So, arising from that, they also decided on the people best suited best-suited for the positions at the TRI [Tea Research Institute] and the Sri Lanka Tea Board. I was asked to step back into my previous role as chair for obvious reasons. The immediate past chairman went along with this delegation and met the minister [Minister of Plantation Industries, the Hon. (Dr.) Ramesh Pathirana] to discuss these things and told him that after the debacle as a result of a wrong decision on fertilizer, it’s time that we get the feedback from the experts. Plus, the industry will tell them exactly how things should be run. We have been doing this for the last 155 years, and it’s arising from that conversation that I’m in this seat today.

Dananjaya – Now that a new president has been named, will changes in the cabinet likely means a new appointee to the Minister of Plantation Industries post?

Niraj – I sincerely hope that he [Dr. Pathirana] will be reappointed to the position. Of course, there is no issue whatsoever because he and I will get on.

He’s a minister who sizes up things quite well. He’s a learned man being a medical doctor himself. If there is going to be a change in ministers, the Associations will take up with whoever who’s appointed to the position of Minister plantations that you know that I should remain. Be that as it may, I’m here to do the job.

First and foremost, we need to steady the ship.

Dananjaya – The ban on importing chemical inputs, including most fertilizers, was halted in October, but the effects of the setback linger.

Niraj – Mistakes were made, but circumstances that led to that decision have changed. The big development is a result of the Russian-Ukrainian war, a conflict between some of the world’s largest fertilizer suppliers. Fertilizer has since become scarce and prices went sky high, impacting Sri Lanka at a time when our currency itself also depreciated, compounding matters for the average tea farmer. It’s now virtually impossible for him to afford this kind of price.

To address that, the Sri Lanka Tea Board considered an initiative that has been knocking on the door since January. I see from the minutes a request for funds from the promotion levy to be used to facilitate a loan scheme so that farmers get fertilizer to start feeding these bushes, which have been starved for nutrients.

The board has since delivered fertilizer to nearly 100 factories to offer to smallholders and regional plantation companies. They are working to ensure that the estates will have sufficient fertilizer within about one and a half months.

Editors Note: The Hindu reports that India, on July 17, delivered 44,000 metric tons of urea under a credit line extended to Sri Lanka, as part of New Delhi’s ongoing efforts to support the island nation’s farmers and help bolster bilateral cooperation for food security, the Indian High Commission in Colombo said.

Dananjaya – It seems we’ve returned to the days of old during the colonial period when the Planter’s Association essentially told the Governor of Sri Lanka what was good for the country. Because what was good for the planters’ community was good for the country.

Niraj – Absolutely. Absolutely. It’s time actually that all the private sector did that, not only tea. The private sector has long been the engine of growth in this country, be that planting, manufacturing, exports or brokering. All that is well handled by the private sector and the government sector, such as the Tea Research Institute of Sri Lanka, does the research.

Dananjaya – The crisis not only impacts the rural tea sector. Service providers report difficulties obtaining financing, fuel, and reliable electrical power in Colombo, Sri Lanka’s hub for blending, packaging, and shipping. Will you describe how the tea board is addressing these concerns?

Niraj – I think there needs to be some clarification on this. The private sector basically handles it, but we are trying as far as possible to assist. I have tried to instill into the minds of the officials that we have to be an enabling outfit.

Going back to your question No. 2, there’s one item that was missed: the fuel factor. Actually, that has taken precedence over fertilizer now because the collection of leaves as well as bringing the manufactured tea out is essential to run your factories. Exporter functions, particularly the tea bagging sector, where the machines have to be run continuously, all require an uninterrupted power supply. Power cuts that have been prevailing in this country for the last 4-5 months are an encumbrance to the people, as a result of that, now compounded by the fact that there’s fuel scarcity, particularly diesel. So given the availability of fuel we are trying our best to contact all concerned with the right message to ensure that the producers get their fuel quota.

They cannot have it the way they used to have, because the country itself is, you know, is importing fuel ship by ship. The private sector importers, in particular, have stepped in, which is very magnanimous on their part. To fast-track this process, the government has said, well, if you can produce the foreign exchange, you can certainly get the fuel across. So, the private sector exporters banded together to give off whatever they could.

Dananjaya – As new problems have arisen over the course of this year, from power cuts to rationing fuel, the tea industry has drawn on a battle-hardened core of tea professionals who are able to react quickly and make provisions to see that the industry continues to operate.

Niraj – That’s right. That’s right, reaffirming that Sri Lanka tea has for 155 years been one of the most resilient industries in this country.

There will be little disruptions here and there, but the fact of the matter is we are managing, though it’s challenging. There is great unity among the stakeholders, particularly now with these current issues which they had to face together. We started at the beginning of the pandemic back in 2020. Everybody came together in two and a half weeks to quickly convert to an electronic platform to conduct the auctions, which was great. That carries on to this day. The Colombo traders are very, very confident that there will not be a return to the old outcry system. I started life as a broker and enjoyed the outcry system, but the fact-of-the-matter is we have to move with the times. The platform has enabled us to quicken the process, giving buyers, producers, and brokers time to spend on other things.

Cricket is an apt metaphor… Cricket is the only game that stops for Tea, the country might be 74/8, with a bumping pitch and blinding light, but the Tea sector continues to bat on at the crease.

“Play up! Play up! and Play the Game! “
– Niraj de Mel

Dananjaya Silva is the managing director of London-based PMD Tea and a fourth-generation tea man whose family business, P.M. David Silva & Sons, dates to 1945 during the Plantation Raj in Ceylon’s Dimbula Valley.

Related
- Protecting Sri Lanka’s 150-Year-Old Brand
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July 25, 2022

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ceylon tea, crisis, foreign currency crisis, loose leaf tea, orthodox tea, protected geographical indicatior, sri lanka, Sri Lanka Tea Board, Tea, Tea Biz Podcast
UK Tea Academy
Co-founder and Director of Studies Jane Pettigrew describes the remarkable evolution of the UK Tea Academy into an innovative global tea education resource that has emerged from the chaos of COVID-19.
- Caption: Jane Pettigrew, author, educator, historian, and tea retail expert
Hear the Interview

Jane Pettigrew and Suranga Perera on how the UK Tea Academy evolved to meet challenges posed by the pandemic

Jane Pettigrew at the UKTA’s launch party at the Cafe Royal in January 2016.

Online Adaptations Enhance and Expand Tea Education

By Dananjaya Silva | PMD Tea

The United Kingdom Tea Academy is recognized as a world authority for online tea education. Staffed by professional tutors the academy offers courses from beginner to advanced. I sit down with Co-founder and director of studies Jane Pettigrew, who is a leading author and speaker on tea, along with Suranga Perera, the chief instructor of the Ceylon tea program, who counts over 20 years of experience in tea and is the former CEO of Ceylon Tea Brokers PLC.

UK Tea Academy

Dananjaya Silva: Will you explain the essential role that is performed by UKTA in the growth and expansion of specialty tea?

I think that what we’re doing is actually raising awareness amongst consumers of the possibilities of drinking better tea and also helping food service employees to deliver better tea and to know more about the sort of tea we’re hoping they will serve.

There’s an awful lot of people amongst the general public, but also working in restaurants and hotels and tea lounges, coffee bars, etc., who really don’t ever stop to think about tea as a suitable offering for what they’re doing.

And so I’m afraid tea has always been treated as a bit of a loss leader, a second cousin — twice removed.

It’s never really featured in a lot of people’s minds. Our aim is to raise people’s awareness of the fact that there is so much more than paper teabags.

Suranga Perera

“We have created a very, very exciting master class for Ceylon Tea where we will be tasting roughly 80 teas. Some of the sessions are live at the factory so that the audience can see the production line and talk with factory owners and managers for a greater understanding.“
– Suranga Perera

Dananjaya: Specialty tea is growing in popularity and there are more tea houses being established. Who are the courses that you offer aimed at and how do you deliver these courses?

Jane: So the people we aim at are specifically food and beverage. But of course, we are also found online by people who just love tea. About 15 years ago, shortly after the new Millennium up to about 2005, things really started to change. China opened up and people began drinking more Chinese tea again.

And a lot of completely non-tea people came into the tea business. There are many people who have been working in tea for a very long time, and I think a lot of these new people came into tea from just a completely different direction, either with outside experience and a business degree or because they traveled and they’d come across Chinese, Taiwanese, Japanese teas that they couldn’t get here.

Some of those people opened tea businesses so that they would make those teas available.

And as more people learned about teas, cafes, restaurants and hotel lounges started serving more teas, and they all began to realize that they actually didn’t know very much about tea.

So we try to be at least one step ahead, particularly with food service operations, to give them an insight into the different categories of tea which they’ve never heard about. We help them understand fine teas and help them brew the tea properly. We also help them answer clients’ questions about caffeine and why tea is good for us, and to talk about the different flavors.

I mean there is just so much to know, which obviously raises the profile of a really good restaurant or tea lounge or even a coffee bar.

In the past, we were classroom-based here in London which meant that people flew in to find us and sit with us in the classroom. Because of COVID, we had to reinvent ourselves into a completely online business.

There have been a lot of advantages of actually doing that. We of course now can reach people absolutely anywhere in the world.

We try to gear our courses in two different time zones because if we’re teaching in Asia, they’re eight hours ahead, and if we’re teaching in West Coast America, we’re eight hours behind. So we try and find times that suit the different markets, which seems to be working really well. Instead of teaching for a whole day, now we teach in three-hour chunks or less, and the three hours absolutely fly by. Quite a lot of our courses include brewing together, discussing flavor and aroma profiles together, learning to talk about tea, and sound exciting.

There’s just so much to this that people gradually get very drawn in, and once they start with us, they tend to go through the different levels.

Dananjaya: You mentioned that it’s a global course. How does someone sitting in Australia or New Zealand receive those samples? Could you take us through the process?

Well, yes, of course. Our foundation level, what we call Tea Champion is taught in two segments, practical and sensory. We don’t have so many teas going out for that course.

For our Tea Sommelier class, which is the second level up we send out something like 170 teas. We’re not drinking all of those. We add things in for little quizzes on dry leaf recognition and for blind tastings.

We try to do as much as we used to do in the classroom, but of course, we have to plan ahead and allow a good month to get teas out — and not just to far off places but actually into Europe, which has since Brexit been a bit of a problem. So then we send them the recording of a class or event and they can listen along on their own and brew the teas on their own time.

We have a brilliant team now who are constantly packing teas for the next course. The students keep in touch with us to let us know whether or not they’ve received the teas. So with good planning and “military precision,” we can actually do this.

Dananjaya: So by the sounds of it, although COVID had a massive negative impact around the world for your organization, it’s actually allowed you to reinvent yourself and have a much wider scope, hasn’t it?

Jane: It’s been amazing Dananjaya because when we were teaching in class, particularly with the more advanced class, it was very, very intensive. We went through lots of material in four days, maybe with a day off in the middle, but we had to do it like that because people were flying in specially and they couldn’t keep coming back for the class.

They did well, but I think it was an awful lot of material for them to take in and with less time for revision, quizzes, and games.

So now that we’re teaching online, we can actually spread the classes out over four weeks, six weeks, and weekends, whatever we want to do. There is a longer gap between each module and the students are now brewing the teas themselves, which they never did in the classroom, and that means that they actually build up a much closer personal relationship with the tea.

And they have enough tea to brew more than once, so they’re getting a lot more, I think, that we delivered in the classroom. I’ve been running quite a lot of exams individually online, talking for about three hours. The results that we’ve been getting since we began teaching online have been absolutely phenomenal. You know, some people are absolutely word perfect. I think it is because they’ve had more time to build up not just their understanding, but their passion for tea. It’s not hard to develop a passion for tea. Everybody gets caught up in the whole thing.

Dananjaya: Yes, there’s so much to explore. What you’re saying is that participants needed to let the information brew for a while.

Jane: Yes, it’s assimilating it and making sure you’ve really understood it, and if they haven’t, having the time to go back and ask more questions. What we aim to do is give people the tools they need to go off on their own tea journey.

This is particularly true of the lower-level class. It is absolutely essential because tea is difficult to learn on your own. There’s a lot of stuff out there now, more than there used to be, but it’s still quite confusing if you don’t get the basics absolutely clear. We can then introduce the higher-level classes with some of the most amazing teas from all around the world. People just can’t believe the many options.

Ceylon Tea Masterclass and Diploma

Dananjaya: The UK Tea Academy is relaunching the Ceylon Tea Diploma course in July can you explain what the new course entails?

Suranga Perera: As Jane said, the main objective is to bridge that gap between the consumer and the producer. We have created a very, very exciting master class for Ceylon Tea. We have got some very exciting teas and gone into great depth. It’s roughly 10 hours long

The first session will be one hour. We will be tasting one or two teas just to break the ice and get people moving, and we’ll be talking about the history, of Ceylon teas. Then a current overview of production and discussions about certifications and Ceylon Lion logo in particular. There is a segment on ozone-friendly teas a discussion about the employment that Ceylon tea provides and an explanation of the auction system.

The second session is three hours long and covers what are known as the “high-grown” tea gardens on the island. There are some teas that we are tasting for the first time. For example, we are featuring a Mattekelle Golden Curl from a Japanese clone that is extremely flavorful, and quite different. Few have tested and tried it out. In this masterclass, we will be tasting roughly 80 teas.

The third session is also three hours long. it will focus on low-grown teas. We will cover teas from Sabaragamuwa, Galle, Deniyaya, Matugama, and other tea producing subdistricts. Having been a broker for 21 years I worked with these factories very, very closely and personally tasted these teas and picked the best at the time. Because teas change all the time due to weather and various reasons, we need to pick the right teas for the current season. We want to make it as current as possible and as precious as possible so it’s a dynamic masterclass. There are eight teas in this session to be tasted at home by participants.

The fourth and last session is about specialties, amazing teas that are not readily available. We see that a lot of factories are now getting into manufacturing specialties from which we have picked up the best available. Several of these factories are so, so, exciting, so authentic, so organic.

Some of the sessions are live at the factory so that the audience can see the production line and talk with factory owners and managers for greater understanding.

Bridging the gap to the best of our ability is what we are trying to do with this masterclass.

London-based Dananjaya Silva is the managing director of PMD Tea and a fourth-generation tea man whose family business, P.M. David Silva & Sons date to 1945 during the Plantation Raj in Ceylon’s Dimbula Valley. The company was founded on Brunswick Estate in the fertile Maskeliya Valley as a small independent Tea shop for tea plantation workers to gather, relax and enjoy a quality cup of tea.

Related
- Instagram: UK Tea Academy
Outstanding Education for Tea Professionals and Enthusiasts

The UK Tea Academy was established in 2015 to raise the standards of tea service in hospitality. One of the UKTA founders and director of studies, Jane Pettigrew, is a passionate advocate of high-quality tea, prepared correctly to draw the best flavor from the leaf. Jane is among the best-known and most highly respected professionals in the tea world. She has worked as a writer and educator for more than 35 years and is tirelessly committed to sharing her knowledge of tea with anyone who has an appreciation for this fabulous leaf. She teaches all over the world, has written 17 books on tea, and was awarded a BEM (British Empire Medal) for services to the tea industry.

A certificate from the UKTA is recognized in the hospitality industry as representing a high level of achievement and means the holder has attained a deep understanding and serious appreciation of quality tea. On completion of the introductory Level 1: Tea Champion, most of our students are inclined to develop an even greater knowledge of this fascinating world and enroll in Level 2: Tea Sommelier. Some go even further, to the ultimate challenge of Level 3: Tea Diploma.

UKTA Tutors
Tea experts living in the United Kingdom teaching live webinars

Jane Pettigrew Sam Kimmins Kate Popham
Dr. Tim Bond Beverly-Claire Wainwright Carri Hecks
Asako Steward Alex Probyn Sunjin Lee
Chau-Jean Lin Eunice Pallot Juyan Webster

Licensed Tutors
Teaching UKTA courses online in other languages

HyunSei Yu, South Korea Isaline Lannoy, France Pilar Serrano, Spain
Sabine Gullatz, Germany Stefania Gilardi, Italy
Asako Steward, Japan Gabriella Scarpa, Italy

Online Study
Linktree: UK Tea Academy Courses

Pouring Dark Teas

Self Study Online

Tea Samples Arrive by Mail

Tea Champion Theory course consists of eight modules of densely-packed self-study material with information on tea history, culture, and the six different categories of tea. The Sensory & Practical side of the qualification is made up of four live webinars, where the class tastes more than 30 different hand-packaged loose leaf teas with UKTA’s expert instructors.

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April 29, 2022

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Dananjaya Silva

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Learning

ceylon tea, Ceylon Tea Masterclass, loose leaf tea, Online Education Programs, Tea, Tea Biz Podcast, Tea Education, UK Tea Academy