Sri Lanka’s cassava generates FDI venture
Sri Lanka will be supplying part of the world demand for manioc or tapioca starch and its leaves used as healthy foods processed at a proposed new US$40 million venture empowering farmers to increase incomes.
The company Starch Industries Pvt. Ltd is managed by two Norwegian and Swedish nationals and established about two years ago and with its main office based in London. Starch Industries Global Ltd was incorporated and registered just this year with a top and middle management comprising 15 persons.
Starch Industries Chairman Andreas Wiik speaking with the Business Times on Thursday said that they had commenced operations into the sale of tapioca starch about three years ago when they set up a plantation of about 300 acres in Moneragala.
However, now they have sold out that plantation and will be setting up a processing factory at Welikande, Polonnaruwa for starch and other related products from the manioc plant for export to West Asia, North America and Asia in future.
The project received presidential patronage at the foundation laying ceremony held recently to mark the commencement of work on the construction of the Starch Industries factory that would be working in collaboration with the Grama Shakthi initiative to connect with farmer groups.
Mr. Wiik explained that they would be establishing Swedish technology from Larsson Sweden Technology company that will provide technology-know-how for processing of starch from manioc that includes cleaning of crops, to peeling and processing and packaging of bags that will be exported.
Commenting on the selection of manioc, he pointed out that it is a crop that could be easily grown and there is a demand for fresh cassava root in West Asia.
Fresh root
“We discovered a lot of farmers had been cultivating manioc and we have asked all farmers now to sell to us,” he said. They would limit the exports to 5-10,000 tonnes of fresh root that would head to the supermarkets of West Asia and in mainly to the Dubai market that would distribute the product to other countries in the region, Mr. Wiik said.
“Tapioca starch is the real name and that is what’s to be processed at the factory,” the Chairman said adding that the extract of starch from the cassava root will be used for export.
He pointed out that tapioca starch is the second most used starch in the world and is used for a lot of different food and animal fodder and even in the production of paper and pulp.
“We have a plan to sell the starch worldwide but in addition to this we will take some of the cassava leaves and make into health supplements – dry the leaf and crush them – animal food and healthy foods,” Mr. Wiik explained.
The product will be sold as “Visus” which will be sold through Starch Industries’ Global company in the UK where the conduct of operations is more convenient, he said.
The global company has brought in the business plan and the investment while the Sri Lankan listed company will be carrying out the local operations and the sale of the product.
Currently the company has about six buyers with no indication from which countries but they hope to expand their reach as well.
The Polonnaruwa factory is situated on an extent of 37,500 acres of which about 400 acres will be used as a cassava plantation with approximately 100 acres to be allocated for the facility.
The company hopes to export at least 100,000 tonnes per annum of cassava starch to the international market when operations are likely to commence once the factory is established in about 18 months.
“We are working with a leading company in Holland in Netherlands and they will work with buyers to promote the cassava plant in Sri Lanka,” Mr. Wiik said.
At present the company is still awaiting approvals for the setting up of the factory and plantation that would employ 200 and 2000, respectively.
Grama Shakthi
“We can benefit from the Grama Shakthi and the farmer groups since they already have organised farmer groups and can work with these groups and engage many in the cultivation of cassava,” he said.
Through the Grama Shakthi programme the company will ensure farmers will be organic certified and plants will be provided by them along with the required knowledge to cultivate according to their specifications.
In this respect, a handbook and workshops would cover the extent of work involved in the cultivation of this crop in an organic manner and these would be continuously monitored by the company, Mr. Wiik explained.
Meanwhile, this Grama Shakthi programme that is benefitting from this venture detailed how the operations are carried out.
Grama Shakthi Sustainable Division Consultant Hemal Dias speaking with the Business Times said that they would be linking the farmer groups with the company to establish a well- functioning out-grower farmer system for cassava cultivation that can be replicated for other agriculture projects in Sri Lanka.
This would also provide cultivation expertise and significant knowledge of modern agriculture practice to enable the programme to provide improved services to its farmer networks, he explained.
This venture would also ensure that farmers within this network will be able to grow a crop in high demand using modern technology and obtain a stable income.
Another key aspect of this project will be the implementation of water supply and irrigation systems for farmers; organic manure and compost production programmes at out-grower farms and the facilitation of organic certification from out growers, Mr. Dias explained.
Moreover, the farmers would be enabled to cultivate on currently unused lands; offer farmers a buyback guarantee; offer a fair and fixed rate for the cultivated crops; access to cultivation input, training, technology and methodology; crop insurance and crop finance and basic sanitary facilities.
Mr. Dias pointed out that Welikanda was selected based on the right conditions available for the cultivation of cassava which was also the location of the farm that closed operations due to the LTTE problems since 1996.
“We want to get the benefit for our people – they will have permanent employment and farmers producing cassava will have a buy back guarantee system and market assurance,” he said.