Forging ahead and remaining evergreen in business

Lynn Ockersz

Co-Chairman and Jt. Managing Director, Mackwoods Limited, Nirmali Samaratunga speaks of the growth and success achieved by her organisation, while focusing on the hurdles to business development in Sri Lanka and ways of overcoming them in the country's efforts at economic advancement.

Q: What is your formula for business growth, considering that Mackwoods is now a very diversified business organisation ?

A: Mackwoods, a long established family business has survived and grown under the guidance of the first Sri Lankan Chairman, the late N.S.O. Mendis whose vision and foresight as well as business acumen and principled integrity, was a driving force.

His daughter, the late Mrs. Sriyani Nonis, who was the Chairperson of Mackwoods, steered the Group for over forty years continuing the theme of "tradition with vision" and spearheaded the Group's diversification into many new business areas.

They played an invaluable role in the success of the Mackwoods Group. The business has now passed on to the third generation, Dr. Chris Nonis, Group Chairman and Mrs. Nirmali Samaratunga Co-Chairperson/Jt. Managing Director, who continue to uphold these traditions and values, whilst taking the Group forward.

As you said Mackwoods is a highly diversified conglomerate and we are active in key sectors of the economy, primarily in agriculture, healthcare, industry and have diversified also into Information Technology, which is a fairly new area for us but we foresee great potential for us in this sector.

We have also diversified into leisure. We are active in the energy sector and have a fairly strong focus on exports. This is the profile of the group as it exists today.

In discussing the formula, I couldn't help but go to the vision of the company. As a group what we are seeking is to achieve recognition as a global organisation.

We already have recognition locally as a leading mercantile establishment but we are also looking to enhance this at a global level and achieve excellence in all our activities. We are seeking to create value for our customers, our employees, share holders.

But while doing this we are seeking improve the quality of life of the community. This is something very specific about our Group, which has been an underlying theme in all our activities. That is, to improve the quality of life of the community we serve and thereby contribute to national development. This is the guiding principle behind our activities.

In looking at the formula for our success and our survival and growth, I would really look at the history of Mackwoods and its over 165 year heritage. The long years of business experience has enabled us to withstand any obstacles we have encountered over the years. It is an index really of our resilience.

With that comes our adherence to our core business values, which have always been fundamental to our organisation. That is, our integrity, our high principles, sense of fairplay and our high commitment to quality.

Over the years we have also enjoyed a reputation for stability, which is synonymous with our name. These factors have stood us in good stead over the years and we are building on them steadily.

We have a strong tradition of looking outward to the community we serve. In fact our driving business philosophy is to serve the needs of the community. If we look at the various business sectors we are involved in, they are all related to the basic living standards of society.

We are in agriculture, which is entirely rural-based, healthcare, which looks at improving the quality of life of the people, industry, which seeks to improve the industrial strength of the country and promotes local industries.

Even Information Technology has a great potential for employment generation and Sri Lanka is getting into a position of strength to offer these services and we are a significant player in the field.

Therefore, what we have always looked at are ways to service the needs of the community.

Getting back to business formulas, we do not have a set, standard formula,so to speak, but I would say that what has been our strategy is the continuous development and consolidating of our core business areas, namely, agribusiness, plantations, healthcare and industry.

However, at the same time we have selectively diversified into new business areas, which are linked to our core competencies.

Having identified the 'Need', the viability and the potential to create value for our stakeholders and society, we have embarked on that particular diversification activity. For example IT Education, Software Development and leisure.

We have, at all times remained committed to our core values of integrity, ethics, principles and good governance. Also our strong commitment to quality, and our strategy of continuous enhancement of quality.

Another key feature has been our investment in our human capital and focus on attracting and retaining competent and experienced staff at all levels. We consider this fundamental to the success and long term growth of the Group. We place high priority on a committed, motivated and loyal staff. This has played an important part in our growth.

Other initiatives contributing to growth have been Innovation, such as Branding initiatives for selected products such as "Mackwoods Fine Tea", our premium single estate tea targeted at the high end of the market.

I must mention that with all these strategic initiatives our aim is not only bottom line growth and performance, but at the same time to aim at improving the quality of life of the community. Underlying our business activities is the aspect of rural upliftment and raising living standards.

We do not undertake Corporate Social Responsibility as a specific programme or activity. Throughout our many years' in business we have endeavoured to combine the social aspect with our business activities as much as possible, in line with our philosophy of caring for the community. It is really an ongoing process, which goes hand in hand with our business.

Q: What are the current obstacles to business growth, in your view ?

A: I would first like to say that notwithstanding the current situation, notwithstanding the challenges, both local and global, businesses have performed quite creditably.

They have recorded growth in turnover as well as in bottom line. Also the economy has shown creditable growth. The growth figures for the economy in 2005-2006 reflect the resilience of businesses and the adaptability of the economy in the current context of high oil prices.

In regard to obstacles, there are some key issues at the macro level. One is the absence of a long term national policy, which is really planning for the long term future of the country, which has the consensus of the main political parties. The lack of such a long term policy is, I feel, an obstacle to business growth.

Everything else hinges on this. If you have a long-term national policy in place other key areas also get addressed through that.

There is also the work culture, which we have discussed as businesses and seen the need to change. We need to have a committed and industrious work force. Our low productivity, I feel, is one of the results of this work culture.

Perhaps one should look at productivity - related training, performance - based incentives and remuneration, for improving productivity.

Another obstacle is the lack of infrastructure facilities. We need to strengthen these facilities. This problem is being addressed by the State. I would particularly like to mention power generation which will address the high energy cost.

This is a problem businesses are finding unbearable at the moment. There is also the need to improve the road network and several other problems, but these two issues are foremost.

There is also the question of high interest rates and rising inflation. This is becoming a growing impediment to business growth and it has resulted in high cost of finance and rising exchange rates. This calls for fiscal consolidation and the need to correct the economic imbalances as otherwise growth would be negated.

Q: Anything you would like to tell the State ?

A: To be fair, the State has recognised some of the obstacles I mentioned. But they need to be addressed and measures must be implemented to rectify them. We need implementation. Such measures with regard to infrastructure in particular need to be fast-tracked.

Once again, speaking at a macro level, we need to move out and be integrated with the global economy, if we are to speed-up development. We cannot work in isolation, our market is small. We need growth with equity and to address the needs of the country.

But this should go hand-in-hand with global integration.

We have to more forward now and there the Government needs to strategically identify the key areas, the key markets, the key industries where we would have a competitive advantage. The Government should evolve the policies and mechanisms to exploit these opportunities.

We need to be globally integrated and create an enabling environment for the businesses to perform. This is a task for the State. This is a message I would like to highlight in terms of promoting business growth. What is important is that we be globally competitive and advance steadily.

The overriding issue which affects not only business but has widespread effects on the entire nation, both directly and indirectly, is the continuing North-East conflict and the need of the hour is a negotiated settlement leading to a permanent peace.