Issue link: https://read.dmtmag.com/i/1506254
22 STiR coffee and tea | 2023 Issue 4 (August / September) Q|A: Romesh Walpola Q A B Are bought-leaf factories competitive in the global market for premium black tea? We compete heads-up with government- and estate-owned factories. Competition is fierce, as you know. We are located mainly in Galle and Ratnapura and have one factory in Ginigathhena. The competition in Galle and Ratnapura is quite tenacious and very competitive. Why does your company call its growers "smallholder partners"? They are paramount as they provide the green leaf, which is indispensable as it is the fundamental raw material for tea manufacturing. The company places great importance on nurturing enduring relationships with our committed suppliers, fostering partnerships that last for years. When welcoming new suppliers, TSFL carefully considers various factors and ensures new suppliers are aligned with the company's beliefs and value systems. How do you work with growers? We have our extension officers in the field daily. And they have little pocket groups that are educated on basic soil management, the type of fertilizer to apply, pruning cycles, and recommended plucking rounds, all needed to maintain their plots. We give that service to the smallholders, but apart from that, they do their own thing as well. How do you ensure quality? We don't take just any leaf. We are very selective. We encourage them to bring a decent standard. You have to make sure your raw material is good for you to have a good end product. We're very y working hand-in-glove with small tea growers, a bought-leaf factory can outperform the market. One business proving it is Sri Lanka's Tea Smallholder Factories Ltd., a listed corporation that operates six factories in Galle, Ratnapura, and Ginigathhena. It helps its 8,700 small tea growers with training, credit, and price premiums for quality. Founded in 1991 and owned by a consortium led by the nation's largest conglomerate, John Keells Holdings, the company won the top prices in each of 84 auctions during its fiscal year ending in March 2023, including 17 record high prices. Its gross sales average increased 138% to Rs 1,601 ($4.94) per kilogram, helping it earn profits of Rs 440 million ($1.35 million) on revenues of LKRs 3.7 billion ($11.4 million). What's remarkable is that the company attained these results during a year of political upheaval, rioting, a currency crisis, a foreign exchange crisis, and a shortage of fertilizer. The company proactively upgraded its factories to improve efficiency and minimize disruptions during fuel shortages and power cuts. It also renovated staff housing. The company has about 400 employees. Smallholders are crucial to Ceylon tea. Farms of 10 acres (4 hectares) or less produce about 77% of Sri Lanka's tea, which is mostly orthodox-grade leaf. To find out more, STiR's tea correspon- dent, Dan Bolton, spoke with Romesh Walpola, appointed as CEO in 2022. Partnership with Tea Smallholders Helps Ensure Quality