Features
Setting up support services for the Dilmah brand
(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.
Sri Lanka needs to take full stock of its current economic situation and use to the maximum the potential in its GSP+ facility for export sector growth. In the process, it should ensure that it cooperates fully with the European Union. The urgency of undertaking these responsibilities is underscored by the issues growing out of the recent US decision to sweepingly hike tariffs on its imports, though differentially.
These were principal ‘takes’ for participants in the Pathfinder Foundation’s Ambassadors’ Roundtable forum held on April 8th at the Colombo Club of the Taj Samudra. The main presenter at the event was Ms. Carmen Moreno Raymundo, Ambassador of the European Union to Sri Lanka and the Maldives. The forum was chaired by Ambassador Bernard Goonetilleke, Chairman, Pathfinder Foundation. The event brought together a cross-section of the local public, including the media.
Ms. Moreno drew attention to the fact Sri Lanka is at present severely under utilizing its GSP+ facility, which is the main means for Sri Lanka to enter the very vast EU market of 450 million people. In fact the EU has been Sri Lanka’s biggest trading partner. In 2023, for instance, total trade between the partners stood at Euros 3.84 billion. There is no greater market but the EU region for Sri Lanka.
‘However, only Sri Lanka’s apparel sector has seen considerable growth over the years. It is the only export sector in Sri Lanka which could be said to be fully developed. However, wider ranging export growth is possible provided Sri Lanka exploits to the fullest the opportunities presented by GSP+.’
Moreno added, among other things: ‘Sri Lanka is one among only eight countries that have been granted the EU’s GSP+ facility. The wide-ranging export possibilities opened by the facility are waiting to be utilized. In the process, the country needs to participate in world trade in a dynamic way. It cannot opt for a closed economy. As long as economic vibrancy remains unachieved, Sri Lanka cannot enter into world trading arrangements from a strong position. Among other things, Sri Lanka must access the tools that will enable it to spot and make full use of export opportunities.
‘Sri Lanka must facilitate the private sector in a major way and make it possible for foreign investors to enter the local economy with no hassle and compete for local business opportunities unfettered. At present, Lanka lacks the relevant legal framework to make all this happen satisfactorily.
‘Sri Lanka cannot opt for what could be seen as opaque arrangements with bilateral economic partners. Transparency must be made to prevail in its dealings with investors and other relevant quarters. It’s the public good that must be ensured. The EU would like to see the local economy further opening up for foreign investment.
‘However, it is important that Sri Lanka cooperates with the EU in the latter’s efforts to bring about beneficial outcomes for Sri Lankans. Cooperation could be ensured by Sri Lanka fully abiding by the EU conditions that are attendant on the granting of GSP+. There are, for example, a number of commitments and international conventions that Sri Lanka signed up to and had promised to implement on its receipt of GSP+ which have hitherto not been complied with. Some of these relate to human rights and labour regulations.
‘Successive governments have pledged to implement these conventions but thus far nothing has happened by way of compliance. GSP+ must be seen as an opportunity and not a threat and by complying with EU conditions the best fruits could be reaped from GSP+. It is relevant to remember that GSP+ was granted to Sri Lanka in 2005. It was suspended five years later and restored in 2017.
‘The importance of compliance with EU conditions is greatly enhanced at present in view of the fact that Sri Lanka is currently being monitored by the EU with regard to compliance ahead of extending GSP+ next year. A report on Sri Lanka is due next year wherein the country’s performance with regard to cooperating with the EU would be assessed. The continuation of the facility depends on the degree of cooperation.
‘A few statistics would bear out the importance of Sri Lanka’s partnership with the EU. For example, under the facility Sri Lanka benefits from duty free access in over 66% of EU tariff lines. The highest number of tourist arrivals in Sri Lanka in 2023 was from the EU’s 27 member states. Likewise, the EU’s 27 member states rank second in the origin of inflows of foreign exchange to Sri Lanka; with Italy, France and Germany figuring as the main countries of origin. Eighty five percent of Sri Lanka’s exports to the EU market benefits from GSP+. Thus, the stakes for the country are high.’
Meanwhile, President, In-house Counsel & Legal Advisor, The European Chamber of Commerce of Sri Lanka, John Wilson said: ‘GSP+ should be seen as not only an opportunity but also as a necessity by Sri Lanka in the current international economic climate. ‘Implementation of local laws is what is needed. Considering the pressures growing out of the US imposed new tariff regime, a good dialogue with the EU is needed.
‘Sri Lanka’s level of business readiness must be upped. Among the imperatives are: An electronic procurement process, Customs reforms, a ‘National Single Window’, stepped-up access to land by investors, for example, a clear policy framework on PPPs and reform of the work permits system.’
It ought to be plain to see from the foregoing that Sri Lanka cannot afford to lose the GSP+ facility if it is stepped-up economic growth that is aimed at. It would be in Sri Lanka’s best interests to remain linked with the EU, considering the aggravated material hardships that could come in the wake of the imposition of the US’ new tariff regime. Sri Lanka would need to remain in a dialogue process with the EU, voice its reservations on matters growing out of GSP+, if any, iron out differences and ensure that its national interest is secured.
Chit-Chat
Chiara Tissera
Mrs. Queen of the World Sri Lanka 2024, Chiara Tissera, leaves for the finals, in the USA, next month
I had a very interesting chat with her and this is how it all went:
1. How would you describe yourself?
I am a sensitive and passionate individual who deeply cares about the things that matter most to me. I approach life with a heart full of enthusiasm and a desire to make meaningful connections.
2. If you could change one thing about yourself, what would it be?
Actually, I wouldn’t change a thing about myself because the person I am today, both inside and out, is the result of everything I’ve experienced. Every part of me has shaped who I am, so I embrace both my strengths and imperfections as they make me uniquely me.
3. If you could change one thing about your family, what would it be?
If there’s one thing I could change about my family, it would be having my father back with us. Losing him six years ago left a void that can never be filled, but his memory continues to guide and inspire us every day.
4. School?
I went to St. Jude’s College, Kurana, and I’m really proud to say that the lessons I gained during my time there have shaped who I am today. My school and teachers instilled in me values of hard work, perseverance and the importance of community, and I carry those lessons with me every day. I was a senior prefect and was selected the Deputy Head Prefect of our college during my tenure.
5. Happiest moment?
The happiest moment of my life so far has been winning the Mrs. Sri Lanka 2024 for Queen of the World. It was a dream come true and a truly unforgettable experience, one that fills me with pride and gratitude every time I reflect on it.
6. What is your idea of perfect happiness?
Happiness is a deeply personal and multifaceted feeling that often comes from a sense of contentment, fulfillment and well-being. For me, perfect happiness is in moments of joy, peace and accomplishments … and also being surrounded by my loved ones.
7. Are you religious?
Yes, I’m a very religious person. And I’m a firm believer in God. My faith guides me through life, providing strength, dedication and a sense of peace in every situation. I live by the quote, ‘Do your best, and God will do the rest.’
8. Are you superstitious?
I’m not superstitious. I believe in making my own decisions and relying on logic and faith rather than following superstitions.
9. Your ideal guy?
My ideal guy is my husband. He is compassionate, understanding and is always there to support me, no matter what. He’s my rock and my best friend – truly everything I could ever want in a partner.
10. Which living person do you most admire?
The living person I admire the most is definitely my mummy. Her strength, love and unwavering support has shaped me into who I am today. She is my role model and she inspires me every day with her wisdom and kindness.
11. Your most treasured possession?
My most treasured possession is my family. They are the heart of my life, providing me with love, support and strength. Their presence is my greatest blessing.
12. If you were marooned on a desert island, who would you like as your companion?
I would like to have my spouse as my companion. Together, we could make the best of the situation, supporting each other, sharing moments of laughter and finding creative ways to survive and thrive.
13. Your most embarrassing moment?
There’s quite a few, for sure, but nothing is really coming to mind right now.
14. Done anything daring?
Yes, stepping out of my comfort zone and taking part in a pageant. I had no experience and was nervous about putting myself out there, but I decided to challenge myself and go for it. It pushed me to grow in so many ways—learning to embrace confidence, handle pressure, and appreciate my own uniqueness. The experience not only boosted my self-esteem but also taught me the value of taking risks and embracing new opportunities, even when they feel intimidating.”
15. Your ideal vacation?
It would be to Paris. The city has such a magical vibe and, of course, exploring the magical Eiffel Tower is in my bucket list. Especially the city being a mix of history culture and modern life in a way that feels timeless, I find it to be the ideal vacation spot for me.
16. What kind of music are you into?
I love romantic songs. I’m drawn to its emotional depth and the way they express love, longing a connection. Whether it’s a slow ballad, a classic love song or a more modern romantic tune these songs speak to my heart.
17. Favourite radio station?
I don’t have a specific radio station that I like, but I tend to enjoy a variety of stations, depending on my mood. Sometimes I’ll tune into one for a mix of popular hits, other times I might go for something more relaxing, or a station with a certain vibe. So I just like to keep it flexible and switch it up.
18. Favourite TV station?
I hardly find the time to sit down and watch TV. But, whenever I do find a little spare time, I tend to do some spontaneous binge – watching, catching whatever interesting show is on at that moment.
19 What would you like to be born as in your next life?
Mmmm, I’ve actually not thought about it, but I’d love to be born as someone who gets to explore the world freely – perhaps a bird soaring across continents.
20. Any major plans for the future?
Let’s say preparing and participating in the international pageant happening in the USA this May. It’s an exciting opportunity to represent myself and my country on a global stage. Alongside this, I am dedicated to continuing my social service work as a title holder, striving to make a meaningful difference in the lives of others through my platform.
The formation of wrinkles and fine lines is part of our ageing process. However, if these wrinkles negatively impact appearance, making one look older than they actually are, then trying out some homemade remedies, I’ve listed for you, this week, may help in giving your skin a fresher look.
* Banana:
Bananas are considered to be our skin’s best friend. They contain natural oils and vitamins that work very perfectly to boost our skin health. Skincare experts recommend applying the banana paste to the skin.
Take a ripe banana and mash a quarter of it until it becomes a smooth paste. Apply a thin layer of the banana paste on your skin and allow it to sit for 15 to 20 minutes before washing it off with warm water.
* Olive Oil:
Olive oil works as a great skin protector and many types of research suggest that even consuming olive oil may protect the skin from developing more wrinkles. Olive oil contains compounds that can increase the skin’s collagen levels. Yes, olive oil can be used as a dressing on your salads, or other food, if you want to consume it, otherwise, you can apply a thin layer of olive oil on your face, neck and hands and let it stay overnight.
* Ginger:
Ginger serves to be a brilliant anti-wrinkle remedy because of the high content of antioxidants in it. Ginger helps in breaking down elastin, which is one of the main reasons for wrinkles. You can have ginger tea or grate ginger and have it with honey, on a regular basis.
* Aloe Vera:
The malic acid present in Aloe Vera helps in improving your skin’s elasticity, which helps in reducing your wrinkles. Apply the gel once you extract it from the plant, and leave it on for 15-20 minutes. You can wash it off with warm water.
* Lemons:
Lemons contain citric acid, which is a strong exfoliant that can help you get rid of your dead skin cells and wrinkles. Also, as an astringent and a cleansing agent, it helps to fade your wrinkles and fine lines. You can gently rub a lemon slice in your wrinkled skin and leave it on for 10-15 minutes. Rinse afterwards and repeat this process two to three times a day.
* Coconut Oil:
Coconut oil contains essential fatty acid that moisturises the skin and helps to retain its elasticity. You can directly apply the coconut oil, and leave it overnight, after gently massaging it, for the best results.
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Sun directly overhead Hatthikuchchi, Kalankuttiya, Halmillewa, Ipalogama, Palugaswewa and Habarana at about 12:11 noon. today [10]
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