ISSN: 1391 - 0531
Sunday, October 01, 2006
Vol. 41 - No 18
Financial Times

Hayleys improving local image

By Natasha Gunaratne

The Hayleys Group, more successful overseas than in Sri Lanka, is undergoing a re-branding process and giving its company logo a makeover, aimed at improving and enhancing its local status and its share value.

Its chairman Rajan Yatawara said they have instituted progressive and forward thinking initiatives such as a program for succession planning by enrolling 60 of his employees with the Indian School of Business (ISB) to focus on the development and future of Hayleys.

"We are in the process of re-branding exercises which should be complete in about April or May of next year," he said in an interview. Hayleys had a record turnover of nearly Rs. 25 billion, approximately US$25 million, in the last financial year but turnover could have increased by 15 – 20 % if not for the appreciation of the rupee against the Euro and Sterling. According to the company's financial review, profits fell to Rs. 586 million from Rs.774 million in the previous year. Yatawara stressed the need for proper control of inflation and interest rates, saying “The government has to control the currency."

Yatawara, who has been with the company since 1966, spoke to The Sunday Times FT on new and ongoing ventures of the company.

Since the mid 1970's, Hayleys has been primarily engaged in value added manufacture for import. In 1983, Hayleys embarked on its global expansion by setting up companies in the United States. In 1986, it moved to the United Kingdom to access the European market and subsequently, to Australia.

Hayleys has also formed clusters in which the various business sectors are able to share information, knowledge and adopt best practices. Yatawara explained that the business sectors which were organized as vertical silos will now be interconnected with the introduction of the clusters, resulting in improved quality, standards, and overall efficiency of the various sectors. The company is planning on managing logistics for the newly constructed Brandix India Apparel city in India. Yatawara said they already provide logistics for MAS Holdings here in Sri Lanka but on a smaller scale than the anticipated Brandix project.

He said the company has launched several successful business ventures in the Maldives and are looking to expand into other countries such as Laos and Cambodia where opportunities are ripe. "We have been more successful overseas that we have in Sri Lanka," he said, adding that Sri Lanka is not large enough to accommodate the company's growth.

Some other new ventures in the pipeline are tissue culture projects such as special plants for high germination and high tech western medicine. Hayleys already has a highly successful and lucrative plant germination operation where they export hybrid flower seeds in collaboration with Syngenta Seeds BV of the Netherlands. Yatawara explained that through cross pollination, they are able to determine the exact colour of certain flowers such as petunias which are exported. "The size of the exports only fill about three shoe boxes but are very high in value," he said. Rising rubber prices over the past years has caused a problem for Hayleys, being a value added manufacturer. Dipped Products Ltd (DPL), a Hayleys subsidiary which manufactures rubber gloves, has been affected by the high costs but Yatawara feels the sitation is improving due to the recent decline in prices. "Actually, the increase in rubber prices helped our plantation sector," said Yatawara, referring to Kelani Valley Plantations which produces a several types of processed rubber, accounting for 4.5% of Sri Lanka's overall rubber plantation. He highlighted Hayleys semi-processed and processed vegetable sector which includes the export of primarily gherkins, pickled gherkins and other processed vegetables like silver skin onions, chillies, bell peppers, relish and mixed vegetables. Hayleys is the country's only exporter of gherkins and employs about 5000 families in villages around the country. The company supplies pickles to all of the McDonalds franchises in Japan and has secured a 50% market share in the country.

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Copyright 2006 Wijeya Newspapers Ltd.Colombo. Sri Lanka.