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By Kushani Ratnayake

Nienhuis Montessori Asia (Pvt) Ltd, a BOI approved company which manufactures educational toys for the export market, plans to increase its production capacity with a further investment of Rs. 15 million.

Currently, the company has about 40% of the total worldwide production and the anticipated growth of the production volume, in the foreseeable future, will be between 15% to 25% per annum.

"The total investment in our company in Sri Lanka is close to Rs.150 million while the currently planned additional investment for 2003 amounts to approximately Rs. 15 million, Plant Manager of the Nienhuis Montessori, Herman Reuvers said.

The subsidiary company was set up in Panadura in 1995 and named Nienhuis Montessori Asia (Pvt) Ltd. It was originally established in co-operation with a local joint venture partner.

Besides a small management and office staff, Nienhuis Montessori Asia (Pvt) Ltd has a workforce of 45 permanent production workers and on an average 25 contract workers and temporaries.

The company was set up as a cost effective manufacturing alternative for the more labour intensive products.

During 1996 the business of the local joint venture partner deteriorated, as a result of which the local joint venture partner was bought and thereafter the company became a wholly owned manufacturing subsidiary of Nienhuis Montessori B.V in the Netherlands.

Today the Nienhuis group of companies is by far the largest supplier of Montessori educational materials worldwide. Besides the specialised Montessori materials, the company is also successfully developing and marketing high quality wooden educational materials for a more general education, in the age group of 3-12 years.

The company, Nienhuis Montessori B.V originally manufactured Montessori Educational Materials in the Netherlands in 1929. "This was a result of a co-operation between the founder of the Montessori teaching method, Dr. Maria Montessori and the founder of our company, Albert Nienhuis, he said.

The co-operation became a long lasting association, during which the ideas and requirements of Dr. Montessori were materialised in the workshops of Nienhuis Montessori.

Nienhuis selected the best materials and provided the craftsmanship to manufacture the special didactic apparatus, which met Dr. Montessori's exact requirements.

Export markets

As the years went by, Dr. Montessori's educational method received worldwide acceptance.

Nienhuis Montessori responded to the needs of the worldwide Montessori community, by expanding its craftsmanship capabilities and manufacturing facilities, in order to cope with the growing demand.

In 1975 a wholly owned subsidiary company, Nienhuis Montessori USA Inc., was founded and established in Mountain View - California, with responsibility for the distribution and service to the Montessori community in North America.

"As we have no local sales of product into Sri Lanka, all our products are manufactured for export", Reuvers said. The majority of the products from Sri Lanka (60%) are shipped to our parent company in the Netherlands, mainly for distribution in Europe. The remaining part (40%) is shipped to our sister company in the USA, exclusively for distribution in North America.

Future plans and expansion programs

For cost reasons, Nienhuis Montessori, since 1995 has adopted the policy to consolidate its manufacturing facility in The Netherlands, and to expand its manufacturing facility in Sri Lanka annually, in order to cope with the worldwide increasing demand.

The production in the Netherlands is directed towards less labour intensive, more technological advanced and trendier products. While the production in Sri Lanka is directed towards the more labour intensive, less technological advanced, and less trendy products.

"Sri Lanka's production facility has been able to gain much credibility by manufacturing products of equal, or in some instances even superior quality, compared with the products from the Netherlands," Reuvers said.

During the initial four years after its inception, all products from Sri Lanka used to be shipped first to the Netherlands, where a quality check took place, before it was distributed further. Today the products are shipped directly from Sri Lanka to the USA as well as Europe, to the full satisfaction of our customers", he said.

In-line with the planned increase in production there is an adequate investment plan in Facilities and Manufacturing Equipment. During the past year the available production floor space in Panadura was increased from 15,000 to 35,000 square feet, providing sufficient expansion space for the next three to five years. For 2003 there are again some major investments planned, among which are a new office building, and the renewal/extension of some of the available installations and machines.

"As we don't sell any of our products in Sri Lanka, and as the bulk of our raw materials also come from elsewhere, our operation is relatively independent from the economical situation in Sri Lanka itself", Reuvers said "but, the recent political developments have certainly helped us, in that the political climate is a lot more stable now, which has its direct reflection on the stability of our workforce".

He said that "the better political stability, some of the more investment friendly policies, plus the bias towards the attraction of foreign investments, are much to our advantage".

"This makes it a lot easier for the local management to convince our foreign directors and shareholders to invest their money in Sri Lanka, rather than elsewhere in the world", he said.

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