From a tender age, money motivated him.
The third of seven children in working-class family, one day his father gave them a task of planting a seed of choice, which he assured them would someday grow into a big tree. While some of his siblings planted sprats, he planted a coin!
But deep-rooted aspirations and inherent characteristics of entrepreneurship took him far beyond simply making money to a completely new level of business leadership.
“I just thought of it and I did it.”
His initial inspiration to become an exporter, which has now made him South Asia’s largest exporter of ceramic ware, is an interesting story which he wishes to share especially with the young generation of today to encourage them to dream big.
“In my younger days, while working as a Quality Control, Research and Development Manager at a multinational export company, I happened to attend a funeral of a director of my company who was a distinguished businessman at Longdon Place, Colombo 7. I was struck with amazement to witness the presence of the first Executive President at that time, Late J. R. Jayewardene, the nation’s leader and a political powerhouse who seemingly unapproachable and held in awe by me. This incident right there was where the seed of an idea was planted in my brain. Right there I started brainstorming by breaking down the situation and analysing the reasoning behind the presence of a man of such magnitude and calibre at a place like this. In my young mind I concluded that I want to be an exporter and want to be in the presence and earn the respect of such magnanimous personalities. And right there an exporter was born and made me where I am today!,” S. H. B. Karunaratne, Chairman, Art Decoration International Pvt. Ltd. said in an interview with BMD.
An inspirational entrepreneur, exporter and businessman himself, Karunaratne recounts his success in a series of anecdotes and asides, revealing the unique personality and inherent entrepreneurial traits that led him to be the largest in his field in this region.
Within a mere four years of that epochal encounter with President Jayewardene, Karunaratne was exporting terracotta to Germany. My first order was for US$ 7000, says the exporter who now ships a 1×40 -foot container per day. I was very proud of that shipment, as I set up my export business from scratch,” he says.
His early days in business were ignited and propped up by his foreign buyers themselves. His German order for terracotta utility and ornamental ware, then the world trend in ceramic ware, came from a German buyer, Peter Zürn, while Karunaratne made progress for the next few years with his one container load of terracotta per month, the true turning point, which upscaled his business to its current proportions came from the “Expo 94 Colombo” exhibition in 1996.
A buyer from Holland who promised half a million US dollars’ worth of business per year was very encouraging. Karunaratne still recalls the words used by his buyer who stated “Our trip to Sri Lanka would have been invain if you were not here,” as our products were the only ones that caught their interest.
Karunaratne has never looked back since this stroke of unexpected fortune. He maximized his opportunities to expand business, whilst exporting his decorative ceramics to 47 countries, and to further curtail the outflow of foreign exchange he has brought to life “OTTO Bath ware”, a trademark registered bathware manufacturer producing 300 sets of sanitary ware per day. With a total of 350 employees and over 600 customers from all over the island.
The shift from the early terracotta days to the current 300 sets of bath ware and 1×40 foot container per day was gradual but steady. The second largest manufacturer of bathware in the country and the largest decorative ceramicware manufacturer in South Asia now excels in a variety of new glazing methods such as reactive, crackle, mother of pearl, matt glazes and many more varieties of designs, textures for the export and domestic markets.
The company closely tracks international market trends and upgrades their product range and quality standards with regular participation in most international fairs including the biggest in the world Messe Frankfurt, Canton and New York fairs which showcase the gamut of ceramic ware from household and gift items, interior décor to living and dining ceramic ware.
All our ceramic ware is produced to international quality standards. We are ISO 9001:2015 certified and are being regularly audited by our customers such as TCHIBO Germany and H&M Sweden for quality and standards.
“Entrepreneurs should not fear to unearth opportunities as I did. It is a disturbing fact that only 2.4% of our population are entrepreneurs whereas China and India account for 11% with their large populations.
Of our total workforce of around eight million, around 3 million have jobs that give them a monthly income and out of this 1.4 million of them are in the public sector and the rest in the private. Another 2.5 million are self-employed whereas 1.7 million live on a daily wage.
Karunaratne says, he recommends a clear ten-year national policy on industry and exports which would lay a strong foundation for industrial entrepreneurship which will not be affected by party policies with changes of government.
As an exporter and a well recognised entrepreneur in Sri Lanka I am very happy to say that I am fully content as per today. I have been rewarded with more than 18 awards including the most prestigious President’s Gold Award as Best Exporter awarded by the Export Development Board in 2006 and the National Business Excellence Award in 2006 by the National Chamber of Commerce of Sri Lanka to name a few.
Karunaratne recollects a statement from a deputy general manager of Seylan Bank who recently complimented him as an excellent money manager, observing that he never bit off more than he can chew. Karunaratne says this is a very good example to all entrepreneurs and to any government of Sri Lanka too!
I think it’s a great injustice to my lovely wife, Nilani Karunaratne, if I am to not mention her immense contribution towards my success today and I take my hat off to her on the tremendous support she has continuously extended my way.
Even though I have been a hardworking and dedicated exporter and entrepreneur I never failed to give my time for my children; for their education and wellbeing and as a result today I have gifted to my country three well educated children; my eldest daughter Dr. Dilini Herath Jayaratne, is a doctor, my second daughter, Ruchini Herath Abeyratne is an Attorney-at-Law and my only son, Dilanga Karunaratne is a lawyer / businessman all having completed their education in UK and presently managing their own businesses.
BMD spoke with Karunaratne on this issue, his foray into fine, decorative ceramicware, sanitary ware and his reflections on leadership.
Excerpts from the interview:
What are the key factors that contributed to your success?
There are many factors, but firstly I am proud to be of service to my country, which I love. I am also happy to give back to my family and friends who believed in me and supported me in my endeavours.
As a leading exporter, I earn valuable foreign exchange for the country. Most of the raw material used for ceramic ware like dolomite, feldspar, kaolin and ball clay deposits are part of our country’s rich mineral resources. Since our business requires relatively less imported raw material, we contain the outflow of foreign exchange for raw material imports to a great degree. Developing industries based mainly on local raw material, uplifting domestic industry, creating employment opportunities in many related industries are some of my targets.
So, ours is a business that has given back to the community. While I consider my contribution to our country as one of my main business achievements, my strong commitment and belief in some fundamental business practices and ethics have richly contributed to our success. Among these key elements are people management or human resource management, adaptability and spreading business risks.
What is your philosophy in people management?
Personally, I consider Sri Lankan employees to be the best in the world. They are intelligent and quick to learn but entrepreneurs and leaders should know how to handle them. I prefer the Japanese style of management. For example, if I want my room cleaned, I walk up to the person in charge and ask them if I could clean my own room as it needs to be cleaned. I discovered an immediate positive response to this approach as they instantly take the task upon themselves and the job gets done!
We do take pride in our way of managing people. We do not impose strict “HR” policies. Our approach is more humane. The company payed our staff the regular increments and bonuses (a three-month end of year bonus and another in April) despite the ongoing pandemic crisis. Breakfast and lunch are provided buffet style to all staff. Transport is also provided to all workers. We create a happy, homely and safe environment for our workers who are confident that we will take care of them even in times of adversity. In return we get immensely positive results from our team of employees collectively and individually.
How has adaptability helped Art Decoration to sustain business in a highly competitive international market?
Well, we keep close track of changing international market trends in our sector. We learnt early lessons from our German buyers who admired the craftsmanship of our local handicrafts but did not see their potential in export markets. Trends differ in individual markets across Europe, USA and Scandinavian countries for fine ceramic ware and we have to cater to these constantly changing trends. We attend the largest ceramic fair in the world to retain and expand our current markets and latest international trends in ceramic ware. For example, the Scandinavian tastes vastly differ from the Japanese. The English like the country home style or vibrant colours. We have to be flexible, adaptable and move fast to cater to these varying and changing market trends with top quality designs, colours and products.
How do you spread your business risk?
Currently, we export to 47 countries thereby spreading our market risk. We could sell our entire capacity to one country, for example, but we do not want to put all our eggs into one basket, as the saying goes. Therefore, we work across the globe exporting to Europe including Sweden, UK, Denmark, France, Holland, Italy, USA, Middle-East, Canada etc.We have a considerable competitive advantage with our geographical location. The Colombo Port’s central location as a hub, connecting to major shipping routes and a leading port in the south seas for bunkering is a valued advantage to all exporters. Our freight charges to the western markets are much cheaper than our main competitor China giving us that valuable competitive edge. Our shipments reach Europe in 18 days while shipments from China takes 30 days to the same destination.
What is your perspective on leadership?
Leadership is what we lack in our country. I prefer to see myself as a leader and not as a boss. Leaders lead from the front while bosses position themselves at the back of their team ready to whip them when they falter. Leaders should also be very empathetic and understand the mentality and issues of their workers to get the best of them.
We held a kiln operation training course for our workers recently. I was surprised that in just two weeks they absorbed the training and are now even able to maintain the kiln themselves. Our workforce is very smart. But they need to be guided and managed properly. I would like to quote a revered preaching of the Lord Buddha here. He once said, “the bee takes honey from flowers, but the flower does not even know it.” I work in this manner and my workforce give their best to me willingly because I lead from the front and am empathetic to their problems, and take care of them.
Leaders think differently, in a visionary manner with maturity. Sometimes my employees say that they cannot understand what I am saying but in the next six months they realize the value in what I suggested or implemented. This foresight and vision are necessary for true entrepreneurship and leadership.
How have you handled the organizational crisis during the pandemic?
It depends on how you look at a crisis. It’s all in the mind and the mind comes first. Sometimes crisis can be golden opportunities. We need to be flexible and adaptable. Personally, for me the crisis has provided new opportunities.
International ceramic buyers missed the world-famous Canton Fair in China during the pandemic and some of their big orders came to us since we kept sending buyers our new developments. So, this takes me back to my theory that opportunities have to be unearthed, they don’t necessarily drop into your lap.