ECONOMYNEXT – Sri Lanka’s Udapussellawa Plantations, part of the Finlays Colombo group, said it had resorted to importing fertiliser for its estates helping to mitigate the effects of the government withdrawal of the fertiliser subsidy.
The company, which reported a loss for the second straight year, said in its annual report for 2016 that it had faced a challenging year given the global downturn in tea and rubber prices and bad weather coupled with a wage hike.
“In the absence of the fertiliser subsidy, the company took the daring and innovative step of importing fertiliser for our own consumption, with the approval of the National Fertiliser secretariat in 2016,” Dushanth Ratwatte, chief executive of Udapussellawa Plantations, said.
“This accrued a substantial cost-benefit and economy of scale, mitigating the adverse effect of withdrawing the fertilizer subsidy to a certain extent, if not fully,” he told shareholders.
Industry officials have expressed fears that the withdrawal of the fertiliser subsidy to regional plantation companies could force those in financial difficulty to restrict application which could reduce future yields.
Ratwatte also said the downturn in oil prices had also hurt the firm’s rubber sales, he said.
“The prevalence of artificial rubber in the backdrop of declining crude oil prices caused us to be hard pressed to sell our natural rubber and effectively prevented us from at least breaking even.”
(COLOMBO, March 29, 2017)