Sept 20, 2007 (LBO) – Sri Lanka’s plantations are warning that the sector is losing its appeal to serious investors at a time when fresh capital is urgently needed to replant crops and modernise factories. “These restrictions coupled with the rapidly increasing cost of production, consequent to increases in costs of fuel, energy, fertilizer and other large scale inputs has had a negative impact on the industry.” “The long term stability of the plantation industry needs the continued involvement of strong business establishments,” said Kavi Seneviratne, chairman of the Planters’ Association of Ceylon.
“But there have been disturbing signs of the industry losing its attractiveness to serious investors.”
Some established business conglomerates have withdrawn from the sector, Seneviratne told the association’s annual general meeting this month.
Analysts said one of the firms he was referring to was the John Keells Holdings conglomerate which sold off its regional plantations companies because of poor returns.
JKH acquired the two plantations firms when the state-run estates were privatised.
Seneviratne said the withdrawal of big investors should be taken as a warning sign.