Insight on Sadaharitha’s Madagascar Vanilla Project!

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In Sri Lanka, the commercial plantation industry and related investments suffer from inadequate regulation, leading to numerous challenges, including fraud. This regulatory gap has resulted in a proliferation of misleading content on social media and numerous scams, tarnishing the industry's reputation.

Consequently, even legitimate companies often find themselves wrongly accused of being fraudulent. This lack of proper oversight harms genuine businesses, erodes investor confidence, and hinders the industry's growth.

Social Media Posts

Recent social media posts allege that Sadaharitha Plantations is involved in financial fraud by falsely claiming to have a vanilla plantation in Madagascar, thereby deceiving potential investors.

The posts question the legitimacy of a commercial plantation project in Sri Lanka and state that Sadaharitha does not own any vanilla plantations in Madagascar; therefore, the Sri Lankan investors who had invested in the vanilla plantations of Sadaharitha in Madagascar are losing money due to this alleged fraud.

FB | Archived

Several other users also shared these posts, as seen here and here.

We decided to do a fact-check on this.

Fact Check

We first looked at the type of investment options advertised by Sadaharitha plantations regarding Sadaharitha’s Golden Vanilla project in Madagascar. Some of these posts can be seen here, here and here, which mentioned 4 – 11-year investment options.

Therefore, we contacted several stakeholders and reviewed online sources to gain more insights into Sadaharitha’s Golden Vanilla project.

Company Registration:

Sadaharitha Plantations, a premier company in commercial forestry, is registered in Sri Lanka under the company registration number - PB 3579. The company's registration details are available on the Department of Registrar of Companies and match the information provided by Sadaharitha Plantations.

Interview with Managing Director:

Sathish Nawarathna, Managing Director of Sadaharitha Group of Companies, stated that the company was founded in 2002 and has been operating in Sri Lanka for over two decades. They grow agarwood, mahogany, vanilla, and other commercially valuable plants in Sri Lanka.

The Madagascar vanilla and palm trees plantation project began in 2022 and covers over 5,000 acres in Ambohitralanana, Madagascar. The project is registered as Sadaharitha Plantations Madagascar Limited, and some Sri Lankans have been sent to work there.

Mr. Nawarathna provided registration documents (Registration in Madagascar) for the plantation. He further said that in addition to vanilla, they also cultivate palm trees on the Madagascar plantation.

Also, on the occasion of Sadaharitha marking its 20^th anniversary in 2022, a news article about the company mentioned the investment of a 5,500-acre vanilla and oil palm plantation in Madagascar, as seen here. Archived

Why shift towards Madagascar Vanilla Cultivation?

Madagascan vanilla is considered one of the highest-quality vanillas in the world. It is known for its rich and creamy flavour, with floral and fruity notes. The unique warm and humid tropical climate with consistent rainfall and soil conditions in the Madagascar region is ideal for growing vanilla beans. Usually, plants start producing their first yield after three years of planting and continue producing for 12-14 years. More on this here.

A Sadaharitha Employee in Madagascar: To get further details regarding the plantation's current operations, we contacted an executive officer from Sadaharitha, currently residing in Madagascar.

He added that the first set of vanilla plantations related to this project is expected to yield in around one and a half years and be sent for production. This is in line with the minimum return period on investments (due in 2026, 4 years starting from 2022) mentioned in Sadaharitha's promotions.

The Madagascar executive went on to say that the majority of the labour force is composed of Madagascar nationals and that around 13 Sri Lankan nationals were working alongside 80 local staff members from Madagascar. He also provided photos and a video of the plantation.

Photos

Below is a video of the vanilla plantation in Madagascar.

Furthermore, we inquired about the production setup for the expected yield since the footage didn't show any production facility. He said that there are plans to set up their own production facility in the future.

We also contacted the country representative for Sadharitha Plantation in Madagascar, who confirmed the details and added that the total plantation area covers approximately 5,000 acres. Of this, around 3,500 acres are dedicated to palm oil cultivation, while 600-700 acres are currently used for vanilla cultivation. The first phase of vanilla cultivation began in mid-2022, with the first harvest expected to be yielded by the end of 2025. After the first harvest, the vanilla plants are expected to yield annually for up to 11-12 years, the typical lifespan of a vanilla plant. The representative assured that investors who invested in 2022 would receive the promised profits in 2026.

Geographical Verification:

Using Google Maps and Google Earth, it was confirmed that Ambohitralanana is a town and commune in northern Madagascar, part of the Antalaha district in the Sava Region.

Further details from Google Maps indicate that Sadaharitha Madagascar Limited is located in Ambohitralanana, Antalaha district, and the location is marked below.

The Sadaharitha Plantation's website states that Sadaharitha has invested in a vanilla plantation covering thousands of acres. The plantation focuses on high-quality, organic vanilla known for its distinct flavour and aroma and high levels of vanillin. The plantation is managed under strict guidelines to ensure sustainability and the highest quality of vanilla production. The web content can be reached here.

Inquiries with Local Authorities:

Police Media Division: No complaints regarding any financial fraud from Sadaharitha's Madagascar project have been received by Sri Lanka police so far.

Central Bank of Sri Lanka (CBSL):

The Central Bank of Sri Lanka spokeswoman confirmed that the CBSL does not regulate plantation projects or related investments and that no company named "plantations" is registered with the Central Bank.

The spokeswoman warned about the risks of plantation-type investments, especially given past issues with pyramid schemes, and mentioned ongoing discussions to bring such investments under Central Bank regulation.

P.S. In this fact check, we have only explored the Sadaharitha vanilla plantation project in Madagascar, which is not related to their other plantation projects in Sri Lanka.

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Conclusion:

There is no substantial evidence to support the claims that Sadaharitha Plantations is involved in a scam concerning its Madagascar vanilla plantation project. The company is officially registered and has provided documentation and media evidence of its operations. Geographical verification confirms the plantation's location, and additional details from the company's website support the legitimacy and quality focus of the project.

Additionally, no complaints have been reported to the police regarding this project so far, and the minimum investment period of 4 years for the project, which started in 2022, is due in 2026.

However, potential investors should exercise caution and conduct thorough due diligence before making investment options related to plantation-type investments. None of these investment products are registered with the Central Bank of Sri Lanka.