Sustainability, Innovation and Growth in Sri Lanka's Agriculture Sector

An Exclusive Interview with S. D Rajendram Arupragasam, Chairman at Agarapatana Plantations Limited

Agarapatana Plantations Limited is a leader in Sri Lanka's agricultural sector, particularly with regard to tea, with a strong focus on sustainability and innovation. Agarapatana's commitment to modern manufacturing, automation, and mechanization has enabled it to achieve high levels of efficiency and productivity, while also minimizing its environmental impact.

We sat down with S. D Rajendram Arupragasam, Chairman at Agarapatana Plantations as he discussed the Company's growth trajectory within the context of the present economic environment.

1. How will oil price fluctuations affect the price of tea in the local and global markets?

As tea is an export commodity, its prices are subject to global demand and reflects any movements in the exchange rate. This provides general insulation against depreciation and inflation too. With the recent rise in fuel costs, we can expect an increase in the cost of transportation. However, the impact of this on the overall tea industry will depend on various factors, including the level of demand, production volumes, and global economic conditions.

2. What plans does Agarapatana Plantations have to support its growth and expansion in the coming years?

We have ambitious growth plans for the coming years, which include modernizing tea plantations and manufacturing processes through automation and mechanization. The Company has also implemented sustainable practices to minimize its environmental impact and improve its overall efficiency. As a result of these initiatives, Agarapatana Plantations Limited is well-positioned to take advantage of potential increases in the prices of tea. Additionally, the company is exploring new market opportunities both locally and internationally.

3. How can Agarapatana Plantations Limited benefit from a tighter monetary environment?

Higher rates can present both challenges and opportunities. On one hand, we face higher borrowing costs and increased competition for funding. On the other hand, a high-rate environment may offer opportunities for the Company to generate higher returns on its investments and boost its profitability. With its strong financial position and track record of success, Agarapatana Plantations Limited is well-positioned to navigate the challenges and capitalize on the opportunities presented by a high-rate environment. Furthermore, we are undertaking efforts to attract new investment to help minimize the cost of borrowing as we move to achieve our growth targets.

4. Can you discuss Agarapatana Plantations Limited's financial performance over the past 5 to 10 years?

Over the past 5 to 10 years, Agarapatana Plantations Limited has demonstrated solid financial performance, with consistent revenue growth and solid profitability. Additionally, the company has generated strong cash flows from operating activities, which have enabled it to invest in its operations and pursue growth opportunities, together with support from our parent company, the Lankem Group. Overall, our financial performance has been positive and demonstrates the company's ability to deliver value to its stakeholders.

5. Agarapatana Plantations Limited has been recognized for its sustainable agricultural practices. How is the company is balancing environmental responsibility with profitability?

We have a strong commitment to sustainable agriculture and recognize that environmental responsibility is critical to long-term success. The Company has implemented a range of initiatives to reduce its environmental impact, including water conservation measures, adoption of organic farming practices, and increased use of renewable energy sources. By prioritizing sustainability, we have been able to improve our operational efficiency, reduce costs, and enhance our corporate reputation. Agarapatana Plantations Limited believes that its sustainable practices not only benefit the environment but also contribute to its long-term profitability by attracting environmentally conscious investors, customers and partners.

6. How does Agarapatana envision itself contributing towards Sri Lanka's growth story in the future?

We have always been committed to contributing towards Sri Lanka's growth story. As one of the largest producers of tea in the country, we are acutely aware of the role we play in supporting the forex position and bridging the trade gap, through tea, even though our role may not always be direct, due to the way the industry is set up. Our interests in tea means that our revenues are insulated from the risk of depreciation, as the prices of tea tend to reflect global prices. This makes the sector, and Agarapatana Plantations Limited, in particular, highly attractive to investors.

Looking to the future, we remain committed to expanding our operations and investing in cutting-edge technology to ensure we remain a leading player in Sri Lanka's agricultural sector. By leveraging our strengths in innovation, sustainable agriculture and deep industry expertise, we are confident that Agarapatana Plantations Limited can continue to drive growth and contribute to Sri Lanka's economic success story.

S. D Rajendram Arupragasam, Chairman, Agarapatana Plantations LTD.