Dearth of professional engineers now

[Young Entrepreneurs]

Harshini Perera

Having started with a small factory with old machinery EMP Group of Companies is now looking forward to list in the Colombo Stock Exchange in five years time. The growth of the company has mainly been the knowledge and experience he acquired. He is EMP Group of Companies Chairman Chandranandana Diyunuge who is featured for this week’s young entrepreneur column.

Excerpts of the interview with Diyunuge

Q: How did you come up with your enterprise?

A: I worked in three different companies after my graduation from the Moratuwa University in 1998. The companies I have worked for never used my fullest capacity and it compelled me to start a new venture. The companies I worked for gave me the responsibility without giving me the authority. Without giving authority, an engineer cannot discharge his duty well. The nature of the Sri Lankan companies is to provide responsibility without giving authority.

When I gained experience from those companies I realized that they are not taking the maximum benefit out of my knowledge and thus I wanted to start my own company. My partner is the Managing Director of my company. We took over a 50 percent share of Electro Metal Pressing (Pvt) Ltd with Rs 35 million liabilities in October 2003. The company was on the brink of bankruptcy when we took over the company. We first started as a small factory with about 2000 square feet. There were only five employees to work for the company. After the acquisition of the company we stepped into a new customized products portfolio for the construction industry.

Q: What were the challenges you faced?

A: When we acquired the company we did not invest money. We took over the company on a Rs 35 million liability. The settlement of the liability was a challenge to us. Within a very short period of one year we managed to settle the liability. We took full control and ownership of the company by the end 2004 and the number of employees kept increasing. The company realized that the old machinery will not be sufficient to meet the growing demand as the company progressed. We then decided to purchase new and latest machinery.

The challenge we had to face was to find ways to purchase the latest machinery but somehow or the other we managed to import a machine from Japan. We invested Rs 50 million in 2005 for that machine.

We have won the certificates from the panel board of industries such as ISO 9001, 2008, ISO 14000 and fully ASTA Type Tested Certificate from Germany. None in the construction industry in the country has this certification. We had to spend a lot of money to set up the process of getting this certificate. Currently we are capable of meeting the requirements of any project in Sri Lanka and to the export market as well. We are exporting our projects to Maldives, India, Bangladesh and European countries on a project by project basis.

Q: What are the strengths of the company?

A: The young and energetic professional staff is the main strength of the company. We have recruited young people with qualifications and we use robotic machines in the production process. We have currently ordered robotic machines as the company is in the process of a Rs 300 million expansion.

Our second important strength is the latest technology as we are not depending on workmen but machinery for metal pressing. We comply with all international standards as a local company. The company has partnered with world renowned companies. We import all our raw materials from direct suppliers.

Our relationship with the banks is strong which is a strength to our company. We have been able to satisfy our customers and it also adds to our strengths. EMP has been delivering an excellent after-service service.

Q: How do you manage your enterprise?

A: I always try to allocate authority among the professional staff so that they can discharge their duties together with responsibilities. When it comes to marketing we identify the customer requirement correctly. The department heads are given necessary authority to discharge their duties.

Q: How did you supply with capital initially?

A: Initially we did not invest in the company. The small factory with old machinery was our major capital. We invested only on our knowledge and experience. Today our assets are close to Rs one billion.

Q: What are your aspirations?

A: I was born to a poor family. My father was a tailor and mother was a housewife.

During 70s, there was a textile ban and thus the family had to face a difficult time. I conducted my studies under difficult conditions but anyhow I completed studies.

The places where I worked after the graduation did not treat me well.

That is why I wanted to start my own company. I changed myself from a job seeker to a job creator.

Q: What are the strategies you adopt to enhance the employee efficiency?

A: We have given key performance indicators to all our management staff. The company operates under two categories of employees which is the sales team and the production staff. We have given targets for the production staff and they are given attractive incentive packages. Then they become energetic to reach the production targets.

The sales staff too were given targets and identified the market as a physical segment. A special manager is assigned for these segments and given targets. We always look at the sales side because it plays a main role while helping the production.

Q: What is your goal in business?

A: My plan is to reach a turnover of Rs ten billion in the next five years and for that I have set up six subsidiary companies. We have established EMP Holding Ltd which will list in the Colombo Stock Exchange in 2014. The capital raised from the listing will be reinvested on our group of companies. I need to increase the number of employees to 2500 from 600 by the end of these five years.

We have three manufacturing companies and three service providing companies under the Holding. All these companies are serving the construction industry.

Q: What are your future plans?

A: My future plan is to diversify into other sectors from the construction industry in ten years time. We need to diversify into the hospitality, leisure and FMCG sector to earn a good turnover.

Q: What is the support you expect from the Government?

A: The brain drain has created a hindrance to the development of industries. Professionals are migrating to other countries and there is a difficulty finding professionals such as engineers for the industry. We always need to recruit professionals and skilled people but due to the brain drain we hardly find these people. The Government should take action to mitigate or control this.

The Government has given an excellent package to the industrial sector. We expect that it will help to trigger a boom in the construction industry. The banking sector should evaluate entrepreneurs in a proper way and then allow financial support for them. The Government should be involved in that.

Q: What is the support you get from the family?

A: My wife has given me the freedom to take decisions and supports me. Since my children are small, my wife looks after them even with less support from me. That is the main support I get from them.