Sri Lanka tea exporter plans off-shore blending plant

July 9, 2011 (LBO) – HVA Foods, a Sri Lanka-based branded tea exporter is planning a blending unit in the Middle East to gain a bigger share in the global retail market by making use of trade liberties. “Discussions with our Middle East partner is at an advanced stage,” HVA Foods chairman Rohan Fernando was quoted as saying on LBR, a sister online publication.

“This is part of our expansion plan towards becoming a company with a foot-hold in every tea producing and consuming country.”

Though Sri Lanka produces 300 million kilograms of tea a year Sri Lankan firms cannot effectively compete with international brands as the island does not allow free import of tea to manage costs.

As a result local firms can only play in a niche market for single-origin Ceylon tea.

The country however could gain a bigger influence in the 1,700 million tonne global export market through off-shore blending plants, which would be free to source tea from the most cost effective growing countries.

Teas in some countries are cheaper even though there no problems with quality or taste, according to industry officials.

Dubai is emerging as a blending centre. Sri Lanka also has some of the best bl