Agriculture

Sri Lankan plantations press for oil palm support as profits surge

Thursday November 30, 2017 6:23 am

ECONOMYNEXT – Sri Lanka’s plantations industry has called for more support for palm oil as profits from the crop surged, exceeding that of tea and rubber, saying it needed less effort and labour, yielding healthy margins.

The gross profits from palm oil in the four regional plantations companies (RPCs) growing the crop rose 66.6% to Rs.2.29 billion at the end of the 2016/17 financial year from a year ago, the Planters’ Association of Ceylon (PA) said in a statement.

The tea businesses of these same four RPCs yielded gross profits of just Rs. 75.2 million in the same period, largely owing to heavy losses at two firms from tea.

The companies have benefited from high global palm oil prices as demand exceeds supply and protective import tariffs on vegetable oils.

The Planters’ Association called for greater facilitation of engagement, investment with a gradual focus towards value addition in the oil palm sector.

“We commend the pioneering efforts of all Sri Lankan RPCs in relation to their proactive diversifications into the oil palm sector. We are confident that sustainably grown oil palm plantations hold the potential to rejuvenate the wider plantation industry.“

Oil palm profits expanded exponentially over the past year with the four regional plantation companies (RPCS) engaged in the business recording turnover growth of 44.2% Year-on-Year (YoY) up to Rs. 3.95 billion, while profits within the sector rose by 66.6% YoY to Rs.2.29 billion at the end of the 2016/17 financial year, the PA said.

Out of the 20 RPCs operating in Sri Lanka’s plantations sector, four – Watawala Plantations with 3,157 hectares, Namunukula Plantations with 2,041 hectares, Elpitiya Plantations 1,571 hectares, and Agalawatte Plantations with 1,311 hectares – have already established commercially viable oil palm plantations.

The full statement follows:

Out of the 20 RPCs operating in Sri Lanka’s plantations sector, four (04) – Watawala Plantations with 3,157 hectares, Namunukula Plantations with 2,041 hectares, Elpitiya Plantations 1,571 hectares, and Agalawatte Plantations with 1,311 hectares – have already established commercially viable oil palm plantations.

By way of comparison, revenue generated by the tea businesses of these same 4 RPCs reached Rs.7.62 billion during the same period, while profits hit Rs. 75.2 million. Similarly, the rubber sector of these RPCs – exempting Watawala Plantations which is not engaged in the rubber business – recorded turnover of Rs. 1.04 billion but ultimately resulted in losses of Rs. 180.7 million during the same period.

Now home to oil palm plantations spanning 8,500 hectares, the continuing efforts by Sri Lanka’s RPCs to establish a thriving oil palm business in the country is aligned with the Sri Lankan Government’s ambitious goal of planting 20,000 hectares of oil palm.

Commending the remarkable performances of Sri Lanka’s oil palm producing Regional Plantation Companies (RPCs) over the recently concluded financial year, The Planters’ Association of Ceylon (PA) issued a statement calling for greater facilitation of engagement, investment with a gradual focus towards value addition in the oil palm sector.

“Particularly given the unprecedented and growing international demand for oil palm, the sector is anticipated to generate strong profitability over the medium term. In that regard, we encourage all plantation industry stakeholders to explore new ways to get engaged in the oil palm sector, either through sustainable cultivation or value-addition,” PA Chairman, Sunil Poholiyadde stated.

Over the recent past, more RPCs have also been making important progress in terms of oil palm diversifications, with Kegalle Plantations now working to plant 300 hectares having already established oil palm nurseries during the previous year. Similarly, Bogawantalawa Tea, Kotagala, Lalan Rubber, and Horana Plantations each launched their own oil palm projects during the past year and anticipate substantial contributions to revenue from this emerging segment over the medium-long term.

Unfortunately, despite the remarkable potential for this crop to substantially improve the financial performance of Sri Lankan RPCs, and in turn, for those employed in the plantation sector, oil palm continues to face resistance at the local government and provincial council level.

“While the higher levels of Government have been supportive, unfortunately there is a lot of misinformation and outright lies being circulated among lower levels that is leading to serious challenges for RPCs seeking to make diversifications into oil palm. For our part, we are working to educate the general public about the tremendous potential that sustainably cultivated oil palm has to drastically improve the lives of those working in the sector, while providing invaluable support for RPCs that continue to face stiff challenges in tea and rubber cultivation,” Poholiyadde explained.

Internationally, palm oil remains a ubiquitous part of modern life, being commonly utilized as primary ingredient in food, soaps, cosmetics, candles, bio-fuel, animal feed and many other consumer products. While approximately 64.5 million tonnes of palm oil was produced globally in 2016, demand for the commodity has outpaced global production.

First established in Sri Lanka in the late 1960s, growing demand for sustainably grown oil palm ensures that the commodity commands strong prices while the effort required to cultivate the crop is much lower and less labour intensive than either tea or rubber with field level cost of production standing at Rs 20/Kg of fresh fruit bunches (FFB) as against a selling price of approximately Rs.40, enabling healthy profit margins for sustainable producers.

Leading performances during the financial year of 2016/17, was Watawala Plantations, whose substantial oil palm sector segment posted outstanding growth to close the year with revenue of Rs. 2.16 billion, as compared with Rs. 1.5 billion in financial year 2015/16 and profits before tax (PBT) of Rs. 1.13 billion, improving significantly over the previous year’s Rs. 702.8 million.

Oil palm businesses also recorded considerable growth in other oil palm producing RPCs with Namunukula posting revenue of Rs. 898 million against a previous Rs.566 million, while gross profits from the segment stood at Rs. 602 million in FY2016/17, as compared with Rs. 347 million in FY2015/16.

The contribution of oil palm to Elpitiya Plantations revenue increased from Rs. 408 million to Rs. 619.6 million, generating a profit of Rs. 396.1 million by the end of the period in review, as compared with Rs. 202.2 million in the previous financial year. Meanwhile, Agalawatte Plantations posted revenue of Rs. 275.1 million as compared with Rs. 265.4 million leading to profits of Rs. 169.8 million, as compared with Rs. 127.3 million in the previous year.
(COLOMBO, November 30, 2017)

FILED UNDER: Sri Lanka

Markets

Sri Lanka stocks close down 0.60-pct, dragged by HNB and LOLC

Friday November 13, 2026 3:28 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.60 percent.

The ASPI was down 133.22 points at 22,024.18, while the more liquid S&P SL20 was down 1.06 percent, or 67.55 points, at 6,298.02.

The ASPI ended the week up 784.53 points from last Friday.

Positive contributors to the ASPI were Dialog Axiata (up 0.40 percent at 50.20 rupees), Distilleries Company of Sri Lanka (up 0.52 percent at 58.30 rupees), Aitken Spence (up 3.60 percent at 151.00 rupees), Ceylon Tobacco Company (up 1.05 percent at 1,828.50 rupees), and LOLC Finance (up 1.96 percent at 5.20 rupees).

Hatton National Bank (down 1.88 percent at 403.75 rupees), Richard Pieris and Company (down 6.21 percent at 27.20 rupees), LOLC Holdings (down 2.17 percent at 405.00 rupees), Sampath Bank (down 1.91 percent at 154.00 rupees), and Singer (Sri Lanka) (down 2.40 percent at 77.30 rupees) were top negative contributors.

Market turnover was 3.23 billion rupees. Capital goods led turnover with 869.21 million rupees. (Colombo/Nov13/2026)

Economy

Sri Lanka MP slams budget speech for omitting Tamil national question

Friday November 13, 2026 2:56 pm

ECONOMYNEXT – A Sri Lanka legislator has voiced strong disappointment that the President’s budget speech failed to make a single mention of the Tamil national question.

“It is very unfortunate that in His Excellency the President’s speech, there has not been a single word mentioned about the Tamil national question. Not a single word,” Shanakiyan Rasamanickam said.

“A budget speech generally, is a policy direction of the government for the next year. The budget speech is not only a statement of the country’s fiscal position or the economy’s position. It is the country’s, the government’s, plan, or what the government plans to do the following year. That’s a policy statement.”

Former presidents would at least mention the Tamil question even if it was not resolved, he said.

Former President Ranil Wickremesinghe in his speech, in his policy statement, he would mention: “The Tamil national question must be resolved,” Rasamanickam said.

Former Presidents Maithripala Sirisena and Gotabaya Rajapaksa also mentioned that the national ethnic question must be resolved, he added.

“Every President, every country’s Head of State, in their policy statements, have acknowledged the fact that there is an unresolved national issue, the Tamil national question, that it needs to be resolved. Various governments have proposed various mechanisms; none of them have succeeded, but at least it was mentioned.”

This year’s budget made allocations for the Office of Missing Persons, and the Office of Reparations.

“But the domestic mechanism is a mechanism that the victim community has rejected. So you all are allocating money to a mechanism where the victim community is not going to be part of.”

Last year’s budget 1 billion was allocated to be spent on the Trincomalee and Jaffna airports.

“Where was that 1 billion for the Trincomalee and Jaffna airports spent last year?”

“The trajectory of this government, Honourable Deputy Speaker, is worrying to me. It’s really worrying to me. Because if the objective is to say that there is no Tamil national question, if the objective is to say that you all have resolved any ethnic issue that this country faced, then Honourable Deputy Speaker, then I think the Tamil people will teach this government a very, very, very harsh lesson in the future.” (Colombo/Nov13/2026)

Bonds & Forex

Sri Lanka sells extra Rs6.5bn Treasury bills after auction

Friday November 13, 2026 12:32 pm

ECONOMYNEXT – Sri Lanka has sold 6,500 million rupees of treasury bills offered on tap at an average rate of 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 85.562 billion rupees.

The issue offered 90 billion.

Total market subscription was 6.5 billion rupees.

The debt office sold a 12-month bill at 9.95 percent.

On Wednesday (11) the debt office raised 79 billion rupees of 3, 6 and 12 month bills after offering 90 billion.

The settlement date is November 13. (Colombo/Nov13/2026)

Construction and Real Estate

Access Engineering Sept quarter group net profit surges 200-pct to Rs4.75bn

Friday November 13, 2026 12:15 pm

ECONOMYNEXT — Sri Lanka’s Access Engineering PLC recorded a group net profit attributable to equity holders of Rs. 4.75 billion for the quarter ended September 30, surging 200 percent from Rs. 1.58 billion a year earlier, interim accounts showed.

Basic earnings per share rose to Rs. 4.08 for the September quarter, up from Rs. 1.58 previously.

Quarterly group revenue expanded 36 percent to Rs. 20.39 billion from Rs. 14.94 billion, underpinned by condominium property handovers — reflected in inventories dropping Rs. 7.69 billion since March to Rs. 35.71 billion — alongside strong automobile sales and steady civil engineering execution.

Cost of sales rose at a slower 27 percent to Rs. 14.34 billion, lifting gross profit by 64 percent to Rs. 6.05 billion and expanding gross margins to 29.7 percent from 24.7 percent.

Other income jumped 144 percent to Rs. 259.9 million, while administrative expenses rose 75 percent to Rs. 1.14 billion, leaving operating profit up 64 percent at Rs. 5.16 billion.

However, finance costs more than doubled, rising 107 percent to Rs. 1.18 billion on elevated group borrowings of Rs. 43.74 billion, partly offset by finance income climbing 302 percent to Rs. 42.2 million.

Share of results from equity-accounted investees rose 122 percent to Rs. 26.7 million, pushing pre-tax profit up 56 percent to Rs. 4.05 billion.

Income tax swung to a net reversal of Rs. 186.6 million from an expense of Rs. 804.1 million, boosted by deferred tax assets on unrelieved losses from a 100 percent enhanced capital allowance claimed by 60 percent-owned radiopharmaceutical subsidiary Access Medical Tracers (Private) Limited.

Total period profit rose 136 percent to Rs. 4.24 billion, with non-controlling interest declining 24 percent to Rs. 164.9 million following last year’s buyout of minority shareholders in Harbour Village (Private) Limited.

No separate exchange gain or loss was itemized in quarterly earnings, though foreign currency translation via associates recorded a Rs. 17.4 million loss in other comprehensive income, alongside USD 16.6 million in corporate guarantees.

Notes also flagged an expected Rs. 1.45 billion recovery from the terminated South Asia Commercial and Logistics Hub project, a Rs. 225 million post-quarter legal settlement already provided for, and a Supreme Court appeal over a 2011/12 PAYE tax ruling.

Group assets stood at Rs. 132.4 billion as of September 30, with net asset value per share at Rs. 46.70, as the Employees’ Provident Fund raised its stake to 5.69 percent.

Access Engineering shares closed at 80.00 rupees at the end of September and are currently trading around 85.80 rupees. (Colombo/Nov13/2026)

Economy

Sri Lanka private sector says timely implementation of Budget 2027 key

Friday November 13, 2026 11:43 am

ECONOMYNEXT – Private sector body, The Ceylon Chamber of Commerce, said it was encouraged by the broad direction of Budget 2027, noting that it reinforces Sri Lanka’s commitment to economic transformation while maintaining policy continuity, macroeconomic stability, and fiscal discipline.

“This continuity is particularly important as the country seeks to transition from economic stabilisation to a more durable, investment-led growth trajectory.”

The chamber also noted several areas where the Budget could have placed greater emphasis to strengthen the country’s growth prospects.

“In particular, there is a need for a stronger focus on attracting Foreign Direct Investment (FDI), accelerating factor market reforms, particularly in land and labour, and fast-tracking public procurement reforms to improve the efficiency and speed of project implementation.

“More targeted and actionable proposals could have been introduced to unlock the potential of sectors with significant growth opportunities, including tourism, agriculture, IT/BPO and logistics.”

The chamber said the budget contains positive measures aimed at enhancing competitiveness, and external sector resilience, while presenting opportunities for focus on sectors that can accelerate growth.

“A number of the key structural reforms identified in last year’s Budget have been carried forward and strengthened, providing greater certainty and predictability to businesses and investors.

“These include the continued implementation of the Trade National Single Window (TNSW), the phased removal of para-tariffs, the rollout of the Digital ID framework, efforts to expand market access through new Free Trade Agreements (FTAs), the strengthening of one-stop-shop investment facilitation mechanisms, progress on Customs reforms, the expansion of Bandaranaike International Airport (BIA), enhanced financing support for SMEs, and reforms relating to the management of State-Owned Enterprises.”

The CCC said that more than 20 proposals submitted by it have been reflected in Budget 2027.

These include measures to strengthen investor facilitation through the establishment of a professionally managed investment promotion agency; continued efforts to improve trade facilitation and export competitiveness; the Government’s consideration of a successor programme with the International Monetary Fund (IMF); accelerated progress on key legislative reforms; the expansion of digital government services; and the promotion of cashless payments and broader digital adoption. The Budget has also captured several priorities relating to energy security, including the accelerated deployment of Battery Energy Storage Systems (BESS) and investments in fuel storage infrastructure, initiatives to optimize underutilized agricultural land, measures to support the expansion of the digital economy and the IT/BPO sector, and tax reforms to support exporters, including the acceptance of newly VAT-registered exporters as eligible exporters.

“The inclusion of these priorities reflects the value of sustained public-private dialogue and demonstrates increasing alignment between national policy objectives and the needs of a competitive, export-oriented economy.

“The priority now must be effective and timely implementation to translate policy commitments into investment, competitiveness, exports and sustainable growth.” (Colombo/Nov13/2026)