Tea Export Industry in Sri Lanka


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Tea Export Industry in Sri Lanka

  1. 2. Tea <ul><li>Tea is globally one of the most popular and lower cost beverages. </li></ul><ul><li>Tea is consumed by a wide range of age groups. </li></ul><ul><li>Even though tea is not indigenous to Sri Lanka </li></ul><ul><li>and is an area where the country can take a </li></ul><ul><li>lot of pride. </li></ul><ul><li>Tea industry have dominated history. </li></ul><ul><li>The tea industry was introduced to the country in 1867 by James Taylor. </li></ul>
  2. 3. Tea Cultivation Areas Uva Dimbula Ruhuna Kandy Uda Pussellawa Nuwara Eliya
  3. 4. Target Market for Tea <ul><li>Local Market – Tea industry targets the existing local tea drinkers, providing them with something new and attractive, with a great aroma and taste. Thus, the industry tries to make profit through customer satisfaction and also to make a good profit. </li></ul>The tea industry targets the both local and global market. <ul><li>Global Market - Tea exports to foreign countries to earn foreign </li></ul><ul><li>currency. </li></ul>
  4. 5. The Most Important Foreign Market for Tea Country Million kilograms Million pounds Percent of total CIS Countries 57.6 127.0 20 UAE 48.1 106.0 16.7 Russia 46.1 101.6 16.01 Syria 21.5 47.4 7.47 Turkey 20.3 44.8 7.05 Iran 12.5 27.6 4.34 Saudi Arabia 11.4 25.1 3.96 Iraq 11.1 24.5 3.85 UK 10.2 22.5 3.54 Egypt 10.1 22.3 3.51 Libya 10.0 22.0 3.47 Japan 8.3 18.3 2.88 Germany 5.0 11.0 1.74 Others 23.7 52.2 8.23 Total 288 634.9 100
  5. 6. Global Market for Tea <ul><li>Ceylon Tea has being the “Official Tea Supplier” for many world class events. </li></ul><ul><li>Sri Lanka is the 4 th biggest tea producer in the world. </li></ul><ul><li>The newest demand in the world market is for “instant” tea packets. </li></ul><ul><li>Sri Lanka is the biggest tea exporter in the world. </li></ul>
  6. 7. Tea Exporting Countries <ul><li>Sri Lanka </li></ul><ul><li>Kenya </li></ul><ul><li>China </li></ul><ul><li>India </li></ul><ul><li>United Kingdom </li></ul><ul><li>Germany </li></ul><ul><li>Indonesia </li></ul><ul><li>Viet Nam </li></ul><ul><li>Rwanda </li></ul><ul><li>United Arab Emirates </li></ul>
  7. 8. Current Situation of Macro Environmental Factors (PESTLE) Technology Industry Political Natural Cultural Economic Demographic Social
  8. 9. Political & Legal Environment <ul><li>Marketing decisions are strongly affected by development in political environment. The political environment consist of law, government agencies pressure groups that influence or limit various organizations and individuals in given society. </li></ul><ul><li>Channels in trait quota region of the tea industry. </li></ul><ul><li>Domestic politics. </li></ul><ul><li>Impact of SAARC. </li></ul><ul><li>Illegal tea export. </li></ul><ul><li>Influence of WTO. </li></ul><ul><li>Influence of pressure groups like union. </li></ul>
  9. 10. Economic Environment <ul><li>Consist of factors that affect consumer purchasing power and spending patterns. </li></ul><ul><li>Price </li></ul><ul><li>High cost of production – Higher potion of cost should be allocated for wages. (60%) </li></ul><ul><li>Easy for buyers to switch from one source to another . </li></ul><ul><li>A large number of countries produce tea. </li></ul><ul><li>Tea supply is greater than demand from manufactures. </li></ul>Price Decline
  10. 11. Demographic Environment <ul><li>It is a study of human population in terms of size, destiny, location, age, gender, race, occupation and other statistics . </li></ul>Demographic Distribution District Total population No. of estates Estate population % of population on estates Kandy District 258,432 625 81,476 31.53 Badulla District 129,000 130 15,555 12.06 Matale District 71,724 111 13,052 18.2 Kegalle District 105,287 40 3,790 3.6 Sabaragamuwa 92,277 37 3,227 3.5 Nuwara Eliya District 36,184 21 308 0.85 Kurunegala District 207,885 21 2,393 1.15 Matara District 143,379 11 1,072 0.75 Total 1,044,168 996 123,654 11.84
  11. 12. Social Environment <ul><li>Written regulation cannot possibly cover all potential marketing abuses, existing laws are often to enforce. However beyond the written laws and regulations, business is also governed by social codes and rules of professional ethics. </li></ul><ul><li>National Services </li></ul><ul><li>Social Welfare </li></ul><ul><li>Education </li></ul><ul><li>State Housing </li></ul><ul><li>Labour </li></ul>
  12. 13. Natural Environment <ul><li>It involves natural resources that are needed an inputs by marketers or that are affected by marketing activities. </li></ul><ul><li>Main planting areas are Dimbulla, Galle, Nuwara </li></ul><ul><li>Eliya, Rathnapura, Uva, Kandy. </li></ul><ul><li>Different flavors. </li></ul><ul><li>Different soil conditions. </li></ul><ul><li>Weather conditions. </li></ul>Kandy District
  13. 14. Technological Environment <ul><li>There is no big different in technical background of tea industry during last few years in Sri Lanka. </li></ul><ul><li>The highest percentage of the tea production goes to labour wages. </li></ul><ul><li>The second generation of Indian labours are not willing be the workforce of plantation. </li></ul><ul><li>There is no much technology advances find in tea industry – tea plucking machines. </li></ul>
  14. 15. Cultural Environment Culture is the most basic cause of a person’s wants and behavior. Every group or society has a cultural influences or buying behaviors may vary greatly from country to country. <ul><li>Changes in consumption patterns. </li></ul><ul><li>Attitudes of Sinhala female workers towards plucking tea. </li></ul><ul><li>People expect more convenient. </li></ul><ul><li>The attention for the Sri Lankan logo ( ceylon tea) . </li></ul>
  15. 16. Marketing Mix
  16. 17. 4 P’s <ul><li>Product – Products are the means by which organizations satisfy customers need. </li></ul><ul><li>Price – Critical element which determine the revenue which it will generate. </li></ul><ul><li>Place - usually make their goods & services in places which are convenient for production. </li></ul><ul><li>Promotion – Used to communicate the benefits of their products to their target market. </li></ul>
  17. 18. SWOT Analysis Strengths Weaknesses <ul><li>Cost Advantage </li></ul><ul><li>Asset leverage </li></ul><ul><li>Effective Communication </li></ul><ul><li>Online Growth </li></ul><ul><li>Loyal Customers </li></ul><ul><li>Innovation </li></ul><ul><li>Diseconomies to scale </li></ul><ul><li>Low market share </li></ul><ul><li>No online presence </li></ul><ul><li>Poor supply chain </li></ul><ul><li>Increase in cost of production </li></ul><ul><li>Not diversified </li></ul>Opportunities Threats <ul><li>Acquisitions </li></ul><ul><li>Asset leverage </li></ul><ul><li>Financial markets (raise money through debt, etc) </li></ul><ul><li>Emerging markets and expansion abroad </li></ul><ul><li>Innovation </li></ul><ul><li>Growing demand for good quality teas. </li></ul><ul><li>Comparatively low yields </li></ul><ul><li>High cost of production </li></ul><ul><li>Declining competitiveness </li></ul><ul><li>Inability to engage in multi origin </li></ul><ul><li>blending. </li></ul><ul><li>Strong buying interest from Russia and </li></ul><ul><li>the Middle East </li></ul><ul><li>Changing consumption patterns </li></ul><ul><li>Supply-side factors </li></ul>
  18. 19. Suggestions <ul><li>Government should pay attention on tea cultivating more lands. </li></ul><ul><li>Government and cultivators try to add new facilities of tea cultivation improve production. - change stock, use new technology for packing tea packets. </li></ul><ul><li>Introduce new procedures in tea processing and new machineries to the industry. </li></ul><ul><li>Government should take necessary action to curve these illegal exporting rackets. </li></ul><ul><li>Introducing tea picking machines for providing an attractive salary to workers. </li></ul><ul><li>Government should provide necessary incentives to the small scale tea planters to encourage them. </li></ul>
  19. 20. <ul><li>Government should pay their attention to improve infrastructures to develop distribution system and other facilities. </li></ul><ul><li>Training workers about technical side and management sides. </li></ul><ul><li>Introduce different taste and aroma of tea to markets - flavored tea , Ice tea. </li></ul>
  20. 21. Group Members <ul><li>Shiwanthi waragoda </li></ul><ul><li>Awanthi Wasana </li></ul><ul><li>Nadeeshani Tharangika </li></ul><ul><li>Kushani Narmada </li></ul><ul><li>Amila Gunathilaka </li></ul><ul><li>Nilukshika Chamali </li></ul>