Sri Lanka Operations

At the Security Products launch (R-L): D.E. Byramjee, Vice President and Business Head, Security Equipment Division, Rizvi Zaheed, Managing Director, Hayleys, and G. Rajaratnam, Market Manager, Godrej, Sri Lanka.

he Office Consumer Products Division of Godrej & Boyce Mfg. Co. Ltd. (G&B) opened a Liaison Office in Colombo on 27 May, 2003.

The main objectives behind setting up the office were to gauge the potential in the region for marketing OCP products, to identify and appoint Channel Partners for OCP’s unrepresented product lines and to technically support the Channel Partners. The Liaison Office will also evolve strategies to effectively combat aggressive competition from China, Malaysia and the Far East and will strive to establish G&B as a recognised brand in the Home, Office and Industrial Segment in Sri Lanka.

Market Dynamics/Hurdles

The Sri Lankan market is a quality-conscious, price-sensitive market, which has been exposed to leading international brands from Europe, Japan and the Far East. Godrej is virtually unknown, except for a small presence in the consumer segment (Hair Dye).

In the Furniture segment, there is an overall preference for items made out of wood/Medium Density Fibre rather than steel, as most architects and interior designers perceive wood as warm and steel as cold. Wood also has a price advantage over steel. Traditionally, aesthetic products are more popular than functional ones.

In a “touch and feel” market, referrals are important. In most of our Product Lines the market is protected with high rates of import duty averaging around 40 per cent to 50 per cent. We also have to contend with the general belief that goods “Made in India” are inferior to international brands.

The Indian Line of Credit of $100 million is available only for Plant and Machinery and not for other sectors. We are unable to leverage the Indo-Sri Lankan FTA as most of our Product Groups fall in the Negative List of the FTA.

Executive Director and President P.D. Lam at the Colombo office.

Activities Carried Out

We have identified and appointed the following Channel Partners for unrepresented Product Groups:

Metropolitan Office Systems for the Furniture and Interiors Group. Metropolitan is a 40-year-old group handling office automation and currency management systems with a strong presence across the island. It has 7 branches and 120 dealers across the country.

Hayleys will represent the Security Division. Hayleys is a 125-year-old group and the number two company on the Colombo Stock Exchange with a turnover of $10 million. It has 19 showrooms, 200 dealers and 48 service centres across the island.

Harris Ceylon Ltd. for Locks. The company is a leading manufacturer of paint brushes by appointment to Her Majesty Queen Elizabeth II. It has a strong distribution network with more than 3,000 outlets across the island.

In addition, the Liaison Office has obtained a breakthrough order for Seating (500 chairs). Breakthrough orders have also been received for the following Product Groups:

• Locks: The first order received for upcountry distribution.

• Safes: The first order for 31 hotel safes received from a five-star hotel.

• Typewriters: 400 pieces, 150 from the Sri Lankan Army and 250 from the Police.

• We are expecting the first Government order for Furniture ($60,000) in November.

• We plan to set up an office and guest house with basic amenities for the benefit of employees visiting Sri Lanka.
   

G. Rajaratnam
Godrej, Sri Lanka