2. PlantationLandDiversification
In the Plantation context, diversification can be regarded as the re-allocation of some of estatesproductive
resources, such as land, capital, estate equipment and paid labor, into new activities. These can be new
crops or livestock products, value-adding activities, provision of services to other estatesand, particularly
in richer countries, non-estate activities such as restaurants and shops. Factors leading to decisions to
diversify are many, but include; reducing risk, responding to changing consumer demands or changing
government policy, responding to external shocks and, more recently, as a consequence of climate
change.
Definitionof Diversification
Theterm is defined as diverting the current set up in to different segments or expanding through
innovative ways in a broader way that would benefit the organization. When you take in to
account our pilot project of Chilaw plantations land diversification it‟s important that we identify
the areas we could use our finances to maximum use in transforming a plantation in major time.
What you are looking at now is at major time where sustainability and reusability concepts and
innovativeness play key roles in differentiating the current land.
While most definitions of diversification in developing countries work on the assumption that
diversification primarily involves a substitution of one crop or otherplantation product for
another or an increase in the number of enterprises, or activities, carried out by a particular
estate, the definition used in developed countries sometimes relates more to the development.
In developing countries such as Sri Lanka, which has been one of the leaders in promoting
diversification, the concept is applied both to individual estates and to different regions, with
government programs being aimed at promoting widespread diversification. The concept in Sri
Lanka is seen as referring to the “shift from the regional dominance of one crop to regional
production of a number of crops ...... (Which takes into account)..... The economic returns from
different value-added crops... with complementary marketing opportunities”
Opportunities
Changing consumer demand. As consumers in developing countries become richer,
food consumption patterns change noticeably. People move away from a diet based on
staples to one with a greater content of animal products (meat, eggs and dairy) and fruits
and vegetables. In turn, more dynamic plantations are able to diversify to meet these
needs.
Changing demographics. Rapid urbanization in developing countries has an impact on
consumption patterns. Moreover, a smaller number of estates, in percentage terms at
least, have to supply a larger number of consumers. While this may not imply
diversification it does require adaptation to new plantation techniques to meet the higher
level of demand.
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3. Export potential. Developing country plantations have had considerable success by
diversifying into crops that can meet export market demand. While concern about food
miles, as well as the cost of complying with supermarketcertification requirements
such as forGlobal GAP may jeopardize this success in the long run, there remains much
potential to diversify to meet export markets.
Adding value. The pattern witnessed in the West, and now becoming widespread in
developing countries, is for consumers to devote less and less time to food preparation.
They increasingly require ready-prepared meals and labor-saving packaging, such as pre-
cut salads. This provides the opportunity for plantation‟s to diversify into value addition,
particularly in countries where supermarkets play a major role in retailing.
Changing marketing opportunities. The changing of government policies that control
the way in which plantations can link to markets can open up new diversification
possibilities.
Improving nutrition. Diversifying from the monoculture of traditional staples can have
important nutritional benefits for estates in developing countries.
Threats
Urbanization. This is both an opportunity and a threat, in that the expansion of cities
places pressure on land resources and puts up the value of the land. If plantations are to
remain on the land they need to generate greater income from that land than they could
by growing basic staples. This fact, and the proximity of markets, explains why farmers
close to urban areas tend to diversify into high-value crops.
Risk. Plantations face risk from bad weather and from fluctuating prices. Diversification
is a logical response to both. For example, some crops are more drought resistant than
others, but may offer poorer economic returns. A diversified portfolio of products should
ensure that estates don‟t suffer complete ruin when the weather is bad. Similarly,
diversification can manage price risk, on the assumption that not all products will suffer
low prices at the same time. In fact, plantations often do the opposite of diversification by
planting products that have a high price in one year, only to see the price collapse in the
next, as explained by the cobweb theory.
External threats. Plantationsthat are dependent on exports run the risk that conditions
will change in their markets, not because of a change in consumer demand but because of
policy changes. A classic example is the Caribbean banana industry, which collapsed as
a result of the removal ofquota protection on EU markets, necessitating diversification
by the region‟s plantation.
Domestic policy threats. Agricultural production is sometimes undertaken as a
consequence of governmentsubsidies, rather than because it is inherently profitable. The
reduction or removal of those subsidies, whether direct or indirect, can have a major
impact on plantation and provide a significant incentive for diversification or, in some
cases, for returning to production of crops grown prior to the introduction of subsidies.
Climate change. The type of crop that can be grown is affected by changes in
temperatures and the length of the growing season. Climate change could also modify the
availability of water for production. Plantations in several countries, including Canada,
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4. India, Kenya, Mozambique and Sri Lanka have already initiated diversification as a
response to climate change. Government policy in Kenya to promote crop diversification
has included the removal of subsidies for some crops, encouraging land-use zoning and
introducing differential land tax systems.
Opportunities for diversification
In making decisions about diversification plantations need to consider whether income generated
by new plantation enterprises will be greater than the existing activities, with similar or less risk.
While growing new crops or raising animals may be technically possible, these may not be
suitable for many plantations in terms of their land, labor and capital resources. Moreover,
markets for the products may be lacking. The United Nations Food and Agriculture
Organization(FAO) has been one of the development organizations promoting diversification
by small farmers. So far, it has produced booklets identifying beekeeping, mushroom farming,
milk production, fish ponds and sheep and goats, among others, as diversification possibilities.
Measures of diversification
Agricultural diversification is measured in a number of ways throughout the world. For example,
one such measure is the index of maximum proportion, which is "defined as the ratio (proportion)
of the plantation's primary activity to its total activities". [
Crop Diversification Achievements
Output project target achievement short fall or excess
Forest development
Oil palm development
Other crop development
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5. Social and Environmental Programs
In land diversification not only about the infrastructure and physical resources but also the
human resource plays the vital role because it‟s the human resource that is available that drive
forward the plantation so it‟s important their needs and wants are considered and steps are taken
to uplift their living conditions and that would directly impact on making the maximum use of
land diversification.
When you take in to consideration the human resource that is available in the plantation their
behavior to this plantation land diversification is very important.
In plantation also we have to take to account the organizational behavior because behavior equals
performance.
Therefore it explains why a superintendent is interested in a subordinate‟sbehavior.
The performance brings in the output. The superintendent is responsible for the workers
performance. The effectiveness and efficiency of an organization is highly influenced by its
culture to understand the linkage it‟s better to understand the meaning of concept of culture.in a
culture there is the essence of it which is called core values. When the majority shares of the
Chilaw plantations core values as shown below and accept the core values it results in a
dominant culture. A dominant culture is the force which effects the identity the way that things
are done .the attitude .the customers however within the dominant culture certain sub units or
certain group of people may have a special cultural relationships which brings out which is non
as subculture. When you have primary values and when they are accepted throughout the
organization they become the core values of an organization.
The core values of Chilaw plantations.
CPL VALUES
WE Value Honesty, Integrity, Sincerity, Commitment, Loyalty, Discipline, and Punctuality
WE Respect Confidentiality, Independency, Transparency,and Spirituality
WE Treasure Innovative, Qualified, and Skilled Professionalism
WE Achieve Our Winning Goals through Leadership, Empowerment and Motivation of Our Staff
WE Strengthen Our Teamswith Human Resource Advancements
WE TreatThreats and Problems as Challenges and Opportunities
WE Aspire To Be Accepted and Respected
WE Pursue To Be Wanted and Demanded
WE EnjoyLife Holisticallyand Serving Our Motherland.
The living environment of estate workers has long been characterized by lower standards when
compared to the general rural population in Sri Lanka. Apart from resulting in low self-esteem,
standards of health have also been adversely affected. The project hoped to improve the living
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6. environment as well as empower them by providing training in a range of topics to improve the
overall quality of life. The implementation of the programs were delayed due to the relatively
high contribution (50% of cost) that the Regional estates were expected to contribute. However,
implementation was successful due to subsequent changes to the financing method.
Chilaw Plantations
Vision
Chilaw Plantation aspires to be the world‟s best Coconut growing and marketing Company.
Mission
Managing the natural, financial and human resources of the company to maximize the national wealth and
prosperity of the island.
1. Name: Chilaw Plantations Ltd (CPL)
MARKET OPPORTUNITY
Coconut Plantations are categorized under Agricultural products. Slowly and surely as
technology advances the Demand for genetically superior high quality coconut seedlings, Increase
value of lands for development activities, The newest product in the estate the dragon fruit could access
untapped markets and potential for further growth, Increase demand for livestock products are things
that we can assume that there could be further advances etc…The above mentioned things all do
occur up to now but there is no major advancement in any particular category that offers ease of
access to any specific user.
We will be mainly targeting local users who would like to purchase, handle and selling of
products. We will also be targeting the entire segment of general planters and consumers as well.
The decision to invest in this particular plantation now is because we feel the available market
has grown to a significant proportion as such that we need not worry about having to think twice
about launching the products and services.
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7. BUSINESS CONCEPT
CPL is an old company in the plantation industry. We at CPL believe in providing customers
with innovative products and services so that they can do things easier. We mainly sell coconut,
coconut husk, coir, sheep, goat, paddy etc. We believe that we have the capacity to provide an
innovative solution to all plantation related products that currently exist. We know it is an
extremely challenging task but we are up to it always.
We will mainly be focusing to sell our products to the following categories of people.
1. Curry market
2. Oil mill owners
3. Retailers
4. Wholesalers
5. Government
6. Cargills,Keels Super
Initially we will be distributing the product across various parts western province and around the
country. Thereafter based on the response and feedback we will be hoping to go worldwide
countries such as Pakistan, Australia, UK, US, Europe etc….
The above-mentioned categories of people would all prefer to buy more according to there
buying power. Retailers, people who do selling and people doing whole selling would really like
this product since there is a big curry market. This will enable them to create an exact replica of
whatever image they were attempting to recreate.
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8. BUSINESS MODEL
In business strategy, a business model should be planned and developed since this helps in
figuring out the probability of profitability of new products and services. It will provide a means
of identifying different paths of revenue generation and profit maximization that CPL can pursue
with regard to the products and services they offer. It also provides an insight into the current
market situation, competitor profiles and existing market competition.
COMPETITION
When launching new Products and Services it is extremely important to consider the competition
that exists within an industry so as to determine the amount of profits we can reap from that
particular industry. Competition influences the marketing strategies a company will take in order
to maximize revenue and thus profit. CPL has competition mainly from KPL, NLDB, CICAgri
Business and etc…
In order to survive in the market processing, further processing and value added products and
services have to be introduced to the market.
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9. SWOT ANALYSIS
The SWOT analysis is a tool which can be used to highlight the strengths and weaknesses of our
particular product. Analyzing the strengths of our product will help us to find out any business
opportunities that will enable our company to have a stronger market position. Also being aware
of any weaknesses that exist in our product will help us to minimize any threats that may reduce
the demand for the product. Therefore SWOT analysis proves to be a useful tool that helps to
carve business strategies in order to keep a sustainable share in the market. While the strengths
and weaknesses are affected by factors internal to the company, the opportunities and threats are
related to the external environment which can be defined by the PEST (Political, Economic,
Socio-cultural and Technological) factors.
CPL
STRENGTHS WEAKNESSES
- Quality of Coconut /Copra is above
standard
- No value added Products.
-More than 100 years in the industry -Poor Marketing andproduct
-Highly Suitable Landscape & soil for Development programs. INTERNAL
Coconut Plantations and other -Weak Management.
Crops. -Unavailability of State of the art
-High Valued Assets and large Equipment,
Coconut Estates. machinery,laptops,palmtops
OPPORTUNITIES THREATS
-Increase demand for livestock -High price fluctuation in the
products. market.
-The newest product in the estate the -The staff and Laborers because of
dragon fruit could access untapped lack of knowledge mishandling of EXTERNAL
markets and potential for further finances,equipment,livestock etc.
growth
NEGATITIVE
POSITIVE
The above diagram shows the SWOT analysis of Chilaw Plantations. It shows the strengths,
weaknesses, opportunities and threats that will be faced by CPL once launched fully in to the
market.
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10. CPL SWOT ANALYSIS
STRENGTHS (Internal) WEAKNESSES(Internal)
1) Quality of Coconut /Copra is above standard. 1) No value added Products.
2) More than 100 years in the industry. 2) Scarcity of Labor and Low Productivity.
3) High Valued Assets and large Coconut Estates. 3) PoorMarketing and product Development
programs.
4) Highly Suitable Landscape & soil for Coconut 4)Dependence on Basic Market as a supplier of raw
Plantations and other Crops. materials.(Fresh nut,copra,husks,trees)
5)Availability of lands for development of main 5) No Financial backing to start on new Agri
Product- Coconut Business Ventures.
6) Opportunities for Crop Diversification. 6) Profits earned by the estate are given to other
Eg:Dragon purposes not related to the estate without utilizing it
Fruit,Bannana,Mango,Cinnamon,Ginger,Coffee,Pe to increase the salaries of the staff and laborers.
pper,Arecanut,Pineapple
7) High Valued Lands for Infrastructure 7) Low Palm density, resulting low yields. Senile
Developments. Palms.
8)Potential for 8) Poor Re/Under Planting Program.
InterCrops,Livestock,Cashew,Timber Plantations
9) At Present The Bingiriya Area Estate is running 9) Weak Management.
at a profit.
10) Assured profit due to high coconut prices. 10) Non Availability of Proper Cadre system and
Human resources.
11) Availability of reserve investment funds for 11) Poor Capital Assets Management.
new investments and development.
12) Gov. Owned Business with Organized 12) Unutilized Land.
management structure.
13) Copra manufacturing, Further manufacturing of 13)Unutilized Fixed Deposits,Funds,Technical
Coconut oil and Virgin oil. Personal
14) Coir Husk Industry. 14)Unavailability of State of the art
Euipment,machinery,laptops,palmtops,
15) Turning Coconut Plantation into Agro 15) Private Mgt until May2008 resulted in less
Business. Under Planting & infrastructure maintenance.
16) Making Coconut Milk, Coconut Ghee, Coconut 16) No trained Personnel in the estate.
Powder..
17) Staff and Laborers are not updated or given
training of latest methodologies used in the world
in plantation management.
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11. OPPORTUNITIES(external) TREATS(external)
1) Increase demand for livestock products. 1) High price fluctuation in the market.
2) Close to the fence planting valuable timber. 2)Unser eyed Land utilized for paddy cultivation
e.g.: teak, Mahogany, Nadun,Jak tree..etc.….
3) The newest product in the estate the dragon fruit 3)High capital expenditure in dragon fruit
could access untapped markets and potential for cultivation
further growth.
4) Rain Water harvesting utilized for Fisheries. 4)Soil erosion
5) Mango cultivation in the estate. 5) Robbing of coconut and other products of the
estate.
6) Getting an extra income through Dragon fruit 6) The staff and Laborers because of lack of
and using that money for the betterment of the knowledge mishandling of finances, equipment,
estate. livestock etc...
7)Increase value of lands for development 7)No proper watchers ,no proper training and no
activities. mechanism to properly safe guard the estate at all
times
8) Demand for genetically superior high quality 8) Utilization of Inorganic Fertilizers in adversely
coconut seedlings. affecting the Crops.
9)No product completion(Coconut has less 9) No funding from the top management in the
substitutes in Sri Lanka) accurate time.
10)Dolamatation In proper time
11) Approval from head office on time.
12) Dead and fallen trees should be removed
immediately. Otherwise pest will develop.
13)COP due to world market prices.(Petroleum
price levels and devaluation of rupee value)
14) Changes of weather patterns affects the
production and it‟s an uncontrollable factor.
15)Non Availability of trained labor and reluctance
of youth for the industry, specially picking, husking
16)Varying trade and tax policy for importation of
palm oil ,which is a competitive substitute for
coconut oil
17) Unknown diseases and insect damages for the
Dragon fruit cultivation.
18) High capital expenditure for dragon fruit
cultivation.
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12. Marketing and Alliances
Marketing Objectives
Ever since the establishment of the company, CPL. has launched a great variety of successful
products that are used and trusted by its customers. The first and foremost marketing objective of
our company is to gain the trust of customers and end users within a short period of time. With
over 100 years of experience in the research and development of products for the general public
and various consumers, the company is confident that its latest invention‟s the Dragon Fruit will
be readily accepted by its customers and would greatly aid to their convenience.
The company intends to launch the ultimate product, The Dragon Fruit, in the western as well
as the whole market simultaneously in an attempt to earn quite a noteworthy reputation and
increase brand equity from every possible perspective of customers. This is because the product
would face greater competition in the western and whole country, while western province is still
quite a fresh market for such products. However, due to relatively high price of the product, the
scope of sales in western province might be better. Another potential market could be the north
and east. However, due to the economic slowdown, the demand of the product might be affected.
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13. Target Customer Segment
The main target market segment would be general public and professional high-end consumers.
Another minority target user would be those wanting to learn or experience newer technologies.
The product could be sold to public as well as Agri- companies and various other consumers.
Government
2%
Target Market
cargills and
other super oil mill owners
markets and and other
retailers and
plantation
whole sailers realted owners
3% 60%
Curry market
35%
Market Research Strategy
Market Research is a key aspect in the development of any new product. It helps us to get a
much clearer picture of the wants and needs of the customers and hence provide them with better
solutions; thus reducing the risk of product failure. Considering this fact, it was intended to carry
out both primary and secondary market research that would provide the company, with business
intelligence to make informed decisions.
Secondary research would enable, to gather information gleaned from studies previously
performed by government agencies, plantations. This in turn would provide statistics about the
population of plantations. Secondary research would also include study of existing products and
their limitations.
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14. Primary research would be carried out through questionnaires and personal interviews with
potential customers. This would enable the company to identify the difficulties which the
customers face with the existing products and how they can be resolved. This would also help to
get a good idea about which pricing strategies to be used and how much the customers will be
willing to pay for the products and services.
Marketing Mix
The marketing mix for CPL is intended to generate a positive response in the target market by
blending the four P‟s in an optimal manner.
The marketing management plan would be strategized in following manner.
Product
The „product‟ here are the products [coconuts, dragon fruit etc...] and services. The relevant
plantation entities with the government should take care to see that plantations and estates are
given necessary funding and encouragement to produce quality products and services. Both these
types of products and services are equally important to the long-term sustainability of the
industry.
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15. Price
Marketers should price the products and services according to the demand fluctuation, world
market prices and crops, weather patterns, curry market and research. For an example, when the
rain increases, the crop increases and the price godown. Also, it is reasonable to demand a higher
price from the locals when the world market prices go up.
However, in the case of curry market the people in the country has to be considered and a
reasonable price has to be put up.
Due to four main reasons such as the world market price, rain increase, rain decrease and
demand fluctuation the price is expected to be relatively high. But it is still cost-effective,
considering the benefits that it offers. This would be reflected in the price. The pricing objectives
to be considered when setting the price for the products and services can be prioritized in the
following manner.
Survival of the product
Quality leadership
Maximize profit margin
The demand for the products and service is expected to be elastic, due to the current unstable
economic situation. Therefore a lot of strategic planning and analysis was needed to be carried
out before setting the price of the products and services, specially the coconut price. In addition,
due to rapid technological advancement, high competency and short life-cycle of plantation
products, its value is expected to depreciate over time. In order to overcome this, the company
intends to improvise the product at a later stage to overcome the limitations and hence stay
competent in the market for a longer time.
The price would be set, based on a combination of cost-plus and value-based pricing method.
Cost-plus pricing would ensure that the costs are covered up, plus a certain percentage of profit
is earned on each unit sold. Value-based pricing on the other hand, will pass on the effective
value relative to alternative products; thus ensuring that the product is not under-valued.
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16. Placement
The Plantation land and business places (place) are extremely important to the industry because
this is where the products and services (product) are delivered to the various markets. The estates
should be in good condition if the plantations producers wish to give out a quality product
(product or service) at the end of the day.
There is no point in producing excellent products and services if there is no place to sell them
with the appropriate technology. More and more producers are using the latest technology in
their productions. But the problem lies in the estates which are seldom upgraded. Thus plantation
companies together with the ministry should see that necessary improvements are done in the
plantation sector so they are equipped with the necessary technology to market products and
services superior.
It is also important to note that the threat of other competitors within the local market as well as
internationally are impacting the revenue of the plantation industry can be heightened if the
consumers are disappointed with the quality of the plantations; in other words if they would
rather buy other products from other plantations.
The product is targeted mainly at a mass market. Therefore, the volume of sales is expected to be
high. The most appropriate distribution channel that could be used is manufacturer-retailer-
customer. In addition to save costs, it was intended to make use of processing, further processing
and other value added products. Due to high volume of sales, there is a need for wholesalers. By
doing the additional things this would save cost because the shorter the distribution channel,
lower the cost. The CPL products would be placed in leading outlets and agri fairs in the
international market.
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17. Promotion
Promotion or the ways of communication to the target market is crucial if CPL want to get back
a profit. Producing a good quality product takes time. And it is necessary to build up hype from
the begging to the end.
Posters, social media, radio, newspapers, TV are some of the ways promotion of plantation
products and services. With the restriction regarding poster pasting in towns, the significance of
poster are relatively low. On the other hand, promotion through online media is becoming
increasingly favorable with the urban audience. But, the most efficient way to communicate the
coming of a Product or service is through on TV, either at 8 clock news or along with popular
Tele-dramas.
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18. Diversification beyond Stocks
If there's one thing that even the newest investor understands, or has at least heard of, about a
portfolio its diversification - blending a variety ofasset classes to reduce exposure to risk. But a
well-diversified stock portfolio is just one component of putting together the best possible
portfolio.
Diversifying not just among different stocks, but among different assets, is how an investor can
truly mitigate risk. Even with a well-diversified stock portfolio, an individual is still exposed to
market risk (or systematic risk as finance professors like to call it), which cannot be diversified
away by adding additional stocks.
What Exactly Is Diversification?
Basically, diversification among various asset classes works by spreading your investments
among various assets (e.g. stocks, bonds, cash, T-bills, real estate, etc.) with low correlation to
each other; this allows you to reduce volatility in your portfolio because different assets move up
and down at different times and at different rates. Thus, having a portfolio diversified among
different assets creates more consistency and improves overall portfolio performance.
How Does Correlation Work?
Correlation is simple: If two asset classes are perfectly correlated they are said to have a
correlation of +1. This means that they move in lockstep with each other, either up or down. A
completely random correlation - a relationship in which one asset's chance of going up is
equal to the chance of dropping if the other asset rises or falls - is said to be a correlation of 0.
Finally if two asset classes move in exact opposition - for every upward movement of one there
is an equal and opposite downward movement of another, and vice versa - they are said to be
perfectly negatively correlated, or have a correlation of -1.
A Diversified Stock Portfolio vs. A Diversified Portfolio of Assets
When we talk about diversification in a stock portfolio, we're referring to the attempt by the
investor to reduce exposure to unsystematic risk (i.e. company-specific risk) by investing in
various companies across different sectors, industries or even countries.
When we discuss diversification among asset classes the same concept applies, but over a
broader range. By diversifying among different asset classes you are reducing the risk of being
exposed to the systemic risk of any one asset class; in other words, the risk that diversification
within an asset class, such as stocks, cannot eliminate.
Like holding one company in your stock portfolio, having your entirenet worth in a portfolio of
any one asset - even if that portfolio is diversified - constitutes the proverbial "all of your eggs in
one basket" . Despite the mitigation of unsystematic risk (risk associated with any individual
stock) you are still very much exposed to market risk. By investing in a number of different
assets you reduce this exposure to market risk or the systemic risk of any one asset class.
Most investment professionals agree that although diversification is no guarantee against loss, it
is a prudent strategy to adopt towards your long-range financial objectives.
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19. How to Diversify Your Portfolio
To this point we have talked more in a theoretical sense. Now, let's look at some examples to
sink your teeth into. Bonds are a popular way to diversify due to their very low correlation with
some of the other major asset classes, particularly equities. Other fixed-interest investments such
as T-bills, bankers' acceptances and certificates of deposit are also popular.
Another viable option is real estate, which has proved its worth during various stages in the
economic cycle, and has a relatively low correlation with the stock market.
It's amazing how many people tend to overlook the investment potential of this asset. Investing
in real estate doesn't mean that you need to go out and purchase a house or building, although
that is a viable option for entering this market.
As an alternative to a direct property purchase, individuals can invest in the real-estate market
through real estate investment trusts, or REITs. REITs sell like stocks on the major exchanges,
and they invest directly in real estate through properties or mortgages. REITs typically offer
investors high yields as well as high liquidity.Because of the real estate market's relatively low
correlation with the stock market, by investing in an REIT an individual is able to diversify away
some the stock market's inherent risk.
Real estate, and more specifically REITs, is just one of the means to accomplish this reduction in
exposure to risk. As the illustration above demonstrates, investors have a number of different
options that can all help to reduce the risk of investing in any one asset class.
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20. Improving Welfareof Plantation Labour force in Sri Lanka
The living environment of estate workers has long been characterized by lower standards when
compared to the general rural population in Sri Lanka. Apart from resulting in low self-esteem,
standards of health have also been adversely affected.
"A larger labour force does not necessarily guarantee a larger output. In fact, in estates
where there is a labour shortage the current difficulties are felt less, because they do not have to
employ large numbers even at times of low output.
PEOPLE
The Democratic Socialist Republic of Sri Lanka (formerly known as Ceylon) is an island in the
Indian Ocean about 28 kilometers (18 mi.) off the southeastern coast of India with a population
of about 21 million. Density is highest in the southwest where Colombo, the country's main port
and industrial center, is located. The net population growth rate is about 1%. Sri Lanka is
ethnically, linguistically, and religiously diverse.
Sinhalese make up 74% of the population and are concentrated in the densely populated
southwest. Sri Lankan Tamils, citizens whose South Indian ancestors have lived on the island for
centuries, total about 12%, live throughout the country, and predominate in the Northern
Province.
Indian Tamils, a distinct ethnic group, represent about 5% of the population. The British brought
them to Sri Lanka in the 19th century as tea and rubber plantation workers, and they remain
concentrated in the "tea country" of south-central Sri Lanka. In accordance with a 1964
agreement with India, Sri Lanka granted citizenship to 230,000 "stateless" Indian Tamils in
1988. Under the pact, India granted citizenship to the remainder, some 200,000 of whom now
live in India. Another 75,000 Indian Tamils, who themselves or whose parents once applied for
Indian citizenship, chose to remain in Sri Lanka and have since been granted Sri Lankan
citizenship.
Other minorities include Muslims (both Moors and Malays), at about 7% of the population;
Burghers, who are descendants of European colonists, principally from the Netherlands and the
United Kingdom (U.K.); and aboriginal Veddahs. Most Sinhalese are Buddhist; most Tamils are
Hindu. The majority of Sri Lanka's Muslims practice Sunni Islam. Sizable minorities of both
Sinhalese and Tamils are Christians, most of whom are Roman Catholic. The 1978 constitution--
while assuring freedom of religion--grants primacy to Buddhism.
Sinhala, an Indo-European language, is the native tongue of the Sinhalese. Tamils and most
Muslims speak Tamil, part of the South Indian Dravidian linguistic group. Use of English has
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21. declined since independence, but it continues to be spoken by many in the middle and upper
middle classes, particularly in Colombo. The government is seeking to reverse the decline in the
use of English, mainly for economic but also for political reasons. Both Sinhala and Tamil are
official languages.
There lots of estate workers who are Tamil and are living in line houses. They have been
working plantations for generation as labourers.
Social and Environmental Programs
In Plantations not only about the infrastructure and physical resources but also the human
resource plays the vital role because it‟s the human resource that is available that drive forward
the plantation so it‟s important their needs and wants are considered and steps are taken to uplift
their living conditions and that would directly impact on making profits.
When you take in to consideration the human resource that is available in the plantation their
behavior to this plantation is very important.
In plantation also we have to take to account the organizational behavior because behavior equals
performance.
Therefore it explains why a superintendent is interested in a subordinates behavior.
The performance brings in the output. The superintendent is responsible for the workers
performance. The effectiveness and efficiency of an organization is highly influenced by it‟s
culture to understand the linkage it‟s better to understand the meaning of concept of culture.in a
culture there is the essence of it which is called core values. When the majority share the Chilaw
plantations core values as shown below and accept the core values it results in a dominant
culture. A dominant culture is the force which effects the identity the way that things are done
The attitude, the customers however within the dominant culture certain sub units or certain
group of people may have a special cultural relationships which brings out which is non as
subculture. When you have primary values and when they are accepted throughout the
organization they become the core values of an organization.
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22. The core values of Chilaw plantations.
CPL VALUES
WE Value Honesty, Integrity, Sincerity, Commitment, Loyalty, Discipline, and Punctuality
WE Respect Confidentiality, Independency, Transparency, and Spirituality
WE Treasure Innovative, Qualified and Skilled Professionalism
WE Achieve Our Winning Goals Through Leadership, Empowerment and Motivation of
Our Staff
WE Strengthen Our Teams with Human Resource Advancements
WE Treat Threats and Problems as Challenges and Opportunities
WE Aspire To Be Accepted and Respected
WE Pursue To Be Wanted and Demanded
WE Enjoy Life Holistically and Serving Our Motherland.
In order to improve the living standards of plantation labours the earnings should be distributed
evenly by the plantation owners. There should be motivation from superintendents to uplift the
welfare of these hard working labours. Through salary increases and bonuses the population of
labours are mostly motivated to work effectively and efficiently, but the sad part has been for
decades this plantation community of labour‟s have been neglected and their wellbeing hasn‟t
been even thought of by the owners in going to make quick money and for them to reap the
benefits of the harvest by only the top management of plantations. Pay checks have been delayed
and not paid in some instances.
Developing Livestock functions within the plantation and thus adding value to the plantations
products and services and making the most by diversifying the land.
Cows, buffaloes, goats, pigs, sheep and etc…… could be done as livestock.
The cow dune and other animals waste could be utilized as “Bio Gas”. Then the bio gas surrey
could be used for agriculture plantations which would do more value adding to the plantation as
a whole.
The output of the bio gas could be utilized as a long term sustainable, renewable energy source
and would save money to the plantation in one way and make the plantation in the other hand
self-sufficient with its own private mini power plant with the use of bio gas.
Bio gas could be given to people through pipes as gas for gas cookers to utilize which would
once again save money for plantation and generate money revenue to the plantation through its
processes. The surrey of the bio gas could be used as a fertilizer to cultivate banana or plantains.
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23. Because there‟s moisture in the surrey. Moisture that makes the process of fruit bearing faster
and nutritious without using artificial chemicals that are harmful for the human body.
Utilization of the waste of the Bio-Gas as a fertilizer for plants such as vegetable‟s, coconut,
green vegetables and fruits. The waste also can be Recycled, Reuse and reduce the carbon foot
print in Plantation Industrialization processes and in other related systems that happen day
out day in Plantations.
Inter cropping and mix cropping could be done in between coconut trees. By doing this
maximum land utilization happens leaving no room for wastage of the land available within the
Plantation Land.Pineapple could be done as a under
plantation.Lime,Lemon,Oranges,Mandarin all this tonic giving acid juices could be done as
under planting making the space in between coconut plantations very rich, grapes,cashew could
be also done as inter cropping. But in the Sri Lankan context most of these under planting,inter
cropping and mix cropping are done in plantations because of lack of knowledge and not enough
resource personnel to carry out the activities in doing so and adding value to your products and
services as wellas getting an extra income through these cultivations. And all the above add up to
land diversification.
Mukunuwanne, Gotukola like green vegetables could be grown and using the surrey or the
waterish waste of bio gas by just connecting the green vegetable cultivation with a pipe to the
green vegetable‟s growing system.
Pepper, coffee, giniciriya are crops that you could do while having coconut as your main crop.
By starting with a substantial amount of capital and assigning a suitable land for these
crops,coffee and pepper could be used to export and to look forward for untapped local ,global
through that creating a glocal market and expanding it to mass production would in the long term
help the coconut plantation even when a recession is hit or if the coconut plantation industry is
hit with some disease. To keep the plantation alive in turmoil situations because of various
disease‟ spreading to coconut trees and the only option is to destroy them. In that kind of a
scenario to totally uproot the mass plantations of coconut and to replant new coconut‟s plants
needsa substantial amount of finances as well as human resource and to build again a plantation
from the scratch in such a scenario is hectic.Continously pushing forward for innovative ,
value adding ventures at present, in major times will do wonders for the plantation as well it will
set a benchmark for the whole Sri Lankan Agriculture and Plantation Sector and it could be a
significant contributed to the GDP,when Sri Lanka is only a service oriented country where
through the HR personnel in diverse areas Money is injected to the National economy, in order
to develop a country “Production” should increase through, „ continuous research & development
and the income of the final product or service should be evenly distributed among the population
or work force population of the country”, by implementing such a practical mechanism only a
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24. country could prosper. Having pepper,coffee,giniciriya,doing inter-cropping, mix- cropping
and various cultivations in vast amount of lands and the diversification of land plays a major role
in major time .And the diversed crops and cultivation within that was planted in between coconut
trees would pay dividends .
“Dragon fruit” a new plant in the Sri Lankan context a foreign plant to the Sri Lankan soil is
becoming very popular among the metropolitan population in Colombo and around suburbs.
Thisforeign plant is also being exported and a substantial amount of revenue and foreign
exchange is brought back to this country by a few entrepreneurs. „Cinnamon” in the 1960,1970
a very popular export spice that attracted the merchants from the middle east and an export
money making venture for lots of businessmen in the good old days. A spice that has lots it‟s due
recognition and reviewing this spice and exporting once again to untapped markets would in
years to come by looking forward for mass production by starting small and keep this as a
valuable and marketing this spice through branding would create good name for the plantation in
the years to come and would keep the loyal customers as wellas stake holders interested as well
as shareholdersinjecting more money to the plantation.
Grass could be planted among land that where crops are not planted and also would keep out
weed plants and create a green carpet to the umbrella shading which would in turn create a sub
culture in the natural environment, that is unique to the coconut plantation. “Weed Management”
plays a pivotal role in this aspect when we take in to consideration grass planting. Livestock
products animals in diary buffaloes, cows could feed them “.Maze and Sogam” could be
transformed in to “Silage”.
“Pig and sheep manure” could be used as fertilizers for coconut trees. This in turn acts like
“organic matter”.
“Rain water harvesting” could be used to build water tanks like our forefathers used to do. It is
said that SriLankan‟s wereso advance in Irrigation Engineering, the era when kings used to rule
this country Sri Lankan irrigation engineers where send to Kashmir to help people both in
Pakistan as well as India. The dry zone of Sri Lanka was rich in water when the kingdoms realm
was managed by our Kings and Queens. In a drought period utilizing rain water and storage
would enable the plantations throughout the year to have a good supply of water as well as to
create mini irrigation systems inside the coconut plantation and fisheries could be done and once
again expanding rainwater harvesting and fisheries will create alternative revenue and cash
injecting ways as wellas lots of job opportunities and create lots of alternative income ways to
the plantation as a whole and it would be able to enlighten the hard working labours day to day
livelihoods. By spending the money generated through this rain water harvesting and fisheries
would motivate these people and could be taken as an intrinsic factor that would increase labour
productivity. Hence happy employees generate high productivity.
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25. THROUGH LAND DIVERSIFICATION BUILDING A COIR FACTORY
Establishing a “Coir Strings Mall”. The coconut tree which is known as “KAPRUKA” in
Sinhalese is a tree that Sri Lankan‟s think as a tree that gives tremendous amount of advantages
especially to the households. One such process that could be designed using “Management
Architecture” is a design to “Develop a Coir Strings Mall” and this would be done through
“Land Diversification”.
Through the coir which is available in each coconut creating such a facility and implementing a
map making process and next when the map making is done to implement 5s and implement
“JAPANESE JIT AND JITODA”, The two main pillars any Organization needs, With this
Foundationthe Chilaw plantations could develop a world class facility. Only the integrity from
the Top Management to the Front line Managementand Laborer‟s is needed. World famous
TOYOTA runs on this Foundationbut they “DON‟T IMPLEMENT 6 ZIGMA”.Here in
SriLanka5‟S is the very popular thing but “5‟S is Outdated in the Global Arena and Sri Lankan‟s
haven‟t identified the essence of implementing 5‟s but put pictures and fancy words without
knowing the through meaning how truly it was implemented and it‟s just a basic very small
foundation methodology used not a methodology to picture in office‟s and make workers
memorize the words of the 5s.„KAIZEN” and other Japanese Philosophies in Quality
Management have come to the “Limelight”. The quality in japan is stated as the attitude of the
workers, which has enabled them to do work efficiently and effectively. Transforming their war
mentality to work efficiently with less talk.Creating this facility through Coconut Land
Diversification would need a large amount of Capital and a Strategic Corporate Plan or win –win
Corporate Strategy for Sustainable Corporate Growth, to keep this facility moving forward in the
years to come in a positive manner.
The problem this industry is facing is that the lack of Coconut Husk, Sky Rocketing cost of
Living in Sri Lanka,electricity & increased fuel charges, finding experienced personnel ,export
demand declining because of this currently “SRI LANKA‟S COIR INDUSTRY is in
diastreateous.“High standard quality supervision and maintaining for a long periods of time, lack
of knowledge in “Kaizen”, leanproductivity, and higher plant efficiency through the autonomous
maintenance pillar of total productive maintenance (TPM).Lean enterprise on productivity
through Lean Transformation,Manufacturing experience, quality assurance, maintaining the
results and challenges, Productivity enhance through Lean and 5s, Acculturation as a strategy to
go beyond 6 zigma, the 4 pillar strategy 4 Manufacturing Excelence,Performance improvement
in the Public Sector Plantations. The public sector or private sector top management has to make
major changes to send the income of the public or private companies or plantation‟s towards the
hard working labuorers,because according to a recent research done on„„ Sri Lanka‟s economy,
90% of Sri Lanka‟s earnings go to the only 10% of Sri Lanka‟s Wealthiestpeople”, the other
10% of Sri Lanka‟s earning‟s go to the middle class and lower middle class families.
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26. Because of this the population in this plantation sector isn‟t motivated to work effectively and
efficiently. But if a Practical system, solid process and statistics, facts,figures,insight of industry
people and analyzing these would pay dividends in the years to come. This would create an
environment to make the laborer‟s, workers and managers as shareholders and they would be
motivated, not only by money when the plantation implement certain above mentioned kaizen
perspectives by changing the attitude of the frontline and middle management human resource
there would be external factors created to motivate your workers.
If a plantation can implement these philosophies the advantages you get through these practical
ways is immense. These philosophies will certainly enlighten the Plantation Industry in Sri
Lanka which is rather stagnated and gloomy.
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27. DEVELOPING A BALANCE SCORE CARD FOR A COIR FACTORY
FINANCIAL
PERSPECTIVE ROI LCC STRATEGIC LEVEL
LP
CUSTOMER PERSPECTIVE
MANAGERIAL LEVEL
Q C D
INTERNAL PERSPECTIVE Q O DEFECTS
OPERATIONAL LEVEL
Q T O O DELAY
INVENTORY
S O UNWANTED ITEMS
LEARNING AND
GROWTH FUNCTIONAL
PERSPECTIVE LEVEL
S S
O O DUST
UNITENDIFIED ITEMS
SEIRI, SEITON, SEISO &
SEIKETSU, SHITSHUKE
AND SAFETY. (3 S TO
START THEN NEXT 3 S
TO FOLLOW)
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28. Appendix-
1st pillar - ROI –Return on Investment, LP – Labour Productivity, LCC – Labour Cost
Company,
2nd pillar- Q – Quality, C– Cost, D – Delivery.
3rdpillar- Q- Quantity, Q – Quality, T- Time,
0 – Zero Defects,0- Zero Delay,0- Zero Inventory
4th pillar - 3 s- denote Seiri, Seitonand Seiso. 5s as a whole could be implemented and you
could add safety as the sixth S.
6S
1. SEIRI
2. SEITON
3. SEISO
4. SEIKETSU
5. SHITSHUKE
6. SAFETY
O denotes- 0 –Zero Dust, 0 – Zero Unwanted items, 0 –Zero Unidentified Items.
Conclusion
The foregoing estimates suggest that, Sri Lanka could make substantial savings in foreign
exchange and improve the productivity of coconut plantations.
Diversification is a key building block to anyone's financial plan, including the understanding of
what diversification does and how it helps an individual's overall financial position. It is crucial
that investors know the difference between systematic and unsystematic risk, as well as
understand that by diversifying among asset classes they can mitigate exposure to systematic
risk.
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