|Tuesday, 4 March 2003|
Elephant House - part and parcel of Lankan society
by Shirajiv Sirimane
Though ice is cold and is expected to liquefy, a company which started manufacturing ice over a century ago has not liquidated and has grown solid year after year to become one of the leading companies in Sri Lanka.
'Elephant House, the household company, which has firmly entrenched itself as part and parcel of the Sri Lankan society as well as among the expatriates, began with the formation of the New Colombo Ice Company Limited' in 1894. The company was floated to purchase the Colombo Ice Company Ltd, to manufacture ice and mineral waters.
In 1863, at a time when all ice related requirements were imported to then Ceylon, the company imported the first ice making machine and local production began on a small-scale.
The production of ice on a large commercial scale, began with the formation of the Colombo Ice Company in 1866, which soon became known as the 'Ice Kompaniya'.
However, the newly formed Colombo Ice Company, went into liquidation and was purchased by a syndicate headed by Tom Walker - thus emerged the New Colombo Ice Company (Elephant House), with the birthday of the firm being celebrated on May 8, 1894.
The firms initial capital was Rs. 200,010 divided into 2,100 shares of Rs. 100 each and Tom Walker was Managing Director. While ice and mineral waters were initially their main line of business, the Company expanded into other areas of business such as frozen food, wine, spirit and general goods.
The Company's output in its earliest days was six tons of ice and 700 bottles per day which was sold mostly on a wholesale basis to ships chandlers, hotels, clubs and shops.
The year 1910 was a significant year for Ceylon Cold Stores, when Bois Brothers and Company, were appointed agents of the firm and the rapidly growing New Colombo Ice Company Limited bought the business and plant of one of its main rivals - the Galle Face Ice Company from J.P. Motten for Rs. 45,000.
In 1919, the next merger took place with the purchase of Von Possners British Aerated and Mineral Water Company, which was purchased by the New Colombo Ice Company for Rs. 175,000 of which Rs. 150,000 was financed by Debentures.
In 1922, an era of improvements began, with the replacement of the old rubber ringed bottles by crown corks. At a time when there were no advertising agencies, the New Colombo Ice Company announced its changes from old to new in an intriguing caption "a tale of two bottles". This also gave way to an effigy of an elephant on the bottle as a sign that it contained the "Right Stuff".
In 1923, the New Colombo Ice Company Ltd took a major step forward by purchasing a new ice manufacturing plant which was driven by an internal combustion engine replacing its old ten-ton steam driven plant.
A fleet of light weight vehicles were purchased in 1925 to replace the bullock carts which also solved the problems of breakage and thefts specially when transporting their products to upcountry. The company also introduced a policy of fostering the welfare of its employees by donating Rs. 5,000 to the staff provident fund this year.
In the early days there were no advertising agencies and the advertisements for the Company, were written by Ms. Glory Soloman, who was responsible for putting the Company in the forefront of business advertising in the country.
The following year the company launched boldly into the new business of supplying cold storage produce. In order to finance this new venture, the capital of the company was increased by the issue of new shares to the value of Rs. 390,000 which was over-subscribed. On December 1, 1928, the recently constructed Cold Stores was opened in Colombo.
Soon after, there was yet another issue of Rs. 250,000 in 7% preference shares, which were utilised to purchase one of the Company's smaller rivals, the Pure Ice and Aerated Water Manufactory. By 1928, the New Colombo Ice Company became the selling agents for the Ceylon Fisheries Limited.
In 1928, the Company also took over Ceylon Creameries which was initially negotiated on a monthly rental basis with the New Colombo Ice Company, paying Ceylon Creameries Rs. 550 a month. In 1932, the Company bought Ceylon Creameries outright and introduced the supply of fresh milk, which was supplied by the Wester Seaton Dairy in Negombo, which later went on to provide the Company with Cream, Eggs and Poultry as well. A few years later supplies were also obtained from the Kotmale Dairy in Nawalapitiya.
In 1935, Spencer and Company of Madras, offered the 'Icefruite' (Icepalam) agency to the Company on a royalty and sales were made throughout Colombo on cycles.
The Directors of the New Colombo Ice Company took a bold step by purchasing the firms' biggest rival, the Ceylon Ice and Cold Storage Company for Rs. 850,000, in November 1934 to mark the 40th anniversary of the firm.
By 1935, the Company installed its own Carbonic Acid Gas generating plant in order to cut down on heavy imports and also go on to produce carbondioxide as well as Dry Ice.
The firm also made another significant investment by establishing its own printing press in 1935. The following year saw the installation of the latest type of automatic machinery for the production of Aerated Waters at a very high speed and the firm also recorded an almost 100% increase in profits from Rs. 75,494 in 1935 to Rs. 142,291 in 1936. In 1937 profits had gone up further by Rs. 196,054.
The war period saw an unprecedented demand for the Company's products especially Aerated waters, while the opening of a branch in Trincomalee was also lucrative to the Company. In association with Cargills, Millers and Colombo Apothecaries, the Company introduced a form of voluntary rationing of butter, margarine, ham and bacon imports, in order that more supplies would be available to the Armed Forces.
With the Japanese Air Raid on April 5, 1942 on an Easter Sunday, the Company was authorised to open a few branch establishments as an experiment. Three depots were opened at Kollupitiya, Bambalapitiya and Wellawatte and this war-time practice of retail outlets went on to become a permanent peace time feature. Change of name in 1941
The year 1941, saw the change of name from the New Colombo Ice Company Ltd to the Ceylon Cold Stores Limited, in view of the ever extending operations of the Company. Sir (then Mister) Oliver Goonetilleke, Civil Defence Commissioner, opened a canteen for clerks and workers on October 4, 1943 in Colombo.
The post war period saw the opening of the new creamery and a new mineral water factory. Production reached a new high in 1950 when with three lines in operation, a record output of 1,471 dozens were produced in an eight-hour working day - an average of 183 dozens per hour.
The year 1954, saw the Company purchasing two water treatment units at a cost of Sterling Pounds 5,800 each, in order to maintain their name as producers of first class mineral waters.
Ceylon Cold Stores had a rare honour in 1954 when they were requested to supply all the food at 'Queens House' during the Royal visit in January that year.
In 1962 when a ban was imposed on the import of frozen vegetables, coffee and fruits. Ceylon Cold Stores introduced local substitutes of the highest quality.
In 1964, Mallory Wijesinghe, the first Ceylonese Chairman was appointed and all key personnel of the firm were Ceylonese. In 1966, permission was obtained to import machinery to modernise the Cold Stores and to install a modern bottling line, while in the same year, the production of icepalam was revived, and a quick snack service counter was opened at Fountain Cafe, which proved to be extremely popular.
The company's Diamond Jubilee was celebrated in 1969 and records showed that the Company had contributed Rs. 3,565,638 to the national coffers by way of taxation.
The Fountain Cafe, a very popular part of the Company, extended itself by opening two branches in Kandy and Trincomalee, while Elephant House cakes were sold islandwide.
In 1965 Victoria Estate was purchased by the company for the establishment of an animal husbandry project. This was the largest livestock farm to be run by the private sector in this country, with high quality breeding stock being imported from Australia.
By 1969, the farm had its own poultry breeding stock imported from Canada, with 5,000 day-old chicks being produced every week, while the broiler unit sent 5,000 fattened broilers each week.
The sheep operation at Victoria commenced with the purchase of a stock in Jaffna in 1967, and by the end of 1969 the sheep herd had grown to over 1,000. Other activities of the farm included the rearing of turkeys and ducks and the Estate with its extensive acres of coconut and cocoa, presented an ideal combination of crop and stock farming.
In 1969, the Company purchased Mahaberiatenna and amalgamated it with the Victoria Estate to form the Victoria Group, resulting in a pleasant bonus to shareholders at the Company's annual meeting in December that year.
CCS has made significant penetration in the market with Elephant Ginger Beer (EGB) as it is a natural product, manufactured using locally grown Ayurvedic ginger. EGB has become the flagship brand for export and is available in Australia, through the Woolsworth Chain of Supermarkets.
Walpola said that with the opening of the North in Sri Lanka, CCS is estimating an increased contribution of 6% to the Softdrinks volume.
He said the introduction of Excise duty has forced the Softdrinks industry to increase a litre by Rs. 4.00 per litre or Rs. 1.60 per 400 ml. bottle.
CCS has also introduced Soda, Cream Soda, Dry Ginger-ale and Tonic in 325 ml. cans to the local market. With the purchase of the company by John Keells Holdings in 1991, Ceylon Cold Stores is rated as one of its major contenders in the Sri Lankan business arena. The company has grown from strength to strength with substantial investments in equipment, thereby ensuring improvement of the quality of the end products and improving the quality of the company's staff, through various programs of leadership and team building which has improved productivity.
Walpola, an old boy of St. Joseph's College, Colombo has been a member of the CCS team that accomplished leadership for the company's core business in the market.
Produced by Lake House