Biz-bud

Rainco's policy - people centred

'Together in any weather':

Ramani KANGARAARACHCHI

When setting up a new factory for a product, any entrepreneur gives priority to good infrastructure facilities. But Rainco as a policy located its factories in areas where unemployment was high even if first-class infrastructure was not available proving its people centered attitude. They are "Together in any weather" with people according to their motto. It may be the secret behind their success.

Umbrellas did not have any identity at all in the past but we have made it a fashionable household name today.

Rainco is the only full fledged umbrella manufacturing company in Sri Lanka and certified with ISO 9001-2000 in terms of quality, Managing Director Rainco (Pvt)Ltd Fazal Fausz said.

He was interviewed by Daily News Business on this success story.

Fazal, the eldest son in the family of six children studied at Trinity College, Kandy. Having completed his higher studies at Royal Institute Colombo he joined the family business.

"It was my father who started this business at Kadugannawa in 1977 with the open economy. He had worked for Elelphant House and when the then Government encouraged people to set up new businesses he started this venture with an investment of Rs 25,000 and five employees. I joined him in 1997 after obtaining my CIMA qualification and I worked as a trainee for four years under my father".

Brand leader

The company's original name was Kandurata Umbrella and it was changed as Globe later but it did not become popular. We then started advertising our products having restructured and professionalized the company branding it as Rainco in 2002 and became the brand leader making a significant impact on the market.

There are five factories, one at Kadugannawa and two at Danture and Mawanella. The Head office is at Mount Lavinia. Our factories are full fledged with all raw materials and we have everything under one roof except the steel component and some fabrics required for umbrellas. This has helped us to reduce the production cost in a big way, Fazal said.

One-thousand people from nearby areas have been given employment by the company. A home delivery department has been set up to provide an income to their ex employees who are unable to come to the factory due to various reasons.

The company delivers all raw materials to their 250 well experienced former-employees' houses to assemble umbrellas where each of them earn a minimum of Rs. 5,000. The company manufactures two million umbrellas per year in all factories. A share is exported to India and the Maldives as well. Rainco has a sixty percent share in the local market.

"We manufacture 62 types of umbrellas including garden tents and canopies ranging from Rs. 300 to Rs.250,000, raincoats and mosquito nets in a range of colours. We introduce three colours every year for umbrellas. Our own strong distribution network with around 5,000 retailers including the north and east and the sales staff visits retailers every week, Fazal said.

Challenges

Asked about the challenges at the beginning, he said that there had been 26 umbrella manufacturing companies, Mackie being the largest and they reduced the prices of their umbrellas by a big amount and all other factories were closed due to market losses".

We were able to survive because of the uniqueness and high quality of our products. We always gave something extra to the customer. There were some imported umbrellas of low quality at cheaper prices but still our umbrellas had a better demand. If a customer came with a complaint we replaced the umbrella, he said. There was a time when we had to close the factory when there was no rain and the demand dropped. But it picked it up when we introduced fashionable new products.

But the market is shrinking at present as a result of the recession and the market has not improved for the past four years. It remains the same.

Our customers' buying power has reduced and they do not replace umbrellas as before and that is the challenge we have to face now, he said.

Asked about future plans, he said, "We are planning to capture the market in Bangladesh and are planning to renovate and refurbish our factories, he said. Our overseas venture that manufactures frames and accessories for umbrellas with Sri Lankan, Indian and Taiwanee collaboration in India is a sign that we are spreading our wings, he said. Rainco undertakes to manufacture corporate gifts with the company's logos which is a popular product. It is an effective way of promoting brands, he said.

Referring to their strength, he said that their dedicated staff are highly skilled, trained and motivated and has an excellent employer-employee relationship which is the secret behind their success.

"We look after them well and we strongly believe in giving back something to the society. Renovating the Kandy hospital, land and building houses for our poor employees are among our CSR projects, he said.

The company has won the Bronze award for the best local brand last year. It also has the SLS 1207 quality award.