Bangladesh tea prices up at weekly auction

DHAKA (Reuters): Tea prices in Bangladesh rose nearly 1% at the weekly auction on strong demand for quality leaf despite a higher volume on offer.

 

Bangladeshi tea fetched an average of 209.34 taka ($2.60) per kg at the weekly auction on Tuesday, compared with 207.13 taka in the previous sale, the National Brokers said.

 

There was strong demand for quality tea and buyers were ready to pay premiums although supplies were higher than last week, a senior National Brokers official said.

 

About 15% of the 2.82 million kg offered at the sole auction centre in Chittagong remained unsold. In the previous auction, 9% of the 2.40 million kg on offer was unsold.

 

Bangladesh’s tea output rose nearly 27% last year to a record 85 million kg, a harvest that was seen as being big enough to make imports unnecessary.

 

The south Asian country was the world’s fifth-largest tea exporter in the 1990s, but is now a net importer due to a surge in domestic consumption.

 

Bangladeshi buyers have imported tea in bulk from India, Thailand and Malaysia, contributing to a glut in the domestic market and reducing demand at auctions, industry insiders said.

 

Daily Ft, 25th August 2017.

IPS study reveals anomalies in living wage for tea estate workers

According to a study by the Institute of Policy Studies (IPS) the estimated living wage (a little more than the minimum pay rates needed to let workers and their families lead a decent life) for the estate workers in the tea plantation industry in Sri Lanka was Rs. 21,585 in December 2015 whereas the prevalent wage at the time was only Rs. 16,971. 

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With the wage revisions in October 2016, this gap narrowed significantly with the living wage estimate standing at Rs. 21,866 and the prevalent wage being Rs. 19,021. Due to high inflation level in July 2017, the estimate of the living wage increased to 23,314 while the prevalent wage remained at Rs. 19,086, widening the gap once again. 

 

This study marked the start of a journey towards paying the workers in the estate sector a living wage by estimating a living wage for the tea sector in the country, which accounted for 12.3% of total exports in 2016 in Sri Lanka. Unlike the minimum wage, a living wage is not legally enforced.

 

The findings from the IPS study were revealed at the Stakeholder Validation Workshop held on the Living Wage Study for the Estate Sector conducted by Research Fellow, Manoj Thibbotuwawa, Research Fellow, Nisha Arunatilake and Research Economist, Priyanka Jayawardena. The workshop, organised by the IPS, Global Living Wage Coalition (GLWC), and Fairtrade International (FLO) was held on 24 August at the IPS Auditorium, with the participation of a wide range of stakeholders, including representatives from the Regional Plantation Companies (RPCs), estate sector Trade Unions and policymakers. 

 

Presenting the findings of the study, Dr. Thibbotuwawa noted that the real wage in the tea estate sector was the lowest when compared to rubber, coconut, and paddy sectors. On a positive note though, he noted that real wage has increased at a higher rate than the inflation, favouring the employees and the daily wages of RPC workers are much better than other key industries in the informal sector.

 

He also pointed out that the wage was not the only factor that has determined the low living standards in the estate sector. Poor financial management of the employees also contributed to the poor living conditions that confront the estate sector workers. 

 

Meanwhile, Michelle Bhattacharya, Coordinator of the GLWC (partner in the study), pointed out that making sure a workers’ wage is enough to sustain himself and his family is of paramount importance to social economic progress. 

 

The presentations were followed by an engaging Q&A session where the stakeholders raised issues that were of concern to them. Expressing his views, Head of the Planters’ Association which represents the RPCs, Roshan Rajadurai, pointed out that Sri Lanka pays the highest wages to the estate workers, compared to other major tea producers, such as Kenya and India. 

 

The IPS research study estimated a living wage for the estate workers in the tea plantation industry in Sri Lanka in December 2015, using the Anker methodology. The methodology estimated the per capita cost of a basic, but decent, quality life style, which includes food, housing, clothing and footwear, health and education, other essential costs and unforeseen contingencies. This benchmark was compared with the prevailing wages in the tea industry while highlighting the importance of considering the economic aspects such as productivity, sustainability and competitiveness of the industry as well. 

 

It is hoped that the findings of this study will be useful in identifying the bottlenecks in improving living standards for workers by collaborating with all stakeholders concerned both within Sri Lanka and abroad. 

 

Daily Ft, 28th August 2017

All-time record price for Alma Tea Factory

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An invoice of Broken Orange Pekoe (BOP) grade offered under the Udapussellawa category at the tea auctions held on 15 August offered through the Alma mark realised an all time record price of Rs. 720 per kg. This line was purchased by M/s Stassens Exports Ltd. and marketed by M/s Forbes & Walker Tea Brokers Ltd. This factory is situated at an elevation of 1,450 m above sea level and is managed by Nuwara Eliya Valley Plantations Ltd. 

 

Daily Ft, 21st August 2017.

Tea auction sees good demand

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Tea auctions this week had good demand, tea brokers said yesterday with a total of 7.5M/kgs coming under the hammer with positive demand from the Middle East. 

 

Ex-Estate offerings totalled at 0.9M/kgs, Forbes and Walker said in their weekly tea statement. Quality of teas from the Western, Nuwara Eliya and Udapussellawa Districts showed no significant change whilst teas from the Uva Planting Districts were improved with a small selection of teas from the Malwatte Agro Climatic Region possessing seasonal quality/flavour. 

 

Best Western BOPs declined Rs.20/- per kg whilst the corresponding BOPF were irregular following quality. BOP’s in the below best category declined Rs.10-20/- per kg whilst the plainer sorts were mostly firm. Corresponding BOPF which commenced at easier rates firmed up as the sale progressed. 

 

Nuwara Eliya’s – BOP’s were irregular following quality whilst the BOPF declined Rs.20/- per kg. Udapussellawa’s were irregular and barely steady whilst Uva’s gained Rs.20/- per kg with prices for the seasonal teas fluctuating following quality and special inquiry.

 

CTC teas continued to sell well with select invoices in the Mid Grown category appreciating following special inquiry. There was fair interest from shippers to CIS whilst shippers to UK and the Continent were more active on select improved teas.

 

Low Growns comprising of 3.7M/kgs in the Leafy/ Tippy catalogues came up for sale this week. There was good demand particularly for the well-made teas. In the Leafy catalogue better BOP1/OP1’s were fully firm to dearer whilst others were mostly irregular.

 

Better OP/OPA’s too commenced around last levels but gained Rs.10-15/- per kg towards the close. At the lower end however poorer stalky varieties were irregular and were often lower. PEK/PEK1’s too were mostly firm barring a selection of below best teas which were irregular.

 

In the Tippy catalogue FBOP/FF1’s were fully firm to dearer particularly for the improved below best sorts. At the lower end too cleaner teas gained whilst the poor leaf sorts were easier. In the Premium catalogue better made teas were fully firm to dearer whilst others were irregular following quality. There was good demand from shippers to CIS, Turkey, Dubai, Libya, Kuwait and Saudi Arabia.

 

Daily Ft, 19th August 2017

Pothotuwa Tea Factory achieves all-time record price for BOPF grade

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Pothotuwa Tea Factory, situated in Beralapanatara – Deniyaya, achieved an all-time record price of Rs. 845 for a BOPF grade at the weekly tea auctions held on 1 August. This line of tea was marketed by Forbes & Walker Tea Brokers Ltd. Pothotuwa Tea Factory established in 1989 is owned and managed by Anil Alwis and this tea factory is a leading producer of high quality Ceylon Tea.

 

 

Daily FT- 04th August 2017

PM urges tea industry to think outside the cup


Outlines importance of focusing on new lifestyles, supply chain systems, food technologies and sales techni

ques to conquer new markets 

Insists if investments are insufficient locally Govt. will allow investors from other regions

Tea consumption in the UK decreases while it is growing in India and China 

Asks TRI to let the industry grow as they did earlier

Assures support for tea smallholders

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Prime Minister Ranil Wickremesinghe yesterday served the 150-year-old tea industry a cup full of refreshing ideas to reach greater heights.

 

Speaking at the inauguration of the Colombo International Tea Convention, the Premier called on all stakeholders to go beyond a traditional tea cup and explore the industry from a fresh perspective to outperform others in the global arena.

 

Wickremesinghe outlined the importance of focusing on new lifestyles, supply chain systems, food technologies and sales techniques to conquer new markets by 2050.

 

“I just looked at the long-term future of the industry. Looking at the world population in 2050, you are going to have an additional two billion people and most of them are going to be wealthier than they are today, whether they are in the working class or the middle income class. By the end of the three-day convention if you can focus on the markets by 2050 then the rest of the picture is easy for us to think about,” he added.

 

He said that with the higher income, the tea industry would have to think in terms of mechanisation and automation. “These will become necessities. And there will also be the need for conservation and the additional cost for that conservation.”

 

Noting that all these initiatives require new investments, Wickremesinghe insisted that if the investment from Sri Lanka was insufficient, the Government would have to allow investors to come from other regions. 

 

“If you don’t invest, you perish. If you invest, you survive. We have to take a new look at the total industry,” he stressed. 

 

He said the rapid growth of the population as well as the tea industry will be limited from India to Indonesia, adding that there will be more people above the age of 60 who are natural tea drinkers and insisted that anyone who is over 40 years of age was part of a good market.

 

With different types of beverages invading the market and lifestyles rapidly evolving by 2050, Wickremesinghe encouraged tea stakeholders to create different varieties of tea products that could outperform leading products in the global market.

 

“I cannot tell you how it is going to be in 2050, but it is going to be a completely different one. Do not think of supplying tea only in a traditional form of a cup which is brown or black or iced tea. Try to make the successor to Red Bull; that’s how you should think now. We have to rapidly increase the value added percentage of our total tea production,” he stressed.

 

The slow growth of the population, which calls for a minimal land requirement, was outlined as a plus point for Sri Lanka while the shortage of labour was pointed out as a negative factor going forward. 

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“While the world population will increase by two billion by 2050, the maximum we can increase the population at our rate of fertility is about two million. So the plus point is that the pressure for land is less. The minus point is that the supply of labour will move out to the industrial and service sectors for higher wages,” he pointed out.

Commenting on prevailing market conditions and consumer patterns, he said that although tea production has doubled from 1995 to 2015, the gap between tea production and consumption has decreased. He also emphasised that tea consumption in the UK has decreased, while noting that many millennials were not drinking tea. 

However, he noted that tea consumption was going up in India and China. 

Taking a very close look at the Tea Research Institute (TRI), he said: “You must earn your keep. The only way to earn your keep is to let the industry grow as you all did earlier.”

The Prime Minister noted that the Government was also changing the system, where estate workers were now being given land to build individual houses for a better lifestyle.

In terms of the role of workers, he said the industry should make a decision on whether they could go on with the traditional workers, subcontract the land or think of a combined model.

He acknowledged that the Tea Board, Colombo Tea Traders, members of the tea industry, members of the plantation unions and tea smallholders were all direct stakeholders and commended their efforts and commitment in sustaining the tea industry for 150 years in Sri Lanka. 

Stating that there was a belief that all the tea was brought from China, Prime Minister assured that the tea was not from China but from the region. 

“I can assure you this is not Chinese tea. All the tea that the British got from China died in India. Somehow India has not had a good climate for Chinese tea. This is some variety that was founded in the region and we have committed. We took the rubber from Brazil and tea from India and turned it into a big industry,” he added.

He also spoke extensively about the history of tea and how it evolved into what it is today.

Wickremesinghe said modernisation commenced in 1835, which was a first for Asia, with state land then being made available for cultivation, and an administrative service and public school education system being brought in. 

However, it was pointed that after nationalisation, an accelerated tea economy came into place in 1977 with the opening up of the economy under the leadership of Sri Lanka’s late President J.R. Jayawardena, where large loans were obtained from Asian Development Bank and the state plantations investing in the estates and roads being rebuilt, which made the difference that enabled the State plantations to go on and become RPCs 10-15 years later.

“As money came in it affected and benefitted many parts of the country. It changed the demographics of the area because the local Sinhala villagers were not interested in working on plantations so we had to get the labour from South India. It made new classes for Sri Lankans who benefitted,” he said.

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While the industry itself was British, the periphery created a wealthy, strong Sri Lankan middle class, he said, adding that it was this wealth that enabled Sri Lankans to invest it elsewhere so the next generation made money. 

 

He also encouraged tea smallholdings, which was created by the late D.S Senanayake, which became a substitute for employment in the Sabaragamuwa and Southern provinces. 

 

He asserted that the industry which grew from tea smallholders today contributes 70% of the country’s tea production. 

 

“We will improve tea smallholders’ practices and provide access to credit to modernise.” 

 

“It is time we have to think fresh in the tea industry in Sri Lanka and I thought it was much better to have a younger politician in charge so the best I could think of was Navin Dissanayake. Your father delivered with the Mahaweli (project); kindly deliver with the modern tea industry,” said Wickremesinghe. 

 
Daily FT-10th August 2017


 

Navin brews his cuppa for future of tea industry


Calls on stakeholders for a tea master plan to meet global challenges, trends in the international beverage markets

Says to rebrand Ceylon Tea according to certain markets that require cheaper teas

Urges industry to take unified approach in terms of policies 

Conveys appreciation for Indian plantation workers for their immense contribution 

Promises to increase replanting in tea smallholders sector by 30% over next five years

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Plantation Industries Minister Navin Dissanayake yesterday highlighted the importance of maintaining a competitive advantage while making the necessary reforms that will propel the industry over the next decade to create greater wealth and prosperity for Sri Lanka.

 

Addressing at the Colombo International Tea Convention organised by the Colombo Tea Traders’ Association (CTTA) to celebrate 150 years of Ceylon Tea, he called for a master plan by the industry.

 

“It is important for us to look at this master plan holistically, fine-tune it, finding the necessary changes that are instrumental to meet global challenges and trends in the international beverage markets,” he added.

 

The Minister stressed the importance of going further up the value chain for emerging markets such as China and Iran, while remaining in the existing markets. In addition, he emphasised rebranding Ceylon Tea according to certain markets that require cheaper teas.

 

He also urged the industry to have a more unified approach, particularly in terms of its policies as there was too much debate over issues such as blending, importation of tea, cess, levies and marketing.

 

“Ideally, the Government should have minimum regulatory functions to ensure that the laws completely comply with the industry’s necessities. We must ensure an ethical and transparent tea industry in line with international best practices,” he added.

 

It was pointed out that the economics of tea in the long run would mean that Sri Lanka needed to address the issues of the cost of production, the strengthening and upgrading of factories with the assistance of the Japanese Government while strengthening the management structure of regional plantation companies (RPCs) with the support of the World Bank.

 

“These are much-needed policy initiatives that will be undertaken soon,” he added.

 

With new initiatives being implemented, Dissanayake believes the next two decades will be robust and dynamic for all those involved in the tea industry.  Reflecting on the history of the industry, he said Scottish planter James Taylor, who introduced tea to Sri Lanka, would never have imagined even in his wildest dreams that tea would be such a social, economical and political factor influencing so many of the country’s spheres, helping it become the world’s third-largest exporter of the beverage, bringing in $ 1.5 billion in export revenue. Not forgetting the painful past of the 150 years, Dissanayake said it was no secret that the tea industry was built on the sweat and tears of Indian plantation workers who were brought to Sri Lanka from India.

 

“I would like to, from the depth of my heart, thank those Indian plantation labourers for the immense contribution that they have made to the plantation and tea industry in Sri Lanka.”

 

While things have improved over the years, he asserted that further improvements are to be made to enhance the dignity of the estate workers and insisted a new model was required to take the industry forward.

 

“We are currently studying a model. The estate workers are given some rights over land and the management companies will also have better yields. This model is commonly known as the outgrow model. I hope that union leaders will support us to take the initiative forward,” he stressed.

 

He added that the Government was aggressively building individual housing units for the estate workers.

 

Noting that smallholders today accounted for 73% of Ceylon Tea production, the Minister promised to strengthen and increase replanting in this sector by 30% in the next five years. 

 

He acknowledged the late Montigo Jayawardena’s vision which extended tea plantation. “The late Minister must be remembered by the plantation industry for the services he rendered.”

 

Citing that “thick skin” was common to both tea stakeholders and politicians, Dissanayake urged the industry to maintain its fighting spirit in the decades ahead. (CdeS) 

 

Daily FT- 10th August 2017

 

Celebrating all that is tea at the inaugural Ceylon Tea Festival


Festival to coincide with the 150th anniversary of Ceylon Tea, attracting a new generation of tea connoisseurs and enthusiasts

Jason Atherton

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Tom Aikens

 

Colombo will host the first ever Ceylon Tea Festival from 11 to 13 August, bringing together a wide array of events and activities celebrating the tradition of tea for a new generation of experience seeking consumers. Tea cultivation began in Sri Lanka as a diversification experiment in 1867 and not long after, it surpassed many geographical borders to satisfy 19% of the global market share. Now a century and a half later, the Ceylon Tea Festival will celebrate this unique beverage, marking the future for celebrating Ceylon Tea. 

 

The three-day festival will provide a range of free and ticketed events, tea appreciation master  classes, tea banquets with world class Michelin star chefs, pop-up tea galleries, food markets, tea tastings, tea and wellness, high teas, tea brunches and tea with music. The festival will also be Sri Lanka’s first luxury food, drink and leisure event that will champion Ceylon Tea. 

 

Co-founder and Director of the Ceylon Tea Festival, Neela Marikkar Chairperson of Dentsu Grant Group said, “Our goal is to make Ceylon Tea contemporary and youthful while celebrating its rich heritage. We want to associate our premium Ceylon tea with the beautiful island of Sri Lanka. Today the millennial consumer does not know that Ceylon Tea comes from Sri Lanka. By creating a tea tourism product we can make this association much stronger which we will market globally to attract more tourists and build equity for both Ceylon Tea and Sri Lanka Tourism. Today global travellers look for authentic experiences and the Ceylon Tea Festival can become one of these.”

 

At the centre of the celebration will be a specialist tea tasting master class and two exclusive dinner events that will feature a tea inspired culinary journey presented by highly celebrated chefs. On Saturday, guests will be wooed by two Michelin Star Chef Tom Aikens at the Mount Lavinia Hotel. On Sunday, three Michelin Star Chef Jason Atherton will present a Ceylon Tea curated menu at the Cinnamon Grand. 

 

Marikkar spoke of her delight in showcasing the incredible richness of tea, cuisine and culture the country has to offer. “The Tea Festival was originally conceptualised over a decade ago as part of a greater plan to promote the Ceylon Tea Brand and to create a global demand for a local event that celebrates the rich taste that is unique to Sri Lankan grown teas. This is possibly the first time a three Michelin Star Chef will present a Ceylon Tea curated menu. We hope this will spur consumers to see and appreciate Ceylon Tea and the unique flavours of the seven growing regions.” 

 

The festival also brings together the Sri Lanka Tea Board, the Colombo Tea Traders Association and Sri Lanka Tourism together with prestigious brands like Mastercard to support an event of this nature. The annual festival is expected to be a highlight in local and international calendars and, the team at Dentsu Grant Group will look to create similar festivals outside Colombo and eventually in key markets overseas. 

 

The full program is now available via the Ceylon Tea Festival website at ceylonteafestival.com. Tickets for selected events will also be available on the site and other locations to be announced shortly. 

 

Daily FT-01st Aug 2017

 

Geography is History

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A review of Ceylon Tea: The Trade That Made a Nation by Richard Simon

By Anvar Alikhan

 

I remember once writing an ad for Ceylon tea for an international audience. The image showed a shattered tea cup, and the line said: ‘Sorry, but your tea cup is probably not good enough for this tea’. The ad then went on to talk about how to appreciate a good Ceylon tea – starting with getting yourself a delicate China tea cup to drink it from, because a regular pottery cup ruins the experience. Talking with tea-tasters to collect the information for that ad was my first introduction to the world of tea appreciation, and its rituals. And that set me on a journey of learning that still continues. Which is why reading ‘Ceylon Tea: The Trade That Made a Nation’ was a special pleasure for me. 

 

I am fascinated by the idea that ‘Geography is History’. I suppose that concept holds true for most countries in some way, but it perhaps holds particularly true for Sri Lanka. And what Richard Simon does, essentially, is to explore this theme. He begins with Marco Polo, who apparently said of Sri Lanka, ‘For its actual size, it is better circumstanced than any other island in the world’. And from there he brings us down through the centuries – from the time Sri Lanka was the ‘Spice Isle’ of the Dutch, supplying cinnamon to titillate the palates of 17th century Europe, through the glory days when it became the world’s largest supplier of coffee, to the ‘Great Coffee Disaster’ of the 1870s. And then, from the felicitous replacement of coffee with tea, through the various upheavals of the 20th century – economic, political, ethnic and military – he brings us to the present day. 

 

Along the way, Simon touches upon fascinating subjects, like how Rajasinha II, the 17th century king of Kandy, regretted having supported the Dutch against the Portuguese, bitterly remarking that he had merely ‘traded ginger for cinnamon’; how a Scotsman named James Taylor transformed Sri Lanka’s future with a little experiment at a place named Loolecondera; how Sir Thomas Lipton created the global market for tea, by making it more affordable; and why, unlike in the case of wine, there is no ‘Grand Cru’ of tea. But even more interesting, perhaps, are some of the what-ifs of history that Simon suggests, like: what if the British had not mistaken the ancient Sinhalese custom of ‘rajakariya’ for laziness, and used local labourers instead of importing Tamil labourers? And what if, instead of cultivating tea, they had decided to cultivate some obscure crop like cinchona, or indigo (as it may well have done)? Thought-provoking questions, indeed!

 

Ceylon Tea is, indeed a story of geography inextricably intertwined with history, and Simon tells it with vivacity, elegance and delightful turn of phrase. He notes, for example, that the nineteenth-century planter made up for his dietary deficiencies ‘by frequent recourse to spirituous consolation’. Of the incompetent Governor Torrington, he writes that he ordered his army to suppress rebels, ‘which they did with sanguinary enthusiasm’. Of planting in the mid 19th century, he says it was it was a career for ‘poor lads with broad shoulders and narrow prospects’. And he describes the tea taster as ‘the practitioner of a dark art whose lore was for long decades a closely guarded secret amongst the brotherhood of tea’.

 

Ceylon Tea is a splendidly produced book, thanks to Dominic Sansoni’s sumptuous photography and the charming archival images that accompany the narrative (having worked on similar books myself, I am filled with admiration for the painstaking pictorial research that has evidently gone into this). In fact, the book is perhaps a little too good-looking for its own good: the danger is that people might treat it as just a ‘coffee-table book’, simply admiring the images, and keeping it as a living room adornment – thereby missing out on the richly detailed and pleasurable narrative.

 

In a sense, reading ‘Ceylon Tea’ reminded me of ‘The Panama Hat Trail’ by Tom Miller, about the Panama hat industry in Ecuador –one of my favourite business books, because of the way it describes the workings of the industry in great detail, and yet does so in the engaging manner of a best-selling travel book (I can’t think of anything duller than the inner mechanism of Sri Lanka’s tea auctions, for example, and yet Simon presents it in an entirely readable – almost entertaining – manner). In another sense, Ceylon Tea reminded me of L’Aventure du Sucre, that wonderful museum in Mauritius, set in an abandoned nineteenth-century sugar mill, which presents the history of Mauritius and its people – the colonial eras of the Dutch, French and British; the slave trade; the hypocrisies of the indentured labour system – all through the history of the sugar industry, upon which the island’s economy was built. The parallels with Sri Lanka and its tea industry are striking.

 

(The writer is Strategy Consultant, J.Walter Thompson, India. He spent some of the best years of his life working in Colombo. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. ,

 

Daily FT-14th July 2017

About F&W

Forbes & Walker was set up in 1881 as a partnership between James Forbes and Chapmen Walker. Although there is no actual record of the date on which it was established the very first cash book, still in the possession of the Finance Director, indicates the brokerages were earned from 1st August 1881. In Sir Thomas Villiers' book “Mercantile Lore” the date of establishment of Forbes & Walker has been put down      Read More...

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