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Sri Lanka's Mackwoods Builds on its Reputation as Tea Pioneer
The Tea & Coffee Trade Journal / May 2009

By Larry Luxner

COLOMBO, Sri Lanka — With annual sales of $60 million, Mackwoods Ltd. makes everything from medical equipment to mango juice, and has interests in a variety of business sectors ranging from software development to swanky beach hotels.

But tea is what made Mackwoods famous. Established in 1841 by William Mackwood, this privately owned empire ranks as the second-oldest company in Sri Lanka.

"Mackwoods is one of the pioneers of the tea industry," said Mackwoods' 43-year-old chairman, Chris Nonis. Like many other members of Sri Lanka's business elite, Nonis is descended from Portuguese Catholics.

"My grandfather, N.S.O. Mendis, bought the company from the Mackwood family in 1956," he told The Tea & Coffee Trade Journal during an interview in Colombo. "He was the first Sri Lankan to make a successful takeover bid in the City of London. Since then, Mackwoods has remained in our family."

Nonis said that his mother, Sriyani Nonis, "was the only female in Sri Lanka to head a plantation company." When she died in 2005, Nonis — who had spent 28 years in England — returned to take over leadership of Mackwoods.

Some 20 companies currently fall under the Mackwoods umbrella, which consists of five sectors: healthcare (pharmaceuticals, medical and scientific equipment); agribusiness (tea, rubber and oil palm); import/export (industrial chemicals, essential oils, organic food products and fibers); IT and computer software, and finally leisure tourism.

The group manages 27,000 acres of crops and employs 9,500 people — of which 4,500 work in tea. Each year, Mackwoods produces 4.0 million kg of rubber and 3.8 million kg of tea. The plantation sector accounts for $18 million in sales, with tea contributing 40% of that, making it the company's single biggest revenue-earner.

"We export predominantly in packets because our advantage as a 167-year-old company is our brand name and our standards," said Nonis. "We are one of the world's few companies that still does an unblended, single-estate tea in a bag. That's a real challenge.

"Also, our loose-leaf teas are single-estate, where you can trace the origin of the tea. The end user deserves a good-quality tea at an affordable price. And because we are primary producers, we can give them just that."

Nonis said his major markets are Western Europe — mainly Great Britain — and Japan, while Russia and the Gulf states buy primarily in bulk.

"We're also looking to expand in the United States because we have such a good group of Americans who are fans of our tea," he said, adding that "we're looking at the moment to identify some U.S. distributors. Even though we are a large producer, our real forte is single-estate tea. That's why we have not gone into the larger markets."

Nonis is particularly proud of his sponsorship of tea-tasting events at operas, particularly in England.

"We started that about six years ago," he said. "We take tea to a finer art form. The character of each tea is brought out by the operetta being performed, from Mozart to Verdi."

Mackwoods' tea processing takes place in Labookellie, located at an elevation of 1,500 to 2,000 meters above sea level, in the center of Sri Lanka's hill country.

Sitting on a 1,800-acre estate, this was the first black tea factory in Sri Lanka to achieve ISO 9001:2000 status. It's also a tourist attraction, receiving 3,200 foreign visitors and 6,000 local visitors per month.

At Labookellie, tourists watch a short video about Mackwoods' history, then proceed to a nearby tea garden to see how tea is plucked. After that, they're led on a factory tour to watch the various stages of withering, rolling, fermentation, drying, grading and packing.

Then it's back to the visitors' center, where visitors are encouraged to sample a wide variety of Mackwoods tea products and — hopefully — buy some of those products to take home with them.

These include a full line of single estate loose-leaf and unblended teas, as well as a dozen flavored teas (apple, blackcurrant, camomile, cinnamon, earl grey, lemon, mango, mint and strawberry) and five infusions (camomile, peppermint, ginseng, hibiscus, rosehip and ginger).

But what really catches visitors' attention is the company's line of connoisseur teas in very expensive-looking mahogany boxes.

Mackwoods' 160th Anniversary Blend consists of silver tips (plucked from only the bud of the Camellia sinensis variety) and Orange Pekoe. The Queen's Golden Jubilee Blend is a mix of golden tips and other blends. In Tokyo, the 160th Anniversary Blend retaills for $90, and the Queen's Jubilee for $200.

The company's most expensive product is a silver-plated, handmade canister set with semi-precious stones from Sri Lanka. Retailing for $250, it contains tea from 100-year-old bushes.

"We produce the boxes ourselves. Previously, we outsourced them," he said. "The sets are handmade in Sri Lanka by silversmiths who have been doing it for generations. It shows Sri Lanka at its best in terms of the finest tea as well as fine craftsmanship."

Nonis said his company will soon open its own "Heritage Center and International Tea Museum" at Labookellie. It already runs Taprospa Resorts, a luxury chain of restored colonial mansions nestled within the company's vast tea, rubber, coconut and palm oil plantations. The flagship of this series of plantation guest houses is Taprospa Culloden Villa, a luxury property set in the middle of the 4,300-acre Culloden rubber and palm-oil plantation, and reachable mainly by helicopter.

Indeed, if Nonis has any doubts about Sri Lanka's economic future, he's keeping them to himself.

"Despite all the problems going on, we still managed to achieve GDP growth of 6% last year," he told us. "We all look forward to an inclusive peace process. Little by little, we're heading towards that direction."

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