Changes to RPCs to ensure profitablity

The Government is planning to bring in changes in regional plantation companies (RPCs) to ensure profitability on the estates.

Plantations Minister Navin Dissanayake told the Business Times on Tuesday that following reports on the findings of an audit on the RPCs and a committee of visiting agents’, another high-level committee headed by PM’s advisor R. Paskaralingam would develop an action plan on the way forward for the plantations and a road map with a timeline.

This would be carried out in a bid to ensure profitability on the plantations without simply enforcing new regulations on the companies. “We need to give them some time to breathe,” the minister pointed out.

The audit report had found that at least five of the RPCs were “not bullish” but a majority were considered bullish.

Minister Dissanayake noted that there were RPCs that have not done well and which had been “deliberately mismanaged.”

In this respect, the authorities would need to bring about some controls and in the future engage them to ensure they would be sustainable and profitable.

The authorities were hoping to revive the RPCs that have not performed to expectations and reward others that have delivered.

Prime Minister Ranil Wickremesinghe also highlighted in his speech on August 10 to the industry at the recently concluded International Tea Convention that new legislation would be introduced to bring these companies under Parliamentary scrutiny.

If we consider each smallholder as a business entity then we will understand how they should be doing business

Meanwhile Sri Lanka Tea Board Chairman Rohan Pethiyagoda said they would be pumping in Rs. 8 billion to ensure a sustainable model on the plantains with a new revenue model for replanting. These funds would be generated from within the industry, Mr. Pethiyagoda pointed out.

Moreover, he explained that there was a need to change the outlook of the tea smallholders who were engaged in contributing 73 per cent of the exports to the sector.

“If we consider each smallholder as a business entity then we will understand how they should be doing business,” Mr. Pethiyagoda said.