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Maintaining
the pace of economic reform The government seems to have switched to survival mode and to be pre-occupied with fighting political battles to ensure its grip on power. Its much-heralded effort to 'clip the president's wings' has suffered a humiliating defeat at the hands of the Supreme Court following its rejection of the 19th amendment to the Constitution to deprive the president of her powers to dissolve parliament. Minority parties, on which the UNF's existence depends, are making disgruntled noises and rocking the boat. The opposition
has scented blood and appears to be waiting for the moment to pounce,
to topple the UNF by engineering defections and form their own government,
without having another election. There seems to be a near-universal
reluctance, especially in the business community, to endure the
agony of another election, as our opinion survey published elsewhere
reveals. The joint opposition
campaign against the UNF's privatisation programme seems to be the
cutting edge of a broader effort to return to power through the
back door. The opposition's argument does have some merit - there
is no real need to privatise state enterprises that are performing
well and making profits. What matters is not ownership but the manner
in which organisations are run. What needs to be done is to transform
the way they are managed - perhaps with private sector input - as
has been attempted in some cases. The government
is caught in a bind. With an empty Treasury, not enough revenue
to fully meet debt service payments, and foreign aid donors and
investors reluctant to commit large sums of money before the Eelam
war is actually over, it has no option but to sell the family silver
to generate the funds required to keep the economy moving. Many
government departments have no money except to pay salaries. Much
work has got held up as a result. The business
community is naturally worried that the momentum of the reforms
process, on which it had put so much hope, appears to have slackened
although it did point out at the outset that the reforms needed
to transform the economy cannot be done overnight. Treasury secretary
Charitha Ratwatte, at a meeting with business chambers and industry
associations last week to discuss the government's forthcoming budget,
appealed to the private sector to be patient and promised that things
would get better in the next 12 months. The business community is
well aware of the government's predicament but it has also got tired
of such 'coming soon' type assurances. There is no need for the government's political insecurity to affect its economic agenda. After all both the main parties now have broadly similar economic outlooks and blueprints for the nation. Both have no choice but to be subject to pressure from the 'international community' and aid donors and foreign investors which would naturally insist on an economic system similar to their own. The government should try its best to isolate its economic programme from the vagaries of the political power game it must necessarily play with the other political parties. Hayleys
celebrates golden jubilee Chairman Sunil
Mendis doesn't believe in such celebrations, preferring to let his
company's impressive record speak for itself. The Hayleys Group
accounts for 1.7 percent of Sri Lanka's export income, 1.3 percent
of Sri Lanka's GDP, 2.3 percent of domestic value addition and seven
percent of market capitalization on the Colombo Stock Exchange.
These figures apart, the company's steady progress despite the country's
flagging economy in recent years is noteworthy. The head office
at Dean's Road, Maradana is today much transformed as befits its
corporate giant status. But the squat building, elegantly redone
inside with marble foyers and fountains was once the hub of the
coir trade. Coir remains
an important part of the company's operations, as it owns the patents
on 345 products and is the country's largest exporter of coir fibre
products. But other sectors have over the years added strength.
In the rubber business, Hayleys pioneered glove manufacturing in
the country and is now among the five largest industrial and general
purpose glove manufacturers in the world. They are also the world's
largest producer of activated coconut shell carbon. Hayleys also
exports exotic vegetables, flower seeds and gherkins and in its
plantation sector, accounts for five percent of the country's tea
and 4.5 per cent of its rubber production. Freight forwarding, shipping
and hotel management with the Jetwing chain, etc, are other key
areas. "The company's
focus has been value addition in our export businesses," says
Mendis and it is a policy that has paid rich dividends, enabling
it to weather the buffeting the economy has had in recent years.
Diversification into different avenues of business and forming strategic
alliances with international names has helped them stay ahead of
competitors. Venturing into financial services, tying up with AIG,
a Fortune 500 company and leader in the insurance field, into power
generation with the AES Corporation of the USA, also water treatment
with Vivendi, obtaining the GSA for British Airways, were all noteworthy,
he feels. Improving productivity
is another key area and sub-contracting and out-sourcing are means
by which this is achieved. The company has also ventured overseas,
with the setting up of Dipped Products in Thailand this year. Good management
has been a vital factor in the company's success, asserts Mendis,
pointing out that Hayleys has had Non-Executive Directors on its
Board, all these past 50 years. But fifty years ago, when it all
began as Hayleys, it was indeed a different picture: The Korean
War boom in the aftermath of World War 11 saw a commodities market
hold sway in the early 1950s. It was in this scenario that George
G. Hayley, grandson of the founder (Chas. P. Hayley) devised a scheme
to buy out Hayley and Kenny and launch Hayleys Ltd with the executive
employees of the company. George Hayley's
account of the scheme makes fascinating reading. "It was all
so simple. We would form a new company with whatever small capital
we could jointly raise, taking shares in proportion to our H&K
Ltd (Hayley and Kenny) commission entitlement. We would bid the
shareholders Rs. 4.5 million for the entire undertaking in Colombo
and Galle, this sum half in cash and half in paper, secured in some
way on the new Company's assets. The cash we would find largely
by liquidating Hayley and Kenny Ltd and thereby under the Income
Tax law of that time, saving one year's complete taxes, the choice
would be ours out of the company's last three fiscal years. We would
do all this early in the next financial year, 1952/53, and the old
shareholders would receive no dividends in respect of 1951/52, the
profits of which would provide the balance of the cash we needed
and of course, the whole of the Rs 4.5 million would be tax-free
in their hands as in those days there was no Capital Gains Tax.
It was by the values of those times a marvellous package for them
and I had little doubt that they would all ultimately accept, though
clearly long and tricky negotiations lay ahead." Hayley accomplished
the tricky negotiations with the trustees and the firm's bankers
Mercantile Bank. And thus it was that Hayleys Ltd came into being
on May 31, 1952. Company stalwart Ken Hutton entertained the new
shareholders at his Colombo bungalow while Hayley and his wife Pat
away from Ceylon's shores at the time, hosted the proprietor of
a fibre company to dinner in Monte Carlo. The company
had a paid-up capital of Rs. 200,000. By end 1953, every member
of the executive staff in Colombo and Galle had been offered a modest
shareholding. However, more changes were to follow. With Commerce
and Trade Minister R.G. Senanayake insisting that the company's
Ceylonese Directors acquire one-third of the issued share capital,
the company was not only converted into a public company but also
began a new chapter in its history. Among the Ceylonese directors
was a wealthy landed proprietor and barrister Hayes Jayasundera
whose son Lal (D.S.) would later blaze his own trail within the
company. Hayleys Ltd
initially built its strength as a company which exported coir fibre
in various forms as well as sheet rubber and dessicated coconut,
etc. But over the years, under some astute and far-sighted leadership,
it expanded its base from a commodity trading company to one which
had diversified into high-value adding manufactured export products. Hayley left
Ceylon in 1961, describing the day of his departure as the saddest
day of his life. He was comparatively young at 44, but the stringent
conditions being imposed on British citizens working in the country
made it well nigh impossible to stay and he took up employment in
Hong Kong. He now lives in retirement in the UK, but his youngest
daughter, Carol Cookson is now back in the island, her husband coming
here as principal of the British School. Hayley was
succeeded by Neil Brown, who joining the company from Mackinnon
Mckenzies in Calcutta is credited with transforming Hayley's rather
lethargic import business into a thriving enterprise. Brown was
a chartered shipbroker and an excellent golfer as well. George Bobbiese
, chairman from 1968 to 1976 was Italian, the son of an Admiral
in the Italian Navy. He had come to Trincomalee, to command a submarine
after World War II and married a Scotswoman in Colombo. Joining
Hayley and Kenny in 1947 he worked for a while in Galle before being
transferred to Colombo in the late 1950s. Those who remember Bobbiese
at Hayleys today credit him with a wide-ranging vision that saw
him leading the company into new projects and fields. Ravi Industries,
Haycarb and Dipped Products, some of the jewels in the Hayleys crown
were his brainchild. An avid golfer and erstwhile President of the Royal Colombo Golf Club, Bobbiese was known to have loved the island and would often sail the boat he himself built 'The Enterprise' in Galle and Bolgoda. He died in South Africa in 1999, aged 78. The Bobbiese
days were followed by the D.S Jayasundera era at Hayleys. A versatile
and dynamic chairman, Jayasundera spearheaded the company's growth
from the country's leading exporter of fibre to its multinational
status, with operations in the USA, Europe, Australia and South
East Asia. "In the process Hayleys and its subsidiaries consolidated
the transition from exporters of commodities to manufacturers and
exporters of value-added products and suppliers of services amounting
to 2 percent of the export earnings of the island. Concurrently
he put in place a sophisticated human resources development programme
unmatched in Sri Lanka and built a management team considered the
most professional in the country," records the Hayleys Annual
Report of 1994, the year following his untimely death in Australia. The Hayleys
annual report was indeed one of DSJ's pet projects and he had a
childlike pride in seeing the company win the award for the Best
Annual Report awarded by the Institute of Chartered Accountants
since its inception in 1967. The company has managed to keep that
tradition intact, with only three misses in between. DSJ joined
Hayleys straight from Royal College as a youngster of 19, but his
extraordinary prowess and financial acumen saw him rise rapidly.
He was appointed a Director in 1964, Chief Executive in 1974 and
Chairman in 1977. His untimely
death in 1993 saw Sunil Mendis take over the reins. Mendis now presides
over a company whose workforce numbers over 33,000. A source of
satisfaction is that the company has a rural base, with several
companies and projects providing employment outside the major cities.
"Little did I know what a wonderful seed I was planting on that far-off day," remarked Hayley in a recent communication to Chairman Sunil Mendis. Words that have rung true for many in the Hayleys fold over the years. Clipper
ship launches success story The Percy Douglas,
so named after Major General Sir Robert Percy Douglas, the Lieutenant
General of Jersey, in the Channel Islands belonged to Thomas Hayley.
Registered in 1861, the 781-tonne clipper ship operated out of Liverpool
and it was recorded by Lloyds that she was destined for the China
tea trade. The details are sketchy as to whether she did actually
sail between Liverpool and China, or merely to any Far Eastern port. In 1869, Thomas
Hayley made an important voyage on the Percy Douglas accompanied
by his son Charles Pickering Hayley. The journey was part of Charles's
coming of age celebrations and his half-sisters Julia and Adelaide
sailed with them, making the lengthy trip past the Cape of Good
Hope before reaching the scenic port of Galle. They disembarked
at Galle and family history has it that Charles so liked what he
saw of the sleepy seaport that he may have well decided to return
and make his fortune there. Back in Liverpool,
Charles went through his business training before boarding the Percy
Douglas once again in 1871. He reached Galle safely in late August
or early September, but the clipper ship was fated never to return.
She was wrecked off the coast of Rangoon. Charles Hayley worked
first with a firm of shipping agents and when they folded up he
rented a house in the centre of Galle Fort in Pedlar Street which
was both office and godown and launched his business, exporting
cinnamon and citronella oil and importing luxury goods such as claret
from Britain. But he knew the coir yarn business was the way forward
and he was fortunate enough to acquire more properties in Pedlar
Street. Soon he had a large godown, with an expensive baling press.
Chas. P. Hayley and Co. was now a force to be reckoned with. The business
prospered though staff was always kept to a minimum and soon branched
into plantations, offering management services which included a
good deal of financing to other plantation companies in the south.
They survived the coffee crash, though not unscathed and helped
estates switch to tea. In 1909, Charles
Hayley made a strategic move, by going into partnership with W.W.
Kenny, a plumbago exporter. With Colombo offering better port facilities,
the coir export business boomed. He also panned
for gold in the Gin Ganga and though they found small quantities,
that scheme was abandoned. But a timber mill where tea chests turned
out from logs floated down from Udugama estates prospered until
cheap Momi chests from Japan knocked them out of business. The agency
for Thorneycroft lorries saw them begin a partnership with Whittall
and Corp and Boustead Bros. launching the Southern Province Transport
Co. in Matara after the turn of the century, serving tea and rubber
plantation companies. Other very
profitable ventures were an ice manufacturing plant at Hikkaduwa,
where Charles Hayley employed Tom Walker, who later set up his own
business the New Colombo Ice Company, better known today as Ceylon
Cold Stores. After Walker left, the factory manufactured soap but
was done in by the 1930s slump. The death of
his wife saw Charles Hayley returning to England leaving the running
of the firm to his sons Alec and Steuart, and son-in-law O.J. Steiger. Hayley and
Kenny and Chas P. Hayley were made Private Limited Companies in
1935 and 1943, respectively. When the fallout from World War 11 demanded new avenues, the firm of Chas. P. Hayley was a wholly owned subsidiary of Hayley and Kenny, all shares of which were exclusively owned by a retired partner Steuart Hayley and the heirs of other partners living abroad. George G. Hayley, a grandson of the founder and son of Dr. F.A. Hayley QC was appointed a director of Chas. P. Hayley in 1948 along with Tony Humphryes. The names of Giorgio Bobbiese, Arthur Woosnam, E.C. Stewart, Ken Irvine, Brent Moore-Boyle and Dennis Fuller figure prominently in this period along with J. Neilson-Crawford and T.B. Johnson who ran Hayleys Engineering. In the early
1950s, several young Ceylonese were recruited as executives and
a training school for them set up at the Galle office. Headquartered
still in the godown where Chas P. Hayley launched his firm in 1878,
the company is still a major player in the manufacture of coir mats
and matting for export, producing also curled coir fibre which is
used by many in its natural state or after being sprayed with rubber
latex and vulcanised. (Extracted from A Short History of the Hayley Companies in Ceylon by George G. Hayley). |
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