Toast among disseminators of Japanese electronics expertise

by Lynn Ockersz

A specialist in electronics manufacturing services, TOS Lanka Co. (Pvt) Ltd, a wholly Japanese - owned BoI enterprise, located in the Biyagama Export Processing Zone, has braved all over the past 12 years and continues vibrantly with its core business concerns.

In this interview, the company's Executive Director Merrick Gooneratne and its Factory Director Nobuyuki Tanaka focus on how Sri Lanka has gained by TOS Lanka's presence besides elaborating on other areas of interest.

Q: How would you describe your enterprise to the public ?

Merrick Gooneratne: We are a Section 17 BoI enterprise, fully Japanese owned, specializing in electronics manufacturing services, entirely for the export market.

Q: What's the structure of your organisation in regard to equity and ownership ?

Merrick Gooneratne: It is fully owned by a Japanese company which has a history of about 30 years in manufacturing, located in Kyoto and is a major sub contract supplier to renowned brand names in Japan, in various electronics end uses.

Q: What are your main product lines ?

Merrick Gooneratne: Our focal activity is what you would call surface mounting of printed circuit boards. It is a very hightech product process which involves the assembly of printed circuit boards on using high-speed chip mounters.

The product goes into various end uses because virtually every electronic product needs printed circuit boards. So it goes into telecommunications, automotives, bio-medical engineering - whatever you name there is a PCB required.

Telecommunications is a major end use of printed circuit boards. Because every telecommunication equipment needs a printed circuit board, whether it be a small telephone or a mobile phone, or instrument or whatever, at the higher end of service position, it requires a PCB.

Q: What's your strength with regard to employment ?

Merrick Gooneratne: With regard to employment we have around 240 employees at the moment but we should go up to about a thousand.

Q: Will one be right in assuming that you are a young company?

Merrick Gooneratne: Yes, we are into our tenth year of commercial operations. What is significant is that this company was launched in 1995 at the height of the war in this country.

In fact our BoI agreement was signed in the aftermath of the Central Bank bombing. Despite the confusion in the country the President of the company who is a Japanese gentleman, was undaunted; he was determined to go ahead with the project.

He came on time, we signed the agreement. Our banker at that time was ABN Amro and if you remember, they are located next to the Central Bank and they were in shatters.

Despite all that the project took off. What is more, you can understand his commitment to the country and the project because he has just constructed the second factory, also at the height of the conflict.

Another interesting point is that our project was commissioned at the time that President Mahinda Rajapaksa was the Minister of Labour. He in fact was the chief guest.

He supported us in various ways.

Q: Over the past 12 years, how has Sri Lanka benefited from your enterprise ?

Merrick Gooneratne: Sri Lanka has benefited in two ways. One, is through the introduction of a very high technology, specially in the area of surface mounting.

I believe we are one of the few companies in the country concentrating on this and this at a very high level of technology. Secondly, the company operates a very high level human resources development programme, where we send our employees in various categories, at management level, supervisory and at operator level, for extensive training in the facilities in Japan.

There they get exposed not only to the technology in Japan but also to the lifestyle, the work ethic and culture of Japan.

They come back better human beings. Over the years I have trained over 150 young men and women under this programme. We don't charge any fee and after they come back we don't want them to work for long periods. They are free to go at the end of it.

But most of them serve us for at least two or three years. In foreign exchange earnings, the value-added percentage is about 25 percent, so we generate a substantial amount of foreign exchange as well.

Q: How has the present President of Sri Lanka helped your enterprise?

Merrick Gooneratne: In 1995 when we launched this HRD programme in Japan it was under the initiative of his Excellency who found us a counterpart in Japan which enabled us to facilitate the training programme. He was associated with the initial stages of the training as well because he assisted us with the various procedures at that time.

Q: Mr. Tanaka, would you describe your experience of working in Sri Lanka as beneficial in nature ?

Nobuyuki Tanaka:I have interacted with your workers when they came for training to the holding company in Japan. We have continued the interaction after they returned to Sri Lanka and resumed work here in the factory. I find that they have a strong commitment to their work. Secondly, they are very diligent in following instructions.

They will do as they are told.

Q: Is it official Japanese policy now to promote investment in South Asia ?

Nobuyuki Tanaka: Because of the continuous escalation in manufacturing costs and other inputs in Japan, the Japanese manufacturers are on a track to relocate themselves overseas.

Their first choice upto now has been China. But now they are moving towards Vietnam, which is an emerging destination for investment and of late they are looking at India very seriously.

This has nothing to do with any official policy, it is a purely commercial decision; a businessmen's decision to relocate themselves initially in China, and from there looking at a better base in Vietnam and from Vietnam at India, as a cost-effective base as well as the potential offered by a huge domestic market. Cost and the potential of marketing, these are the key factors.

Q: Could you give us details of any other major on-going projects ?

Merrick Gooneratne: We are a fully Japanese company but we have had a successful interaction with a Norwegian company, through the Sri Lanka - Norway Match-Making Programme executed by the Chamber of Commerce.

We have met a Norwegian partner who is specializing in putting into the Norwegian market a product which will facilitate the life of a disabled or aged person. But this is not a component, it's a total product.

We are turning out this total product here and the Norwegian partner buys it back in its entirety and has now successfully marketed the product and the quality is in compliance with all the requirements of that sophisticated market.

Secondly, the partner is now developing the programme into its second stage by doing an R and D project with this company, supported by some young graduates from the University of Moratuwa. And we are successfully developing a second range of products for this Norwegian company.

So, internationally, it is a very interesting experience because you have a partnership between Japan, Norway and Sri Lanka working on track.

This product enables the disabled and elderly to communicate with their household utilities electronically.

It also helps them to communicate with any visitor coming to the gate or any health institute that provides them facilities. And Sri Lankan engineers are adding value to this product. I am very proud of the fact that there are three young Lankan electronic engineers who are adding value to this product locally.