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| Sunday, 26 January 2003 |
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Personality Plus Dilshan Fernando : Reaping what he had sown
Dedication and hands-on experience are the pillars of success for Dilshan Fernando, the energetic and dynamic Director and Chief Executive Officer of Tess Agro Ltd (TAL), the operator of Sri Lanka's first cold chain and a leading exporter of fruits, vegetables and fish to Europe. Family Fernando was born to a family of three boys and one girl. His father was a Director at St Anthony's Group. He was educated at St Thomas' Prep School, Colpetty and St Thomas' College, Mount Lavinia. "From my younger days, I was good at turning out and repairing things. Once the turning top I was playing with broke and I was quite disappointed over it. While my parents were having their afternoon nap, I repaired it and since I was so happy, I woke up my parents to show them what I had done. My family still has fond memories of this incident," he recalled. Beginnings His father, Oliver Fernando, while working at St Anthony's Group, wanted to build an ice plant in his home town, Negombo to preserve fish in their raw form by keeping them on ice instead of preserving them as dry fish. During this time, a loan scheme was also introduced to promote Small and Medium scale Industries. Taking advantage of this scheme, he obtained a loan and built the factory in 1980 and installed machinery. Fernando said: "By then, I had finished my Ordinary Levels and was at home. Therefore, I accompanied my father daily to Negombo and was involved with the building of the factory as well as installing of machinery. My interest in the technical aspects of the project increased due to my involvement. "In 1984, I built a duplicate 10 tonne ice plant on my own, and 70 per cent of the raw materials used was local. I am very proud of this achievement even today." After completing school, he followed the first and second parts of the Institute of Engineers Sri Lanka examination while helping his father's business, because his dream was to become an engineer. After some time, he wanted to study for a Master in Business Administration, which he felt was more appropriate for his career. Today, he has an MBA and is a Fellow of the Chartered Institute of Management, UK. By 1991, the company realised that using two 10 tonne plants was not viable due to the escalation of electricity costs. Therefore, they built and commissioned the 40 tonne plant while functions of the two small plants were stopped. Seventy per cent of the raw material used in the new plant too was local. During this period, the Mahaweli Agriculture Rural Development Project, sponsored by the United States Agency for International Development (USAID) and the Mahaweli Authority of Sri Lanka, after a study concluded that to increase the income of System B area farmers, a diversification program from paddy cultivation to high value horticultural crops was necessary. For this diversification to be implemented, a cold chain operator was sought by calling for public tenders from local private sector companies willing to embark on this project with a USAID grant. The project was awarded to the company based on competitive selection. With the experience gained on industrial refrigeration throughout the years, the company ventured further towards the supply and installation of refrigeration equipment to the private sector and the government. This prompted the company to submit a proposal to the USAID, to establish and operate a cold chain system for farmers. After being selected by USAID as the cold chain service provider for farmers of Mahaweli System B area, the company obtained Board of Investment (BoI) approval under pioneer status. Tess Agro Ltd. (TAL), incorporated in 1992, was approved under the BoI and enjoys a 15-year tax holiday. The company was formed to cater to the pressing need of farmers in the Mahaweli System B area to have a central place to sell their produce so that the produce reaches markets in peak condition, thus bringing the best prices for farmers. Operations of the company Since then, the company has ventured into the cold chain service which includes pre-cooling, cold storage warehousing and the provision of refrigerated transport to the perishables industry, for transporting perishables and providing storage for clients who require temporary storage at their own sites. As a pioneer in the field, the company has established a name for itself as a high quality service provider. New markets Traditionally, Sri Lanka has exported to nearby countries such as the Maldives and the Middle East. Owing to the company's infrastructure in post-harvest handling and cooling of produce, which extends their shelf-life, the company has been able to export to European markets over the past five years. Now it is a leading exporter to the EU. TAL is presently the largest exporter to the European market and has the highest FOB price among Lankan exporters. "We only export low country grown vegetables as they have a high demand in the European market," he added. The company has a packhouse in an area where 40,000 settler farmers and their families live and work. The irrigation system in the growing area comprises well developed infrastructure that is capable of year-round irrigation. TAL went for a private placement of shares in 1996. The issue was over-subscribed and raised Rs 21 million, which was mainly invested in the deep sea fishing project, Tropic Fishery and to build a cold storage warehouse in Kelaniya. "The main aim of going public last year was to expand our exports by infusing capital and retiring some of the short-term debt," he added. At present 500 farmers supply fruits and vegetables to the company which also purchases from commercial farms. Problems Fernando said: "Ensuring consistency in quality and high air fares are problems encountered by us. Some farmers are dedicated and give high quality produce while some do not. Perishables are best transported by air, but since our costs are high compared with most other countries, we use sea freight. It is a problem since large volumes have to be sent at a time unlike sending a few kilos by air on a more regular basis. "The company exports about five tonnes of perishables by air while another 10-15 tonnes of melons are exported weekly by sea to Hong Kong and Singapore. Indirect exports of this product is between five and seven tonnes a week. Monthly Shashimi tuna exports to Japan and Europe from the company's subsidiary, Tropic Fishery, is valued at Rs 25 million." Plans for the future "We will continue to be in the forefront of pioneering industries while striving to increase shareholders' wealth by looking for opportunities to develop in the industry." |
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