Hayleys wins USAID Global Development Alliance Award for Sri Lanka

A ground-breaking Private Public Alliance (PPA) between the United States Agency for International Development (USAID) and the Hayleys Group has been chosen from 700 such initiatives around the world to receive USAID’s 2009 Global Development Alliance (GDA) Award.  The U.S. Government singled out this partnership as a model of how U.S. Government foreign assistance can be maximized through greater engagement with the private sector. 

The alliance with Hayleys fosters commercial agriculture in Sri Lanka’s Eastern Province.  The pilot project was launched in April 2008 and assisted farmers in areas affected by conflict to embrace innovative agricultural practices in an effort to improve their incomes. Hayleys initially introduced gherkins, jalapeno peppers and pineapples to selected locations of the project areas, facilitated technology transfer to farmers, provided material inputs on credit and provided guaranteed prices to the farmers for their agricultural produce.

At the end of this pilot project, each of the 160 participating farmers earned an average of Rs 45,000 per acre (approximately $400) as additional net income for the two-month crop cycle, a substantial supplement to subsistence farming.  Knowledge transfer and creation of market linkages helped the farmers to increase their commercial farming income through better utilization of their land resources.

USAID Chief Operating Officer Alonzo Fulgham presenting the award to Hayleys and USAID’s Sri Lanka Mission in Colombo said: “I am proud to be a part of this successstory and take this opportunity to wish USAID/Sri Lanka continuing success in bringing economic prosperity and stabilization to Sri Lanka by building such alliances.”  Since 2008, USAID/Sri Lanka, the development agency of the U.S. Embassy, has provided an estimated $4.9 million for economic development in the East through public private partnerships, leveraging over $9.6 million in private sector funding.   These partnerships have helped create 5,100 full time jobs.

Hayleys Chairman Mohan Pandithage who received the award said: “For Hayleys, this project is much more than an expansion of business; it is an opportunity to help a poorer segment of Sri Lankan society improve its living standards. When the project was launched the war was not over and both organizations took a risk in committing human and other resources to make the project a success, despite the prevailing situation.”

Rebecca Cohn, Mission Director at USAID Sri Lanka added: “I am delighted to accept this award on behalf of USAID/Sri Lanka and am very proud of our partnership with Hayleys.  This award is a testament to their dedication and commitment to their country.  USAID will continue to build many more such alliances to help create thousands of new jobs in former conflict areas ofSri Lanka.”

The success of the pilot project led to a new alliance in 2009 between USAID and Hayleys and its subsidiaries.  This Sustainable Agriculture through Commercialization (SAC) Project is expected to link 3,600 conflict-affected farmers from different regions in the Eastern Province to a commercially viable and sustainable agricultural programme that ensures a substantial increase in farmer incomes.

Through the project, Hayleys plans to buy farmer produce valued at $5 million (Rs 575 million) thus ensuring an increase of almost 50 per cent in net income per farmer, by 2012.  An initial grant of $1 million (Rs 113 million) by USAID will help to leverage nearly $3 million (Rs 323 million) in investment by Hayleys and its subsidiaries Sunfrost Limited and Hayleys Agro Farms (Pvt) Ltd. 

The SAC project will link 2,500 gherkin farmers to a global supply chain through a farmer out-grower system utilizing Hayleys’ strengths in superior manufacturing and global marketing and increased value addition to farmer produce in the Eastern Province. In addition to the links with the global market, the project will empower local agricultural producers through production and supply of high quality seed material.

The agribusiness companies within the Hayleys Group’s account for 34 per cent of Sri Lanka’s exports of fruit and vegetables and 25 per cent of the inputs in the local agriculture sector.  The Hayleys Group is the sole exporter of gherkins from Sri Lanka and the second largest in Asia, processing more than 11,000 tons a year.  This accounts for 50 per cent of the market for bottled pickles in Japan and is a major supplier to renowned international brands such as McDonalds, Burger King, Unilever and Heinz.

Globally, USAID has successfully established over 700 private sector alliances.  USAID/Sri Lanka continues to develop new partnerships to help leverage more resources for economic growth in the Eastern and Northern regions of Sri Lanka.