Kahawatte Plantations, a part of the Dilmah Group, has partnered with the Australian Government-funded Market Development Facility (MDF) to build on its coffee cultivation and invest further in improving its coffee processing capacity.
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 an 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.
Chairman, Dilmah Tea and Kahawatte Plantations, Dilhan C. Fernando said, “Dilmah was set up as a premium Ceylon Tea brand 40 years ago, and it has been a privilege to see it grow into a global presence.”
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.
