BCC’s plan for the next hundred years
Breathing new life into domestic production:
By Vagisha Gunasekara
The need to turn the current economic crisis that was pushed off the edge by the COVID-19 pandemic into an opportunity to reconfigure national economies is the topic of many policy discussions, both in Sri Lanka and elsewhere. In June this year, addressing the 95th annual plenary session of the Indian Chamber of Commerce in Kolkata, Indian Prime Minister Narendra Modi said it is time to create an ‘Atmanirbhar Bharat’. Although ‘Atmanirbhar’ loosely translates into “self-sufficient”, the Indian PM was not at all channelling Import Substitution policies in the 1960s and 70s. He was not referring to throwing out foreign companies from operating in India or large-scale nationalisation of industries. While Atmanirbhar entails a strong push to become self-sufficient in food, water and defense needs, the concept underlies the realization that a country cannot survive or economically thrive in isolation. It does not mean closing doors and borders to the world. Rather, it is an open-door policy that encourages foreign investment and goods to be manufactured in India and exported to the rest of the world and for products made in India to be sold in the global market. In other words, the aim of atmanirbhar is for India to become the next manufacturing hub of Asia and the rest of the world. The Government of India is already exploring various modalities with domestic and foreign investors and governments on how to redesign their economy in line with the spirit of atmanirbhar, and opening their economy in a much bigger way to the rest of the world.
Here at home, there is still hesitation among some circles about whether a small developing island nation like Sri Lanka can compete in the global market without the “economies of scale” advantage that larger markets like India have. But there is optimism around producing specific items that Sri Lanka may have an advantage in the global market, solely based on the quality of the product. Coconut oil is a case in point. In the past 10 years, the global demand for skyrocketed by 500% as it was identified as a “superfood” in the West.
To be specific, this demand is primarily for two products – virgin coconut oil and coconut water. In the United States alone, coconut water is now an 800-million-dollar industry. Globally, the coconut water industry is estimated to be worth around 2.2 billion dollars. The demand for coconut water is expected to increase by 27% by 2020. Similarly, the global industry value of virgin coconut oil was 2.1 billion dollars in 2016, and it is expected to be 4.2-billion-dollar industry in 2024. In the past five-six years, there is a steadily expanding niche market for coconut-based products such as coconut flour, coconut sugar and desiccated coconut. Furthermore, as Goldstein Research finds, the global beauty care industry, which is currently worth more than 10.3 billion dollars is gradually shifting to organic ingredients and coconut oil extracts in particular. Among the top five coconut consuming countries is the Philippines, United States, India, Indonesia and Vietnam (Export Development Board 2017).
In Sri Lanka, export earnings from coconut-based products has been increasing in recent years and much of it is attributed to industries surrounding virgin coconut oil (VCO), fresh king coconut, coconut cream and coconut milk. In 2017, the total revenue generated by exporting coconut-based products was 598 million dollars, which was a 3% increase from 2016 (Coconut Research Institute 2018).
BCC Lanka Ltd is currently exploring an interesting modality to increase the production of coconut oil for cooking, wellness and other purposes both for domestic consumption and exportation. BCC is a household name in Sri Lanka. The company has a history that dates back to 1830s. According to the early records of the company, E. Price & Co. of the United Kingdom acquired patent rights for the technique of separating coconut oil into its solid and liquid parts. However, due to the irregular supply of raw material, the company set up crushing mills at Hultsdorf to separate oil directly from the kernels. The mills were set up in 1835 under a company set up in London called Hultsdorf Mills Co. (Ceylon) Ltd. The ownership of the mills changed hands between its inception and the World War I period and companies such as Wilson Richie & Co., G &W Leechman, and Freudenberg steering its operations.
In 1918, a powerful European syndicate operating in India tendered to purchase Hultsdorf Mills and it became British Ceylon Corporation (BCC). Since then, BCC operated in Sri Lanka, together with its fully owned subsidiaries such as British Ceylon Milling Company Ltd and Ceylon Extraction Company Ltd. Of the subsidiaries, in 1976 Ceylon Extraction Company Ltd ceased operations due to the lack of raw material that was required to sustain its minimum production capacity. In the period that followed, as a result of liberalisation reforms and changing political administrations, the company went through a period of decline, and this culminated in the sale of its most lucrative arm – Orient Co Lanka Ltd, which had the license for foreign liquor. In 1988, BCC Lanka was incorporated with the issue of 10,000,000 shares (held by the Treasury). Under the Conversion of Public Corporations and Government Owned Business Undertakings into Public Companies Act No. 23 of 1987. In order to trim the BCC workforce, a Voluntary Retirement Scheme was offered to its employees in 1991.
Following more privatisations in the 1990s and the lack of vision, leadership, government support and poor management resulted in further curtailment of the BCC operations and its workforce. However, when government policy shifted from a pro-privatisation position to one that was not in favour of selling off state enterprises, BCC Lanka commenced operations with minimum staff capacity in September 2006 and continues to produce and sell its number one product – refined coconut oil, both locally and internationally, along with a range of other products such as bath and laundry soap, washing powder, dish washing detergent and disinfectant.
The company appears to have received a new lease of life under the current policy trend of strengthening the viability of domestic industries. As the situation triggered by the COVID-19 pandemic has renewed interest in increasing the capacity of domestic production, BCC seems to be making plans to get back into business in a bigger and better way. During a recent visit to the BCC premises at Meeraniya Street, Colombo 12, the management revealed its plan to expand it operations and increase its competitiveness in the domestic and international market. Currently, BCC produces roughly 250 metric tonnes of refined coconut oil and 160 metric tonnes of soap and other items in a year. This, however, is well below the maximum production capacity of the company. The new strategy to increase coconut oil production is aimed at making productive use of BCC’s underutilised machinery and storage facilities, and also will carve out revenue prospects for the collaborating partner companies.
The most notable component of BCC Lanka’s new strategy is the consolidation of their supply chain for the production of coconut oil. The company is launching a partnership among BCC and three state-owned enterprises – National Livestock Development Board (NLDB), Kurunegala Plantation Ltd., and Chilaw Plantation Ltd., – and the Mahaweli B zone in order to ensure an uninterrupted supply of green coconuts in order to produce refined coconut oil. NLDB is one of the largest semi-government organisations whose core business is dairy farming. In addition to dairy and other poultry-related ventures, NLDB owns and maintains 4,545 hectares of coconut estates in the island’s “coconut-triangle”. Chilaw Plantations Ltd is a government-owned company managed by the Public Enterprise Development Ministry. Currently, they own 3,825 hectares of coconut plantations. Kurunegala Plantations Ltd is also a government-owned company with 5,244 hectares of coconut plantations. Its core business activities include cultivation, production, processing, and sale of coconuts. BCC Lanka will serve as the Original Equipment Manufacturer (OEM) and undertake downstream activities in producing edible oil. The strategic alliance among the four companies and the Mahaweli B zone is expected to ensure an uninterrupted supply of coconuts. Green coconuts collected from all four supply hubs will be transported to a central oil mill, where the initial production will take place. The central oil milling facility is a new investment proposed under the current strategic plan. Thereafter, the base coconut oil will be delivered to BCC’s refinery unit, where the value-addition process will take place. From that point onwards, BCC will take over downstream operations such as labelling, packaging, marketing, and sales. The intention is for these products to enter domestic retail markets, online shopping platforms and the export market through direct dealers, distributing agents and strategic sales partners. Given the expanding trend of the global market for coconut oil and other coconut-based products, increasing the production, marketing and sales of coconut oil and reviving state-owned companies like the BCC and its partners is a welcome move by the Ministry of Small & Medium Business and Enterprise Development, Industries and Supply Chain Management.
The second component of BCC’s strategic plan is to develop a modern, 7-storey multi-purpose commercial centre using a 6-acre portion of BCC’s current premises in Meeraniya Street. The compensation funds that BCC will obtain from giving up a parcel of their current premises to construct a court complex will be directed to the construction of the new commercial centre. Furthermore, the current management of BCC has plans to restore the original Chairman’s bungalow (located in Colombo 12) which is currently in a dilapidated state into a commercialised heritage establishment. The colonial charm of the bungalow and BCC’s collection of old machinery that were used during the colonial period is sufficient basis for this venture and a tasteful transformation of this site into a tourist attraction will undoubtedly add aesthetic and commercial value to what the currently has to offer.
BCC’s new strategic plan and its renewed motivation to strengthen its capacity, operations and relevance both nationally and internationally is a refreshing step, particularly given the sad situation of Sri Lanka’s state-owned enterprises. Currently, Sri Lanka has over 400 SOEs, employing over a million employees, however, running on an aggregate annual loss of USD 27 billion. SOEs are seen by ordinary citizens as employment- not service providers that consume an extraordinary amount of public resources and assets. Political interference, corruption, inefficient recruitment and management practices, low productivity and the lack of autonomy in decision-making have long been identified as constraints to developing SOEs. Like BCC, the Valachchenai paper mill and the Paranthan chemical factory also seem to have risen from the ashes given the renewed interest in strengthening domestic industrial production. Acknowledging BCC’s strategic plan which carries the objective of securing its presence and relevance for the next 100 years, and the resumption of activities in Valachchenai and Paranthan factories, it would be timely for BCC and for other SOEs to set up sound governance practices, accountability mechanisms, and performance-based incentive structures and focus on improving productivity and efficiency, financial discipline, transparent and effective treasury management and credit control and technological advancement. Lastly, the management and the overall leadership must keep in mind that politicisation of SOEs has long been identified as a curse that has eventually run these enterprises to the ground. As this is ingrained in Sri Lanka’s political culture, it might be challenging to change the status quo. However, if the leadership is keen that local industries remain active and relevant for another 100 years, such structural issues must not go unaddressed.
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Islamophobia and the threat to democratic development
There’s an ill more dangerous and pervasive than the Coronavirus that’s currently sweeping Sri Lanka. That is the fear to express one’s convictions. Across the public sector of the country in particular many persons holding high office are stringently regulating and controlling the voices of their consciences and this bodes ill for all and the country.
The corrupting impact of fear was discussed in this column a couple of weeks ago when dealing with the military coup in Myanmar. It stands to the enduring credit of ousted Myanmarese Head of Government Aung San Suu Kyi that she, perhaps for the first time in the history of modern political thought, singled out fear, and not power, as the principal cause of corruption within the individual; powerful or otherwise.
To be sure, power corrupts but the corrupting impact of fear is graver and more devastating. For instance, the fear in a person holding ministerial office or in a senior public sector official, that he would lose position and power as a result of speaking out his convictions and sincere beliefs on matters of the first importance, would lead to a country’s ills going unaddressed and uncorrected.
Besides, the individual concerned would be devaluing himself in the eyes of all irrevocably and revealing himself to be a person who would be willing to compromise his moral integrity for petty worldly gain or a ‘mess of pottage’. This happens all the while in Lankan public life. Some of those who have wielded and are wielding immense power in Sri Lanka leave very much to be desired from these standards.
It could be said that fear has prevented Sri Lanka from growing in every vital respect over the decades and has earned for itself the notoriety of being a directionless country.
All these ills and more are contained in the current controversy in Sri Lanka over the disposal of the bodies of Covid victims, for example. The Sri Lankan polity has no choice but to abide by scientific advice on this question. Since authorities of the standing of even the WHO have declared that the burial of the bodies of those dying of Covid could not prove to be injurious to the wider public, the Sri Lankan health authorities could go ahead and sanction the burying of the bodies concerned. What’s preventing the local authorities from taking this course since they claim to be on the side of science? Who or what are they fearing? This is the issue that’s crying out to be probed and answered.
Considering the need for absolute truthfulness and honesty on the part of all relevant persons and quarters in matters such as these, the latter have no choice but to resign from their positions if they are prevented from following the dictates of their consciences. If they are firmly convinced that burials could bring no harm, they are obliged to take up the position that burials should be allowed.
If any ‘higher authority’ is preventing them from allowing burials, our ministers and officials are conscience-bound to renounce their positions in protest, rather than behave compromisingly and engage in ‘double think’ and ‘double talk’. By adopting the latter course they are helping none but keeping the country in a state of chronic uncertainty, which is a handy recipe for social instabiliy and division.
In the Sri Lankan context, the failure on the part of the quarters that matter to follow scientific advice on the burials question could result in the aggravation of Islamophobia, or hatred of the practitioners of Islam, in the country. Sri Lanka could do without this latter phobia and hatred on account of its implications for national stability and development. The 30 year war against separatist forces was all about the prevention by military means of ‘nation-breaking’. The disastrous results for Sri Lanka from this war are continuing to weigh it down and are part of the international offensive against Sri Lanka in the UNHCR.
However, Islamophobia is an almost world wide phenomenon. It was greatly strengthened during Donald Trump’s presidential tenure in the US. While in office Trump resorted to the divisive ruling strategy of quite a few populist authoritarian rulers of the South. Essentially, the manoeuvre is to divide and rule by pandering to the racial prejudices of majority communities.
It has happened continually in Sri Lanka. In the initial post-independence years and for several decades after, it was a case of some populist politicians of the South whipping-up anti-Tamil sentiments. Some Tamil politicians did likewise in respect of the majority community. No doubt, both such quarters have done Sri Lanka immeasurable harm. By failing to follow scientific advice on the burial question and by not doing what is right, Sri Lanka’s current authorities are opening themselves to the charge that they are pandering to religious extremists among the majority community.
The murderous, destructive course of action adopted by some extremist sections among Muslim communities world wide, including of course Sri Lanka, has not earned the condemnation it deserves from moderate Muslims who make-up the preponderant majority in the Muslim community. It is up to moderate opinion in the latter collectivity to come out more strongly and persuasively against religious extremists in their midst. It will prove to have a cementing and unifying impact among communities.
It is not sufficiently appreciated by governments in the global South in particular that by voicing for religious and racial unity and by working consistently towards it, they would be strengthening democratic development, which is an essential condition for a country’s growth in all senses.
A ‘divided house’ is doomed to fall; this is the lesson of history. ‘National security’ cannot be had without human security and peaceful living among communities is central to the latter. There cannot be any ‘double talk’ or ‘politically correct’ opinions on this question. Truth and falsehood are the only valid categories of thought and speech.
Those in authority everywhere claiming to be democratic need to adopt a scientific outlook on this issue as well. Studies conducted on plural societies in South Asia, for example, reveal that the promotion of friendly, cordial ties among communities invariably brings about healing among estranged groups and produces social peace. This is the truth that is waiting to be acted upon.
Pakistan’s love of Sri Lanka
By Sanjeewa Jayaweera
It was on 3rd January 1972 that our family arrived in Karachi from Moscow. Our departure from Moscow had been delayed for a few weeks due to the military confrontation between Pakistan and India. It ended on 16th December 1971. After that, international flights were not permitted for some time.
The contrast between Moscow and Karachi was unbelievable. First and foremost, Moscow’s temperature was near minus 40 degrees centigrade, while in Karachi, it was sunny and a warm 28 degrees centigrade. However, what struck us most was the extreme warmth with which the airport authorities greeted our family. As my father was a diplomat, we were quickly ushered to the airport’s VIP Lounge. We were in transit on our way to Rawalpindi, the airport serving the capital of Islamabad.
We quickly realized that the word “we are from Sri Lanka” opened all doors just as saying “open sesame” gained entry to Aladdin’s cave! The broad smile, extreme courtesy, and genuine warmth we received from the Pakistani people were unbelievable.
This was all to do with Mrs Sirima Bandaranaike’s decision to allow Pakistani aircraft to land in Colombo to refuel on the way to Dhaka in East Pakistan during the military confrontation between Pakistan and India. It was a brave decision by Mrs Bandaranaike (Mrs B), and the successive governments and Sri Lanka people are still enjoying the fruits of it. Pakistan has been a steadfast and loyal supporter of our country. They have come to our assistance time and again in times of great need when many have turned their back on us. They have indeed been an “all-weather” friend of our country.
Getting back to 1972, I was an early beneficiary of Pakistani people’s love for Sri Lankans. I failed the entrance exam to gain entry to the only English medium school in Islamabad! However, when I met the Principal, along with my father, he said, “Sanjeewa, although you failed the entrance exam, I will this time make an exception as Sri Lankans are our dear friends.” After that, the joke around the family dinner table was that I owed my education in Pakistan to Mrs B!
At school, my brother and I were extended a warm welcome and always greeted “our good friends from Sri Lanka.” I felt when playing cricket for our college; our runs were cheered more loudly than of others.
One particular incident that I remember well was when the Embassy received a telex from the Foreign inistry. It requested that our High Commissioner seek an immediate meeting with the Prime Minister of Pakistan, Mr Zulifikar Ali Bhutto (ZB), and convey a message from Mrs B. The message requested that an urgent shipment of rice be dispatched to Sri Lanka as there would be an imminent rice shortage. As the Ambassador was not in the station, the responsibility devolved on my father.
It usually takes about a week or more to get an audience with the Prime Minister (PM) of a foreign country due to their busy schedule. However, given the urgency, my father spoke to the Foreign Ministry’s Permanent Sectary, who fortunately was our neighbour and sought an urgent appointment. My father received a call from the PM’s secretary around 10 P.M asking him to come over to the PM’s residence. My father met ZB around midnight. ZB was about to retire to bed and, as such, was in his pyjamas and gown enjoying a cigar! He had greeted my father and had asked, “Mr Jayaweera, what can we do for great friend Madam Bandaranaike?. My father conveyed the message from Colombo and quietly mentioned that there would be riots in the country if there is no rice!
ZB had immediately got the Food Commissioner of Pakistan on the line and said, “I want a shipload of rice to be in Colombo within the next 72 hours!” The Food Commissioner reverted within a few minutes, saying that nothing was available and the last export shipment had left the port only a few hours ago to another country. ZB had instructed to turn the ship around and send it to Colombo. This despite protests from the Food Commissioner about terms and conditions of the Letter of Credit prohibiting non-delivery. Sri Lanka got its delivery of rice!
The next was the visit of Mrs B to Pakistan. On arrival in Rawalpindi airport, she was given a hero’s welcome, which Pakistan had previously only offered to President Gaddafi of Libya, who financially backed Pakistan with his oil money. That day, I missed school and accompanied my parents to the airport. On our way, we witnessed thousands of people had gathered by the roadside to welcome Mrs B.
When we walked to the airport’s tarmac, thousands of people were standing in temporary stands waving Sri Lanka and Pakistan flags and chanting “Sri Lanka Pakistan Zindabad.” The noise emanating from the crowd was as loud and passionate as the cheering that the Pakistani cricket team received during a test match. It was electric!
I believe she was only the second head of state given the privilege of addressing both assemblies of Parliament. The other being Gaddafi. There was genuine affection from Mrs B amongst the people of Pakistan.
I always remember the indefatigable efforts of Mr Abdul Haffez Kardar, a cabinet minister and the President of the Pakistan Cricket Board. From around 1973 onwards, he passionately championed Sri Lanka’s cause to be admitted as a full member of the International Cricket Council (ICC) and granted test status. Every year, he would propose at the ICC’s annual meeting, but England and Australia’s veto kept us out until 1981.
I always felt that our Cricket Board made a mistake by not inviting Pakistan to play our inaugural test match. We should have appreciated Mr Kardar and Pakistan’s efforts. In 1974 the Pakistan board invited our team for a tour involving three test matches and a few first-class games. Most of those who played in our first test match was part of that tour, and no doubt gained significant exposure playing against a highly talented Pakistani team.
Several Pakistani greats were part of the Pakistan and India team that played a match soon after the Central Bank bomb in Colombo to prove that it was safe to play cricket in Colombo. It was a magnificent gesture by both Pakistan and India. Our greatest cricket triumph was in Pakistan when we won the World Cup in 1996. I am sure the players and those who watched the match on TV will remember the passionate support our team received that night from the Pakistani crowd. It was like playing at home!
I also recall reading about how the Pakistani government air freighted several Multi Barrell artillery guns and ammunition to Sri Lanka when the A rmy camp in Jaffna was under severe threat from the LTTE. This was even more important than the shipload of rice that ZB sent. This was crucial as most other countries refused to sell arms to our country during the war.
Time and again, Pakistan has steadfastly supported our country’s cause at the UNHCR. No doubt this year, too, their diplomats will work tirelessly to assist our country.
We extend a warm welcome to Mr Imran Khan, the Prime Minister of Pakistan. He is a truly inspirational individual who was undoubtedly an excellent cricketer. Since retirement from cricket, he has decided to get involved in politics, and after several years of patiently building up his support base, he won the last parliamentary elections. I hope that just as much as he galvanized Sri Lankan cricketers, his political journey would act as a catalyst for people like Kumar Sangakkara and Mahela Jayawardene to get involved in politics. Cricket has been called a “gentleman’s game.” Whilst politics is far from it!.
Covid-19 health rules disregarded at entertainment venues?
Believe me, seeing certain videos, on social media, depicting action, on the dance floor, at some of these entertainment venues, got me wondering whether this Coronavirus pandemic is REAL!
To those having a good time, at these particular venues, and, I guess, the management, as well, what the world is experiencing now doesn’t seem to be their concerned.
Obviously, such irresponsible behaviour could create more problems for those who are battling to halt the spread of Covid-19, and the new viriant of Covid, in our part of the world.
The videos, on display, on social media, show certain venues, packed to capacity – with hardly anyone wearing a mask, and social distancing…only a dream..
How can one think of social distancing while gyrating, on a dance floor, that is over crowded!
If this trend continues, it wouldn’t be a surprise if Coronavirus makes its presence felt…at such venues.
And, then, what happens to the entertainment scene, and those involved in this field, especially the musicians? No work, whatsoever!
Lots of countries have closed nightclubs, and venues, where people gather, in order to curtail the spread of this deadly virus that has already claimed the lives of thousands.
Thailand did it and the country is still having lots of restrictions, where entertainment is concerned, and that is probably the reason why Thailand has been able to control the spread of the Coronavirus.
With a population of over 69 million, they have had (so far), a little over 25,000 cases, and 83 deaths, while we, with a population of around 21 million, have over 80,000 cases, and more than 450 deaths.
I’m not saying we should do away with entertainment – totally – but we need to follow a format, connected with the ‘new normal,’ where masks and social distancing are mandatory requirements at these venues. And, dancing, I believe, should be banned, at least temporarily, as one can’t maintain the required social distance, while on the dance floor, especially after drinks.
Police spokesman DIG Ajith Rohana keeps emphasising, on TV, radio, and in the newspapers, the need to adhere to the health regulations, now in force, and that those who fail to do so would be penalised.
He has also stated that plainclothes officers would move around to apprehend such offenders.
Perhaps, he should instruct his officers to pay surprise visits to some of these entertainment venues.
He would certainly have more than a bus load of offenders to be whisked off for PCR/Rapid Antigen tests!
I need to quote what Dr. H.T. Wickremasinghe said in his article, published in The Island of Tuesday, February 16th, 2021:
“…let me conclude, while emphasising the need to continue our general public health measures, such as wearing masks, social distancing, and avoiding crowded gatherings, to reduce the risk of contact with an infected person.
“There is no science to beat common sense.”
But…do some of our folks have this thing called COMMON SENSE!