View source for Tobacco Industry Country Profile – Sri Lanka

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==Sri Lanka==
Sri Lanka is an island in the Indian Ocean with a population of 20.2 million. A country with a predominantly rural population distribution (77.4%), the average Life Expectancy at Birth is 74.9 years. With a literacy rate of 93.2% and universal free health and education, the country reports a Human Development Index of 0.757.<ref name = CensusReport2012> Department of Census and Statistics, [http://www.statistics.gov.lk/PopHouSat/CPH2011/index.php?fileName=FinalReportE&gp=Activities&tpl=3 Census of Population and Housing, 2012], 2012, accessed November 2016</ref> It is a Lower Middle Income Country with a GDP Per Capita of USD 3,924. Known as an agriculture based country in the past, Sri Lanka is currently showing a downward trend in agricultural activities, with only 7.9% contribution to the country’s GDP. As of 2016, 56.6% of the GDP was generated via services, with ‘Industry’ following second, contributing 26.2%. From 1977, Sri Lanka has taken an ‘open economy’ approach, generating a conducive environment for foreign investors and industries.<ref>Central Bank of Sri Lanka.  [http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/statistics/other/Socio_Econ_Data_2016_e.pdf Sri Lanka Socio-economic data 2016], June 2016, accessed March 2017</ref><ref>World Bank. [http://siteresources.worldbank.org/INTSRILANKA/Resources/293961LK0revised.pdf Sri Lanka Development Policy Review], 08 December 2004, accessed March 2017</ref> 

In the period from 1505 to 1948, Sri Lanka was consecutively invaded by Portuguese, Dutch and the British. Tobacco cultivation was first introduced by the Portuguese and it is speculated that they also introduced the habit of tobacco smoking.<ref> C.G.Uragoda, A History of Medicine in Sri Lanka. Colombo: Sri Lanka Medical Association, 1987</ref> [[British American Tobacco (BAT)]] first established its branch in Sri Lanka in 1906 and the [[Ceylon Tobacco Company PLC (CTC)]] was incorporated in 1932.<ref name = amba> Amba Research Private Limited. [https://cdn.cse.lk/cmt/upload_report_file/460_1398260076495.pdf Ceylon Tobacco Company PLC], 31st October 2013, accessed March 2017</ref> ’Ceylon’, the term British used as the name of the country continues to be the name of the tobacco company (Ceylon Tobacco Company), established in the British colonial era.<ref name = CTCAnnualReport2015> Ceylon Tobacco Company, [http://www.ceylontobaccocompany.com/group/sites/sri_9pmjn9.nsf/vwPagesWebLive/DO9PMKN2/$FILE/medMDA7UEUE.pdf?openelement Ceylon Tobacco Company Annual Report 2015], 2016, accessed November 2016</ref>

[[Image:countNew.jpg|500px|thumb|right| Image 1: Trends of Tobacco Smoking Among Males in Sri Lanka<ref name = ADICspotsurveyReport/>]]

===Tobacco Smoking in Sri Lanka===
According to the 2015 STEPWise approach to Surveillance (STEPs) Non-Communicable Disease risk factor survey results by the World Health Organization and the Sri Lankan Ministry of Health, proportion of current smokers among those aged between 18 and 69 years was 15.0%. The daily smoking prevalence rate was 10.2%. The current tobacco smoking prevalence among men was 29.4% and 0.1% among women.<ref name = STEPS survey Report> Ministry of Health, Nutrition and Indigenous Medicine, Sri Lanka. [http://www.who.int/chp/steps/STEPS-report-2015-Sri-Lanka.pdf Non-communicable Disease Risk Factor Survey, Sri Lanka 2015], Colombo: Ministry of Health/World Health Organization, 2016, accessed November 2016</ref> 

Spot Survey, conducted biannually by the [http://www.adicsrilanka.org/ Alcohol and Drug Information Centre] (ADIC), on tobacco smoking trends of males over the age of 15 years, reports a steady decrease of smoking prevalence from the beginning of the 1990s to 2015 (Image 1).<ref name = ADICspotsurveyReport> Alcohol and Drug Information Centre, [http://www.adicsrilanka.org/wp-content/uploads/2015/11/Spot-Survey-July-2015.pdf ADIC Spot Survey July 2015], 2016, accessed November 2016</ref>

According to the same survey, main tobacco product smoked was manufactured cigarettes with a proportion of 91%. Bidi (or Beedi), the home industry based hand-rolled smoking product, was consumed by only 8%.<ref name = ADICspotsurveyReport/> Even though the CTC claims that 40-45% of tobacco smoking market is comprised of bidi smokers during the year 2009 to 2015 period, many local studies conducted in the same period reported prevalence rates lower than 10%. More details can be found in [[Industry Arguments: Increase of Beedi Consumption]].<ref name = CTCAnnualReport2015/>

=== Burden of Tobacco Use ===
The death toll of tobacco in Sri Lanka estimated in the year 2015, is 222 deaths per week. Thus, 1 in every 10 Sri Lankan adult deaths is caused by tobacco.<ref name = TheTobaccoAtlas2015> M.Eriksen, J.Mackay, N.Schulger, et.al.[http://www.tobaccoatlas.org/ The Tobacco Atlas. Fifth Ed.], Atlanta: American Cancer Society, 2015, accessed November 2016</ref> 
The reported annual revenue of the CTC in 2015, Sri Lankan Rupees (LKR) 106.5 Billion, (the equivalent of approximately 722 Million US dollars) indicates the economic burden of tobacco on Sri Lankan  households.<ref name = CTCAnnualReport2015/> Local evidence suggests some rural low income households spend around 40% of their income on tobacco.<ref> V.De Silva, D.Samarasinghe, R.Hanvella. Association between concurrent alcohol and tobacco use and poverty. ''Drug and Alcohol Review''. 2011,30:69–73 </ref> According to the Tobacco Atlas, “a smoker in Sri Lanka would have to spend 15.2% the of national median income to purchase 10 of the cheapest cigarettes to smoke each day!”.<ref name = TheTobaccoAtlas2015/>


== Tobacco Industry in Sri Lanka==
===Tobacco Companies & Market Shares===
The [[Ceylon Tobacco Company PLC (CTC) | CTC]] has a monopoly over the cigarette market in Sri Lanka. CTC is also directly involved in the complete process of production of cigarettes to the local market; namely, tobacco cultivation, manufacturing of cigarettes and distribution to retailers. It remains a subsidiary of [[British American Tobacco (BAT) | BAT]], operating via its local counterpart British American Tobacco Holdings (Sri Lanka). According to the 2015 Annual Report of the CTC, [[British American Tobacco (BAT) | BAT]] owns 84.13% of shares of CTC.<ref name = CTCAnnualReport2015/>   
According to a report from World Bank in 2003, CTC owns 99% of the manufactured cigarette market in Sri Lanka with the remaining 1% comprising of imported cigarettes.<ref name = EconomicsofTobaccoControl> N.Arunathilake, M.Opatha, [https://openknowledge.worldbank.org/handle/10986/13626 The Economics of Tobacco in Sri Lanka.], ''Economics of Tobacco Control'' Paper No. 12, Tobacco Free Initiative, World Health Organization, 2003, accessed November 2016</ref> According to a report by the John Keells Stock Brokers (Pvt) Ltd quoting the CTC in 2008, CTC owns 96% of the cigarette market, the remaining 4% comprising of illicit cigarettes<ref name=JKH>S Rajasekaran. [http://www.jksb.keells.lk/newjksb/research%5CCeylon%20Tobacco%20Company%20Plc%20-%20Sep%202008.pdf Ceylon Tobacco Company (CTC): Corporate Update], September 2008, accessed March 2017</ref> According to the same report;
::“The Sri Lankan cigarette market is on a decline, with the pace of decline escalating  because  of  the  implementation  of  the  National  Alcohol  and Tobacco Act in December 2006 which prohibits smoking and drinking in enclosed  public  places  such  as  restaurants  and  social  clubs  and  in  public transport and as well as continuous excise led price increases.”<ref name = JKH/>

A report by the Amba Research Private Limited in 2013 also reports a decline in the cigarette market in Sri Lanka. According to them, the main reasons for the observed decline are the rising cost of cigarettes driven by increased tax and growing health awareness about the adverse health effects of smoking. The report also explains the increased sales volumes in 2010-2011 period was due to the opening of country’s Northern and Eastern Market after the ending of the war.<ref name = amba/> 

===Tobacco Cultivation & Manufacturing===
Almost 100% of the tobacco used for cigarette manufacturing in Sri Lanka is cultivated in the country, which accounted for approximately 3000 tons of tobacco in 2014.<ref name = CTCAnnualReport2015/><ref>Sri Lanka Excise Department, [http://www.excise.gov.lk/web/images/stories/downloads/annualreports/EXCISE%20DIPARTMENT%20PERFORMANCE%20REPORT%202014.pdf Sri Lanka Excise Department Performance Report 2014], Colombo: Sri Lanka Excise Department, 2015, accessed November 2016 </ref> Even though CTC includes tobacco farmers to the livelihoods it generates, tobacco farmers are not directly employed by the CTC.<ref name = CTCAnnualReport2015/>  

CTC operates via two factories; the Colombo Factory and the Green Leaf Threshing Plant in Kandy.<ref name = CTCAnnualReport2015/> According to the [http://www.srilankabusiness.com/exporters-directory/manufactured-tobacco-exporters-in-sri-lanka.html Sri Lanka Directory of Exporters], there are three other tobacco manufacturing companies in Sri Lanka<ref name = EDB/>; 
*United Tobacco Processing Pvt Ltd 
*Thansher and Company 
*Agio Tobacco Processing Company Pvt Ltd


===Distribution, Sales & Profits===
According to the CTC, its cigarettes are distributed via 16 ‘exclusive distributors’. The network of retailers is reportedly 72,000. CTC implements a trade loyalty programme named ''Abhisheka'' to reward retailers selling high numbers of cigarettes.<ref name = CTCAnnualReport2015/> 
CTC’s reported profits (after tax deductions) in the year 2015 was slightly more than LKR 10.5 Billion (10,550,913,000), which approximately amounts for USD 69 Million.<ref name = CTCAnnualReport2015/>  

===Role in the Economy - Tax, Exports & Employment===
====Tax====
The contribution to the government tax revenue by the CTC in 2015 was 7%.<ref name = CTCAnnualReport2015/> The details on tobacco tax and related issues can be found under the key topic [[Category:Tobacco Tax and Pricing Related Issues]].

====Exports====
CTC exports cigarettes, which contributes approximately 1% to its overall annual revenue.<ref name = CTCAnnualReport2015/>  According to the Sri Lanka Export Development Board, CTC also exports unmanufactured tobacco.<ref name = EDB>Sri Lanka Export Development Board. [http://www.srilankabusiness.com/exporters-directory/manufactured-tobacco-exporters-in-sri-lanka.html Sri Lanka Directory of Exporters], 2017, accessed March 2017</ref> 
[http://www.srilankabusiness.com/exporters-directory/manufactured-tobacco-exporters-in-sri-lanka.html Sri Lanka Directory of Exporters], also lists the following as exporters of tobacco products; <ref name = EDB/>
*United Tobacco Processing Pvt Ltd – exports cigarettes and tobacco cuts
*Thansher and Company – exports cigars
*Agio Tobacco Processing Company Pvt Ltd – exports semi-manufactured tobacco<ref>Royal Agio Cigars. [http://www.agiocigars.com/en/the_organisation1.html The Organisation: Agio Cigars in Sri Lanka], undated, accessed March 2017</ref>

====Employment====
Even though CTC claims they are generating more than 181,000 livelihoods, as of 2015, the number of permanent employees in CTC was 238 and only 55 others were under direct contract.<ref name = CTCAnnualReport2015/> The number of employees in the other tobacco companies operating in Sri Lanka are;
*United Tobacco Processing Pvt Ltd - 1875.<ref>United Tobacco Processing Pvt Ltd. [http://www.jcortes.com/craftsmanship/factories/sri-lanka Factories], undated, accessed March 2017</ref>
*Thansher and Company - between 250-499.<ref> Kompass International. [http://lk.kompass.com/c/thansher-and-company/lk004179/ the Thansher and Company], undated, accessed March 2017</ref>
*Agio Tobacco Processing Company Pvt Ltd – 1800<ref> European Chamber of Commerce of Sri Lanka. [http://www.eccsl.com/memdetail.asp_CompName=AGIO+Tobacco+Processing+co.+%28Pvt%29+Ltd..html Agio Tobacco Processing Co. (Pvt) Ltd.], undated, accessed March 2017</ref>

===Social Investments===
CTC operates its social investments under a subsidiary named [[Outreach Projects (Guarantee) Limited]]. The reported social investments of the CTC in the year 2015 is LKR 47 Million.<ref name = CTCAnnualReport2015/>  
For further details on social investments of CTC please visit the pages under [[Category:Corporate Social Investments | Corporate Social Investments]];
[[Sustainable Agriculture Development Programme (SADP)]] | [[SADP Plus]] | [[SADP Lite]] | [[Gangaramaya Temple Wesak Zone]] | [[Na Sevana Community Development Project]].

==TobaccoUnmasked Resources==
Other relevant TobaccoUnmasked entries:
*[[Ceylon Tobacco Company PLC (CTC)]]
*[[British American Tobacco (BAT)]]

==External Resources==
*[http://www.adicsrilanka.org/ Alcohol and Drug Information Centre]
*[http://www.ceylontobaccocompany.com/ Ceylon Tobacco Company]
*[http://www.jcortes.com/ United Tobacco Processors]
*[http://tobaccotactics.org/index.php?title=Sri_Lanka-_Country_Profile Sri Lanka Country Profile – Tobacco Tactics]

== Notes ==
<references/>

[[Category:Tobacco Companies]]
[[Category:Influencing Policy]]
[[Category:Marketing and Promotions]]
[[Category:Tobacco Cultivation]]
[[Category:Corporate Social Investments]]