Expolanka - The Untold Success Story

Could you talk about how Expolanka first began before it diversified into a conglomerate?

Expolanka first began in 1978. The founder, the Chairman of the Board, Osman Kassim started a small company at Dam Street Colombo 12, to export fresh produce. That is how Expolanka was born, as a small 500 square foot office situated in a lawyer’s chambers. I came in when the company started exporting vegetables. The Chairman invited me during a chance encounter to join the company as a partner even though I was without much experience at the age of 21. Together with his brothers the company took off in the following year exporting fruits and vegetables.

We were everything – the tea maker, the peon, we carried out every task and believed in ourselves. Subsequently we grew with backward integration, as we ventured into shipping our own goods. This led to other freight forwarding work and we became specialists in the garment industry. That became one part of our business. From there we grew to overseas countries and today we have a presence in 11 countries with the 12th just opened in the Philippines. We are a Sri Lankan company with considerable overseas presence covering a total of 38 locations.

At that time business just prospered although we were faced with many situations. Money was a problem and we were in a learning process. We made mistakes but we never gave up and it snowballed. If we came up against a wall we found a way around it. When we fell, we got up instantly. And the company with its very basic capital in 1979, today is quite a large company of diversified businesses with a turnover of over 25 billion rupees.

As a very diverse conglomerate, could you elaborate on the different functioning arms of the Group and the services offered?

Five years ago our circumstances were – five shareholders running diversified businesses, each running his own. We got together and said let’s bring all this into one structure, let’s bring value to what we have made. That’s what we attempted and we turned it into a holding company, a corporate. Then we looked at our sectors and found that we have four different sectors – Transportation, Manufacturing, Strategic Investment and International Trading. We started a llocating companies into the sectors to give them greater visibility. In doing so we discovered that we had a company more sizeable than we had initially thought and decided it best to structure the company as founders of the group, and that’s what we did.

As a pioneer exporter of Sri Lankan fruits and vegetables, within a short period we added fresh coconuts and desiccated coconut to our export portfolio. We have received widespread recognition in the international markets from the Middle East, Africa, Europe and the UK for quality and reliability and we have sustained our position as the leading exporter of these products for the past several years.

Becoming an IPO brings a structure and discipline when you know you are accountable. Then more focus on growth would come into play. We have been planning for five years, its nothing new and it so happened that when you are ready, the timing is right.

In 1990 Expolanka Teas commenced operations and after 20 years we export tea to over 30 countries and are among the top ten exporters of Ceylon tea in this competitive sector. Expolanka Commodities was also incorporated in 1990 and began modestly as a team comprising of just five members dealing primarily with import and inland trade of agriculture produce. Now it has recorded a phenomenal success with an increasing turnover of over two billion rupees. In airline representation we have represented major airlines since April 1994 when we were nominated as the General Sales Agent for Saudi Arabian Airlines Cargo in Sri Lanka. Since then we have forged ahead to become the premier GSA service provider for a number of key international passenger and cargo carriers with 26 GSAs of 13 prestigious airlines in four countries.

In the transportation sector we are in freight-forwarding, travel agency and inbound operation. Then we are in education – APIIT, is our Strategic Investment, we are also in the BPO business with Hello Corp, and we currently run the SriLankan Airlines Contact Centre as well. Classic Travels is also one of our own and we are in various other businesses.


Could you talk about the Group’s decision to go public, to become an IPO?

It is not a decision we made because the markets are good. When you are a family business it takes time for minds to meet. This is not a spur of the moment – “the stock market is good so lets go” – mentality. All the money that we are raising is to grow. For five years we have been planning, not for the best time to come, but to develop structurally and implement processes. We are also a people led company.

All that urged us to think that we must become a company with a broad based ownership scheme, raise equity, and do businesses where we have already been successful in, so that we can take it to the next leap. For example we are the number one exporter of fruits and vegetables. We are moving into agriculture as well but what do we do next to add value?

We believe that when we go to a public domain we will be able to attract more talent and professionals to work for us. We need entrepreneurship and professionalism, which can help us make the correct blend. We also need to be disciplined and to be guided by governance, so that we may leave a company with a legacy for the next so many years. Becoming an IPO brings a structure and discipline when you know you are accountable. Then more focus on growth would come into play. As I said we planned five years ago, it’s nothing new and it so happened that when you are all ready for it the timing is right.

How would the Group benefit by this move?

The benefit is two sided, for the people who run the company and for the investors as well. This company has been a success story and maybe this has not received the right visibility but in its quiet way it has grown to a certain degree with a fairly good returns Group. It’s not something that began a few years ago. We are talking about three decades of growth. The ground is certainly firm. The rules are inbuilt at its core and borne fruit. Now we want to take that to the next level.

Could you talk about the recent appointment of independent directors to the board and the significance of this move?

As a family business with only family shareholders, we had meetings over the breakfast table and now we meet at our company boardroom. It is important and required that we also appoint independent directors because there is a wealth of experience that they have. They’ve seen companies and they’ve served other companies. They have expertise in their respective fields. We have three independent directors – Sanjay Kulatunge, Harsha Amarasekera and Dr Siva Selliah. All three of them are professionals in their own fields with their own success stories. We have already held meetings with them, and we find valuable input, we see the other side of the thinking factor and we readily welcome it. As a company we have been disciplined throughout and corporate governance is going to be strictly adhered to. Now the ownership is also going to include many others. Therefore, transparency is critical.

As a company we have been disciplined throughout and corporate governance is going to be strictly adhered to. Now the ownership is also going to include many others. Therefore, transparency is critical.

What are the Group’s current developments in the different subsidiaries?

Of course there are some businesses that have reached its peak. As entrepreneurs we will always look for new ventures. We have always been successful by looking at different possibilities. The ‘dare to do’ spirit – because of our beginnings with almost nothing to talk about to what we have now. But we don’t want to go too far away from our core businesses. We are taking every business and making it better. Today must be better than yesterday and tomorrow must be better than today. That’s the philosophy.

Building on our success in fresh produce we now have ready to eat packs coming out of that. In freight forwarding we are ranked among the top not only in Sri Lanka but in India and Bangladesh as well, which is an achievement for Sri Lanka. We are constantly working towards adding value. What we are doing is a basic forwarding business. Taking shipments from one point and delivering to the next point. We want to move on to the next stage, to be able to do pick-and-pack operations and just-in-time delivery. Our next plan is to build a very workable warehouse for the fashion industry. We already have allocated a large amount of land in Colombo to put up a warehouse. This is the first project we are going to do after we finalise the IPO. It is to be a first class logistics centre.

Every other business has the potential to grow further. So there’s working capital required. There is more horizontal type of growth that we can talk about in those businesses we are in. Our vision is to make everything expand. We have been growing in a time where there was a conflict. Every stumbling block was a steppingstone, today with the war over, with hope and with progressive activities taking place we feel it’s time for us to take the next leap. If we miss this opportunity, we will miss the bus, doing injustice to ourselves and the country. For 30 years we have waited and watched and grown, and today we have to take it beyond. And that is what Expolanka is about. A truly Sri Lankan Global Company: that is what I would like to call ourselves.

The Group has established an extensive network of offices all over the world. Could you elaborate on the Group’s global presence that has been developed over the years?

As Sri Lankans we have a great service attitude. Especially in the service business and it didn’t require much to go to a neighboring country and use those particular skills and demonstrate to the same customers that we are able to serve them from anywhere in this region. We took away our Island mentality.We are Sri Lankan but we always thought of ourselves as part of the Indian subcontinent. We did not forget that, so we went into Bangladesh first, then to India, to Pakistan and everywhere we went we found success. We only had to go there where the customers also told us please go and serve us from there. And the timing again was right. These countries are developing countries. They were emerging markets. And we found that people sometimes found it difficult to work in these markets. They wanted to speak to one individual in the whole region and that was missing, there was a vacuum there – buyers in the United States, buyers in Europe speaking to one person for the Indian subcontinent. Then we went to Africa because it was another virgin territory. People want to communicate with someone they have already done business with, so, there again we saw the opportunity and we just explored and expanded. This was mainly in the freight business, but we are not restricting ourselves to freight business. We are thinking of others as well, as we now have the ground experience in doing business in foreign countries. We have the experience in dealing with other nationalities. It’s only a matter of time till we go into other verticals as well.

With a diverse portfolio of clients could you elaborate on how the Group continues to maintain and deliver quality assured services?

Customer service is not given because the customer demands it. At Expolanka customer service is given because we demand it. Not because the audience will applaud you for it. We believe that it is the only way that we can improve ourselves. The customer service is a given thing; we always place a lot of emphasis on this.

In all our businesses we are considered a flexible company and with this flexibility there is empowerment for our employees. Being a family business, surprisingly much empowerment is given. Our staff can tell you that – how much empowerment and freedom they have. Their decisions are respected and therefore we give them the drive to work. Mistakes do happen, good things happen at the same time. Overall it’s a good balance and that has given us the feasibility of being able to expand our services.

Structurally every CEO is measured by his general attitude, by his products to the customers and his behaviour towards his employees. Absolutely, customer service tops. They keep us going. So you make the rules and regulations, you make processes and the structures, to give them the service that you chose. And that’s the cardinal rule here. How much you receive depends on how much you give. The philosophy at Expolanka is to give. And the more you give the more you receive. So that’s the philosophy we have told all our CEOs.

With the end of the 30-year conflict and new opportunities arising, especially in the tourism sector, could you tell us how the Group has taken advantage of the resulting changes and upcoming developments?

Every challenge that comes across is an opportunity. We are very passionate in these situations. Focusing our determination and changing them have been our forte. It is our ‘dare to do’ spirit... Challenges are opportunities to grow further.

We started a destination Management Company called LUXE ASIA , 18 months ago to service inbound tourism. Since we started, and up to date we have handled 7500 tourists to the country. I think that’s a strong beginning. I feel that it is due to the prevalent theme that we have – our focus rests on people, and they are bound to expand further in this business. Along with tourism, the other businesses also get their share of work especially food products, transportation, the call centre etc. If we look at our entire portfolio of businesses they are all related to something, and consequently when one sector advances it is felt everywhere, it’s all connected.

What are the challenges the Group has faced in the recent past with reference to the changing economy and how were they overcome?

I don’t know about challenges, I have only been seeing opportunities. Every challenge that comes across is an opportunity. We are very passionate in these situations. Focusing our determination and changing them have been our forte. As I said before it is our ‘dare to do’ spirit. We have always dared to break into new situations, and I feel challenges are opportunities to grow further and change those.

Compliance with Shari’ah business principles in transacting and managing business is one of your core values – can you elaborate on this?

It’s very simple. Our background doesn’t allow us to conduct certain businesses. Alcohol, gambling etc. We are not allowed to take or give money on interest. There is no fair play and justice there. If I give money on interest I am receiving money for not sweating at all. You have to sweat for the money that you invest. In life, every individual must have certain principles that one adheres to. These are ours.

Could you talk about some of the Group’s significant milestones and awards received?

We have received several awards. We were a young company when we got our first award, a Presidential Award for exports. Thereafter we have received scores of awards from airlines for outstanding services. One award that we are particularly proud of is from our customer, Limited Brands. Limited Brands owns Victoria’s Secret, the Lingerie Company. For the past six consecutive years they have awarded us as the best in on-time delivery of their merchandise. Now this award is not just in Sri Lanka it is worldwide, comparing our services as a Sri Lankan freight forwarder among all of the other major freight forwarding companies in the world for services surpassing our counterparts in the Indian subcontinent, surpassing the far East and the Europe, we can rightly say we are very proud of that.

The future is making a good company into a great one. And how do I do that? By investing more on people. Business is a human venture. It is about doing good, it is about serving people. And that’s the creed that we want to follow.

What are the future developments for the Group?

The future is making a good company into a great one. And how do I do that? By investing more on people. More on creative ideas, I don’t shutdown any ideas that come from people. We are gentle with them and there is no tough talk here. I believe the strongest weapon is gentleness. That philosophy, and the philosophy of good business and ethics, good backgrounds and keeping to your principles, can make this happen. Business is a human venture. Business is about doing good. It is about serving people. And that’s the creed that we want to follow.

Could you talk about the Group’s recent CSR endeavours?

We don’t make business of CSR. We never did it for the sake of recognition. Initially as a family business it has been at every spur of the moment. Whenever we felt something was required, first within the company, families and employees of the company and outside of it. As we became structured, we thought we would structure the whole programme of CSR as well. At present we have begun low cost dispensaries in very poor areas.

There are doctors, nurses and medicines provided at a fraction of the cost that one has to spend elsewhere. We really want to expand on this, as receiving care from a hospital can become very expensive and a great burden on the poorest of the poor.

Could you elaborate on the Group’s environmentally friendly practices?

We have a team within our Group called the Expo Green Team. They go to every office and investigate the carbon footprint and they have conducted a lot of projects, creating a lot of awareness within the group. I am not talking about just tree planting and so on. Everything is scrutinised as to whether we are helping the environment. The Group has also initiated Earth Hour in Sri Lanka. We did a lot of work in the previous year, and created considerable noise about it and this year also we participated in it.

Apart from that, since in our business we use a lot of paper, we are striving towards a near paperless environment. What is more, one of our businesses is collecting waste paper. We collect paper from banks and offices offering shredding facilities and then export the paper waste. We also recycle paper and make paper products such as writing pads. Currently our Neptune Papers is the largest waste paper exporter in the country. So that helps the environment as well. It’s a business itself apart from what we do on a conscious basis.

Concluding thoughts?

The time has arrived for Sri Lanka, let’s forget our negatives, we always had our pluses, lets work on them and transform to a very progressive country. We are very proud to be Sri Lankans, reaching the global arena. We have come to a certain degree now and we would like to expand that even further, to become a truly international company.