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Heladiv Tea, unlocking the potential of Sri Lanka’s oldest crop
http://www.sundaytimes.lk/100926/BusinessTimes/bt36.html
Heladiv Tea, unlocking the potential of Sri Lanka’s oldest crop
By Jagdish Hathiramani
KANDANA — When the Business Times received an invitation to visit the Heladiv tea factory in Kandana, little did we realise that the most noticeable feature of the operation would be the enthusiasm of its head, Rohan Fernando, Chairman of Heladiv holding company HVA Lanka Exports and its various subsidiaries.
An industry veteran who counts more than 30 years experience in the tea industry, it was under Mr. Fernando’s stewardship that this tea company, initially begun by the Dutch firm HVA in 1990, and later bought out by him, has risen in stature to become exporter of branded tea products to the tune of Rs. 70 million per month across the world.
Speaking exclusively to the Business Times, and all throughout animatedly gesturing with his hands; Mr. Fernando is proud that, while many in his business were focusing on only on value addition as a cure for commoditisation of tea when his operation was started, only a few companies such as his had gone the branding route. As a result, HVA Lanka’s brands have become relatively well known in regions such as Russia/CIS, the Middle East, the Far East, etc. He was happy to note that many of his brands had become so-called “pull” brands; that is they are asked for by customers by name and so demanded by retailers rather than him having to push retailers to carry his brands.
In fact, his Infini.T brand of 10 tea cafes were so upscale in China that one of his bestsellers was a 350 grammes tea gift pack that retails for US$350, according to Mr. Fernando who makes this assertion while flipping through an album of Infini.T’s highlights in China which shows a number of photographs of Sri Lankan dignitaries at his various cafes, in Beijing, Quanzhou, Jinjang, etc., as well as trade stalls at exhibitions including one that pictures him alongside Sri Lankan President Mahinda Rajapaksa.
Cuban cigars and wine
He also excitedly displays pictures of his newest shop which offers high end tea products alongside dining, Cuban cigars and wine; indicating that this would be his flagship for his ultimate push for 100 cafes opened in China.
Unreservedly talking about his plans for next year, including a vision to develop this franchise akin to India’s Barista or USA’s Starbucks, he also intimates the franchise’s first store in Sri Lanka was due by year’s end. Meanwhile, further speaking about exports, which account for 98% of his group’s output, he admits to have already looked at USA and Australasia as potential test markets for his products and also notes that the USA’s tea market comprises 85% ice tea drinkers and is currently valued at US$ 3.2 billion a year. It appears that Heladiv’s Ice Tea products are particularly geared to be potential exports for this market, especially with its first exports to UN personnel in the Middle East tracking so well.
As to his plans for Sri Lanka consumers, where 2% of HVA’s products valued at Rs. 1 million are sold through supermarkets, he reveals that his company is primarily marketing its Heladiv Ice Tea offerings locally. He also notes that sales in the future for this segment and even his entire local business may only be through the Internet, catalogues or even greater distribution through shops. However, he appears hesitant about pursuing the mass marketing potential of his products locally.
While discussing the scope of his worldwide business dealings was interesting, it was actually when talking about the future of the company that Mr. Fernando’s enthusiasm leapt to a whole new level. With virtually boundless energy, he talked about his new facility which was a result of research and development efforts aimed at unlocking the true potential of tea, all of which was also partly funded by the Asian Development Bank. Said to start commercial operation by the end of the year at a cost of Rs. 30 million, this operation had already developed a number of practical applications for so-called refuse tea, or “Broken Mixed Fannings”, which was usually discarded because, as a byproduct, the process by which it was produced was typically unhygienic.
According to Mr. Fernando’s heartfelt assertions, this wasted opportunity, comprising 40 million kilogrammes a year outputted by the local tea industry, if hygienically harvested, could lead to a number of products. In fact, he alluded to its current commercial development as an extract to be used in ice tea as well as an alcohol free mouthwash with fluoride, a green tea cream, a tea bath with jasmine, etc. In addition, once extraction of all the tea occurs there is also the possibility of turning the residue into rooting material block similar to the coir mix used in growing plants so that no waste would be generated at all.
Solar panels help cut power costs
He was also quick to point out that HVA Lanka’s facility was purpose built for tea production, unlike most which were just warehouses converted to this task, and so it had used sustainable architectural concepts to keep costs down. He proudly noted that his expenditure on electricity was just Rs. 280,000 per month due to the building being built with windows facing the East to West solar path.
He also suggested that plans were in the works to install solar panels and storage in an already planned 30,000 square feet area in consultation with a Chinese firm. When realised, phase one would lead to this facility providing enough power for night time illumination, while other stages would result in powering of machines and solar power metering where excess stored energy would be sold to the national grid.
In fact, it was only when asked about the possibility of HVA Lanka going in for an initial public offering (IPO) that Mr. Fernando felt the need to censure himself, indicating that there were no definite plans regarding this avenue so far.
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No real alternatives to oil: Chairman Chevron SL
http://www.sundaytimes.lk/100815/BusinessTimes/bt36.html
No real alternatives to oil: Chairman Chevron SL
By Jagdish Hathiramani
There are no existing real alternatives to the world’s dependence on fossil fuels that account for 87% of the world’s current energy needs, according to Dr. Kishu Gomes, the Chairman of the local operation of USA-based oil company Chevron. He also added world energy demands by 2030 will be 40% higher than today. This is in addition to an oil crisis looming and ever-shortening intervals between recessions. Further, over the last three years, commodity prices increased by 100% while natural disasters, like those recently in Bangladesh and China, which cost these countries 5.2% and 2% of GDP respectively, would only grow to become more and more frequent with greater magnitudes.
He further noted that the recent BP crisis amounting to over a billion barrels of oil spilled was not atypical as the equivalent of 4.7 million barrels of oil leaks annually while a further 4.2 million barrels is added to this mix due to natural seepage. Dr. Gomes also suggested that for energy sustainability to become a reality substantial investments were needed in this area, which was not happening. Instead he noted that more and more money was being used to fight terrorism internationally and, in the case of Sri Lanka, the government’s continued spending of Rs. 170-180 billion on security.
Dr. Gomes made these comments at the recently concluded “CEO Forum on Innovation and Sustainability” organised by the American Chamber of Commerce in Sri Lanka and the Sri Lanka Association of Software and Service Companies. Also speaking at the forum, Sri Lanka Institute of Nanotechnology Chief Executive Ravi Fernando noted that being sustainable for Sri Lankan businesses had more to do with value addition as opposed to their traditional leanings towards commoditisation.
He also noted that there was a significant cause and effect relationship between a country’s investment in sciences and technology and its prosperity. To illustrate this point, he highlighted the examples of Korea and Singapore; countries that spent 2.5% and 2.2% respectively on science and technology research resulting in 75% and 60%, respectively, of exports of a technological nature. He further noted that Korea had over 5,000 patent s filed per year while Singapore had 446, compared to Sri Lanka’s 1.8.
Mr. Fernando also revealed that over the past year, SLINTEC’s first year of science, it had already filed five patents in the USA. He elaborated on one such process that related to sustainable nano fertiliser and its ability to address the problem that, of the Rs. 30 billion in fertiliser bought in Sri Lanka annually, one half or 50% was lost or washed away due to leeching. He further added that this could be exported since other countries faced similar problems.
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