Orange shocks global markets

by Anjana Samarasinghe

Nearly 20 years ago Sugath Kodituwakku, the late Chairman of Orient Holdings Ltd established Clipsal Lanka as a joint venture with an Australian company to manufacture electrical switches in Sri Lanka.

At the beginning only assembling was done in Sri Lanka. When the company grew, Clipsal Lanka started to manufacture all the components, which are used for electrical switches in Sri Lanka. While catering to the local market, the company entered into global markets as well.

In 1995 when Sugath Kodituwakku passed away his son Kushan Kodituwakku took over their family business.

Kushan suggested to their Australian partners to empower the manufacturing process with advanced technology. But they denied it saying that Sri Lanka is not capable of controlling advanced technology.

This forced Kushan to seek for more advanced technology for their manufacturing process. He was able to get the world's latest and advanced machinery and equipment for their plants.

When Clipsal was globally sold out to a French company, they offered large amounts of money for Clipsal Lanka. Kushan didn't want to sell the company. By that time he had the majority in shares of the company. He thought of restarting the business under a new brand name, Orange.

The company had only 48 hours to change their brand name. The entire business collapsed for 48 hours said Managing Director of Orient Electric Systems Kushan Kodituwakku. But the company was able to bounce back to business within 48 hours.

Now the company has been able to gain the same amount of revenue as before and double the business.

'It is amasing to see the support that we got from the public when we changed our brand name to Orange. Sri Lankans demand high quality products and they would support any local entrepreneur who provides high quality products to the market, Kushan said.

Today, Orange holds 80% of the local market share and around 40% share in Australia. Orange is now in the process of setting up their business in Malaysia, India and Maldives.

At present the company is building alliances through their network all the way to Europe. Orange plans to build their industrial estate in Meegoda consisting of eight plants specially to cater to the global market.

The cheap low quality products imported from China has been a huge challenge for Orange products. It is not that we couldn't compete with them. These products are more look a likes of quality products.

Orange products are manufactured from high quality raw material using latest technology and Orange switches and sockets come with a lifetime warranty, he said.

Kushan says the Government should have tariff schemes or certain restrictions on imports to protect the local entrepreneur who provides superior products to the market.

Due to the large market share Orange has in the market, the company has been able to perform well. If this comes down the company will be incapable of being more competitive in the global market, he said.

He called on the Government to have tariff barriers at least for a short period till the entrepreneur can make a strong impact in the market.

Orange expects to be one of the largest domestic electrical players in the world and its intention is to buy some of the multinationals in the electrical field. In the electrical industry many family businesses were brought over by multinational companies. But most of them do not have the passion and knowledge to move ahead, he said.

'Sri Lankans have capabilities of building global businesses. Comparing with other countries we are very much stronger and need not be afraid in reaching ventures. Most of the time we are underestimating our capabilities in not exposing to the world', he said.

At present nearly 700 employees work for Orange through their two plants. Orange offers household electrical products ranging from the light meter to the bulb and exports Rs. 25 Million worth of electrical switches and sockets per month.