How has the company diversified and expanded since the end of conflict in 2009?

Until 2009 we were a finance focused business, comprising of three medium sized financial institutions. When the conflict ended in 2009 we quickly came up with a new strategic plan because we knew that there was going to be a paradigm shift in the way the country would develop and grow, and we knew that there would be certain growth industries which would take Sri Lanka to the next level in the next 10 years. We identified some key industries like the leisure sector, the insurance sector, and the construction sector. At that point in time the government was keen to transform Sri Lanka into a service hub, the thinking being that Sri Lanka could be to India what Hong Kong was to China.

Due to the profitability of the financial organisations back then we had the financial capacity to invest, so we quickly moved into these growth areas. We acquired the 3rd largest leisure operator in the country. We started an insurance company in 2010 focusing on general insurance and life insurance that is now the 6th largest insurance company in the country. We also acquired a stake of the 5th largest construction company in the country. We then took control of Browns in 2012, one of oldest and largest trading companies in the country with a 140 year history dating back to the British colonial era. They have 75% of the market share of tractors in Sri Lanka and 60% of the market share of automotive batteries. They also import white goods to be sold into the domestic market. We then also identified agriculture, particularly export based agriculture, as an industry that would do well so we have acquired one of Sri Lanka’s largest plantation companies. That is our footprint right now, we have diversified quickly since the end of the war however we still have around 70% of revenue coming from our financial institutions, so we consider ourselves a financial services based conglomerate. The financial institutions remain at our heart but the others are catching up in terms of importance and profitability.

What sacrifices have come with expanding and diversifying at such a rapid pace?

Of course there is no gain without sacrifice, nevertheless we remain a very profitable group despite substantial investments in peripheral areas which have obviously taken away from what could have been even higher profits. For us it is a question of diversifying risk, not putting all your eggs in one basket, and the investments we have made are all long term and sustainable investments so it is a risk stabilising strategy we have taken. Despite heavy investments we still rank within the Top Ten in Sri Lanka in terms of profitability.

Do you foresee more consolidation coming up in the financial services sector?

There has been consolidation and that will continue but probably at a lower intensity. We will support that. Our companies are A grade companies and so we have investor confidence and meet the regulatory environments in order to take over some of the weaker companies and take away some headaches for the regulator. We have already taken over one company at the request of the regulator with the view of either rehabilitating it or keeping it as a LOLC company.

What is the outlook for unity between the public and the private sector since January’s political changes?

I expect a business friendly government that encourages the markets to develop. Hopefully, the initial super gains tax was a one off to service some of the immediate cash requirements that understandably arise with such a political change. People will be understanding of this as long as it is just in exceptional circumstances as they have said, and I think if they keep their promises the new regime will receive very strong support from the private sector.

During the years of conflict and instability, many talented professionals decided to leave Sri Lanka to work abroad, what made you stick around?

I am a professional, I do not own any of these companies, I manage them for the shareholders, and during my professional career there were various opportunities to venture abroad. I started out with Citibank and rose to become the CEO at Citibank for 9 years. Whilst working there I got many opportunities to work overseas, for example to spend 5 years in New York Tokyo and London, but I always wanted to live here and work in Sri Lanka and there are a multitude of reasons for that. I took the decision very early to stay in Sri Lanka, and some people definitely thought I was mad when there were bombs exploding every month. The decision during those years was to stay in Sri Lanka and be a big fish in a small pond or venture abroad and be a small fish in a big pond. I knew that if Sri Lanka could get past its problems then there would be great opportunity here, and those that had worked hard and stayed could be the big fish in a big pond, which is what we are seeing now. I knew the conflict would not be there forever: we have a great history, strong social indicators such as literacy rates and so I knew that sticking around would eventually pay off.

I joined this company in 2007 and we have expanded to become a much deeper, larger organisation, one with global standards. Our auditors are Ernst & Young and KPMG. We have an unblemished track record in terms of regulatory requirements, and now we have a great team and we are present in all the industries that we feel we should be in.

Tell us about the team behind the company and the corporate culture you instil.

An organisation called GPW (Great Place to Work ) came to Sri Lanka in 2013 for the first time and used international standards to rank the top corporations to work for. They offered us the opportunity to take part and I immediately said yes, so we participated: we entered 3 organisations and they were all ranked in the Top Five. We hire good professionals and it is a completely performance driven culture. We encourage diversity and innovation, everything is judged on performance and we try to learn from other leading international organisations. The retention ratio is one of the highest in Sri Lanka, we have very low staff turnover. So the great team and their professionalism is really what drives the organisation forward.

What are some sectors that you think will expand rapidly in the coming years in Sri Lanka?

Information technology is a very exciting area because Sri Lanka is becoming a hub for information technology development, but we are not focusing on it right now because we do not want to do too many things at once. The marine sector is another developing area because of our geopolitical location and the developments of the ports so marine services should grow and then some, exports like cinnamon for example.  For us to get involved in any other areas though, we look at scale as it has to be large enough for us to be interested. There are frontier industries and opportunities here in Sri Lanka for those willing to take them. As for LOLC we are not currently seeking further diversification.

What is your future ambition for LOLC?

With the foundations we have laid we should be, and I am sure we will be, the number one company in the country.

If our numbers continue to grow we could be the most profitable conglomerate in the country – that is our goal – but we want to do it in a very stable way, so that it can be sustained in the long term.

What is Sri Lanka’s competitive advantage as a country?

There are many. Firstly it is manageable in terms of size and population, so there are no issues like widespread poverty that countries with larger populations face. Secondly there are no issues with neighbouring countries, we are an island with no border disputes that maintains friendly relations with all neighbours, in Asia that is quite unique. Thirdly the literacy rate is around 95%, which is by far the best in the region. The main objective of parents here is their children’s education.

So you have this cocktail of all these ingredients.

One thing the war created was a very resilient private sector, and now the war is over this cocktail is there and there are great opportunities to be found in Sri Lanka.

These are the reasons why I decided to stay and why I continue to believe that it was the right decision to stay.