One of the oldest establishments in Sri Lanka, B C C Sri Lanka which was to be shut down and transformed to a remand prison due to the establishment being a bleeding State owned enterprises has now made a dramatic turn around and is being converted to a profit making venture. The mentor behind this initiative, Chairman of BCC Chaminda Welegama who was appointed in 2020 said that the premises were to be transformed into a remand prison. This was subsequent to a decision made in the 2015-2020 period.
“However, the subject Minister Wimal Weerawasna saw the potential in the institution and made several new initiatives to make this ‘business’ viable and –sufficient.”
Today the ‘Daily News Business Meet the Chairman’ features B C C Chairman Chaminda Welegama.
Q: What were the new initiatives taken to resurrect B C C?
A: After my appointment we studied the plus and minus points of the institution and saw that there is tremendous export potential in this where we could bring in US dollars. We also encouraged local producers of soap, detergents and many other products to ‘up’ their production to stop imports and save foreign currency.
While producing and exporting high quality coconut oil we also encourage more local SMEs to take to this field and engage in exports. Also, once we import our dehydrated coconut chips we hope that we will be able to resolve the short supply of raw material for the mill owners and it will help us in supplying high quality coconut oil with a low cost.
“Our prime idea is to give a good quality litre of coconut oil for around 500 and nothing more than 550.”
He also said that though B C C was under several Ministers none of them had a clear vision and mission unlike now to develop this giant institution. Under Minister Weerawansa’s guidelines we have done a Five Year Development Program.
Q: What are the points spelt out in the five phase development plan?
A: The first point is outlining the new strategies to develop the coconut industry. The Ministry of Industries and Ministry of Plantations have identified that there is an acute shortage of raw material for the manufacturing of copra and coconut oil.
Annual harvest of 3 1/2 billion coconuts 72% goes for the household consumption whilst the balance goes as various high value additions and for exports. Hence there is less availability of coconut green nuts for copra and also for coconut oil, therefore the importation of coconut oil is mandatory in order to meet the local demand.
As a result there were imports of crude and refined coconut oil to the country from different parts of the world mainly (Indonesia, Malaysia and India) and it was detected that poor quality coconut oil with high percentage of ‘Aphlotoxin’ is brought into the country which is not suitable for human consumption.
Earlier there was gazettes that authorized adulterating any other edible oil with coconut oil and market or promote it as coconut oil.
However the authority which was given to mix up with any other oil has been stopped as at present. But the traditional mill owners and the manufacturers are not getting enough copra for their production. Their factories have been closed down along with whatever employment they provided for the neighbouring people.
As a solution, Minister Weerawansa and Dr. Ramesh Pathirana Plantation Minister jointly submitted a Cabinet paper to import dehydrated coconut chips for Sri Lanka to provide raw material for mill owners.
BCC Lanka is the only authorized entity approved by the Cabinet of Ministers to import raw materials to provide for registered mill owners at the Coconut Development Authority (CDA) and the Ministry of Industries; those people will be given these raw material at a concessionary rate and whatever they are manufacturing, a part will be purchased by us. This was the first phase of the development plan.
Q: What is the second?
A: It’s to establish a modern soap factory and detergent factory. At present we are manufacturing sovereign bars as the laundry soap whilst having many other soap ranges within us. As at present; Suvendara, Health Joy, Sovereign bar and all the products which we had earlier will be brought forward with the new concept and authorities of BCC.
Our target is to acquire about 25% of the local requirement. So that every household will be using some sort of detergent in their house chores. We are planning to revamp, reorganize and restructure the soap and detergent in order to make them more available in the local market. Since we are producing a small quantity for the moment, it’s not sufficient to cater for the needed areas. We are only selling through our own distributor network so that we wish to expand our network on a wider level. Our target is to establish a modern type of a factory.
We have a facility in Wathupitiwala Industrial Zone. The 75 years old machinery happens to be quite outdated. We have called the expression of interest for the parties who could give us advisory support and to make recommendations in order to establish a soap factory.
We are proud to do this on our own finances instead of depending on the treasury or the state. Likewise as in the development plan is to set up and develop a soap factory where we will be able to manufacture shampoo, shower gel and soap ranges at very high quality soap and a very reasonable price which will be affordable for everyone with the same quality soap of 50% TFM and 78%TFM based.
Q: Can you outline the third pillar?
A: It’s the construction of a 20 storey multi- functioned building in the six acres land we own. We are going to call a joint venture development program in order to establish a 20 storey multi-functional building adjoining versatile shopping malls, spare part dealers’ shops, banks, chambers for the lawyers and also with the facility in parking. Moreover, there will be apartments and start up offices as the Port City is round the corner and its development program will be in the necessity of offices as per the oncoming employment for the people. Hence there will be many connected jobs.
Since there are no places in the vicinity for entertainment and hotel facilities we will see a proper banquet hall too within the 20 storeyed building. We have already got the Board approval and the approval of the Ministry whilst discussing our development plan with the treasury and the Ministry of Finance. The next step will be surveying the land and to make other necessities brought forward to reality”.
Q: What is the fourth plan under this scheme?
A: It’s the diversification to a solar power panel system. We have got about 90,000 square feet of roof in our storage facility consisting of 38 locations in the same premises. Since these buildings are over 100 years old we have already written to the Archaeological Departments seeking permission for renovation and to set up a solar power system according to the President’s theme of Vistas of Prosperity in order to convert it into renewable energy as 70% of the national power requirement is set to be supplied by renewable energy. Likewise, we are planning to utilize our entire roof to set up solar power panels and to connect our premises including the proposed 20 storey building. This covers about 2 acres of land.
Q: What are the other plans?
A: It’s to refurbish and renovate a colonial bungalow in our premises to be used for storage as there is a huge requirement in this area for storage. No renovation has been done for a considerably long period. This will provide additional revenue to the company as we also plan to provide facilities for cold storage as well.
We have got a bungalow which consists of six bedrooms. It’s the colonial type bungalow which was used by the former chairman. It will be fine tuned, renovated and offered to the people as for the purpose of a holiday bungalow. The renovated bungalow could be utilized as a club house or even a recreational hall.
Q: What are the other plans to increase revenue?
A: We have got four tanks which have been last operated in 2007 and under my instructions these are being repaired in order to give them on rent for those who require storage bringing revenue for us. We also have several such initiatives to increase our bottom line.
Q: What was the financial performance in the last few months of B C C?
A: I am quite elated to announce that sales revenue which was Rs 181 million in the year 2019 has been increased to Rs 628 million in 2021. Also the profits increased from Rs 20 million to Rs 104 million.
Also we expect additional revenue from new products like Snow White Care for washing machines, newly introduced shampoo, shower gel, detergent and fabric softeners. Sandalwood, Suvendara Rose, Suvendara Aloe-Vera will be introduced again with a new identity by increasing the quantity and volume to distribute all over.
Q: What are the plans to market these products?
A: We are looking at having a better relationship with our existing and appoint new dealers islandwide.
For this there will be a socializing program to do publicity in setting outlets on a wider scale. We are planning to establish 20 outlets to be identified in the main cities; Colombo, Kaduwela, Monaragala, Badulla, Hambantota, Kandy, Kurunegala, Kegalle, Galle, Matara, Dambulla, Anuradhapura, Polonnaruwa, Awissawella, Panadura , Kalutara, Gampaha, Ratnapura, Deraniyagala, Negombo, Nuwara Eliya and Mahiyanganaya.
We are going to set up 20 outlets in phase 1 where people will be able to consume the products from those areas. We have already set up one in Narahenpita. After completing these 20 we will go for another 20 outlets. In this manner we are going to establish 50 outlets in this country. The bottom line is to increase the volume and reduce the cost in order to give the cost benefit to the general public maintaining very high quality, State recognition and assurance.
History of B C C
The present B C C has a history that dates back to 1830’s with a long list of ownership changes. Early records show that in 1830 E Price 7 Co of UK acquired the patent right to the technique for separating coconut oil into its solid and liquid parts but were faced with irregular supply of the crude material for processing and hence, it became practical to set up extensive crushing mills in Ceylon at Hultsdorf for separating the oil from the kernel.
The mills were set up in 1835 under a company set up in London, the Hultsdorf Mills Co. (Ceylon) Ltd. Through the ensuing period until World War I, the Mills changed hands several times with names such as Wilson Richie & Co. G&W Leechman, and Freudenburg until the District Court of Colombo made an order in 1914 appointing a custodian of Enemy Property (Freudenburg being German was designated enemy).
A powerful European syndicate operating in India at the time tendered for the purchase of the Hultsdorf Mills and in 1918 the British Ceylon Corporation was incorporated. This entity continued to function until it was vested with its wholly owned subsidiaries (British Ceylon Milling Company Ltd & Ceylon Extraction Company Ltd) in the State in 1972 under the Business Undertaking (Acquisition) Act no 35 of 1971.
Of the subsidiaries, Ceylon Extraction Company Ltd ceased operations in 1976 due to lack of raw materials to sustain its production outputs (British Ceylon Milling Company Ltd was amalgamated to BCC in its incorporation). With policy changes of successive governments and administrations, the company went through a period of decline which saw the sale of one of its more lucrative businesses Orient Co. Lanka Ltd (Which had the agency for foreign liquor) and difficulties in keeping up with its burgeoning staff payroll. In 1988 BCC Lanka Limited was incorporated with the issue of 10,000,000 shares (held by the General Treasury), under the Conversation of Public Corporations and Government Owned Business Undertaking in to Public Companies Act No 23 of 1987 with the issue of 10,000,000 shares (held by the General Treasury), under the Conversation of Public Corporations or Government Owned Business Undertaking.
Considering the importance of the British Ceylon Corporation to the development of the coconut industry, B C C is now functioning under the Ministry of industries with the supervision of Minister Wimal Weerawansha.
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