Starting off his career at Singer Industries as an accountant in 1973, Hemaka Amarasuriya has come a long way since seeing off a inward-looking, closed market era that ruined business and deprived people of their basic needs and to an even worst period of a conflict that lasted nearly 30 years and ended in 2009.
Preparing for retirement from his day-to-day work as Managing Director/CEO at a much, more diversified company than what it was in 1973, Mr Amarasuriya will remain as the non-executive chairman and only attend board meetings from June 30 with his successor being Asoka Peiris, the company’s head of finance.
Expressing a point |
Ready for retirement? “Not really, the past two years have been very hectic. However I have spoken to a few colleagues who say that the first three months is difficult but thereafter there are plenty of time to do things. I am keeping my options open. Travel is one option,” he told the Business Times in an interview.
Here are excerpts of an interview in which the Singer chief recalls his days at Singer, family life and talks about discipline in society, governance, a new resurgence in domestic sewing machines and why he is not in favour of laptops and mobile communication:
Life at Singer:
I joined Singer because it’s the oldest multinational in the world and has a long tradition, good values and a culture. At that time, the company was a manufacturing plant making mainly sewing machines. The economy was closed at the time and even imports were by license with the Ministry of Industries giving a quota every year and we had to work within that quota.
The government was almost anti-multinational and preferred local companies against multinationals. It was very difficult times and there was price control and we had to seek permission from the Ministry of Industries to increase prices. Though these were not essential commodities, they were considered essential and we had little opportunity of making profits.
On parts being sourced locally:
There was an import substitution programme at that time encouraged by the Ministry of Industries with T.B. Subasinghe as the Minister where 20 % of the components came from local sub-contractors.
We had stringent quality controls so whatever churned out locally was as good as imports. It was mostly on the cast-iron side because at that time, sewing machines were all cast-iron.
However to develop a local industry for components you need to have large volumes. For localisation to succeed, you need large volumes for the economies of scale. With the quota system we were selling about 15,000 machines a year and the market was starved. Whatever we manufactured we sold.
The consumer:
The average consumer was the middle-income housewife using the machine for home use. Those days everything was related to the import-export balance with foreign exchange being very scarce amidst an oil crisis in the mid-1970s.
It was very difficult for companies to operate. We sold some locally manufactured products like water geezers and steel cupboards from St. Anthony’s Industries to supplement our product line. There was no local industry at that time other than sewing machines and refrigerators, the latter being in the very primitive stage.
Continuation of a closed economy:
It was very clear that the country was going down and people were being deprived of basic goods which they should enjoy as humans. For a human to develop he or she needs though basic things and they were deprived of this.
Striking events in the first
10 years at Singer:
When Sri Lanka opened the economy in 1977, we were ahead of even South East Asia in most respects because Singapore, Malaysia and Thailand were closed at that time as they were protecting local industry. We were ahead of the game, giving our consumers a lot of insight into international products and as a result today the Sri Lankan consumer is very fastidious and will not compromise on quality or standards of products. The consumer wants the best even at the bottom end. They are brand conscious and as you get into the higher echelons of society, they are more savvy about technology. By opening the economy we opened the minds of our consumers certainly must faster than the rest of South Asia even the ‘Tigers” in South East Asia.
Missing the bus:
India opened up much later in 1991 but its catch-up has been much faster compared to Sri Lanka. That’s because Sri Lanka didn’t actively pursue added-value of local products in engineering and electronics. If this was done creating a market for sub contracting of components like industrial estates for electronics, Sri Lanka would have grown much faster and created more jobs.
When you create jobs, the consumer market also grows. Thus the economy would have picked up and per capita would have been $4,000-$5,000 (now its $2000).
Malaysia’s population for example is just slightly higher than Sri Lanka but it took the opportunity and created a vibrant local industry for parts plus exporting a part of it.
On conflict deterring growth:
The conflict was only confined to a part of the country. The real problem was the stop-start industrial policy of the two warring parties that have governed this country. One wanted an open economy with everything imported with low tariffs while the other wanted a lot of local added-value. This stop-start policy led to tariffs fluctuating up and down when governments changed. As a result, local industry didn’t really take off.
We have done well in terms of refrigerators because this product doesn’t need many sub contractors. A lot can be done in-house and we do more than 50% added value now and we can produce the country’s total requirements.
Sewing still a lively art
Believe it or not, the age of the domestic sewing machine has not ended at home. The demand for sewing machines has suddenly see a resurgence in the West, according to Singer Chairman Hemaka Amarasuriya.
“Demand is growing in the US, Europe and Japan. There has been amazing growth in the last decade particularly from the ‘baby boomers’ (a generation born after the Second World War in 1945) for domestic sewing machines because they feel lonely after their children have left home. The husband will probably play golf or go fishing while the wife purchases a modern, computerized sewing machines.
They began sewing at home, making clothes for their grandchildren and build up esteem in the eyes of the family (as useful people). There was a resurgence of a product life cycle, an example of a sewing machine coming back to importance. These countries were showing 20-30% growth in the machine sales. The sewing machine hasn’t died. In Sri Lanka demand hasn’t declined and is still at 60,000 -70,000 machines a year.
Users may not sew full garments but would use it for modifications, etc. Another aspect of the art being alive is that Singer runs 60 sewing schools and thousands have passed through these academies, and set up their own, small dress-boutiques.
Fees are very nominal and we also give scholarships. It’s not a visible part of Singer’s profile, is available worldwide from the inception and another reason why sewing is alive as an art.” |
The refrigerator industry can be replicated in electronics, in other areas. Another area where the local industry is strong is furniture. The furniture industry is no longer a family business; it has gone into a new dimension largely in exports – small to medium entrepreneurs. The country lacks a good dynamic minister to drive the industrial policy.
Economists are partly to blame for the lack of a strong industrial policy because they keep saying that the Sri Lankan market is too small. But we have 20 million people and are in the league of nations like Australia, the Netherlands, Saudi Arabia. It’s wrong to say we are small. Look at Europe, how many countries have smaller populations that ours? It’s only Britain, France, etc that have large populations. Our per capita is low but if you add value to products the per capita will rise, the country will prosper and the domestic market will grow.
I have always maintained that the Sri Lankan market is not small; its just that its under-developed and this is due to the policies of our governments.
On a good industrial policy:
A good industrial policy will see per capita doubling and foreign investment coming in for re-export (produce here, sell locally and also export). We have received many offers to sell to India because the Indian market is so huge and the way its growing the local industry cannot keep pace with it particularly in South India.
Sri Lanka is the ideal launching pad for South India. We did some test marketing last year where we opened three shops and that this was an enlightening experience. Sri Lanka can get into those markets, even in appliances, furniture.
We had to halt the process because of the global downturn and I hope Singer Asia which invested in this process while we did the management, will resume it. However the test marketing was very revealing and Sri Lankan manufacturers have a place. We some sold of our refrigerators and furniture.
Balancing family life and work:
It’s difficult to balance the two because office work takes so much of your time leaving less time for the family. It’s a very difficult balancing act. This is a problem for any CEO anywhere in the world. It’s one of the most difficult balancing acts for any CEO. If somebody says, its not so, I won’t believe him particularly if they have young children.
On being a hands-on CEO:
That’s the only way to be successful. Otherwise you have to listen to lot of people and their reports which are often not accurate. I spend a lot of time going into the field. I enjoy that a lot; visiting markets, walking around, talking to my sales force and the customers, and the factories. I spent a lot of time and I like walking around.
On being nice to people:
It’s common courtesy to be nice to your visitor. My parents as well as my principals at Ernst & Young where I did my apprenticeship inculcated that kind of relationship of being nice to people, greeting people, seeing them off.
On whether stress affects one’s ability
to be nice to people:
I don’t think stress should be given as an excuse for not being nice to people or diluting your value system. Management is all about people: its about motivating your people and being fair to them. That is my first priority and often there is this bad Sri Lankan culture of tending to look at what is wrong or negative (in a person). I don’t know whom we learnt it from. Maybe the British, but we also blame the British for everything. We always look at what is negative. In a person, there is a positive and a negative side. People like to be praised – well done or great; simple words that mean a lot.
On new technology:
We are too slavish to laptops and blackberrys. A blackberry hounds a subordinate. When you are in international business, in the middle of the night you may get a message because the sender has forgotten the time-zone difference. That’s puts stress on people. The personal touch is going out of the younger generation. They are buried in their laptops, in numbers and figures. What does that mean? That’s all historical figures. Business is more dynamic; its something happening today in the marketplace. Its not a historical event. We should not be a slave to past information particularly in a growing market like Sri Lanka.
I know people who have the courage to say ‘I don’t need a blackberry, I don’t need to be a slave to my laptop’, those who are honest who don’t really need this technology.
On what he uses:
I use only an ordinary mobile phone. But on retirement I may use a blackberry because no one is going to chase me then!
Technology improving performance:
I am not a great believer of technology. Sitting and looking at numbers, historical data is a waste of time. For me, business means going out to the marketplace, talking to suppliers, looking at factory production and capacities, essentially walking the floor. Technology is important but for example you cannot predict the future on past data. Ofcourse you can intrapolate and extrapolate but unless you know your suppliers, your dealers, the marketplace, the competition, how can you find what’s going on? Technology won’t give you that information; it never does.
International experience:
Whenever Sri Lankans get the opportunity (to work abroad) they have done well. We have a way about us; we are modest and have a better understanding of people than most Asians. That was a huge advantage whenever I did work outside (being first Area Manager and then became Senior Vice President of Singer International based in Colombo except for one year where I managed the Singapore operation in 1984. I also chaired the Singer Global Business Council which implements the policies of the company across the world).
What I discovered was that I was able to work very well with my subordinates. Sri Lankans are not known very well across the globe and there could be complex situations but this never happened to me. My colleagues were very happy to work under me – Australians, South Africans who I managed – and I enjoyed that part of my career specially travelling around mainly in Asia and Africa and seeing other markets. I also handled human resource development for three years and two years in procurement (sourcing).
Governance in the private sector:
There is a lot of room for improvement. We should not be preaching to others; we should be putting our own house in order. However the rules are very stringent for corporate governance but whether they are observed is the question. We have done extremely well in the garment industry and in the hotel industry – on the eco side.
On the need to allow creativity and transforming good ideas to commercial use for the benefit of society:
There is a need to change things but we can’t expect the government to do everything. I don’t know whether there any enough philanthropists who should be funding innovation or providing micro loans.
Unfortunately the many inventors or creators of products are not heard of after receiving an award or presenting their creation at an exhibition.
They don’t have markets, information to sell their products.
There is an amazing number of school children who are innovators who get awards, etc but beyond that do they get any grants? Do they have a mentor who would take them on and try to develop them? |
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