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Tea harvesters awaited a weigh-in at the Holyrood Estates plantation near Hatton in central Sri Lanka. Most tea here is hand-plucked by small armies of Tamil women, descendants of Indians who were brought to the island 150 years ago by the British.

After years of struggle for higher wages and better working conditions, Sri Lankan estate workers are now better paid than laborers in India and elsewhere, though many often still live in small, rundown houses. An average daily picking of 25 to 28 kilograms will earn them about $5. 

A plantation manager recorded the weight of a harvest.

Even though plantation companies say they have spent millions to improve education, housing and health for their workers, officials expect a severe labor shortage in the coming years. Many children of plantation workers are not interested in working in tea fields even at the increased wages.

Sri Lanka has carved out a niche as a supplier of high-quality, traditionally processed teas, but many of its tea bushes have low yields because they are decades past their prime and need to be replanted.

Freshly processed tea, ready for sampling at Bogawantalawa Tea Estates. Tea is sampled much as wine is -- it is swished around in the mouth to get the full taste, and then spit out.

A factory worker collected leaves that have been through the wilting process. While most producers in Kenya and India make black tea using a speedy manufacturing process known as "cut, turn and curl," Sri Lanka favors a traditional approach that takes longer to produce more varieties.

Higher wages for workers and an estimated 15 percent drop in production because of poor rains have helped drive up prices at tea auctions in Colombo, Sri Lanka, by 100 percent in the last 12 months.

Pictures by: Keith Bedford for The New York Times

Then he asked for some green tea, which Dilhan delivered on another piece of paper. Mr. Fernando beamed as he put the samples side by side. They looked similar but were starkly different from the silvery white tea produced by his company, Dilmah, which is sold in supermarkets for nearly four times the price of Twinings.

“All the brands without exception sell as white tea either 99 percent black tea or green tea with one piece of white tea,” Mr. Fernando, 79, said ruefully. “This is what we are up against. This is what the consumer is up against. But this is part of normal trade, and I have begun to accept it.”

Twinings said it used a Chinese white tea variety known as Bai Mudan in its tea bags and the more exclusive silver needle variety, which is similar to Dilmah’s white tea, in its loose leaf tea.

Mr. Fernando has relished his role as the underdog battling the giants of the global tea business. In the last two decades, he has built Dilmah into one of the world’s largest independent tea companies and one of the best-known Sri Lankan brands by selling tea that is critically acclaimed and more expensive than the competition.

His company’s story symbolizes the path that other Sri Lankan businesses and industries have had to follow to compete with the likes of China and India, which have lower costs of production and the advantage of size. To attract business, Sri Lankan companies have become specialists and producers of affordable yet exclusive products. In apparel, for instance, producers here have established themselves as a go-to source for lingerie and sportswear so they do not have to compete on cheaper clothes directly with low-cost mass producers like Bangladesh and China.

“To compete with the Chinese juggernaut in particular, the Sri Lankan strategy has been to go into niches like lingerie for Victoria’s Secret,” said Razeen Sally, an expert on the Sri Lankan economy who is co-director of the European Center for International Political Economy in Brussels.

In tea, Sri Lanka was the world’s largest exporter as recently as 2004, but it lost significant market share as governments and companies in Kenya and China made a big push to produce low-cost tea, and as green tea became more popular. Today, Sri Lanka exports about $1.3 billion in tea.

Mr. Fernando spent much of his career selling tea to big companies like Lipton and Tetley. But in the 1970s, he noticed that buyers in the United States, Europe and Australia had started to buy less Sri Lankan tea, blending it with cheaper teas from other countries. Those companies’ profits jumped, but growers, producers and traders in Sri Lanka were devastated.

“Unless I got into branding and marketing,” he said, “I would have been out of the business in two or three years.”

Dilmah, named after his sons Dilhan and Malik, who now help run the company, positioned itself as a seller of pure Sri Lankan, or Ceylon, tea that was not blended with other teas.

But most foreign supermarket operators and customers had never heard of Dilmah and it was hard to persuade them to take a chance on the upstart, said Jaliya Wickramasuriya, Sri Lanka’s ambassador to the United States and a former Dilmah executive. “It was very difficult to even get an appointment with the big chains,” he said.

Mr. Fernando’s break came in the mid-1980s when an Australian supermarket chain, Coles, gave him an order for tea that carried the store’s brand. Dilmah has since expanded across much of the globe, including recently the United States. The research firm Datamonitor estimates it is the sixth-largest tea brand in the world now. In the six months ended in September, Ceylon Tea Services, Dilmah’s parent company, earned $5.2 million on $19.7 million in revenue. That was up from profits of $1.3 million, on $18.6 million in revenue the year before, when the company’s earnings were hurt by a fall in the value of the Australian dollar.

Dilmah has also expanded into tourism, by turning four old tea plantation bungalows in central Sri Lanka into five-star guest houses known as Ceylon Tea Trails. The company plans to add two more bungalows and build 10 timeshare villas nearby.

The company has opened “tea bars” where it offers tastings and classes about how to make, drink and appreciate tea, much as wineries do. These efforts are aimed at showing consumers that its tea is worth the extra cost. Dilmah’s white tea, for instance, cost $11 for a box of 10 bags while a box of Twinings costs about $3. (White tea costs more than black or green tea because it is made from a smaller part of the plant and has more antioxidants.)

The Sri Lankan tea industry has been slow to change in some important ways. Many of its tea bushes, for instance, have low yields because they are decades past their prime and need to be replanted, which is expensive, said Hasitha de Alwis, director of promotion for the Sri Lanka Tea Board.

The country has also shunned automation to preserve the quality of its tea. While most producers in Kenya and India make black tea using a speedy manufacturing process known as cut, turn and curl, Sri Lanka favors a traditional approach that takes longer to produce more varieties.

Most tea here is also hand-plucked by small teams of Tamil women who are descendants of Indians who were brought to the island 150 years ago by the British. After years of struggle for higher wages and better working conditions, Sri Lankan estate workers are now better paid than laborers in India and elsewhere, though many often still live in small, rundown houses.

A recent labor agreement increased wages by about 40 percent; most workers earn $3.50 to $5 a day. That increase and an estimated 15 percent drop in production because of inadequate rainfall have helped drive up prices at Colombo’s tea auctions by 100 percent in the last 12 months.

Plantation companies that manage estates and a foundation funded by Mr. Fernando say they have spent millions to improve the quality of education, housing and health for plantation workers.

Still, industry and labor officials expect a severe labor shortage in the coming years because many children of plantation workers are not interested in working in tea fields even at the increased wages.

On a recent December afternoon, K. Tilgowthey and about 15 other women were plucking tea leaves from a hillside in central Sri Lanka as the rain came down. They worked quickly and quietly, the only sounds coming from the snapping of tea leaves and the rustle of the plastic bags that covered their heads and torsos. Many of the women wore no shoes; some wore flip-flops.

Mrs. Tilgowthey, 31, said she started working on the Holyrood Estate, which is partly owned by Dilmah, 10 years ago when she married a man who worked and lived here. The couple have two daughters and a son. Asked whether she would like them to work with her on the plantation, she was quick to say no.

“It’s hard work,” she said. “So, I hope my children get educated.” [courtesy: NYTimes.com]

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Vikas Bajaj is a correspondent for The New York Times in Mumbai, India, where he writes primarily about economic and business issues. He was previously based in New York and covered housing and financial markets from June 2006 to March 2009. Mr. Bajaj graduated from Michigan State University in 1998 and joined the Times in 2005, having previously worked at The Dallas Morning News. He was born in Mumbai (formerly Bombay) and grew up there and in Bangkok, Thailand. He returned to India in the spring of 2009.

More articles by Vikas Bajaj on NYTimes.com