Beyond Traditional Boundaries 2009

The fifth annual management conference of the Association Beyond Traditional Boundaries, Sri Lankan success stories of our times was held on 4^th March 2009 at the Ceylon Continental Hotel, Colombo 1. During a period of global economic down turn that was increasingly becoming evident in our shores, the now popular conference challenged the business community in the country how it should face the odds loaded against them. The event featured five industrialists who have successfully overcome economic obstacles and personal adversity to build successful business empires while maintaining high ethical standards.

The presenters at the conference were, Mr.Mineka P.Wickremasinghe, Chairman, Ceylon Biscuits Limited. (Munchee biscuits), Mr.Vish Govindasamy, Managing Director, Watawala Plantations PLC. (Zesta tea), Ms.Otara Gunewardena, Chief Executive Officer, Odel (Pvt) Limited (Odel Unlimited), Mr.Raja Hewabowala, Chairman, Silicone Coatings (Pvt) Ltd. of the Nippolac Group, and Mr.Sarma Mahalingam, Managing Director, My Beverages (Pvt) Limited (My Cola and Crystal Water).

The keynote address was delivered by H.E.Dr. Peter Hayes, British High Commissioner for Sri Lanka and the Maldives. The Vice Chancellor of the University of Colombo, Prof.Kshanika Hirimburegama spoke as the patron of the association while the Dean of the Faculty of Management and Finance, Dr.P.M.S.Guneratne, MBA Unit Coordinator, Mr.J.A.S.K.Jayakody and other course coordinators were also present.

The Principal Sponsor of the event was Sri Lanka Telecom and the Media Sponsor of the association for the year, Associated Newspapers of Ceylon Ltd. Publishers of Sunday Observer and Ceylon Daily News who gave wide publicity to the conference.

The project was successfully chaired by the Deputy President, Anusha Wijegunaratne with the able support of other members of the Exco.

From The Leader Newspaper:

Bug is productivity...

Productivity and not wages is the biggest constraint in developing the plantation industry, a manager said.

Vish Govindasamy, Managing Director Watawala Plantations PLC, speaking at a seminar in Colombo on Wednesday said that while the Indian tea plucker on average plucks 30-35 kilos of green leaf daily, his counterpart in Sri Lanka was plucking half of that, some 13-14 kg. of leaf daily.

This was despite an incentive scheme in operation, of an additional payment of Rs. 10 a kg. on offer, for every kg. plucked, after the benchmark of 16 kg. had been met.

"In India the benchmark is much higher at some 25 kg.," said Govindasamy. And the incentive payment is much lower, at some Indian Rs. 1.25 for every additional kg. plucked after meeting that milestone, he said.

Govindasamy blamed this state of affairs to the politicization of the industry.

"What can one expect when a Cabinet Minister is also the leader of a trade union?" he asked at this seminar organised by the MBA Alumni of Colombo University.

"Workers are guaranteed 300 days wages even if they don't work eight hours daily, and collective agreements are not linked to productivity," said Govindasamy.

He also warned that with oil revenues falling, the country's major tea exports markets, namely the CIS states and the Middle East stand the risk of being affected. Govindasamy however said that their Zesta brand was the market leader in the island with a 33% stake, though the same did not hold true as regards to their global operations. Sri Lankans consume 20 million kg. of tea annually, he said.

Watawala's next venture will be selling Watawala kiri to the local market. "We have a total of 100 animals, including milch cows for this purpose," said Govindasamy.

Protectionism way forward

A biscuit manufacturer advocated protectionism after getting his fingers burnt when venturing out into India.

Mineka P. Wickramasingha, Chairman Ceylon Biscuits Ltd. (CBL) recalling his experience in the Indian market at a seminar in Colombo on Wednesday said that recently the Indian government did away with excise levies in relation to locally manufactured biscuits being retailed at Indian Rs. 100 or less, thereby effectively making exports from companies such as theirs' which are subject to all levies, being made uncompetitive.

The "earlier" Indian fiasco was the purchase of a biscuit company in India deemed illegal by the Indian Supreme Court (ISC), because the liquidator involved in this case was a provincial liquidator and not an official liquidator.

"Court blunders, Munchee suffers," said Wickramasingha.

Recalling the incident, he said that CBL bought this company on a court auction. It outbidded Brittania, ITC and a Saudi company in this tender. Munchees then ran this company for four years.

However, the former owner appealed to the ISC and won this case on the aforesaid technicality, Wickramasingha said. "We were forcefully evicted from India," he said.

"If it had happened to a Singaporean or European company their chambers would have had taken up the issue and would have had given adverse publicity to foreign direct investment," Wickramasingha alleged.

ISC had called for fresh tenders, with the local Central Bank saying that they cannot allow for the release of foreign exchange for the new tender.

He also alleged that all countries, including the U.S.A. practise protectionism. This seminar was organised by the MBA Alumni of Colombo University.

Going global

Odel will open a new department store in Singapore later this month, while at the same time conducting negotiations to have its products up for sale in 60 outlets each, located in India and the UK respectively.

It will also open a franchise outlet in Maldives.

Its principal shareholder Ms. Otara Gunewardene told a seminar in Colombo on Wednesday that despite the recession, she has been able to clinch those global openings.

She however said that the Singapore venture had been a long term plan, dating back to a year ago, with two floors in a building having being booked in this regard.

"But despite the recession people are still shopping, and Odel's advantage is that it offers quality clothing at a cheaper price," said Gunewardene. She however said that her target market is the upper and upper middle classes.

Gunewardene admitted that sales in the local market were affected due to inflation. "We are looking to restructure our pricing in the local market," she said. "But it's because we are stable in the local market that we are venturing overseas," said Gunewardene.

This seminar was organised by the MBA Alumni of Colombo University.