Cargills targets Eastern lands for cultivation

by Ashwin Hemmathagama in Norochcholai

In order to cope with the growing demand for fresh vegetables from its super market chain, Cargills (Ceylon) PLC (CSE: CARG) has embarked on a project to purchase vegetables and fruits grown in the Eastern province.
CARG currently owns the largest chain of retail food outlets in the country. It plans to increase the number of outlets from 124 to 150 by the end of this year, increasing the demand for locally produced vegetables and fruits.
Eastern province happens to be a targeted zone for this expansion, with an investment of Rs. 500 million. CARG encourages more farmers in the region to grow quality vegetables and fruits. These agro products are also ensured a higher buying price by CARG, eliminating middle.
Explaining company plans to a team of farmers from Eastern province, CARG Director (Human Capital, Youth Development and Rural Network) Dr. Sunil Jayantha Nawaratne said, enhancing youth skills, reducing regional disparity and cost of living are the company’s main objectives.
“Five years ago, we bought 2 tons of agro products daily which has increased to 50 tons. All these products are grown locally and farmers are ensured of a selling price which is 10 - 20 per cent higher than the rest. In return, this move has enabled us to provide quality vegetables and fruits at a cheaper price to our consumers,” he pointed-out.
CARG intends setting up two super market outlets in Trincomallee, followed by four in Batticloa and Ampara Districts.
“The new outlets are expected to open in the coming months. So we are looking at developing a strong supply chain. Forty five farmers from East, West and the North Central Province participated in the educational and familiarisation tour that enabled to experience farming conditions in areas such as Thambuttegama and Norochcholai. They also witnessed vegetable sorting processes at collection centres. This is a very good experience for them and they have shown an interest to develop farm lands using cultivation methods and technology, witnessed during study tour. Most importantly these participants would ultimately become suppliers to Cargills,” explained CARG Deputy General Manager (Agri Biz) Haridas Fernando.
CARG recorded a 27.1 per cent increase in its turnover (from Rs. 14.1 million to Rs. 17.9 million) during the FY 2007. Profits before tax has been Rs. 394.9 million and the group profits after tax attributable to the shareholders was Rs. 262 million, which is an increase of 62 per cent over the previous year’s Rs. 162 million during this period.