There will be a new set of entrepreneurs to lead the way: Merrill J. Fernando

Dilmah Tea Founder Merrill J. Fernando

Amidst the gloom and doom that surrounds the world due to the COVID-19 pandemic, what if there is a different approach to looking at this predicament we are in? What if there is an interpretation that will motivate and help us pave a positive way forward to steer the world towards more equality and consciousness in the money making processes of businesses? What if we raise our levels of awareness to realise that COVID-19 could be a cracked mirror through which to see that many things were wrong in the pre-pandemic economic equation?

In this week’s interview with Merrill Joseph Fernando, the founder of Dilmah Tea, one of the largest tea exporters from Sri Lanka, there are many insights that help us reflect on some of the points mentioned above. 

Fernando focuses on the global and local economic challenges posed by COVID-19 and presents a new way of looking at the current phase that we are in. Getting a glimpse into the philosophy, spirituality, world view and perseverance in entrepreneurship of one of today’s renowned Lankan business legends, we learn how he got to where he is. 

As he narrates his story, he asserts that his success is because of the initial faith in him by his first banker who granted a loan without any fuss enabling the starting of his entrepreneurial dream.  Thereby in the current context he shares his views on what the banking system should ideally be to support innovative ideas. 

Following are excerpts of the interview:

By Suryamithra Vishwa

Q: You are 90 years old and still functioning as per a busy schedule. What are the lifestyle practices you think have helped you retain your mental and physical energy to this age?

When I was young, I used to be up by 4:30 a.m. to attend to the previous evening’s cables and communications. Then go to the office by 7 a.m. and work very late, often until 11 p.m. Now I rise around 6 a.m. My morning and night ritual – prayers – have remained the same whatever time I wake up or go to sleep. 

I am a Christian. When I pray, I only give thanks for His blessings on me and my family. The MJF Group owns several businesses and they are all generally successful. This success is owed to His divine blessings which flow in abundance. As my earnings increased and profits generated were substantially more than my requirements, I shared them with the wider community, making my business success flow towards bringing a smile to the faces of the less fortunate.

Q: Prayer according to your Christian faith seems to be an important part of your life?

Yes, it is. It always has been.

Q: Beyond your spiritual path, what have been your influences in your life?

 My mother. My mother taught me to care and share. I was quite irritated by it at the beginning though! She forced me to part with nice things – like goodies I received as a child – by giving away almost half of them to neighbouring children! She took no notice of my protests and cries.

I grew up in the beautiful village of Pallansena, about 10 miles north of the Colombo airport. I came from a middle-class, comfortable family. We had some land and that was it. This training I received as a child to share and care has influenced me greatly and has been the philosophy which guided me to this date. 

Q: Could you trace your career?

 During my school holidays, I visited key estates of my friends S. Thondaman and his nephews K. R. Mathavan, K. Karuppiah and K. Arumugam on Wavendon, Madetenna, Kumbaloluwa in Pundaluoya, Ramboda. I enjoyed estate life and became familiar with growing and manufacturing tea. I loved the smell of tea around the factory. I admired the workers – especially the tea pickers – who worked so diligently while looking after their children quite religiously. 

My ambition was to enter the legal profession after my secondary education, however fate had other plans for me. While plantation management was open to locals, tea tasting and trading were taboo. British companies which dominated the tea trade believed that locals could not taste tea because they consumed very spicy food. Accordingly, we were kept out of the only lucrative segment of the tea industry, despite numerous requests by the Government. Fortunately, the Tea Controller started recruiting school leavers for training in tea tasting under his official tea taster at a British company. While most of the recruits came from high society families in Colombo, I also found a place.

While training in tea, I was offered a very lucrative job at Standard Vacuum Oil Company – Mobil, which I accepted. I enjoyed this role as it gave me the opportunity to travel around the country and visit Mobil stations to explain merchandising and market them as a one-stop service for motorists. However, I was not altogether happy in this job and wished to return to tea. 

Two years later, I started work as a tea taster at A F Jones & Co. Ltd. After six months I went to London to understand branding and marketing of tea. Mincing Lane was the world’s tea centre then. What I saw there saddened and astonished me. Our good, high quality Ceylon Tea was mixed with tea from cheaper origins and marketed as Ceylon Tea. At that point, at the young age of 24 years, I vowed that one day I would develop my own brand of tea. That brand would bring integrity back to tea, making it the finest tea on earth. Consumers would enjoy freshness, quality, and purpose in the world’s first ethically-produced tea.

With a socialist government coming to power in 1956, nationalisation took place. Foreigners were not welcomed. The Jones family decided to leave the country and requested me to buy the company. As I did not have resources, I invited two respected friends to invest. The company made good progress. It expanded in export sales and profits. Unfortunately, one of the friends began to create problems for me. I walked out of the company and started my own business in 1962.

I launched Dilmah in 1988, naming it after my two sons Dilhan and Malik. With Dilmah I ensured that I took personal responsibility for the quality; this was not a faceless brand. I wanted it to be a brand with a face; my photograph appears on every Dilmah tea pack and I am thereby committed to maintaining its quality.

I started with 18 employees. We now have 1,400 workers in the Colombo factory alone and around 16,000 plantation workers. Our estates extend from Ratnapura to Nawalapitiya and elsewhere. We provide assistance in education to the children of all our staff. Childcare centres have been set up for the benefit of the children of plantation workers. It is in our family culture to care for our workers and their families. We do so religiously. 

Q: Could you comment on the economic impact in the current global COVID-19 backdrop? As a seasoned businessman with around seven decades of experience, how do you see this stage of life that we are globally in?

COVID-19 levelled down the high and mighty, rich and poor. It will have a serious impact on the global economy. There will be bankruptcies and massive unemployment, causing severe hardship on people. Most successful companies exploited their suppliers and customers alike. When the world awakes from this pandemic nightmare, there will be a new set of entrepreneurs to lead the way. 

The ones who are now laid off from their jobs are starting new small-scale businesses. We see this happening. Husbands and wives, along with their family members, getting together to create diverse food-based products to be sold direct to consumers. 

We see the power of middlemen and large-scale supermarkets receding. People are buying straight from the farmers. Farmers and families involved in starting small agro-businesses are beginning to feel empowered. When this pandemic is over, the economic pattern as we knew it would have completely re-aligned itself.

Q: So you interpret this pandemic as a kind of a lesson to mankind?

 Yes. It has shown that everyone is equal as the pandemic did not differentiate between races or class when it attacked. It had also enforced holidays upon people who were overworked and did not have time to spend with their families. I view the lockdown time as an enforced retreat for families to spend time together and old friends to re-establish contact.

I have never had a proper holiday until the pandemic lockdown. I see this as nature’s response to make humans review and take stock of themselves and their actions. Much was wrong with the pre-COVID-19 world. Hopefully, some of this will correct itself now.

Q: How best can businesses surmount the current global economic downturn and what can be done to secure global health beyond vaccines?

Businesses must become ethical in their activities. Profit should not be the only purpose in business. That is greed. If success is shared with the poor and needy, even in a very small way, divine blessings will flow, generating greater success. 

If we are taught about the environment and conservation in school, we will learn to respect and protect nature. That would be one way of enhancing our quality of life and benefiting from natural remedies that help manage disease.

Q: So you are not worried about your business plummeting due to the world economy?

 No. Our business has been carefully protected by developing Sri Lanka’s only global brand name ‘Dilmah,’ Pure Ceylon Tea. Its quality, taste and purpose has acquired millions of loyal consumers around the world. They will not give up drinking tea for any reason.

In fact, tea consumption increases at times like the present. Some consumers may move to cheaper brands, which may affect our exports, but we have faced enough difficult economic situations which have tested us in the past. Of course, we need to be alert and keep moving forward but in a positive way.

Q: Using the pandemic as justification, companies the world over are either cutting salaries or are retrenching staff. Have you done either?

No.

Q: Could you speak of the humanitarian/social work related initiatives of Dilmah?

 Our business is formed around a commitment to sharing its success with those who are less fortunate, both workers and the wider community. We fulfil that commitment in many ways, through educational, nutritional, empowerment and environmental programmes. These include vocational training in our MJF Centres, for differently-abled children, youth in marginalised communities, inculcating discipline and opportunity through sport, amongst others.

The World Association of Chefs’ Societies (WACS) share knowledge and expertise in our Empower Culinary & Hospitality School, a free culinary school for disabled and less fortunate children who are assisted with employment after their training. 

Childcare centres at our estates provide the educational and nutritional needs of our workers’ children. We provide milk as well as mid-day meals. The centres provide teachers with basic education and suitable TV programs. Children of some workers have become teachers, doctors, lawyers, judges, etc. The first two doctors graduated in 2016. Currently, four more children are in Medical College.  

We also provide other diverse initiatives. Among them is the Prison Reform Programme. We even have a programme to provide clean drinking water to our plantation workers and other urgently needed facilities which have been neglected for decades. Our humanitarian related work is undertaken by the MJF Charitable Foundation.

We set up Dilmah Conservation in 2007 to work on initiatives related to environmental and social sustainability. Since its inception, Dilmah Conservation has engaged in promoting sustainable environmental and social development initiatives, encouraging research, conserving and protecting Sri Lanka’s wealth of biodiversity, habitat and ecosystem restoration, empowering indigenous communities, endorsing sustainable livelihoods, and supporting environment and nature education, as well as organic agriculture.

The MJF Group owns several companies. In keeping with its commitment to make business a matter of human service, each company contributes 15% of its pre-tax profits to the MJF Charitable Foundation, and an additional amount funds Dilmah Conservation.

Q: Is this in any way deducted from your employees’ salary?

No, we will not even consider it. The charity must be done with our own funds, not with others’ support.   

Q: Sri Lanka is a country where there is no lack of talent; especially in the villages. However, where entrepreneurship is concerned, many struggle enormously to get their ideas materialised and many of them just give up. Your views?

We need a banking system which is committed to supporting entrepreneurs, especially rural entrepreneurs. In Sri Lanka, we have the strange situation where banks refuse to support young entrepreneurs, as they are unable to provide security for borrowing funds. Established companies have no difficulty securing generous banking facilities. It is important that every bank provides risk funds to support entrepreneurial efforts.

I attribute my success to my first banker, an Englishman who granted me generous facilities without any form of security. As a good, mature banker, he believed that I would be successful in the tea business. That initial support is what contributed to my success. We need bankers especially skilled in understanding the pulse of new entrepreneurs. Understating this, the MJF Charitable Foundation has fostered a Small Entrepreneur Programme (SEP) which supports young entrepreneurs raised under its care.

Q: The tea industry of Sri Lanka is a colonial inheritance and Sri Lanka had many other native health drinks which can be used for immunity boosting of its populace and for exports globally in these times when it is needed most. Will Dilmah think about diversifying more into these lines and possibly encouraging others to do so?

 We have already diversified, and, in fact, created a revolution in tea. We produce every form of tea that has been unknown in tea’s history. Not just hot teas, but cold-brewed teas, iced teas, flavoured teas, ready-to-drink teas (RTD), tea concentrates, herbal infusions which include Sri Lankan herbs and spices in specialised teas, etc.

Q: Is there a sustainable future for the tea forest garden concept to be adopted by tea companies in Sri Lanka that will prevent deforestation caused by the industry?

 Yes, this is being adopted now by some companies. We pay special attention to climate change, conservation and sustainability at considerable cost. Our programme to plant one million trees on our estate commenced two years ago.