Nestled in the heart of South Asia, Sri Lanka boasts a rich history intertwined with the coconut palm, earning it the moniker – The Pearl of the Indian Ocean. Yet, despite its abundant coconut resources and time-honoured traditions, Sri Lanka’s full potential in the global coconut industry remains largely untapped. As the world’s appetite for coconut-based products continues to grow, from culinary delights to skincare essentials, Sri Lanka stands poised to emerge as a key player in this flourishing market. In this interview Randeewa Malalasooriya, Chief Executive and Director of CBL Natural Foods Cluster, shares insights into the island nation’s untapped potential, delving into its unique offerings and the strategic initiatives poised to propel Sri Lanka to the forefront of the global coconut industry.
Can you provide us with an overview of CBL operations and your footprint in the coconut industry?
Founded over 55 years ago as a confectionery company, CBL has grown to become Sri Lanka’s largest food manufacturer. Our operations span three key sectors: the confectionery cluster, including biscuits and chocolates; the foods cluster, such as soy-based items like Lanka Soy, and Samaposha; and, the natural cluster into coconut, organic fruits and vegan products to export markets.
Within our natural cluster, our primary focus is on coconut-based products, notably coconut milk, alongside organic fruits and vegan alternatives like young jack fruit. As the country’s largest coconut milk exporter, we process a significant amount of nuts daily and primarily serve European markets.
What strategic advantages does Sri Lanka’s coconut industry possess, and how does your company plan to capitalize on them to secure a significant market share?
Despite facing challenges due to economic conditions in various countries, it remains a robust sector, boasting an annual growth rate of around 10%.
To thrive in this competitive landscape, it’s crucial to offer products that stand out and develop effective distribution channels. Continuous engagement with target markets is essential, but equally important is adding value to our offerings. While coconut products are often seen as commodities, we strive to differentiate ourselves by exploring avenues for value creation. For instance, on average it takes 2.5 coconuts to produce one litre of coconut milk which is the most value-added product with high global potential.
While some may perceive coconut as a trendy “superfood,” Sri Lanka holds a distinct advantage due to our expertise and the superior quality of our coconuts. Additionally, our strategic geographical location enables us to reach key markets in Europe and the USA within a relatively short timeframe, a significant asset that proved invaluable during the challenges posed by the COVID-19 pandemic.
In terms of market size, the coconut industry represents a substantial $12 to $15 billion, with coconut milk alone accounting for approximately $1 billion. We aim to capture a significant share of this market, targeting an ambitious 8 to 10% proposition.
How does CBL plan to elevate its position in the market and transition into a global player in the coconut milk sector?
When CBL initially entered this business venture, the decision-makers possessed a clear understanding of its potential.
Currently, our primary objective revolves around elevating our position in the market. We aim not only to maintain our current standing but also to propel this category to new heights, ultimately establishing ourselves as a global player. This entails pursuing global expansion opportunities, venturing into new markets, and transitioning from a local to a global player.
How does the Coconut Milk Manufacturers Association (CMMA) work to unite industry players and advance the coconut sector in Sri Lanka?
The Coconut Milk Manufacturers Association (CMMA), spearheaded by Suresh Silva and later led by myself, aims to unite industry players to advance the coconut sector. With a focus on policy formulation and stakeholder engagement, CMMA strives to enhance export opportunities and elevate the industry’s value. Despite significant coconut production in Sri Lanka, export potential remains untapped. CMMA advocates for industry support and collaboration with authorities to unlock growth, envisioning a $2 billion industry. While individual companies may compete, CMMA seeks to create new markets, including exploring opportunities in India, and contribute to national projects like improving coconut quantification standards. This holistic approach reflects CMMA’s commitment to advancing the entire coconut industry.
How can Sri Lanka harness its coconut industry’s untapped potential to significantly boost foreign exchange earnings?
The coconut industry in Sri Lanka currently uses about half of the country’s total coconut production, which is around 3 billion nuts. With approximately 1.7 to 1.8 billion nuts consumed domestically, there’s a surplus of about half a billion nuts available for industrial use. By improving efficiency, boosting productivity, and expanding cultivation, we could potentially increase coconut production by up to half a million or at least 250,000 nuts, leading to valuable foreign exchange earnings.
The main challenge isn’t in the industry’s milk production capacity, as many producers are capable, but rather in the limited coconut availability. To address this, raising awareness among authorities and ensuring competitive coconut prices aligned with global standards are crucial steps. These measures could potentially double foreign revenue from coconut exports to around 2 billion dollars.
What role does the Institute of Environmental Professionals in Sri Lanka (IEPSL) play in advancing environmental sustainability?
The IEPSL holds a unique position as the flagship organization for environmental professionals. I am deeply passionate about this field, recognizing that the environment is essential for our survival. Founded by an act of Parliament, this association is the sole institution authorized to grant charters to environmentalists.
What sets us apart is our inclusive approach. Unlike other professional bodies that require specific backgrounds, such as engineering or business, our association welcomes individuals from diverse professions, provided they possess the requisite experience and qualifications.
Currently serving as the treasurer, I am actively involved in our efforts to raise awareness, shape policies, and facilitate dialogues aimed at advancing environmental sustainability. Our overarching goal is to elevate environmental consciousness and action to new heights.