CIC Holdings nurtures life

From rice, to fresh milk to poultry produce, CIC Holdings PLC has deftly woven itself into Sri Lanka’s social fabric, producing a gamut of quality agriculture and poultry products in an environmentally sustainable manner.

Over the past decade, the group has transformed itself from a chemical manufacturer to a more environmentally-friendly agribusiness enterprise that has taken on a challenge to nurture and modernise rural farmers across the island.

The transition to a “green company” evolved after its core business, the supply and distribution of chemicals, saw markets in Europe shrink in the mid-1980s.

Left with a choice of either remaining in chemicals or seeking new markets, CIC took a fresh challenge of branching out into new areas in 1991 and subsequently changed its corporate brand identity.

“The shift, to embrace a new corporate identity of nurturing life, emerged as we were uncomfortable mixing chemicals with fresh farm produce and food nutrition,” said Samantha Ranatunga, the affable Managing Director of CIC Holdings.

The gamble paid-off and two decades later, CIC has quietly earned a solid reputation as a responsible partner committed to produce nutritious food, invest in food research and technology and run a chain of outlets to market farm produce.

“Food will always be a fashionable business to be in,” added Ranatunga, CIC veteran, who developed a successful seed-to-shelf business model, linking 20,000 farmer families’ produce to consumers.

The logo ‘nurturing life’ was redesigned to reflect the new thrust into agriculture, breaking off a historic affinity with ICI, CIC Holdings founder shareholder.

The slogan also compliments CIC’s other key business units of healthcare, top quality baby products, pharmaceuticals and surgical inputs, which are all geared to the context of “nurturing life”.

“For us, our customers, the communities we operate in and our environment, takes pride of place,” said Ranatunga.

“We want to touch the lives of everyone through our gamut of products and services. We want our stakeholders to remember that CIC stands for quality, responsibility and social awareness in everything we do,” he said.

Research shows that global food output is tipped to climb 70 percent by 2030, if the world is to be kept fed at current levels. This is a challenging task, as urbanisation continues to encroach into shrinking agriculture lands. Fertiliser, which is linked to volatile global crude oil prices, will continue to put a strain on agriculture production.

To cope with the inevitable tide, Ranatunga believes research, development and technological innovations will lift yields in Sri Lanka and ease the strain on diminishing resources.

Shift to agriculture

CIC’s foray into becoming a ‘fully-fledged farmer’ began in 1989, when the government opened seed production to the private sector. Becoming the first private venture to take up the challenge, CIC leased its first farm from the Mahaweli Authority and has since, built a land portfolio of over 5,000 hectares spread out in Matale, Polonnaruwa, Batticaloa and Anuradhapura.

The agri-business was expanded to include fruits, vegetables, poultry, rice, day-old-chicks, milk, milk-based products and eggs. CIC opened its own chain stores in strategic urban towns to retail the products and also partnered with main supermarkets to broad-base distribution.

Through its agricultural and livestock businesses, CIC has emerged the country’s largest agro based company focusing on paddy, dairy, poultry and agriculture inputs. This segment, which now accounts for over half the group’s profits, made an operating profit of Rs. 1.31 billion for the financial year ended March 2012.

CIC now contributes over five per cent of Sri Lanka’s agricultural gross domestic product, in the vital agriculture sector. The group also commands about 30 per cent of seed paddy market, 40 per cent of the fertiliser market and some 24 per cent of the chemical market and CIC remains the market leader in all these markets. Revenues from agri produce, have grown substantially, due to increase post-war business sentiment, economic growth and steady demand for quality food products

“Our products are non organic, they are planted, nurtured chemically, but with due care to the ecology,” said Ranatunga.

“Paddy and vegetable production segments are now generating surpluses. Our teams are working to fine-tune the quality, processing, cost control and handling infrastructure to penetrate more export markets. CIC’s rice and value-added fruits now proudly sit on the supermarket shelves in Australia, France, Canada and the Middle East. We believe that through a platform of planned production and productivity improvements, we can ensure price stability to our farmers.”

CIC is also benefitting from a Government drive to encourage fruit and vegetable exports. The policy direction is to direct resources to focus on import substitution.

In the poultry segment, CIC produces feed and day-old-chicks, grows chickens and processes poultry meat. The growing process is hormone-free and aimed at securing the highest nutritional value from the meat. Here too CIC is in the forefront of the industry.

It has identified that fresh milk, dried chillie, big onions and potatoes among the products with potential for large scale local production.

Technology

Over the years, CIC has actively pursued technology and new farming techniques to grow our agri business.

Each key division is armed with a research and development unit that regularly works on developing new products or processes to meet the growing needs of the agribusiness sector.

Research ranges from new seeds for paddy, fertiliser utilisation ratios, milling efficiency to agricultural machinery. Being a developing country that sets aside a fraction of GDP on research and development, we believe our R&D, will give us a sustainable competitive advantage in the future.

Some of CIC’s R&D work is already visible in farmlands across the country.

For instance, to overcome labour shortages, CIC pioneered introducing mechanised threshing machines to farmers. Now, over 50 percent of Sri Lanka’s harvest is done by mechanisation. Farmers are also given access to fertile plants, which give higher yields and resistant to pests.

“Farming is a back-breaking exercise and young people shy away from it. We like to blend modern thinking and equipment to encourage young people to remain in agriculture,” Ranatunga said.

North and east

After the conflict, CIC extended its reach to the former warzones, first taking on the east, which was a traditional homeland for dairy industry. Ongoing projects include updating dairy farmers knowledge and skills to improve the genetic stock, and partnering with USAID to set up milk collection centres.

In the north, CIC has setup horticulture advisory units in Kilinochchi and Thinnaveli and plans to start a demonstration seed farm in the region. CIC teams have also planted high quality bananas on an experimental basis.

In the coming months, CIC plans to set up a milk collection centre in Dambulla and expand the poultry capacity as part of ongoing expansion programme to develop the dairy sector.

“We want to touch the lives of everyone through our gamut of products and services. We want our stakeholders to remember that CIC stands for quality, responsibility and social awareness in everything we do,” he added.

Reinvention

Since 1991, CIC group has embraced change, re-inventing itself to develop a new line of core business.  “We took a major step to leave behind, to some degree, our history in chemicals and enter the world of food production and agriculture,” Ranatunga said.

From an input supplier, CIC has shifted gear to partner the farmer, providing him with technology that has helped increase yield and quality. The re-invention drive will continue, as the company actively looks for ways to stay ahead in the market and outside environment.

“Today CIC is predominantly an agro focused company. Over the years we have grown a sizeable seed to shelf enterprise that in terms of scale, allows us to claim ‘Redwood’ status in the country’s agriculture sector,” Ranatunga added.