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Hilmy Cader, International Marketing Expert and MTI's Global CEO recently addressed a gathering of nearly 200 Sri Lankan CEO's directors and senior managers at an evening presentation on "re-structure or perish".
In the presentation, he showed how companies could survive and thrive in difficult times using MTI's 8S based re-structuring process.
Referring to the way most companies operate in good times, he said,
"When the going is good businesses tend to put on a lot of 'fat' and acquire 'bad practices'. More people, more layers, more supervision, more politics, more posh offices, more credit to customers - the vicious list goes on and on. Inefficient bureaucracies start taking shape, while your fixed cost structure skyrockets".
Cader stressed the point that with these pre-occupations, businesses get further away from the customer, as it now takes several layers before a customer's voice is heard at the top. Referring to the practices adopted by some companies to apply a superficial solution, he said, "Unfortunately, window dressing the financials is no longer an option!"
Although the Sri Lankan economy has been through difficult times in the past, for the first time, Sri Lankan businesses are facing a real bottom line crunch, in some cases threatening the very survival of these business empires. This, he said is characterised by the high incidence of retrenchments, downsizing, bankruptcies and bank loan defaults.
In response to how most corporate re-structuring exercises are carried out, Cader described it as a "Bean counter mentality with a butcher's knife", with focus on taking chunks of fat off the system.
MTI's 8S based re-structuring process is fundamentally different. It is built from ground zero. It starts with the customer and goes on to challenge every position, including the need for a full time CEO! The net result is a lean, mean and highly focused organization - ready to take on the world in good and bad times.
By Hiran Senewiratne
A young chemistry graduate who started his career as a lab technologist at a private sector firm, quit his job in order to dabble in business 11 years ago.
"I don't know … maybe because I wanted to be independent. Maybe I wanted to become a successful entrepreneur," laughed Prabath Fonseka recalling the early days of his business career.
Since his entry into business, the 38-year old has emerged as one of the biggest players in the ornamental fish feed and veterinary pharmaceuticals industry successfully com-peting with firms like CIC, Hayleys and Browns, and is also into exports.
Fonseka owns Agro Nutrition (Pvt) Ltd, which has two small factories, at Wadduwa in the Kalutara district.
He said the company is one of the main suppliers of ornamental fish feed to ornamental fish exporters.
Launched with a start up capital of Rs 20,000 and just three employees in 1990, Agro Nutrition has prog-ressed to the extent of recording an annual turnover of Rs 200 million now from smaller turnover years.
"It was not an easy ride to the top but I managed without depending on assistance from government agencies or banks," Fonseka said in an interview, also adding that the company's turnover was not hampered by recent strains on the country's economy which has affected business activity across the board.
He said his products – both fish feed and drugs - were cheaper than the imported ones as local raw materials and natural herbs are used in the manufacturing process. This, he believes, has resulted in foreign exchange savings to the country of US$ 30,000 per month.
The company produces a unique range of animal pharmaceutical drugs such as vitamin mixtures and animal wound spray made out of herbs, which have also attracted foreign buyers.
Fonseka said that initially production was entirely a manual process until he invested Rs 5 million on machinery five years ago, which has led to increased capacity of 200 metric tonnes (mt) per month.
The company currently produces monthly 10 mt of ornamental fish feed, 70 mt of pharmaceuticals and 10 mt of vitamins, some of which is exported. Agro Nutrition says it enjoys a 30 percent market share in the business, with an estimated growth rate of 50 percent annually.
Fonseka said he had also established a facility to manufacture all the veterinary pre-mixture for other producers while creating employment for many people.
He is keen to help small entrepreneurs in the same business and decided to offer this facility as a boost to the industry.
"Any producer can bring the raw material and use the machine (for a fee) or as an alternative we can produce it for them to be sold under their brand name," he said.
The premixing machine – that mixes and produces the feed and pharmaceuticals - was developed by him and cost only Rs 150,000 when compared with an imported machine costing around Rs 800,000.
"I saw this machine in Malaysia and decided to turn out a similar one here," the enterprising entrepreneur said, adding that he has had inquiries from Bangladesh for the machine.
Agro Nutrition employs 30 people while quality standards for all its products are carried out at the Veterinary Research Institute and other government institutions.
Fonseka said the company recently launched a joint export venture with Kepro B.V of Holland, a man-ufacturer of pharmaceutical drugs for animals.
The products – both animal feed and pharmaceuticals - are being made in Sri Lanka under the Kepro label and exported to Asian and Middle East countries.
Exports under this joint venture are set to reach 500 mt by the end of this year.
Enthused by overseas inquiries and potential export markets, Fonseka is planning to open an office in Australia and promote local products via Australia in international markets.
The company though small in many ways has a unique range of products. "For the first time in Asia, we developed and formulated a 100 percent animal wound spray using local herbs," noted Fonseka, while showing the Sunday Times Business team his production facility at Wadduwa.
Field trials of the herbal spray are presently underway in Cyprus, Nigeria and Australia using the company's contacts, he said.
Fonseka is a firm believer in the Indian marketing model.
"India has a fine marketing model and follow-up strategies. We should learn from that model," he said.
The agro entrepreneur also believes the government should create a climate for entrepreneurship and suitably reward any outstanding success in new ventures, particularly when competing with international products.
Ceylinco Healthcare Services Ltd (CHSL) has launched a state-of-the-art Cancer Detection Centre essentially for the early detection and prevention of cancer that kills nearly 4,000 people in Sri Lanka annually.
According to the World Health Organization (WHO) statistics, more than 6 million people in the world die of cancer every year. By 2020 there will be 20 million new cases of cancer in the world and 20% of them will be in developing countries. "It has been estimated that there will be 4000 deaths from cancer and 12,000 new cases annually in Sri Lanka alone with 30% of these cases caused mainly by a poor diet whilst the regular use of tobacco accounts for an additional 30%," a CHSL statement said.
There is evidence to suggest that more than 70% of cancer related deaths could be prevented by early detection (screening) and education. Screening involves testing apparently healthy people who do not necessarily perceive themselves to be at risk of cancer and identifying those who have the disease at a very early stage. Screenings are done when the person being tested has no symptoms so as to reduce the risk of a disease and its complications, it said.
CHSL is a subsidiary of Ceylinco Life, which in turn is the Life Insurance Arm of Ceylinco Insurance Company Ltd. "CHSL with this hi-tech cancer screening centre, is committed to help eliminate cancer amongst Sri Lankans by detecting the disease at an early stage. It is to meet this need that CHSL established this facility, specializing exclusively in the early detection and prevention of the disease," the statement said.
Given the ongoing development in global healthcare technology, the Cancer Detection Centre based in Colombo is a modern facility with the latest equipment available for cancer detection.
A comprehensive programme on Cancer Education, Advice and Information on Cancer Prevention and Healthy Lifestyle as well as Risk Assessment for cancer are some of the services that will be provided in addition to its screening facilities. There is also a Client Education Resource Centre with a wide selection of reading material, videos as well as on-line information, the statement said.
Being an affiliate of the Washington Cancer Institute (WCI) at the Washington Hospital Centre in Washington D.C., the WCI will provide Ceylinco Healthcare Services Ltd with technical, administrative and professional medical consultation and other assistance on a continuous basis.
Do you run a business that is unusual or against all odds? Have you succeeded in life as a small or medium-scale business battling against multinationals and giant local conglomerates and still made it to the top?
The Sunday Times Business would like to hear from you to highlight your success and the winning formula. Write/ contact the Business Editor, (email – btimes@wijeya.lk) or The Sunday Times, 8, Hunupitiya Crossroads, Colombo 2. Telephone 304179.
The first annual general meeting of the Sri Lanka-Hungary Business Council was held last month in Colombo with the following office bearers being elected:
President – Rohan Nanayakkara
Deputy Presidents - Tilak Godamanna and E.T. de Livera
Hony. Secretary - Bramwell Smith
Hony. Treasurer - Kumara Semage
Committee members: S. D. Liyanage, Eraj Abeywardene, J.M.G. Candappa, Rohan Tudawe, Nishan C. Perera and Chandra Corea.
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