Sri Lanka’s Horana Plantations diversifies into oil palm, as tea, rubber prices stay low
ECONOMYNEXT – Sri Lanka’s Horana Plantations is diversifying into more commercially viable crops, especially oil palm, to reduce reliance on tea and rubber whose prices remain low.
The company said in a statement it was using its own and borrowed funds to intensify diversification to phase out unproductive extents with new types of crops capable of supplementing revenue streams and improving resilience to challenges in the tea and rubber industry.
“This strategy helped Horana Plantations PLC to mitigate some of the challenges from the on-going down-turn in the global natural rubber industry,” Horana Plantations chief executive Manuja Kariapperuma said.
“The investments we have made are nearing completion, and we are also looking for innovative ways to build on the progress we have achieved, while generating internal operational synergies between our diversified crops.”
Currently, Horana Plantations has a cultivated extent of 4,899 hectares of which 25 percent will be in oil palm, timber and other crops, 44 percent of tea with rubber making up only 30 percent.
Horana Plantations has invested about 450 million rupees on new projects in oil palm plantations, timber, cinnamon, coconut, pepper and fruits as part of a structured and intensified diversification programme the first phase of which will reach completion by 2020.
Horana Plantations will then have 460 hectares (Ha) of oil palm, and 620 Ha of timber or fuelwood together with 75 Ha of Ceylon Cinnamon and 250 Ha of coconut.
In 2013 it had a cultivated extent of 5,547 hectares with a crop mix of about 47 percent rubber, 42 percent tea, and the remaining 11 percent divided up among minor extents of coconut, cinnamon , timber and fuel wood.
Horana Plantations also plans to establish dedicated extents for pepper cultivation, and fruits of different varieties, having also enjoyed success of intercropping soursop, lemon and pineapple with coconut in selected areas.
“Our oil palm plantations are still in their preliminary phase and as an industry we continue to face serious challenges as a result of government policies on this crop,” Kariapperuma said.
“Nevertheless, Horana Plantations has committed extensively to the establishment of buffer zones, and other good agricultural practices in order to alleviate concerns. When such cultivation is carried out in adherence with the best science on the subject, there is no reason why oil palm cannot be both sustainable and highly profitable.
“Even at preliminary stage, we are able to generate a profit of over 250,000 rupees a hectare on this crop,” Kariapperuma said.
(COLOMBO, 03 July, 2019)