Dilmah for trade liberalization provided there is a master plan: Malik

Oct 22, 2015 (LBO) – Sri Lanka’s top tea company Dilmah supports trade liberalization provided there is a master plan in place, Malik J. Fernando, a director of Dilmah, said at a forum in Colombo.

An effective plan where local corporates are consulted and given preference over foreign investors is necessary within any sector undergoing liberalization, Fernando said.

“If there is full consultation with local corporates, and we agree on what is best, and people have an opportunity of positioning themselves in early mover situation, there would be no concern about opening out,” he said, at the 64th LBR LBO CEO Forum on Wednesday.

“Government needs to communicate better, need to say here are the policies, get input from the private sector, and then come together with an effective plan.”

“Typically what happens is, there is very little information, and then suddenly a certain area may be opened out, liberalized, where local companies have not been given the opportunity to jockey and position,” he said referring to concerns that apply to industries such as tea, commodities or apparel.



According to Fernando, Sri Lanka under utilizes its tea resources which caters to around six percent of the world’s purchasing requirement.

Tea imports are currently restricted to around 5 to 10 percent for blending purposes due to concerns that multi-origin teas may be marketed as ‘Pure Ceylon Tea’ diluting the Sri Lankan brand.

Analysts say blending operations, possibly through new foreign investment with local tie ups, could significantly boost value addition, foreign direct investment and demand for tea from the tea auctions.

Careful surveilling and monitoring of new multi-origin blending operations, maybe in separate tea processing zones, could solve the abuse of the Ceylon Tea brand.

Dilmah believes tea branding is essential to promote Pure Ceylon Tea and has a track record of capturing significant international market share with its orthodox Ceylon teas.