Maskeliya shines among Western high growns

Maskeliya Plantations Limited (MPL) controlled by the Richard Pieris group has set new records at the Colombo tea actions recently, achieving the majority of the country’s top ten tea estate slots in terms of prices achieved, a MPL news release said.

The company said that it has been getting the highest prices for Western high grown teas at the auctions with a record average price of Rs.245 per kilo.

Noting that it had been achieving top prices at the auctions over a considerable period, MPL said that one of its estates, Moray, had been number one price-wise for the last five years in the Western high grown category. Laxapana, also a MPL estate, had finished second.

MPL, managed by RPC Management Services (Pvt) Limited, a member of the Richard Pieris group, was expected to do well with the context the context of rising tea prices in the financial year 2005/06.

The company noted that the last quarter of the financial year historically was a strong performer and the company’s results for the full financial year should do nicely.

The MPL portfolio is tea dominated with net profits moving up from Rs.26 million in 2003/04 to Rs.81 million a year later – an increase of 211%.

Maskeliya expected to further improve net profits during fiscal 2005/06 in the context of operational efficiencies achieved by trimming production cost and improving product quality.

The company said that they were conforming to stringent quality requirements specially from the Japanese market and this had helped push up prices which would help the bottom line in fiscal 2005/06.

MPL expected five of its estates – Laxapana, Moray, Glenugie, Strathspey and Craig – to contribute significantly to an improved performance in 2005/06, a company spokesman said.

A superior performance was expected in the teeth of increased electricity charges, fuel and other input costs on top of the full year impact of the last wage hike.

MPL said that it has been maintaining excellent industrial relations and expected that its results oriented and innovative management style would help it to achieve significant results. -SIO

Private tea factories in trouble

By Don Asoka Wijewardena

As a result of excessive taxes and levy imposed on both large and small scale tea producers the future existence of private tea factories seems to be very slim,according to Private Tea Factory Owners Association.

Private Tea Factory Owners Association Secretary General Tilak Alawattagama said that Sri Lanka was one of the principal producers of quality tea in the world and the country had been exporting around 300 million kg of tea to various countries.

He noted that Sri Lanka had been able to earn about Rs.75 billion per year through tea exports and added that unlike the Garment Industry the raw materials needed for the industry could be found within the country.

He also emphasised that there were around 300 private tea factories in the country and about 260 factories had been affiliated to the Association and added that the contribution made by the private tea factories had not been duly recognised though the association had been playing a crucial role in Tea Research Institute,National Plantation Management Institute and Small Tea Estate Development Authority in accordance with the Sri Lanka Tea Board Act.

Allawattagama also said that the Association had arrived at some important decisions on the future of private tea producers.-Island

Shock waves that hit tea last week

By Steve A. Morrell

From the legal profession to professionals in the Tea industry the question was asked that if the ‘Book was thrown’ at the Director TRI, then there would be far bigger persons who should be behind bars, now. They said that irrespective of Government Financial regulations and Administrative regulations ( 2 Documents that direct government service), the precedent had already been set that these documents were violated with impunity when applied to persons of celebrity status in the Government. Based on these precedents this was a blatant attempt by some to tarnish the good reputation of this official.

Dr. Ziad Mohamed stepped into the Chair of the Director TRI, with excellent credentials. He was also the best choice to succeed those before him who were all men of impeccable character and integrity. Therefore the purported charge of misappropriation of cash, and the precedent set by others who were known rogues, who thumbed their noses at the system, were good enough reasons for fundamental rights applications, said some leading attorneys, who contacted the ‘Island’, immediately the news broke.

Tea industry sources said that this episode would not auger well for the industry.

In the long run, Japan would discredit ‘Ceylons’ , so too would other countries who adhere to the Ethnic Tea Partnership. Additionally EU countries who were now insisting on HACCP standards. Action against Dr. Mohamed therefore would have wide ranging repercussions that would gravely affect the tea industry, they said.

The Japanese tolerance levels on detected contamination standards in Ceylon tea necessitated that The Director TRI with others who were identified, were required to visit Japan to defuse bad assumptions that the incidence of the weedicide 2-4 D, and Glyphosate, were being professionally studied. In our issue of February 29, we reported that the TRI was carrying out trials and studies to prepare a dossier to be submitted to the Japanese market that weedicide traces were not harmful.

Sri Lanka in the War Risk list again

The London-based Joint War Committee has placed Sri Lanka in the war risk list again after the bomb blast which took place in Colombo last week. Shipping sources said that the industry leaders had voiced concern over the move which could affect trade with the island nation.

The decision of the Joint War Committee is the result of an assessment by the independent consultants to exceed an enhanced risk benchmark established by them.

In June 2005, the Lloyd’s Joint War Committee – the advisory body composed of underwriters from the Lloyd’s market – added Thailand, Somalia and the busiest sea lane, the Strait of Malacca, to its list of dangerous waters. The list’A0contains areas which are regarded as in jeopardy from war, strikes, terrorism and related perils. As a consequence, the Lloyd’s Market Association, which is responsible for issuing standard policy wording for the Lloyd’s Market, decided to remove piracy from the traditional marine insurance policy and treat it like a war risk.

This allows Lloyd’s underwriters to cancel vessel policies at seven days’ notice and to request a separate premium whenever a ship plans to sail into a region that is considered a war risk area. Ship owners need to notify the insurer every time they enter dangerous waters. In the case of the Strait of Malacca, this leads to thousands of notifications each year.

Underwriters define war risk premiums based on recommendations made in a war risk table, such as the one from Swiss Re. In the table, every war risk area is assigned a risk rating that is then translated into a specific rate. The more dangerous a region is considered to be, the higher the percentage of the ship value an owner has to pay as a hull war risk premium. These rates currently vary from 0.0175 to 0.04 percent per annum for a standard war risk rate on hull.

The sources said that at present rate for held covered regions were 0.1 per cent. The ratges were likely to go up by this week. Underwriters have issued the notice of cancellation and costs would be known only after the effective date of cancellation on May 7, they said.-Island