Monday Jan 27, 2025
Monday Jan 27, 2025
Monday, 27 January 2025 00:00 - - {{hitsCtrl.values.hits}}
Kahawatte Plantations, part of the Dilmah Group, recently partnered with the Australian Government-funded Market Development Facility (MDF) to build on its current coffee cultivation and invest further in improving its coffee processing capacity.
Sri Lanka’s Regional Plantation Companies (RPCs) have been exploring diversification into coffee cultivation over the past few years. Demand for Sri Lankan coffee far exceeds supply, particularly in the domestic market, and RPCs’ shift towards coffee production has the potential to address this. It also presents a unique opportunity for RPCs to tap into the lucrative specialty coffee export market. The global specialty coffee is thriving, and 2024 saw an increase in specialty coffee prices due to volatility in major coffee producing markets.
Dilmah Tea and Kahawatte Plantations Chairman Dilhan C. Fernando said: “Dilmah was established as a premium Ceylon Tea brand 40 years ago, and it has been a privilege to see it grow into a global presence. As we embark on taking Ceylon Coffee to the world, we are humbled to partner with the Australian Government’s Market Development Facility in furthering our journey of innovation and opportunity.”
The Kahawatte-MDF partnership will establish a coffee farmer outgrower model (contract farming) in Nawalapitiya and a centralised coffee processing facility. This will support Kahawatte to source coffee from smallholder farmers in and around Nawalapitiya and develop a specialty coffee product line for key export markets.
The farmers, many of whom currently sell ad-hoc to buyers, stand to gain access to new markets, receive stable and market-based prices for their coffee, and support in adopting sustainable farming practices. The partnership will increase the prospects for Kahawatte to brand Sri Lankan coffee in prominent markets, including Australia, leveraging sister company Dilmah’s strong international presence.
At the partnership signing, Australian Deputy High Commissioner in Sri Lanka Lalita Kapur noted, “Australia is working with Sri Lankan partners to identify opportunities for economic growth and catalytic investment. This new partnership with Kahawatte is particularly exciting, and one that builds on the support Australia has provided to the coffee sector over several years. We believe that together we can help Sri Lankan coffee producers expand their consumer base and reach greater heights.”
This initiative is poised to increase the volume of coffee produced in Sri Lanka and position the country as a notable player in the specialty coffee sector, driving economic growth and creating new opportunities for local communities.
MDF Country Director Maryam Piracha said: “The Sri Lankan specialty coffee industry is at a critical juncture with the entry of large plantation companies, such as Kahawatte, which can drive volumes due to the available opportunity. MDF has invested significantly with partners in the sector; it is important that we work with companies such as Kahawatte to support them in navigating the specialty coffee markets both locally and internationally.”
