A variety of 'new things' giving Richard Pieris' the business bounce
Richard Pieris & Company Ltd, a household name in Sri Lanka in the
sphere of the manufacturing of a wide variety of consumer goods, could
best be described as being 75 years young this year.
According to the Company's Director / Chief Operating Officer, Pravir
D. Samarasinghe, an interview with whom we carry today, a secret of
Richard Pieris' longevity has been its untiring spirit of innovation and
product diversification. "It has always been new things" that the
company has come up with over the decades.
Q: You have been 75 years in business. What has contributed
towards your longevity as a business organisation?
A: Richard Pieris' has had a humble beginning. We enjoyed
leadership for automobile components and repair work, agriculture
fertilizer etc, were some of our main lines of business. But as to how
the growth and longevity has taken place, I would attribute them to a
lot of innovative thinking. We had a lot of pioneering initiatives
If you look at the manufacturing side of Richard Pieris' which grew
in the last 50 or 60 years, it has always been new things that we have
introduced. If you take tyre re-treading, it was introduced by us, so
were rotation - moulded water tanks. A number of such products were
introduced by us. So, there has been a pioneering nature which has
helped develop the company to what it is today.
Two other aspects worth mentioning is that a strong brand name was
also developed. The Arpico brand which is quite popular among the masses
in Sri Lanka. That has grown to a level which satisfies our businesses.
There is also a good work ethic and a good team of people at Richard
Pieris'. That again has helped us grow. More recently, there has been
tremendous growth. Particularly in the last four years, there has been a
change in our culture as well.
So, I may imagine, that our pioneering aspect, the strong brand
equity which we hold and the people who are involved have helped this
Q: Have you moved away considerably from rubber-based products
to manufactures of other kinds with varying appeal?
A: Now if you take it, the company has a Rs. 15 billion
turnover. It has a Rs. 10 billion market capitalization. We have a
series of businesses. Rubber based products is a small aspect of the
whole group. We have five core sectors in the company.
One is rubber products for export; we have about five factories,
bringing out various rubber products for the export market. We are very
large in retailing - that's another sector. In retailing in general
household goods and large format stores, we are the largest in the
Then we are the largest in plantations in Sri Lanka. If you take the
tea and rubber plantations, we are the largest player in Sri Lanka. We
make 10 percent of Sri Lanka's rubber as well as seven percent of Sri
We are also the largest builder in tyre rebuilding in Sri Lanka. We
have seven factories all over the country and we have about 50 percent
market share in tyres.
We also have a plastics sector. Mainly it is in the area of hardware
- related items and furniture related items in plastics: Water tanks,
PVC pipes, moulded plastic goods like furniture, - there is a series of
hardware and furniture related items. We have about eight factories all
over the country, manufacturing these products.
In addition to these five areas we have gone into transportation;
that is, logistics. We are in real estate development, construction,
media or newspapers. So, if you take it as a group we are a large
conglomerate and rubber accounts for only a small part of this big
Q: So business diversification has been one of your main
A: Yes, at the corporate level, it is a two-focused strategy.
We would focus on those five business areas with the aim of growing
bigger and bigger and getting more market share as well as go into the
related areas in those. For example, if we are in plantations we go into
forward integration into tea exports, or using the other material, such
as timber for furniture.
Likewise, we have looked at selective diversification into selective
industries which have a long term growth potential. If you take
transportation or logistics, we feel Sri Lanka is well positioned with
India. We feel the transportation industry would grow.
Likewise, we went into real estate development. We felt there is some
scope there - there is a niche market we were looking at. We have been
giving affordable, trusted housing solutions to people; middle income
level as well. That way we went into real estate development.
We went into construction as well. There again we felt there are
solutions to the low income housing needs in the country as well as
infrastructure development, such as roads, bridges.
We found there was a gap in the market, so selectively we went into
that. So, it is a combination of focusing on our existing businesses and
developing them as well as going in for selective diversification.
In implementing these plans, we have looked at fast-tracking our
growth through acquisitions or by organically developing our own
Q: Are Richard Pieris' in the management of plantations?
A: After the nationalisation of plantations in the seventies
there was a privatisation about 10 years ago. We jointly managed two
plantation management companies with Keells. That was Maskeliya and
Kegalle plantations. We had a 50-50 relationship with them. That's how
we got into plantation management.
Two years ago we acquired the 50 percent of Keells and we became the
totally owned management company of Maskeliya Plantations and Kegalle
Maskeliya is the premier tea company in Sri Lanka, and Kegalle
Plantations is the premier rubber plantation in Sri Lanka. Even more
recently we acquired Namanakula Plantations, which had tea, rubber, palm
So, altogether we have about 80,000 acres of plantation land, and
nearly 30,000 employees. So we are definitely the largest plantation