ELPITIYA PLANTATIONS: PRIORITISING SUSTAINABILITY IN CHALLENGING TIMES
Despite challenging times in the plantation industry, Elpitiya Plantations, managed by the Aitken Spence Plantations Plc has put sustainability practices at the forefront of their activities. The agriculture sector is particularly at risk of impacts from the turbulence of climate change. Elpitiya Plantations are securing the business for future generations through innovative approaches to water conservation, energy usage, reforestation and community development.
Bhathiya Bulumulla, Director & Chief Executive Officer, and Dr Rohan Fernando, Managing Director, Aitken Spence Plantations, speaks about creating a sustainability mindset in business and how precision agriculture is the future of the industry.
The Plantation sector is one of the most challenging industries to be in. Can you give us a sense of what those challenges are and how the company is dealing with them?
Bhathiya Bulumulla: Climate change has been affecting the industry and we are trying to mitigate this in different ways through sustainability practices. Additionally, we deal with very price-sensitive commodities. Due to various unhealthy situations happening outside Sri Lanka, the prices of Sri Lankan tea and rubber keep fluctuating. It has proved to be a major challenge for us as this is beyond our control. This industry is highly politicised, with powerful trade unions being a factor to reckon with in making major decisions particularly with regard to wages. Compared to the other countries on the continent, we pay the highest salary for plantation workers, which is financially challenging due to the fluctuating prices.
Dr Rohan Fernando: We are competing with the international world so like other businesses we are investing our own money, adapting our own strategies and trying to be competitive. However, unfortunately, because of many external elements that are beyond our control, remaining competitive is a major challenge. In this industry, due to over-regulation, we are not given the flexibility to manage our company like a business. Inconsistency in government policies is also a big impediment to the growth of the plantation and the industry.
Despite the difficulties arising from both domestic and external factors, your company is investing considerably in sustainability initiatives. Can you take us through some of them?
Bulumulla: As a plantation company we have identified six of the UN’s Sustainable Development Goals to focus on: SDG 6 on clean water and sanitation; SDG 7 on affordable and clean energy; SDG 8 on decent work and economic growth; SDG 9 on industry, innovation and infrastructure; SDG 15 which deals with life on land; and SDG 17 on Partnership for the goals.
We see first-hand the decline in rainfall and a recent study found that Nuwara Eliya was hotter than Anuradhapura in certain months. We have begun preserving the water that falls onto our grounds and developed over 240 mini-reservoirs within our plantations that can be used to sustain our crops during dry spells. Fluctuations in rainfall used to mean fluctuations in crops but we are now mitigating that up to a great extent.
Renewable energy is crucial. We are installing solar panels on all our factory roofs, producing an estimated 2.5 MW per year. We were the first plantation company to initiate solar energy which was fixed on New Peacock Estate tea factory in 2017 and by the end of 2020, 14 factories will be completed. We also have three mini-hydro projects within our plantation generating 4.5 MW per year.
On the technology side, we’ve started a pilot project on precision agriculture, which I believe is our future. One example is the use of drones to do aerial mapping and thereby to improve land-use efficiency. Also using different GIS tools, we could maximise the resource efficiency. Previously, fertiliser was applied manually to the entire field but with technology like this, we can be very precise in our applications, reducing waste and saving resources.
Fernando: We are using technology wherever possible to uplift the type of work our employees are doing, transforming their roles from mere workers to machine operators. As well as up-skilling the individuals, mechanising the majority of the processes like plucking and pruning helps to overcome the shortage of workers in the industry. Our investment in palm oil is also connected because palm oil requires fewer employees compared to rubber or tea. Our business strategy is designed to meet the challenges we are facing from a sustainability dimension.
What drives your organization to think about sustainability in a competitive business world, where profit alone is often the main focus?
Fernando: The focus stems from our parent company, the Aitken Spence Group, which has always looked at the triple bottom line – people, planet and profit. Today sustainability is no longer a buzzword, it’s a methodology of doing good business. Sustainability differentiates our business from any other plantation company, helping us to remain competitive. In an agriculture business like ours, it’s all the more important to look at all three elements because we need to make sure that our resources are preserved for future generations. It’s not a case of making short term profit, it’s a case of long-term sustainability, and that’s how we as a company, have been convinced we need to focus on sustainability as a corporate strategy.
Drawing from your company’s experience, can you explain why sustainability is not only the right thing to do in terms of social and environmental impact but how it also makes good business sense?
Bulumulla: For a business like ours, sustainability makes sense in both the short and long term. If we don’t preserve our soils, we will suffer. The same thing applies to the preservation of water and other resources. The renewable energy decisions we have implemented are financially positive. We
have invested Rs. 500 million up to now with a payback of 5-6 years. Both the solar and the mini-hydro projects have brought in revenue from day one and as long as the water flows and the sun shines that will continue. We have looked very carefully at the three Ps and what we found is that sustainability adds to the company’s profitability, so we work towards the betterment of all three Ps whilst securing the bottom line. The issue of climate change and global warming is going to affect every single agriculture-related business. Instead of making it worse, we as a plantation company are determined to be part of the solution to preserve this industry for the future generation.
Fernando: In terms of social impact, we don’t practice CSR; all our initiatives are with a sustainability mindset. For instance, we are the only plantation company in Sri Lanka that has a home for retired workers, and we hope to develop one in each estate. We are one of the few companies that look after orphans and disabled children. Why are we doing that? Not for publicity, but because we want to show our workers that we care for every one of them, not just whilst they remain productive only. We take this kind of approach because it is the right thing to do for society and our business.