Removing flour subsidy welcome

An enterprising Chemistry graduate hailing from deep South who spent 11 years in the mercantile sector started a detergent business and today is the biggest manufacturer of chemicals for the apparel industry. The aim of the company is to be the global supplier of world class herbal cosmetics by 2010.

Shirajiv Sirimane

The success of the company has brought them a haul of local and international awards and they have carried their product lines to Bangladesh too. The modern detergent and textile chemical processing factory in Tejgaon, Dhaka manufactures and formulate car care products, household and industrial cleaners with the same excellence, management and technical expertise, stringent quality control and meticulous care for user and environment as in Sri Lanka.

A dynamic group of companies, Multichemi Group has reached international standards in management, product quality, service and environmental ethics. Their local promotions also include hosing on beauty pageants and sponsorships of various events.

Chairman Managing Director Multichemi Group, Samantha Kumarasinghe speaks to Daily News Business.

Kumarasinghe says that the knowledge he gained at the Peradeniya University and the exposure he got while attending international exhibitions gave him confidence to go on his own after being with Lankem for over 11 years and rising up to become marketing manager.

Q: How did you start your business?

After deciding to leave Lankem I started to manufacture detergents with an investment of Rs. 2 million which included the land in Hokundara, borrowings from Commercial Bank and my own funds. My detergents were environmental friendly and this helped me to capture the market.

For the first time in Sri Lanka I also started to manufacture Enzymes for washing denims for the textile industry which became very popular. These were also exported to Bangladesh.

Q: What made you set up a factory in Bangladesh?

One of the main reasons for it was the fact that the people were always smiling and very friendly. Encouragement for foreign investors to were very good and I must say that it is far better than in India and this is the reason I cannot enter the Indian market.

In addition to textile chemicals, I also introduced my range of detergents to the local market. However I had to face a problem since one of the manufactures had registered my trade mark in Bangladesh knowing that I was entering their market. Due to this, I had to introduce my range under the brand name 'Lion'.

Q: What made you increase your product portfolio?

The detergent market was doing well and I saw that there was a demand for genuine herbal cosmetics and decided to venture in to that field in 2001. We introduced products under the band names Nature's Secrets and Dash not only for the middle and upper middle class but to the grass root as well.

In addition to providing products we also conducted regular workshops to teach rural folk how to use cosmetics and conducts mobile saloons for this purpose. At Liberty Plaza we stall maintain a centre where we give free beauty treatment.

Q: What are your expansion plans?

Both the export and local markets are growing and we have to increase volumes. The company has now invested Rs. 350 million to construct a modern factory in Horana under the Government's 300 factory programme which would be opened next month.

With the anticipated increase in volume we would extend our exports to Eastern European market as well.

The tax holiday I received under the 300 factories programme is very encouraging.

Q: What are the problems the industry is facing?

The free cheap and untested cosmetic imports are a major problem as they enjoy duty free access. We have to pay duty for raw materials and I think the Government must reduce the tax on this.

We also think there is no fair play in marketing and this is evident at the Colombo Airport Duty Free shops.

Q: How do you see the tax structure in Sri Lanka?

I think the VAT should be brought down from 15 per cent to 10 per cent. This would lead to an increase of our profit margins. I also feel that it's the same people that pay taxes every year. The tax net has to be broad based and for this the Inland Revenue must employ more staff.

The Government can get more revenue by widening the tax net and simplifying it so that more enterprises would voluntarily come forward to pay income tax.

Q: What do you think of the Provincial Councils?

It's a sheer waste of time and the amount the state has to spend to up keep them is a burden to the national economy.

Q: How do you see the ethnic conflict?

There is no ethnic conflict in the country it's only a terrorist problem. I think the terrorists should be defeated militarily or by discussion. However economic support should be provided not only to the North East but to areas like Hambantota as well.

I am pleased to note that this is happening now. I still think that Hambantota is still an underprivileged province as people in the area do not have a Tamil Diaspora or relations overseas who send money to people unlike the North and East.

Q: How do you look at subsidies provided to some multi-nationals?

I think that it's very unfair. The Government did the right thing by removing the flour subsidy as it was the farmers in USA that benefited from it. Today due to high prices of flour, people are looking for alternative produces within the country and as a result we see a higher consumption of rice.

Q: Does the currency fluctuation have a major impact on your company?

As we export over 50 per cent of our produce this is not a major concern for us.

Q: What is your favourite destination for a holiday?

I am a nature lover and like to spend my time in places like Sinharaja or in the jungles. If it's overseas I like to travel to countries where you get people who are friendly.

According to my experience so far I like Ukraine and Germany to spend a holiday.