A variety of 'new things' giving Richard Pieris' the business bounce

Lynn Ockersz

Richard Pieris & Company Ltd, a household name in Sri Lanka in the sphere of the manufacturing of a wide variety of consumer goods, could best be described as being 75 years young this year.

According to the Company's Director / Chief Operating Officer, Pravir D. Samarasinghe, an interview with whom we carry today, a secret of Richard Pieris' longevity has been its untiring spirit of innovation and product diversification. "It has always been new things" that the company has come up with over the decades.

Q: You have been 75 years in business. What has contributed towards your longevity as a business organisation?

A: Richard Pieris' has had a humble beginning. We enjoyed leadership for automobile components and repair work, agriculture fertilizer etc, were some of our main lines of business. But as to how the growth and longevity has taken place, I would attribute them to a lot of innovative thinking. We had a lot of pioneering initiatives continuously.

If you look at the manufacturing side of Richard Pieris' which grew in the last 50 or 60 years, it has always been new things that we have introduced. If you take tyre re-treading, it was introduced by us, so were rotation - moulded water tanks. A number of such products were introduced by us. So, there has been a pioneering nature which has helped develop the company to what it is today.

Two other aspects worth mentioning is that a strong brand name was also developed. The Arpico brand which is quite popular among the masses in Sri Lanka. That has grown to a level which satisfies our businesses.

There is also a good work ethic and a good team of people at Richard Pieris'. That again has helped us grow. More recently, there has been tremendous growth. Particularly in the last four years, there has been a change in our culture as well.

So, I may imagine, that our pioneering aspect, the strong brand equity which we hold and the people who are involved have helped this growth.

Q: Have you moved away considerably from rubber-based products to manufactures of other kinds with varying appeal?

A: Now if you take it, the company has a Rs. 15 billion turnover. It has a Rs. 10 billion market capitalization. We have a series of businesses. Rubber based products is a small aspect of the whole group. We have five core sectors in the company.

One is rubber products for export; we have about five factories, bringing out various rubber products for the export market. We are very large in retailing - that's another sector. In retailing in general household goods and large format stores, we are the largest in the retailing category.

Then we are the largest in plantations in Sri Lanka. If you take the tea and rubber plantations, we are the largest player in Sri Lanka. We make 10 percent of Sri Lanka's rubber as well as seven percent of Sri Lanka's tea.

We are also the largest builder in tyre rebuilding in Sri Lanka. We have seven factories all over the country and we have about 50 percent market share in tyres.

We also have a plastics sector. Mainly it is in the area of hardware - related items and furniture related items in plastics: Water tanks, PVC pipes, moulded plastic goods like furniture, - there is a series of hardware and furniture related items. We have about eight factories all over the country, manufacturing these products.

In addition to these five areas we have gone into transportation; that is, logistics. We are in real estate development, construction, media or newspapers. So, if you take it as a group we are a large conglomerate and rubber accounts for only a small part of this big venture.

Q: So business diversification has been one of your main strategies?

A: Yes, at the corporate level, it is a two-focused strategy. We would focus on those five business areas with the aim of growing bigger and bigger and getting more market share as well as go into the related areas in those. For example, if we are in plantations we go into forward integration into tea exports, or using the other material, such as timber for furniture.

Likewise, we have looked at selective diversification into selective industries which have a long term growth potential. If you take transportation or logistics, we feel Sri Lanka is well positioned with India. We feel the transportation industry would grow.

Likewise, we went into real estate development. We felt there is some scope there - there is a niche market we were looking at. We have been giving affordable, trusted housing solutions to people; middle income level as well. That way we went into real estate development.

We went into construction as well. There again we felt there are solutions to the low income housing needs in the country as well as infrastructure development, such as roads, bridges.

We found there was a gap in the market, so selectively we went into that. So, it is a combination of focusing on our existing businesses and developing them as well as going in for selective diversification.

In implementing these plans, we have looked at fast-tracking our growth through acquisitions or by organically developing our own businesses.

Q: Are Richard Pieris' in the management of plantations?

A: After the nationalisation of plantations in the seventies there was a privatisation about 10 years ago. We jointly managed two plantation management companies with Keells. That was Maskeliya and Kegalle plantations. We had a 50-50 relationship with them. That's how we got into plantation management.

Two years ago we acquired the 50 percent of Keells and we became the totally owned management company of Maskeliya Plantations and Kegalle Plantations.

Maskeliya is the premier tea company in Sri Lanka, and Kegalle Plantations is the premier rubber plantation in Sri Lanka. Even more recently we acquired Namanakula Plantations, which had tea, rubber, palm oil.

So, altogether we have about 80,000 acres of plantation land, and nearly 30,000 employees. So we are definitely the largest plantation company.