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| Sunday, 23 March 2003 |
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| News Business Features Editorial
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Success in a tea cup The united strategy of the Dilmah family is to become the number one speciality tea company in the world and bring back the glory and prestige Ceylon Tea enjoyed once upon a time. Dilmah is focusing on quality niche markets, and being small and premium is our strength, said Director MJF Group Malik Fernando. Today the group is the seventh largest tea packer in the world and Sri Lanka's leading exporter of value added tea. It recorded a group turnover of eight billion rupees in 2000. At present, the Dilmah brand name, coined by Merill J. Fernando, the company founder using the names of his two sons Dilhan and Malik, is well known for its quality in more than 90 countries around the globe. History The relationship between tea and Merill J. Fernando, better known as the CEO who makes his own tea, dates back to the early 50s with him starting his career as a tea taster. Incidentally, he was one of the first six tea tasters recruited by the British at a time most tea plantations were owned by companies or individuals in UK. The new recruits were sent to Mincing Lain, UK for training. Fernando came back and joined A.F. Jones. He became the Managing Director of the company in the 60s and subsequently formed his own company. The decision to form his own company was made at a time Sri Lankan tea was losing its position as all brands using Pure Ceylon tea were moving away. The nationalisation of plantations dealt another blow to the already ailing tea industry. "It not only destroyed the industry, but also created competition from countries such as Kenya," said Fernando. Tea's answer to Nescafe, CTC teas, were introduced around this time, dealing another blow to the countries producing orthodox tea including Sri Lanka. Well-known brands such as Lipton, Brooke Bond and Twinings, which relied on Ceylon Tea, also started to move away slowly. During this time, Fernando decided to go for branded tea, but had to fight many battles as local representatives of multinationals got together with shipping lines and increased freight charges of packeted tea. He had to make representations to the Ministry of Trade which stepped in to help him. As the first step in realising his dream of building a Sri Lankan brand of tea, Fernando started to sell tea bags and packets under other private labels. In 1985, Dilma, the single origin tea, was launched in Australia at the Coles Supermarket and is today the number one tea brand originating from a tea growing country. "From the beginning, we were selling at high prices as a quality product cannot be sold cheap. During this time, Lipton, which enjoyed a 50 per cent market share, reduced its price. Woolworths, another reputed chain of supermarkets also started to buy Dilmah, pushing its market share to 12.5 per cent. "We are the only brand distributed in Australia which is growing due to quality and content," added Fernando. In the early 90s, the brand name Dilma became Dilmah and was also introduced in New Zealand, where it currently enjoys a 22 per cent market share while plans are afoot to make it the number one brand. "Initially, we used a Sri Lankan-born model to promote Dilmah in New Zealand, but advertisers convinced my father to come on television. To this day, it is the only brand advertised by the owner as 'honest dedicated founder of the product'," Malik Fernando said. "The personal and caring approach by my father, amply displayed by the theme 'dedicated founder' together with the product quality has taken us to great heights. But we do not just sit back and be complacent as our goal is to bring back the old glory and position to Ceylon tea, and place it firmly on the world map." Production Over 10 million tea bags are produced daily at the Colombo production facility which is ISO 9002 certified and the first in Sri Lanka, perhaps in the tea industry globally, to receive HACCP accreditation. To maintain hygiene and cleanliness, every ounce of tea is cleaned before packing. The group invests over Rs 100 million annually to ensure that its manufacturing capabilities remain state-of-the-art and quality assured. Marketing International marketing operations are managed from the group's head office in Colombo and regional representative offices support this effort in some countries. The group operates offices in Australia, New Zealand, Russia, Ukraine, Uzbekistan and Poland in association with its distributors. Production centres for economy brands have been established in Indonesia, Poland and India, said International Marketing Manager Roshan Tissaratchy. "Dilmah was launched in Sri Lanka last year and we are happy with the response we received," he added. Tea Conference Last month, the company hosted 90 distributors from over 90 countries for a three-day tea conference, the biggest private sector effort to boost Ceylon Tea. The conference involved training the participants in the art of tea, discussing the company's strategies for Dilmah over the next five years and sharing the expertise of the global Dilmah family. The team also experienced a tea trail which took them through some of the finest tea estates in the country. The MJF Group employs 36,000 persons in the estates and 800 in its offices. The Merill J. Fernando Charitable Foundation actively promotes the welfare of the staff and workers as well as pursuing charitable projects with wider objectives. The Foundation is presently constructing a home for elders and a project to care for infants rejected by their parents. Dilmah is also the official sponsor of the Sri Lankan cricket team. |
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