For innovation to be impactful, it needs to be leveraged in pursuit of long-term competitive advantages that create sustainable growth opportunities. When applied correctly, they have the capacity to elevate their entire industry, by transforming innovation into established best practices.
Horana Plantations PLC, one of Sri Lanka’s most diversified Regional Plantation Companies (RPCs), provides an excellent example of such an innovative mind-set applied at scale.
“In order for the plantation industry to remain relevant in the emerging global economic order, we have to adapt, and prioritize innovations that move our individual businesses, and the sector as a whole towards a more circular model for our business. If the margins on our existing crops are insufficient, we have to mitigate those impacts with other crops, and income streams. We believe that by breaking the existing paradigm, we can create space for a much more profitable and sustainable ways of doing business,” Horana Plantations CEO/Director, Johann Rodrigo explains
However, the company is faced with many of the same macroeconomic and systemic challenges as the rest of Sri Lanka’s plantation industry. These include a rising cost of production, reducing workforce, and disruptions in the supply of key agri-inputs, Horana Plantations responded with a multi-pronged strategy to not just mitigate the impacts of these issues, but also derive competitive advantages for itself, and the Sri Lankan plantation industry as a whole.
A hub for diversified agri-innovation
Managing fourteen estates – primarily in the Central and Western Provinces, Horana Plantations annually produces 3 Mn Kg of Tea, 1 Mn Kg of Rubber and 2 Mn Kg of Oil Palm.In an effort to maximize productive utilisation of land, the company has also been on a bold journey of crop diversification.
In recent years, this included the planting of significant extents of coconut, as well as establishing commercial scale intercropped cultivations of a range of crops, fruits, and vegetables including bell pepper, black pepper, coffee, lemon, soursop, rambutan, bamboo, and king coconut, all of which are now being sold in local or export markets.
The Horana Plantations approach is focused first and foremost on optimisation of field operations and productivity of land and labour. Over the past 02 years, the company has been steadily expanded its use of mechanized harvesting, utilising hand sheers and two-man harvesters, resulting in increased harvesting yields.
Working with nature
In the quest for greater yields, the company has also been actively exploring more unorthodox ideas, based on successful international case-studies. These include a pilot project to establish beekeeping projects within its oil palm cultivations.
“As one of nature’s most effective pollinators, the introduction of beehives to commercial agriculture has been found to promote significantly higher yields, in addition to producing honey which can also generate significant additional revenue. We started this project with just 60 bee boxesbut based on the success we have seen so far, we are now in the process of scaling up to 300 bee boxes over the coming months,” Rodrigo stated.
A similarly unorthodox, and equally innovative approach is also being pioneered at Horana Plantations with respect to plant nutrition utilising vermi-compost – a process in which earthworm activity is used to decompose and increase nutrient levels, including nitrogen content, in organic matter.
This final mixture – referred to as vermi-cast – has been utilised in trials by Horana Plantations to produce a liquid extract – known as vermi-wash – to create a highly effective plant nutrient. However the challenge remains in achieving reliable commercial scale production.
Here too, Horana Plantations is now working in close collaboration with the University of Wayamba and with assistance from the Tea Research Institute (TRI), to establish a pioneering model for commercialising production of vermi-compost and vermi-wash.
The project envisions providing estate and tea smallholder communities with all of the infrastructure to produce the nutrients which the company can then buy back. Crucially, the project will be linked it to collection of food waste and other organic waste, including waste gathered from weeding operations. In this manner, the company hopes to establish a new income stream for its workers, while helping to sustain the plantation industry as a whole.
Horana Plantations has also started applying activated carbon dust to its compost composition. Studies have shown that such measures help the soil retain fertiliser. Similarly, the company has also commenced application of ‘mulching film’, under which the soil between plants is covered using a polythene-like film.
This serves to reduce soil erosion and the growth of weeds. The company is also experimenting with its suppliers on the viability of slow-release fertiliser, which can drastically increase absorption levels, minimising quantities applied. The combined impact of these measures is aimed at the company’s crops can receive added nutrition, while optimising fertiliser consumption, again leading to reduced costs and increased yields.
Diversifying beyond the plantations sector, under its renewable energy portfolio, the company is constructing two hydro power plants in its Fairlawn and Bambarakelly Estates. These further strengthen the environmental sustainability credentials of Horana Plantations, which has also made significant investments in solar energy generation, installing solar panels on the rooftops of five factories.
Through these initiatives, the company expects to be carbon neutral in its tea production by 2030 and to reduce its carbon footprint by 10% each year. Horana Plantations has registered its solar energy initiative with the Sri Lanka Climate Fund and intends to join carbon trading schemes in the near future. The company is mulling obtaining carbon neutral status for few of its brands by the end of the year.
“We are going flat out on cutting down on our carbon footprint. Based purely on what we have already committed to, we can reach Carbon Neutral status by 2030. However, many of the more unorthodox projects we are working on have the potential to significantly reduce our emissions, which could help us achieve this target much sooner,” Rodrigo asserted.
Complementing efforts to minimise the climate impact of its core business, Horana Plantations has embarked on a major tree planting initiative, which will also support the preservation of endangered wildlife. The company is planting 500,000 native plants as part of a project with the involvement of external stakeholders, to create wildlife corridors in several estates. This is expected to benefit leopards in particular.
Horana Plantations’ innovation and sustainability-focused efforts have won the company national and global acclaim and accreditation. The company is the only Sri Lankan tea plantation to have obtained ‘Ecolabel’ certification. It’s also one of the plantations companies in Sri Lanka with Fairtrade certification at present – reflecting Horana Plantations’ strong commitment to ethical and sustainable business practices.
The company has Rainforest Alliance certification for all its estates – demonstrating the company’s emphasis on preserving the environment. Horana Plantations has also obtained ISO 14001 environment systems management certificate for its tea plantations.
Furthermore, in a major step towards safeguarding the wellbeing of women and children from estate sector communities, Horana Plantations is among the first seven companies to enter a landmark programme with the Centre for Child Rights and Business in partnership with Save the Children, and key stakeholders to be part of the “Mother and Child-Friendly Seal for Responsible Business”. The initiative aims to improve the well-being of women and children in Sri Lanka’s tea sector by encouraging business entities in the tea supply chain, including buyers, brands, plantation companies and estates, to make sustainable and meaningful investments in the well-being initiatives targeting children and women in tea communities.
“Social sustainability, especially in terms of uplifting our employees, is embedded directly in Horana Plantations’ efforts to enhance our economic sustainability,” Tharindu Weerakoon–Manager Sustainability & Certifications said. “For instance, these efforts have created new income streams for employees and benefited external stakeholders like smallholders. In addition, we’ve also made significant progress in diversifying the business, as part of our economic sustainability efforts.”