Munchee – no niche in the ‘Seeni Bola’ industry

Pannipitiya – At the outset when industries were getting recognition, the late Dr. N M Perera, a one-time Finance Minister, referred to the confectionery industry as ‘Seeni Bola’.
Today it has surpassed that image and about 35 factories produce high quality confectionery that cater to the local and export customers. One such successful company is Ceylon Biscuits Ltd (CBL) with its famous Munchee brand, selling to over 40 countries, in Europe, USA, Africa, the Australian subcontinent, and the far and near East.

Mineka Wickramasingha

Munchee’s founder and chairman Mineka Wickramasingha, fondly known as Micky had big dreams and as he calls it, a ‘one pointed aim’ in life. Those close to him say that his advice is ‘Whatever one does, do it to the best of one’s ability’. More than four decades later, doing what he does best, he’s proven himself with his business, (which he had started with modest beginnings) and now stands tall.
I venture into his office on a warm Wednesday afternoon to learn more about Munchee, which is quite similar to a fairy tale.

At the turn into CBL’s Pannipitiya head office and factory, it’s impossible to miss the new highway cutting across. What crosses my mind is that both the highway and Munchee have now become landmarks in that area.

Whiff of biscuits
At the entrance, there is an unmistakable aroma of ‘that’ biscuit scent wafting across all corridors of CBL and at times to the High Level Road, but one cannot see any boxes of biscuits or anything close to it in the reception areas; the only giveaway are the lorries and other transport vehicles with the Munchee logos and pictures of biscuits imprinted on their sides.

As I enter the elevator cabin to go to the fourth floor, boardroom, to meet Micky, I notice that the opposite side of the elevator is of glass, visible to the courtyard area at the CBL premises. I am convinced that this must be a deliberate attempt to show the clinical cleanliness, which is nothing short of striking.
The visionary behind Munchee will be at the CBL boardroom in a minute, Sharin his secretary tells me with a warm smile. As I wait for him I look around to find a beautifully manicured garden, which also doubles as the balcony.

Factory

I am served a plateful of – what else – biscuits and a refreshing cup of tea. I don’t wait for that invitation to dig in to the biscuits.
When Micky comes in a few minutes later, it’s down to business. My first poser is, why is Munchee infallible? His customary rumbling laughter is addictive when he reflects that his 43 years of determination and grit have stood the test of time. He answers before starting the long story – ‘it was all to do with do your best’.

True grit
“It was 1968, July 28th that we started CBL. I can put our success down to determination and trying to achieve perfection. Whatever the failures were I always felt they were temporary. We had one pointed aim in life to make biscuits not second to none. Our bench mark was our overseas clients,” Micky says, gesturing me to taste ‘one more biscuit’.

I see a faraway look in his eyes when he reminisces that more than 45 years ago lending agencies weren’t favourable towards local companies or industries. “In 1963 we were only meeting 10% of the biscuit demand and it would’ve been a disaster if we didn’t expand.”

With Williams Biscuits, which was his father’s venture at the time, Micky had tried really hard to expand. “All the state agencies didn’t want to give Williams Biscuits an import license to expand, because a few years before a license (as was the requirement those days), had already been given to another biscuit firm. The government agencies felt that it was unnecessary to grant another biscuit firm an import license,” he explained.

Red tape biases
He mentioned that 1963 was a time as such that the top-end bureaucracy thought industrialists were ‘money making tribe’. “At the time lawyers were preferred as independent directors to any board,” he said, reminiscing that once when he was at a Ministry, a director had told him (rather loudly), “Do not peddle your wares in the corridors of our Ministry.”

The much needed expansion for CBL’s survival was not forthcoming. Even after venturing into exports as a condition by the Ministry no import license was given. Micky says that he had to fight these obstacles for three years before he saw a window of opportunity when the CARE organization, that was issuing milk powder and flour to schools to make buns to supplement the food intake of school children, met him to make enriched biscuits to replace the poor quality and inedible buns. It had taken CBL six months of research and development to come out with a hi-protein biscuit that conformed to the nutritional requirements.

But his struggles weren’t over yet. “After getting the licence to expand, I went to the Bank of Ceylon (BoC) which refused to consider my application without a 100% down payment.
If I had the money for a down payment, I wouldn’t have gone to the BoC in the first place,” he explains, still exasperated with the diabolical logic of the then obstructive bureaucracy.

With no options left Micky approached the then Messrs EB Creasy, who gave them the guarantee and became partners with 30% equity holding in the new company CBL. Then came loud protests by the bakers from all over the island not to discontinue the bun programme. However, biscuits were chosen for logistic reasons of monitoring and standardizing quality, and giving the school children a delectable product.

S. Ambalawana, the famous Tax Consultant at the time was successful in getting a five year tax holiday and investment relief. From thereon, Micky smiles, “there was no turning back.”

Seeni Bola
When asked what the future of Munchee is, he explains that CBL is currently unable to meet the demand and expansion is imperative. With that in view a new factory in the export zone is being set up. “In developing countries generally confectionery industries are the starters and what Dr. N. M. Perera called the Seeni Bola industry.”

He says that Munchee is expanding and stepping up their operations riding on the present growth in the country. “Altogether we have 12 plants and we are starting one more factory with Rs.1.5 billion at the Free Trade Zone in Avissawella,” he says, adding that Munchee is facing a capacity shortage for both domestic and exports consumption.

He’s also upbeat on the three plants at Ranala, which turns out 48 tonnes of biscuits for a day. Munchee expects to increase its capacity by some 100 tonnes a day.

Challenge in biscuits
“The challenge in the Fast Moving Consumer Goods industry is exports,” Micky says, adding that now Munchee is exporting to over 40 countries completing with the Western countries.

He also says that the Indian Government appears to be hostile towards investment from the subcontinent (in India), which is why CBL isn’t too keen on expanding there. He notes that the auction purchase from court of Munchee’s former factory in India, after the issuance of sales certificate and being in production for four years, was set-aside on flimsy grounds. Micky says that Sri Lanka has a weak voice against the indomitable stand taken by India towards its small neighbour.

Portfolio Growth
On the company’s future plans, Micky says that Munchee is on a growth expansion both laterally and vertically. “We have already started and are purchasing raw material from large farmer bases in the Moneragala districts encouraging the cultivation of maize, Soya, Mung, peanuts etc.,” he says. Backward integration will fulfill his conviction that the country’s progress is in agriculture.

When asked about a message to the public, he emphatically said offer an incentive to the large companies to take one abandon tank for renovation and rehabilitation. “Our forefathers built massive dams and tanks. There are 476 tanks in the southern district alone that needs rehabilitation and renovation,” he says.

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