CBL forges ahead with innovation

Indunil HEWAGE

The Ceylon Biscuits Limited (CBL) is a Sri Lankan conglomerate specializing in the food industry. The group manufactures a wide range of products under their flagship brand Munchee.

CBL's diverse product portfolio includes biscuits, wafers ,Tiara cakes and swiss rolls, Ritzbury Chocolates, specialty chocolates, Cecil, Natural fruit juices in ready to drink packs, dehydrated fruits, Lanka Soy, flavoured soya meat products, plenty Foods, Energy Foods, Herbal Foods, canneries among others.

Most of the products today enjoy the coveted position of being market leader in their respective category in Sri Lanka.

Ceylon Biscuits was founded in 1968 to manufacture high-protein biscuits to supplement mid-day meals for schoolchildren under a joint programme of Care Organization, USA, and the Sri Lankan Government.

In the mid eighties the company ventured aggressively into commercial operations and recorded one of the highest growth rates in any industry in Sri Lanka. The success story was the company's dedication to high quality standards, constant innovation of the product line, aggressive marketing and high focus on research and development.

This week Daily News Business features the newly appointed Managing Director of Ceylon Biscuits Limited, Sheamalee Wickramasingha in this column.

Here are the excerpts of the interview.

Q: As the newly appointed Managing Director of Ceylon Biscuits Limited, How do you review the company? How are you going to support the future growth aspirations of the company?

A: CBL is continuously engaged in innovating new products to the market. If you take the CBL business, our export volumes and our global presence has been growing rapidly. We are also currently in the process of setting up a new factory at the Seetawake Export Zone and this will be dedicated to achieve the company's export purposes. When that line is put up, we would be having the full capacity to manufacture products.

CBL will be aggressively looking for future expansion for exports as well. If you take chocolates, we made a huge investment recently with the launching of three new products. These are the products we will be looking at establishing in our market. CBL has a lot of plans to develop the chocolate side of business. In Sri Lanka, market for chocolate is not expanding rapidly, so we have plans to revamp this market. In addition, CBL was the first to come out with cakes, which are pre packed hygienically for consumption and again we have expansion in that market segment. Apart from that we also be looking at new avenues that will complement our business.

At the moment, several projects are in the pipeline and plans are on to go for extensive backward integration. These would be the areas that we are really focusing on.

Q: What is your role in the market for biscuits, cakes and chocolates in Sri Lanka? How has the biscuits, chocolates, cakes segments performed so far?

A: CBL became the market leader of biscuits in 2002, since then we have been forging ahead. We managed to introduce a wide range of products to the market which include our newly introduced products, cheese crackers, Kotala Himbutu biscuits and other products such as Crevo and Calo.

Q:How much has your market share grown over the last couple of years?

A: When we see our individual products ,CBL enjoys 60% in Munchee - (Biscuit Market) , 46% in Ritzbury (chocolate market), 75% in Tiara ( Branded cake Market) ,25% in Lankasoy ( TSP(soya meat ) market.

Q:What future plans do you have for these products?

A: We don't believe in sitting back and saying we have done so far. We are constantly innovating and that has become our major success.CBL is having a lot of plans for chocolate, biscuits, cakes and other products as well.

If you take the local chocolate industry, the market only have chocolate slabs. CBL managed to producing a range of product in a bid to change the way, the consumer looked at chocolate products in the country .

This is the ultimate success behind the CBL becoming market leaders in respective categories. Some people still don't believe that Ritzbury is the market leader. But the reality is our volumes are growing rapidly and were capable of surpassing the prime movers in this category.

Q: Which segment is driving your company growth?

A: We don't have any underperforming segments in the company. However the biggest growth comes from biscuits.CBL is aggressively looking at expansion in all categories its manufacture and also working at big capacities in all our factories to achieve set targets in the company

Q: What are the key challenges that you face in the face of stiff competition among opponent confectionery companies?

A: Competition is there, I would say all the products the CBL manufacturing are competitive. We rely on our strength and CBL is fortunate to have a excellent research and development team who are capable of introducing innovative FMCG products to the market. I don't think we have time to react to competition. What we see happening is competition tends to follow us. However, we have managed to secure our position in the market by winning the hearts and trust of our beloved local and international customers and I would say we have always in the position of being in the front.

Q: What are the challenges that you can see in the food industry apart from the stiff competition of other companies in the market?

A: Surging raw material prices in the food industry coupled with global financial turmoil have been major stumbling blocks for the industry growth to a some extent. As an example, cocoa prices have just shot up in the market. The opening of emerging economies like China and India has resulted in increased demand for raw materials.

In this present context, one of the conscious efforts CBL has made is to manufacture the required raw material for the productions locally with going for backward integration. If you take peanuts, earlier we used to import the peanut requirement from overseas. At present, we work to grow peanuts with the quality we want.

Accordingly, the entire requirement is being grown in Sri Lanka. Likewise we are looking at growing several other materials here with the participation of local farming community. This initiative also highlights our commitment for the well-being of the local industry as well as for the local farming community.

Q: What innovations can we look forward to next year?

A: As the market leader in the local confectionary industry, we are into innovation and every year we come up with new products somewhere between 5 to 10 in numbers. I would say CBL would follow the same process we had in the last couple years to cater to customer demand and the Sri Lankans will have the opportunity to taste more CBL products in the future.

Q:Any expansions?

A: CBL is in the process of installing a line at Seetawake trade zone with over billion rupee investment and is on the look out to getting another two lines within the next six months and these investments will also come close to the previously mentioned one.

Q: Is there anything you would like to add in conclusion?

A: The company has been performing well this year like we had in the past. But I would say its been very challenging today in the face of increasing cost of production amidst surging raw material prices. Hence we are not able to pass on the cost to our consumers. So, as a company, we are absorbing a lot of cost, which makes very much more challenging.

In addition, this year's budget promotes small industries. Likewise as a country, we must try to have more support from within the system to develop national industries. Today with more barriers opening up, we have a lot of threats from the surrounding regions as well as multinationals. If we want a Sri Lankan identity with our industry, we need to work as a team to discourage all bottlenecks the local industry facing today.

[Profile]

Name: Sheamalee Wickramasingha

School: Benenden School, UK and Ladies College, Colombo

Experience: She joined CBL in 1991 as a food technologist and since has held several positions within the company. She was asked to join the Board of Directors in 1996. She has a Master's degree in food chemistry from Purdue University, USA and Bsc a degree from the Kansas State University in food science and industry. In 1994 , she started Modern Pack Lanka a packaging company and functions as the Managing Director. She is also an Executive Director of several of the subsidiary companies of CBL. Hobbies: She has several interests which including reading, yoga, mountain biking and tennis.