Factories burnt out of Rs.5 bn brewing Ceylon Tea
Factories in the business of processing teas are facing financial crises with about 105 of the 500 privately- owned requesting government intervention for a two year moratorium on their loans worth a staggering Rs.5 billion while 15 have already closed shop.
In this respect, the Sri Lanka Tea Factory Owners Association (SLTFOA) representatives and Prime Minister Ranil Wickremesinghe had on Monday an hour-long meeting to obtain assistance for their factories facing financial burdens as they are overcome with low crop, mismanagement problems and working under capacity.
During the meeting Mr. Wickremesinghe had requested the relevant authorities to work on the issues faced by the tea factories and also wanted all stakeholders of the industry to be present for a meeting to discuss all issues that could be addressed and resolved with solutions provided across the board.
SLTFOA President Harith Ranasinghe said that 15 of their tea factories had closed in the last six months due to lack of crop mainly from areas like Galle, Matara and Ratnapura as most of them were running under capacity at about 60-70 per cent.
He noted that lack of crop is mainly due to the fact that replanting does not occur at the right time and in the correct percentage.
Earlier, Mr. Ranasinghe explained that it was conducted annually at about 3 per cent of the total hectares but today this has come down to about 1 per cent.
He noted that about 105 factories are asking assistance from the government as they are unable to pay off their loans and have requested on an immediate basis for a moratorium on their loans for a period of two years.
At present there are three factories in line to be sold off by the banks and 35 factories pending legal action, Mr. Ranasinghe said.
At the meeting the factory owners were asked to individually write to the Treasury who would thereafter inform the banks.
During the meeting, Tea Board Chariman Lucille Wijewardena said that the PM had wanted all stakeholders together for a meeting to discuss the tea industry issues and take some concrete decisions.
He noted that some of the factories were not performing well purely due to mismanagement and intense competition among them for crop. Mr. Wijewardena noted that the crop was high since last month and that another follow-up meeting had been scheduled for July 9 at the Tea Board with Plantations Industries Minister Navin Dissanayake, the banks and the factory owners.
The crop produce is facing a disparity as some areas are having a high produce which is a cause for intense competition among factories fighting to get their hands on the tea from the estates producing more.
High cost of borrowings has also left most other factories with financial issues in addition to banks imposing enormous charges on temporary loans and overdraft facility to fulfill some of the immediate payment.
The meeting at the PM’s office was attended by Ministers Dissanayake, Vajira Abeywardena, Gayantha Karunatilaka, Mangala Samaraweera, Harsha De Silva and Malik Samarawickrama. Also present were the Tax chief, Mr. Wijewardena and the Central Bank Governor. (Sunimalee)