Renuka Group – Leaving a lasting legacy
In 1936 when the late Alfred L. Thambiayah, a Member of Parliament acquired The Cargo Boat Dispatch Company from Harry and John Cosmas, (the company’s then foreign owners) and grew it to the forefront of shipping, trading and agriculture, he made sure that it became a leading shipping establishment by the early 1900s accounting for the majority of the business of the Port of Colombo.
When the Business Times (BT) approached the new office of Renuka Holdings PLC (whose start was the Cargo Boat Dispatch) at Baseline Road, Colombo 8, the question that lingered is whether Mr. Thambiayah would have dreamed of a legacy of entrepreneurship that will last more than a century considering that The Cargo Boat Dispatch Company was established in 1866 by Ana G. Mahamadu. The BT team is greeted by the receptionist who directs us to the elevator cabin to go to the 4th floor board room.
As we step out of the elevator the company’s branding strategy seems very evident with several of the popular brand logos, posters and products displayed very prominently on the wall planks. Waiting for Shamindra Rajiyah, (whose representing the ‘third generation’ of Mr. Thambiah’s legacy) to arrive, we are politely asked by the secretary to help ourselves with a wide assortment of chilled Richlife flavoured milk and yoghurts (produced by the company) from the cooler in the board room.
Richlife factory
Being a hot afternoon I settle for a lovely woodapple flavoured drinking yoghurt, while the rest of the team wants strawberry flavoured milk. When Shamindra, the Executive Director of Renuka Holdings PLC arrives a few minutes later he leans back to answer the questions over a tetra pak of chilled mango juice, noting that it would’ve indeed been a Herculean task at the time of the British to think of a legacy which would’ve lasted more than a century.
“When the country was ‘Ceylonised’ in 1936, my grandfather was still holding a vision to make the company big, which he did and by 1958, after nationalization, with the company facing great difficulties, Cargo Boat had to diversify into shipping agencies to counter the adverse business climate,” he explains. The nationalization of the day resulted in diversification into agriculture distribution, leisure and property development.
When Renuka returned…
Shamindra Rajiyah,
Shamindra says that it was in 1975, when Alfred’s youngest daughter Renuka returned from London, after completing her studies that the company saw a turning point. “She started Renuka Enterprises which was the agriculture commodities division exporting agricultural commodities,” he says, adding, “This is (my) mother by the way.” He also says that she was a mere 23 year-old at the time.
During the 1980′s Renuka Enterprises forayed into the value added export of Ceylon tea, manufacture and export of coconut products and logistics. In the late 1980′s the Group was re-organized with certain shareholdings being divested. With time, businesses were separated and Renuka Holdings PLC emerged as a parent company of this organization. In 2011 Renuka Holdings PLC acquired controlling interest of Shaw Wallace Ceylon Ltd, making it a subsidiary. Shaw Wallace Ceylon Ltd is one of Sri Lanka’s oldest firms engaged in the distribution of automotive products, Foodservice, fast moving consumer goods (FMCG) and acts as importers and agents. Today Renuka Holdings operates in four business sectors namely Food & Beverage through the Renuka Shaw Wallace PLC group, Automotive, Investment (portfolio management and Real Estate) and Services.
Renuka Shaw Wallace brings together a portfolio of Food & Beverage companies such as Renuka Consumer Foods Ltd, Shaw Wallace Ceylon Ltd, Shaw Wallace Food Services Ltd, Richlife Dairies Ltd, Renuka Agri Foods PLC, Renuka Teas Ceylon (Pvt) Ltd and Kandy Plantations Ltd which are respective leaders in their segments.
The company is planning to create more products under existing brands. Shamindra says that acquiring Richlife Dairies Ltd has been a step in the right direction. “I can outright say that we won’t be the largest, but we definitely will strive to be the most innovative, Richlife is the pioneer in tetra pak based milk products in Sri Lanka and since its acquisition the company has seen a significant turnaround in terms of its operations. Added to our benefit is the governments dedication in improving liquid milk production and consumption, our plans in supporting the same by promoting more usage in liquid based milk products and also investing in terms of model dairy farms in rural parts of the country, similar to successful models adopted in Pakistan and India are in progress which will result in ensuring livelihood, income generation to many families.”
The trend The trend they’re seeing now, according to Shamindra is that more people prefer convenience.
“Many women are employed at garment factories and some are abroad. Basically what they want (in these busy lifestyles) is the same tasty meal they are used to preparing from scratch to prepare it faster”.
The company has grown more than 100 per cent during the last three years, he says, noting that the group is in the process of developing a ‘total local meal’. Also they intend giving on backward integration with planting crops. Shamindra says that the ongoing Rights Issue by the company is to fund part of these investments. He says that this issue closes on the 7th of December and the response has been very positive.
The company is raising Rs 1,008 million to fund part of its expansion while the rest is funded from internally generated sources. “Looking at the organization’s performance we have recorded significant growth over a 5-year period and the six month results as at 30th September 2012 showed an increase in revenue by 44 per cent and profit attributed to equity holders by 81 per cent. With the transformation we are confident of significant growth in top and bottom line in the years to come,” he says, adding that “We have all the reserves and infrastructure to be a home grown alternative to multinationals.”
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