In mid 1980's, we found that Europe was no longer a competitor for the supply of chemicals. Our 'bread and butter', the supply and distribution of chemicals, was under threat. We could then have continued in the same line and focused on expanding our existing market shares or we could have probed new markets and entered new areas of activity. We chose the latter option and have consequently transformed our corporate brand identity.
In a space of 20 years, we have become a leading supplier of fruits, vegetables, poultry, seed paddy, rice, day old chicks, milk, milk products and eggs. Our operations now straddle the manufacture, the distribution and the sale of food products, directly to the consumer and to other institutions including supermarkets. Increasing business and consumer confidence since the end of the war, a burgeoning economy and growing tourism market have ensured a steady demand for our food products.
In a space of 20 years, we have become a leading supplier of fruits, vegetables, poultry, seed paddy, rice, day old chicks, milk, milk products and eggs. Our operations now straddle the manufacture, the distribution and the sale of food products, directly to the consumer and to other institutions including supermarkets. Increasing business and consumer confidence since the end of the war, a burgeoning economy and growing tourism market have ensured a steady demand for our food products.
The Company took its first steps in Agri Businesses in 1990. The Government opened seed production to the private sector and we were the first to enter this sector.
In 1989, we leased our first farm from the Maheweli Authority and entered business of food production. At that time, the competition was negligible and came mainly from the state. Since then we have acquired four farms consisting of 5,000 hectares in the Matale, Polonnaruwa and Batticoloa districts. We are currently negotiating with the state to lease farms in Anuradhapura.
Over the years, we focused on developing a high quality product and on ensuring that our products reached the consumer's table with a freshness and vitality that we all crave for. It was not long before we became an important supplier of fruits, vegetables, curd, yoghurt, eggs, chicken, seeds and agri inputs.
We have also begun to export some of our products. Our rice is exported to Australia, France, Canada and Middle East and the Company's value-added fruit is exported to Australia and Canada. Last year, exports grew by over 20%.
In 1989, we leased our first farm from the Maheweli Authority and entered business of food production. At that time, the competition was negligible and came mainly from the state. Since then we have acquired four farms consisting of 5,000 hectares in the Matale, Polonnaruwa and Batticoloa districts. We are currently negotiating with the state to lease farms in Anuradhapura.
Over the years, we focused on developing a high quality product and on ensuring that our products reached the consumer's table with a freshness and vitality that we all crave for. It was not long before we became an important supplier of fruits, vegetables, curd, yoghurt, eggs, chicken, seeds and agri inputs.
We have also begun to export some of our products. Our rice is exported to Australia, France, Canada and Middle East and the Company's value-added fruit is exported to Australia and Canada. Last year, exports grew by over 20%.
While emphasising quality and the need to retain freshness and the vitality of the food product, we also gave attention to improving farming techniques and enhancing the genetic stock.
To respond to labour shortages during harvesting, CIC introduced the 'Kamatha' mechanised threshing machine from Thailand. We became the first to launch mechanised harvesting in Sri Lanka and now over 50% of the harvesting in the country is done by way of mechanised means. The harvesting machine has a capacity of one acre in one hour, far exceeding the capacity of manual labour. Naturally, this has proved attractive to farmers from all parts of the country.
CIC also pioneered several other new features including the use of new seed paddy as a planting source for the new season. Farmers previously tended to use seed paddy from their previous crop for the new crop. The result was a progressive decline in the genetic potency of the new crop. It was only about 8% of the farmers used new seed paddy as a source for the new crop not so very long ago. Now this figure has improved to 25%.
By pioneering high quality seed paddy, CIC provided farmers with access to a more fertile plant source for their new crop which helped increase yields and resistance to pests.
To respond to labour shortages during harvesting, CIC introduced the 'Kamatha' mechanised threshing machine from Thailand. We became the first to launch mechanised harvesting in Sri Lanka and now over 50% of the harvesting in the country is done by way of mechanised means. The harvesting machine has a capacity of one acre in one hour, far exceeding the capacity of manual labour. Naturally, this has proved attractive to farmers from all parts of the country.
CIC also pioneered several other new features including the use of new seed paddy as a planting source for the new season. Farmers previously tended to use seed paddy from their previous crop for the new crop. The result was a progressive decline in the genetic potency of the new crop. It was only about 8% of the farmers used new seed paddy as a source for the new crop not so very long ago. Now this figure has improved to 25%.
By pioneering high quality seed paddy, CIC provided farmers with access to a more fertile plant source for their new crop which helped increase yields and resistance to pests.
After we took our first steps, established ourselves as a leading player and developed a market share, CIC had to design an expansion strategy.
We found that farmers lacked access to new technology, information and secure and efficient conduit to the consumer. We then took on the responsibility of providing farmers with access to technology market, information and making them an integral part of the CIC network. The idea of an 'out grower network' began to take on a new meaning.
CIC now has over 20,000 farmers as part of its out grower network. We provide the farmers with all the inputs they require and buy their outputs at market prices providing them the security that they have always craved. The products are made available to the consumer fresh and nutritious through our several distribution points.
We found that farmers lacked access to new technology, information and secure and efficient conduit to the consumer. We then took on the responsibility of providing farmers with access to technology market, information and making them an integral part of the CIC network. The idea of an 'out grower network' began to take on a new meaning.
CIC now has over 20,000 farmers as part of its out grower network. We provide the farmers with all the inputs they require and buy their outputs at market prices providing them the security that they have always craved. The products are made available to the consumer fresh and nutritious through our several distribution points.
The East was for many years the traditional homeland of the dairy industry. Thirty years of conflict though have diluted its genetic material and destroyed much of its resources. Since the end of the war the Company has been taking steps to revive the dairy industry in the East and to create new livelihoods for the multi-ethnic population, who suffered during years of conflict.
In this case too, while transferring knowledge and skills to the dairy farmer we have contributed to enhancing the genetic stock of the region. We use the 'out grower' model for milk production as well. The Company provides all the inputs for the dairy farmer and then buys back their products at competitive prices.
CIC has partnered USAID to establish milk collection centres in the East and is looking at leasing two new farms in the region, one in Muthuwella and the other in Siddapura. Our long-term goal is to re-establish the East as the heartland of the dairy industry in Sri Lanka.
In this case too, while transferring knowledge and skills to the dairy farmer we have contributed to enhancing the genetic stock of the region. We use the 'out grower' model for milk production as well. The Company provides all the inputs for the dairy farmer and then buys back their products at competitive prices.
CIC has partnered USAID to establish milk collection centres in the East and is looking at leasing two new farms in the region, one in Muthuwella and the other in Siddapura. Our long-term goal is to re-establish the East as the heartland of the dairy industry in Sri Lanka.
We anticipate that in the North horticulture will play a bigger role in agriculture. This is because the Northern farmers' techno savvy nature. We have set up two horticulture advisory units, one in Killinochchi and the other in Thinnaveli which is the agricultural heartland of the North. These two units provide advice to those using their home gardens for cultivation purposes.
We have also started experimenting with the planting of high quality banana in the North and have had good results so far. We are negotiating with the state for the lease of two farms in the North, which we propose to use for a demonstration seed farm.
We have also started experimenting with the planting of high quality banana in the North and have had good results so far. We are negotiating with the state for the lease of two farms in the North, which we propose to use for a demonstration seed farm.
CIC deals with some of the most essential items of food. Milk, milk products, eggs, vegetables, fruit and rice make up the essentials of the Sri Lankan diet. While the Company has little control over soaring food prices, we are committed to ensure the absence of food scarcities and will act with a high sense of responsibility at all times to promote and foster food security.
The Company and its shareholders derive pride from the role it is playing in uplifting rural communities and nourishing the nation. Many of our shareholders are regular visitors to our farms and never failed to encourage the management.
The Company and its shareholders derive pride from the role it is playing in uplifting rural communities and nourishing the nation. Many of our shareholders are regular visitors to our farms and never failed to encourage the management.
Through our outgrower model, the high quality inputs we provide and our commitment to 'buy back' at competitive prices, we have grown livelihoods in several rural communities in the region and provided security to these communities. The support we provide at all levels of production, especially at the time of 'buy back' have promoted security and enhanced livelihoods.
Our retail outlets bring produce directly to the consumer enhancing quality, freshness and nutritional value. This way we are able to offer high quality products at competitive prices and also offer the farmer a direct conduit to the consumer. Our retail outlets have been successful in high income urban areas and we are exploring other models in other localities that may not be as affluent.
The Company is looking at integrating tea into the products it offers. Here too, our focus will be on delivering a high quality product at a competitive price. The Company currently operates two factories and is looking to brand the CIC name locally and globally. Tea's health benefits are well-known and the Company will make use of this aspect as part of its marketing strategy.
Exports of rice continued to grow. Last year, the export of rice grew by 20%. The Company's main markets are Australia, Canada, France and USA.
CIC has focused on developing exportable varieties of rice and pioneered a red basmati in Sri Lanka. Exports of the red basmati commenced in 2010 and the product has become popular among consumers in Australia, Canada, France, Germany, the United Kingdom and the United States within a short period of time. We are experimenting with a few other varieties and hope to introduce them to the foreign consumer in the near future.
CIC has focused on developing exportable varieties of rice and pioneered a red basmati in Sri Lanka. Exports of the red basmati commenced in 2010 and the product has become popular among consumers in Australia, Canada, France, Germany, the United Kingdom and the United States within a short period of time. We are experimenting with a few other varieties and hope to introduce them to the foreign consumer in the near future.
CIC has implemented a highly successful business model with regard to the growing and processing of chicken. The Company is engaged in the production of day-old chicks, the fattening of chicken and the processing of poultry meat. The fattening process is hormone free and aimed at securing the highest nutritional value from the meat. The Company has invested in a hatchery and a fully-automated poultry farm and poultry-processing plant. The processing plant is located at our farm in Divulapitiya.
We do not use the outgrower model for poultry. CIC chicken is grown and fattened entirely on CIC farms. The chicken feed we use is hormone free and comes from our feed mill. The quality of the feed is monitored to ensure that it meets the highest standards and safety.
While chicken prices have gone up globally, CIC has managed to provide a high quality and nutritious product at an affordable price. We have managed to maintain price stability because we grow all the inputs within our farms. CIC chicken is now well-accepted in the market and has progressively begun to expand its market share. In addition to poultry meat, CIC also supplies day- old chicks and chicken feed to the local market.
We do not use the outgrower model for poultry. CIC chicken is grown and fattened entirely on CIC farms. The chicken feed we use is hormone free and comes from our feed mill. The quality of the feed is monitored to ensure that it meets the highest standards and safety.
While chicken prices have gone up globally, CIC has managed to provide a high quality and nutritious product at an affordable price. We have managed to maintain price stability because we grow all the inputs within our farms. CIC chicken is now well-accepted in the market and has progressively begun to expand its market share. In addition to poultry meat, CIC also supplies day- old chicks and chicken feed to the local market.
We are committed to supporting farming in its many manifestations. Our goal is to provide access to newer technologies, improve the literacy of farmers and to provide fresh opportunities for the farmer and their families.
The Company is conscious of the low social profile of farming and is committed to enhancing its status as a prestigious and productive vocation. We have already launched the 'Shoora Goviya' programme on Derana TV. The programme highlights the best young farmers in the country and the role they play in the current society.
The programme provides a public profile for the accomplishments of the young farmer. In this way, we honour the role that the farming community plays in ensuring that Sri Lankans have access to nutritious and quality food products.
The Company is conscious of the low social profile of farming and is committed to enhancing its status as a prestigious and productive vocation. We have already launched the 'Shoora Goviya' programme on Derana TV. The programme highlights the best young farmers in the country and the role they play in the current society.
The programme provides a public profile for the accomplishments of the young farmer. In this way, we honour the role that the farming community plays in ensuring that Sri Lankans have access to nutritious and quality food products.
From chemicals to agriculture has been a huge transformation for the Company. We have moved into a more sustainable business, are engaged in activities that are more environmentally friendly and are delivering financial value to our shareholders and social value to the community.
The Company will continue to invest in agriculture and food. Food, we know will never go out of fashion. We will increase the lands under our management, expand the range of products we supply, enhance quality and convenience and look at new areas to venture into. We have recently gone into the manufacture and supply of pulses, ice cream ingredients and fruit pulp and will seek to grow our market shares in these sectors. We will also continue to enhance the genetic stock of the areas we work in. This is a challenge in the Eastern Province, where 30 years of conflict has seen a substantial dilution of the genetic material, including the animals, fruits and other food resources.
The Company is aware of the social dimensions of Agri Businesses. While we focus on enhancing the quality and range of the food products, we also strive to improve rural economies, rural lifestyles and to provide more opportunities for those populations.
Agri Businesses remains an unexploited sector in the country. Its potential to drive other areas of the economy has not been fully-exploited. CIC is ready to grow its Agri Businesses even further and provide leadership and drive to a promising economy.
S.P.S. Ranatunga
Managing Director/CEO
20th May 2011
The Company will continue to invest in agriculture and food. Food, we know will never go out of fashion. We will increase the lands under our management, expand the range of products we supply, enhance quality and convenience and look at new areas to venture into. We have recently gone into the manufacture and supply of pulses, ice cream ingredients and fruit pulp and will seek to grow our market shares in these sectors. We will also continue to enhance the genetic stock of the areas we work in. This is a challenge in the Eastern Province, where 30 years of conflict has seen a substantial dilution of the genetic material, including the animals, fruits and other food resources.
The Company is aware of the social dimensions of Agri Businesses. While we focus on enhancing the quality and range of the food products, we also strive to improve rural economies, rural lifestyles and to provide more opportunities for those populations.
Agri Businesses remains an unexploited sector in the country. Its potential to drive other areas of the economy has not been fully-exploited. CIC is ready to grow its Agri Businesses even further and provide leadership and drive to a promising economy.
S.P.S. Ranatunga
Managing Director/CEO
20th May 2011
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