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Setting up support services for the Dilmah brand

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The operation that takes `Dilmah' to the world

(Excerpted from the autobiography of Merrill J. Fernando)

In the development of my brand Dilmah, what has always been in public view is the brand and the publicity it garners, but not the behind-the-scenes toil, which has contributed to its development over the years. Some of our other successful ventures have also been overshadowed by the Dilmah brilliance. A few such ventures merit mention.

IMA Machines

To project Dilmah into the larger marketing chains, it had to be sold in tea bag form. Such production machines were very expensive, but with this in mind I visited a renowned tea bagging machine manufacturer, IMA, of Italy, a world leader in the design and manufacture of automatic machines for processing and packaging various products, ranging from pharmaceuticals and cosmetics to tea and coffee.

I met its founder, Dr. Andrea Romagnoli, and explained my vision. He agreed to sell me two machines at a special price, but also warned me that I may be many years ahead of the right opportunity for the optimum deployment of the machines. I bought two IMA-C21 machines from him and, visiting him a couple of times a year, also became good friends.

In Italy I also had a very reliable bulk tea agent, Giancarlo Beraldi, ably assisted by his dynamic wife, Edy, who displayed an insatiable curiosity about tea. They supplied bulk tea to the largest companies in Italy and, eventually, I became the major supplier of bulk tea from Ceylon to Italy. The Beraldis were a warm and generous couple who entertained me in the best restaurants in Milan, inculcating in me a lasting love for genuine Italian food.

The two IMA machines arrived and were installed in my Peliyagoda packing plant. However, in ominous confirmation of Dr. Romagnoli’s predictions, they were idle for quite some time. I did not lose heart though, despite a very expensive investment being inactive. I secured its agency in Sri Lanka, as well as the agencies for tea bag filter paper and other related components from J. R. Crompton.

I incorporated a separate company, Package Care Ltd., to market these products. All these initiatives were aspects of my vision for making value addition to tea in Sri Lanka, a realistic prospect for other exporters as well, providing them with a one-stop-shop for the purchase of the required finished material. It would save the potential exporter of value-added tea, the serious inconveniences I experienced in sourcing my requirements from Japan, the UK, and other countries.

About two years after my purchase of the machines, at the first IMA distributors’ conference in Milan, I was invited to speak on the first day. I used the opportunity to share with the participants my vision of value addition at origin and the benefits that would accrue to tea growers and workers as a result. Many found it interesting, challenging, and attractive, but none offered hope for its realization. The UK distributor was scornful, calling me a dreamer!

Printcare

Before I installed my first tea bag machines, I was importing tea bags and envelopes from Japan, a very costly and time-consuming exercise, as shipments often took as long as three months to arrive and if there was a common defect in the printing, the re-order took another three months.

I had just moved into my new office at Alston Place, Colpetty and I would personally go to Ranco Printers, also in close proximity, to get my visiting cards and other stationery printed. It was during this period that I met young K. R. Ravindran, whose grandfather, R. A. Nadesan, I already knew.

Ravindran one day visited me at my Gower Street home and in discussion came up with an interesting proposal. He was aware that I had ventured into the production of tea bags. His suggestion was that together we set up a business to produce tea bags and envelopes. Apparently, he had previously approached both Brooke Bond and lies Finlay, but clearly not envisaging the potential, neither had showed any serious interest in such a project.

I recognized the strategic importance of such a venture immediately. Indeed, it had been in my mind as well. Ravi had a very good understanding of the technical aspects of the printing business and, therefore, I promptly agreed to his proposal. Moving on, in 1979, we established a Joint Venture and named it ‘Printcare’. The name appealed to me as I had already incorporated ‘Package Care’ to deal with another aspect of my export operations.

Previously, the world over, tea bags and envelopes were printed using the ‘gravure’ process. We installed the first ‘Flexo’ process machine, an American machine from St. Louis called Mark Andy, to produce the material at the Peliyagoda premises. It was a business risk which soon paid dividends.

That was the beginning of one of the most successful printing and packaging businesses in the region. Together, Printcare and Package Care have made Dilmah completely self-sufficient in printing and packaging material requirements, whilst the two have also become preferred suppliers to the tea value-addition industry.

One major reason for the success of Printcare is that, having recognized in Ravindran a man with the same passion as I for excellence, I let him run that business entirely on his own judgment, with absolutely no interference from me. A small operation which commenced in a little garage-sized space with three people is today a renowned company with over 700 employees, with multiple manufacturing facilities here and in India and is, arguably, the world’s leading provider of tea bag tags and labels, supplying the largest tea companies in the world, including Lipton (initially), Tetley, and Twinings.

In a relatively short time the company acquired a life and an identity of its own and is now listed in the Colombo stock market. It has also expanded into other fields, providing printing solutions for the apparel, beverages, packaging, publishing, and security printing industries. It is also rated as one of the top export brands in the country.

One of the key lessons I learnt in my career, painfully and at considerable personal cost, is the importance of being in complete control of vital resources, men, material, and money. Dependence on others for crucially- important inputs is an ever-present risk, as individuals and institutions not directly in your business are not reliable all the time. An independent supplier of key components can hold the entrepreneur to ransom. In a fast-moving, export-oriented, value-addition operation, the key components must be available at hand for the timely delivery of the product to the customer.

Apart from the fact that I have always been ready to follow my instinct, if I perceive merit in an investment opportunity, I have never been hesitant about backing myself. I had to set in place the infrastructure that was essential for the business success of Dilmah. I have been very fortunate much of the time but, as I say repeatedly, in my success I also sense the hand of God.

In this writing I have described, in detail, the multinationals’ approach to business and the intimidatory strategies and tactics they unapologetically implement in the face of real or perceived threats to their interests. My connection with Printcare offers another very illustrative example.

As mentioned, Printcare was, for many years, a supplier to Lipton. In fact, Lipton encouraged and assisted Printcare to diversify its product portfolio, fostering a mutually-beneficial business relationship which lasted for many years; that is, till the intervention of the Brussels-based Paul Eavers, Unilever Global Supply Manager, Packaging, In May 2000 he advised Printcare that Unilever was concerned about my relationship with Printcare and, therefore, it had been decided to terminate the business with a supplier with links to a competitor.

The numerous appeals and counter arguments to this decision offered by Printcare were of no avail. In the course of the next few months Lipton withdrew from all business dealings with Printcare, causing considerable loss to the latter as it had made substantial investments to cater to the Lipton business, which were, quite naturally, on the assumption of a long-term relationship. Given the volume of its business with Lipton, it took Princare quite some time and effort to restore volumes and income to previous levels, without the Lipton contribution.

Timber concepts

From the very inception of the tea industry and up to the late ’80s, the extensive use of timber has been an adverse undesirable feature of its operations. Millions of trees would have been felled in order to make all the crates in which tea used to be packed. The switch to paper sacks made a difference in that recycling became possible and the use of timber has decreased.

However, wooden boxes are still used in packing and dispatching special types of tea, particularly to the Middle East, where fancy and elaborate presentations, carrying tea from one to five kg, are still much sought after. It is a small, niche industry but with much potential, which I decided to move into one day.

I purchased the wood working machinery on a visit to Taiwan and waited for the right operations chief in a competitive woodworking business. I told him to join me when he decided that he needed to quit his present job and, some months later, he met me again. I was prepared to let him invest part of his savings and to set him up in the business, but both Dilhan and Himendra, my Deputy Chairman, talked me out of it.

Subsequently, we set up a business in a large warehouse built for me in Hendala, by R&T Constructions and called it Timber Concepts and got it going. Today it is a thriving business with regular export orders. I persuaded Sirimevan, the Manager, to invest in the company at Rs. 10 per share up to 15% and over that at Rs. 25 per share. I have found that often, even those closest to me, do not share my confidence in new ventures.

Ceylon Tea Services

In 1982, two investment consultants prevailed on me to take Ceylon Tea Services Ltd. public. At that time the business was progressing well and there was no urgent need to inject funds from outside. Initially I was reluctant but Chandi Chanmugam, then Secretary to the Treasury, with whom I discussed the matter sometime in 1983, was very encouraging and offered me special incentives to do so. His point was that it would be a unique opportunity for me, as Sri Lanka, though being a major tea producer, did not have a single publicly-listed tea company.

Chanmugam was a man I had much respect for and his arguments persuaded me to go ahead. I offered 20% of the company at Rs. 10 per share and, to my surprise and pleasure, within seven hours, the offer was fully subscribed. The bankers to the issue was Overseas Trust Bank, of which the Managing Director, Yeshwant Desai, was a close family friend. I purchased some of the shares myself.

For anybody who subscribed to that share issue, it would have been a gilt-edged investment, as the current value of a share is Rs. 550. That is apart from the annual earnings per share in the way of dividends and bonus shares as well.



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Rebuilding the country requires consultation

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A positive feature of the government that is emerging is its responsiveness to public opinion. The manner in which it has been responding to the furore over the Grade 6 English Reader, in which a weblink to a gay dating site was inserted, has been constructive. Government leaders have taken pains to explain the mishap and reassure everyone concerned that it was not meant to be there and would be removed. They have been meeting religious prelates, educationists and community leaders. In a context where public trust in institutions has been badly eroded over many years, such responsiveness matters. It signals that the government sees itself as accountable to society, including to parents, teachers, and those concerned about the values transmitted through the school system.

This incident also appears to have strengthened unity within the government. The attempt by some opposition politicians and gender misogynists to pin responsibility for this lapse on Prime Minister Dr Harini Amarasuriya, who is also the Minister of Education, has prompted other senior members of the government to come to her defence. This is contrary to speculation that the powerful JVP component of the government is unhappy with the prime minister. More importantly, it demonstrates an understanding within the government that individual ministers should not be scapegoated for systemic shortcomings. Effective governance depends on collective responsibility and solidarity within the leadership, especially during moments of public controversy.

The continuing important role of the prime minister in the government is evident in her meetings with international dignitaries and also in addressing the general public. Last week she chaired the inaugural meeting of the Presidential Task Force to Rebuild Sri Lanka in the aftermath of Cyclone Ditwah. The composition of the task force once again reflects the responsiveness of the government to public opinion. Unlike previous mechanisms set up by governments, which were either all male or without ethnic minority representation, this one includes both, and also includes civil society representation. Decision-making bodies in which there is diversity are more likely to command public legitimacy.

Task Force

The Presidential Task Force to Rebuild Sri Lanka overlooks eight committees to manage different aspects of the recovery, each headed by a sector minister. These committees will focus on Needs Assessment, Restoration of Public Infrastructure, Housing, Local Economies and Livelihoods, Social Infrastructure, Finance and Funding, Data and Information Systems, and Public Communication. This structure appears comprehensive and well designed. However, experience from post-disaster reconstruction in countries such as Indonesia and Sri Lanka after the 2004 tsunami suggests that institutional design alone does not guarantee success. What matters equally is how far these committees engage with those on the ground and remain open to feedback that may complicate, slow down, or even challenge initial plans.

An option that the task force might wish to consider is to develop a linkage with civil society groups with expertise in the areas that the task force is expected to work. The CSO Collective for Emergency Relief has set up several committees that could be linked to the committees supervised by the task force. Such linkages would not weaken the government’s authority but strengthen it by grounding policy in lived realities. Recent findings emphasise the idea of “co-production”, where state and society jointly shape solutions in which sustainable outcomes often emerge when communities are treated not as passive beneficiaries but as partners in problem-solving.

Cyclone Ditwah destroyed more than physical infrastructure. It also destroyed communities. Some were swallowed by landslides and floods, while many others will need to be moved from their homes as they live in areas vulnerable to future disasters. The trauma of displacement is not merely material but social and psychological. Moving communities to new locations requires careful planning. It is not simply a matter of providing people with houses. They need to be relocated to locations and in a manner that permits communities to live together and to have livelihoods. This will require consultation with those who are displaced. Post-disaster evaluations have acknowledged that relocation schemes imposed without community consent often fail, leading to abandonment of new settlements or the emergence of new forms of marginalisation. Even today, abandoned tsunami housing is to be seen in various places that were affected by the 2004 tsunami.

Malaiyaha Tamils

The large-scale reconstruction that needs to take place in parts of the country most severely affected by Cyclone Ditwah also brings an opportunity to deal with the special problems of the Malaiyaha Tamil population. These are people of recent Indian origin who were unjustly treated at the time of Independence and denied rights of citizenship such as land ownership and the vote. This has been a festering problem and a blot on the conscience of the country. The need to resettle people living in those parts of the hill country which are vulnerable to landslides is an opportunity to do justice by the Malaiyaha Tamil community. Technocratic solutions such as high-rise apartments or English-style townhouses that have or are being contemplated may be cost-effective, but may also be culturally inappropriate and socially disruptive. The task is not simply to build houses but to rebuild communities.

The resettlement of people who have lost their homes and communities requires consultation with them. In the same manner, the education reform programme, of which the textbook controversy is only a small part, too needs to be discussed with concerned stakeholders including school teachers and university faculty. Opening up for discussion does not mean giving up one’s own position or values. Rather, it means recognising that better solutions emerge when different perspectives are heard and negotiated. Consultation takes time and can be frustrating, particularly in contexts of crisis where pressure for quick results is intense. However, solutions developed with stakeholder participation are more resilient and less costly in the long run.

Rebuilding after Cyclone Ditwah, addressing historical injustices faced by the Malaiyaha Tamil community, advancing education reform, changing the electoral system to hold provincial elections without further delay and other challenges facing the government, including national reconciliation, all require dialogue across differences and patience with disagreement. Opening up for discussion is not to give up on one’s own position or values, but to listen, to learn, and to arrive at solutions that have wider acceptance. Consultation needs to be treated as an investment in sustainability and legitimacy and not as an obstacle to rapid decisionmaking. Addressing the problems together, especially engagement with affected parties and those who work with them, offers the best chance of rebuilding not only physical infrastructure but also trust between the government and people in the year ahead.

 

by Jehan Perera

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Features

PSTA: Terrorism without terror continues

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When the government appointed a committee, led by Rienzie Arsekularatne, Senior President’s Counsel, to draft a new law to replace the Prevention of Terrorism Act (PTA), as promised by the ruling NPP, the writer, in an article published in this journal in July 2025, expressed optimism that, given Arsekularatne’s experience in criminal justice, he would be able to address issues from the perspectives of the State, criminal justice, human rights, suspects, accused, activists, and victims. The draft Protection of the State from Terrorism Act (PSTA), produced by the Committee, has been sharply criticised by individuals and organisations who expected a better outcome that aligns with modern criminal justice and human rights principles.

This article is limited to a discussion of the definition of terrorism. As the writer explained previously, the dangers of an overly broad definition go beyond conviction and increased punishment. Special laws on terrorism allow deviations from standard laws in areas such as preventive detention, arrest, administrative detention, restrictions on judicial decisions regarding bail, lengthy pre-trial detention, the use of confessions, superadded punishments, such as confiscation of property and cancellation of professional licences, banning organisations, and restrictions on publications, among others. The misuse of such laws is not uncommon. Drastic legislation, such as the PTA and emergency regulations, although intended to be used to curb intense violence and deal with emergencies, has been exploited to suppress political opposition.

 

International Standards

The writer’s basic premise is that, for an act to come within the definition of terrorism, it must either involve “terror” or a “state of intense or overwhelming fear” or be committed to achieve an objective of an individual or organisation that uses “terror” or a “state of intense or overwhelming fear” to realise its aims. The UN General Assembly has accepted that the threshold for a possible general offence of terrorism is the provocation of “a state of terror” (Resolution 60/43). The Parliamentary Assembly of the Council of Europe has taken a similar view, using the phrase “to create a climate of terror.”

In his 2023 report on the implementation of the UN Global Counter-Terrorism Strategy, the Secretary-General warned that vague and overly broad definitions of terrorism in domestic law, often lacking adequate safeguards, violate the principle of legality under international human rights law. He noted that such laws lead to heavy-handed, ineffective, and counterproductive counter-terrorism practices and are frequently misused to target civil society actors and human rights defenders by labelling them as terrorists to obstruct their work.

The United Nations Office on Drugs and Crime (UNODC) has stressed in its Handbook on Criminal Justice Responses to Terrorism that definitions of terrorist acts must use precise and unambiguous language, narrowly define punishable conduct and clearly distinguish it from non-punishable behaviour or offences subject to other penalties. The handbook was developed over several months by a team of international experts, including the writer, and was finalised at a workshop in Vienna.

 

Anti-Terrorism Bill, 2023

A five-member Bench of the Supreme Court that examined the Anti-Terrorism Bill, 2023, agreed with the petitioners that the definition of terrorism in the Bill was too broad and infringed Article 12(1) of the Constitution, and recommended that an exemption (“carve out”) similar to that used in New Zealand under which “the fact that a person engages in any protest, advocacy, or dissent, or engages in any strike, lockout, or other industrial action, is not, by itself, a sufficient basis for inferring that the person” committed the wrongful acts that would otherwise constitute terrorism.

While recognising the Court’s finding that the definition was too broad, the writer argued, in his previous article, that the political, administrative, and law enforcement cultures of the country concerned are crucial factors to consider. Countries such as New Zealand are well ahead of developing nations, where the risk of misuse is higher, and, therefore, definitions should be narrower, with broader and more precise exemptions. How such a “carve out” would play out in practice is uncertain.

In the Supreme Court, it was submitted that for an act to constitute an offence, under a special law on terrorism, there must be terror unleashed in the commission of the act, or it must be carried out in pursuance of the object of an organisation that uses terror to achieve its objectives. In general, only acts that aim at creating “terror” or a “state of intense or overwhelming fear” should come under the definition of terrorism. There can be terrorism-related acts without violence, for example, when a member of an extremist organisation remotely sabotages an electronic, automated or computerised system in pursuance of the organisation’s goal. But when the same act is committed by, say, a whizz-kid without such a connection, that would be illegal and should be punished, but not under a special law on terrorism. In its determination of the Bill, the Court did not address this submission.

 

PSTA Proposal

Proposed section 3(1) of the PSTA reads:

Any person who, intentionally or knowingly, commits any act which causes a consequence specified in subsection (2), for the purpose of-

(a) provoking a state of terror;

(b) intimidating the public or any section of the public;

(c) compelling the Government of Sri Lanka, or any other Government, or an international organisation, to do or to abstain from doing any act; or

(d) propagating war, or violating territorial integrity or infringing the sovereignty of Sri Lanka or any other sovereign country, commits the offence of terrorism.

The consequences listed in sub-section (2) include: death; hurt; hostage-taking; abduction or kidnapping; serious damage to any place of public use, any public property, any public or private transportation system or any infrastructure facility or environment; robbery, extortion or theft of public or private property; serious risk to the health and safety of the public or a section of the public; serious obstruction or damage to, or interference with, any electronic or automated or computerised system or network or cyber environment of domains assigned to, or websites registered with such domains assigned to Sri Lanka; destruction of, or serious damage to, religious or cultural property; serious obstruction or damage to, or interference with any electronic, analogue, digital or other wire-linked or wireless transmission system, including signal transmission and any other frequency-based transmission system; without lawful authority, importing, exporting, manufacturing, collecting, obtaining, supplying, trafficking, possessing or using firearms, offensive weapons, ammunition, explosives, articles or things used in the manufacture of explosives or combustible or corrosive substances and biological, chemical, electric, electronic or nuclear weapons, other nuclear explosive devices, nuclear material, radioactive substances, or radiation-emitting devices.

Under section 3(5), “any person who commits an act which constitutes an offence under the nine international treaties on terrorism, ratified by Sri Lanka, also commits the offence of terrorism.” No one would contest that.

The New Zealand “carve-out” is found in sub-section (4): “The fact that a person engages in any protest, advocacy or dissent or engages in any strike, lockout or other industrial action, is not by itself a sufficient basis for inferring that such person (a) commits or attempts, abets, conspires, or prepares to commit the act with the intention or knowledge specified in subsection (1); or (b) is intending to cause or knowingly causes an outcome specified in subsection (2).”

While the Arsekularatne Committee has proposed, including the New Zealand “carve out”, it has ignored a crucial qualification in section 5(2) of that country’s Terrorism Suppression Act, that for an act to be considered a terrorist act, it must be carried out for one or more purposes that are or include advancing “an ideological, political, or religious cause”, with the intention of either intimidating a population or coercing or forcing a government or an international organisation to do or abstain from doing any act.

When the Committee was appointed, the Human Rights Commission of Sri Lanka opined that any new offence with respect to “terrorism” should contain a specific and narrow definition of terrorism, such as the following: “Any person who by the use of force or violence unlawfully targets the civilian population or a segment of the civilian population with the intent to spread fear among such population or segment thereof in furtherance of a political, ideological, or religious cause commits the offence of terrorism”.

The writer submits that, rather than bringing in the requirement of “a political, ideological, or religious cause”, it would be prudent to qualify proposed section 3(1) by the requirement that only acts that aim at creating “terror” or a “state of intense or overwhelming fear” or are carried out to achieve a goal of an individual or organisation that employs “terror” or a “state of intense or overwhelming fear” to attain its objectives should come under the definition of terrorism. Such a threshold is recognised internationally; no “carve out” is then needed, and the concerns of the Human Rights Commission would also be addressed.

 

by Dr. Jayampathy Wickramaratne
President’s Counsel

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Features

ROCK meets REGGAE 2026

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JAYASRI: From Vienna, Austria

We generally have in our midst the famous JAYASRI twins, Rohitha and Rohan, who are based in Austria but make it a point to entertain their fans in Sri Lanka on a regular basis.

Well, rock and reggae fans get ready for a major happening on 28th February (Oops, a special day where I’m concerned!) as the much-awaited ROCK meets REGGAE event booms into action at the Nelum Pokuna outdoor theatre.

It was seven years ago, in 2019, that the last ROCK meets REGGAE concert was held in Colombo, and then the Covid scene cropped up.

Chitral Somapala with BLACK MAJESTY

This year’s event will feature our rock star Chitral Somapala with the Australian Rock+Metal band BLACK MAJESTY, and the reggae twins Rohitha and Rohan Jayalath with the original JAYASRI – the full band, with seven members from Vienna, Austria.

According to Rohitha, the JAYASRI outfit is enthusiastically looking forward to entertaining music lovers here with their brand of music.

Their playlist for 28th February will consist of the songs they do at festivals in Europe, as well as originals, and also English and Sinhala hits, and selected covers.

Says Rohitha: “We have put up a great team, here in Sri Lanka, to give this event an international setting and maintain high standards, and this will be a great experience for our Sri Lankan music lovers … not only for Rock and Reggae fans. Yes, there will be some opening acts, and many surprises, as well.”

Rohitha, Chitral and Rohan: Big scene at ROCK meets REGGAE

Rohitha and Rohan also conveyed their love and festive blessings to everyone in Sri Lanka, stating “This Christmas was different as our country faced a catastrophic situation and, indeed, it’s a great time to help and share the real love of Jesus Christ by helping the poor, the needy and the homeless people. Let’s RISE UP as a great nation in 2026.”

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