JAT forms subsidiary to strengthen new portfolio (Daily Mirror (Sri Lanka))

As part of a major diversification process, JAT Holdings embarked on opening up a new subsidiary to the company’s portfolio by introducing Esteem Plantations (Pvt.) Ltd.

JAT Holdings, being leaders in the production of wood coatings, already had acquired plantations of sandalwood and mahogany.

With over 25 years of experience in the plantations sector, in both, state and private entities, General Manager Dinal Samaranayake disclosed that the strength they see in JAT’s policies is regarded as one form of diversification.

The company places emphasis on sandalwood and mahogany in particular and, are today, providing the public with planting initiatives and the advantage of receiving advice and business counselling in terms of growing and managing sandalwood and mahogany trees.

Esteem Plantations takes a scientific approach when maintaining and managing plantations, both from agricultural and commercial perspectives.

There is great potential seen in Sri Lanka’s plantation sector if utilized correctly and the biggest market we see is there in the scattered properties of plot owners around the country. Sandalwood in particular is not an easy crop to plant. Therefore, with our exposure and knowledge, owners who obtain land can receive our backing from the very start. We possess the experience, expertise and interest in our plantations and we provide clients with a total business perspective whilst helping to minimize the cost for the client, Samaranayake added.

Esteem Plantations has already acquired a presence in places such as Badulla, Balangoda, Mathale, Kuruwita, Gatahetta Ayagama Kukuleganga, Mathugama and Pelawatta to name a few. Experienced field managers/supervisors provided through the company and all maintenance requirements are taken care of.

Sandalwood and mahogany are just two of the types of trees that Esteem takes care of. The company also specializes in various other kinds of trees based on the clients’ requirements, land mass, geographical area, growth viability and a number of other factors that may follow.

But the company is encouraging the growth of sandalwood in general due to a number of feasible reasons. The country’s gross domestic product (GDP) can witness a huge boost through the forestry sector alone. Forestry engagements can help bring a valuable accumulation towards the country’s revenue.

Surprisingly, 1.5 million hectares of land is available as land that can be used for agro-forestry purposes and as of now, only around 5 percent of the country’s landmass is being used for plantation purposes.

As for sandalwood, it is essential to take into notice that between 1988 to 2008, sandalwood prices had shot up 20 percent annually. Globally, investments in the forestry sector was recorded to have fallen only twice during the near history, when compared to other means of investments.

Samaranayake further relayed, The market for sandalwood is no doubt going to boom. What we emphasize is not to invest but to use your land’s availability to the maximum. That, by itself is an investment.

One good example is India. It was noted that in India, the demand for sandalwood is something close to 7000 tonnes. But only a limited amount is available. In terms of trees, India needs around 250,000 sandalwood trees per year.

We are also planning to add value for the purchase of sandalwood. A client can earn up to Rs.400,000 from one tree during the harvest period. The harvest definitely changes depending on maintenance levels and that’s where we come in, Samaranayake acknowledged.

Esteem Plantations emphasizes the aspect of the economies of scale, where it becomes apparent here.

Demand for sandalwood trees is not limited to India. Countries such as China, Taiwan as well as countries in Europe have shown demand for this plant. Sandalwood is being widely used as a major ingredient in products such as cosmetics, medicine and perfumery to name a few.

At one stage, sandalwood productions in India and Sri Lanka had been noted to be of similar nature though Sri Lankan sandalwood was noticed to acquire a yield of better quality. Esteem Plantations strives to provide its clients with the best of services, from the growing of the trees up until the client is able to receive the end benefit of it. Maintaining sandalwood specifically is not an easy feat and the proper mechanism of making sure the client yields the best from the harvest is essential.