The real estate sector is one of the most internationally renowned sectors. In India, the real estate sector is rated the second major sector following agriculture. Until around mid last year the real estate sector in Sri Lanka had been a prospective business investment with good returns. Uncertainity, however, which set in the property market resulted in the residential sector taking a declining trendwith many construction projects being on hold, property developers facing difficulties in re-paying their loans, and some even ending bankrupt.
While property developers are weighed down, being unable to earn expected profits, those who buy apartments to sell them at gains are saddled with cost excursion. In Sri Lanka, land prices keep rising year after year. The Colombo District Land Price Index compiled by the Central Bank reached 132.2 during the first half of 2019 recording an increase of 13.6% compared to the first half of 2018. The sub-indices of land price, namely Residential, Commercial and Industrial have contributed to this increase. The averge price of a residential lot was up 15.3% in 2018 and in Colombo, by 15.5%.
There is evidently a bubble in the market when buying a property with intention to sell it at a higher price although not on a very high scale in Sri Lanka, due to land prices constantly rising. At some point of time this bubble will surely burst where none of the apartments could be sold.
The subdued economic performance which resulted in the drop in the real estate sector is attributed to weak domestic demand, continued tightening in monetary conditions, government consumption spending, stagnant fixed investment, and lower net exports.
The tightening monetary policy enforced on the recommendation of the IMF was one cause that led to drag down domestic demand and investments, and further, inconsistent economic policies driven by instability adversely affected public and private sector investments, the key drivers of economic growth.
The real estate sector, which is described as property consisting land and the buildings on it as well as the natural resources including crops, water, and mineral deposits, is linked with the overall performance of the economy. Hence fluctuations within the sector magnify ups and downs of the overall economy. As a result of this link, large movements in the real estate market tend to amplify fluctuations in the overall economy in addition to potentially destabilising the financial system. An example of this is the financial crisis where the real estate market had vast and disasterous effects on the overall economy on a global scale.
With Sri Lanka becoming the number one travel destination according to The Lonely Planet rankings, the success of the novelty gift and souvenir industry, which is one of the major developing categories in tourism, is thus far stabilized. One could say LAKARCADE’s entry into the industry is well-timed, and it is the view of LAKARCADE CEO and Managing Director Anil Koswatte that it is here to cater to the demanding market, by setting up its flagship store in the heart of Colombo.
LAKARCADE is one of the biggest novelty Gift & Souvenir shopping malls in Asia located in the heart of Colombo, LAKARCADE offers a wide array of authentic Sri Lankan souvenirs and novelty gift items. The fine range on display includes carefully selected teas, spices, traditional art & craft items, batiks, gems, jewelry, silverware and many more creative products.
“Sri Lanka is now focusing more on the tourism industry, and we need to exploit this opportunity as much as possible like other South East Asian countries. When you look at tourism development, novelty gift and souvenir industry is one of the major developing categories in the world that contribute to tourism. Gem and jewelry, spa products and handicrafts are subcategories in this industry,” Koswatte said.
According to Koswatte, the statistics of tourists’ arrivals are on the rise, with numbers increasing every year; Sri Lanka currently has reached a mark of 2.5 million arrivals per year. He believes that Sri Lanka has the potential to reach the heights of countries like Thailand and Malaysia, and increase these numbers up to 20 million. As a Sri Lankan entrepreneur, Koswatte states that LAKARCADE is getting ready to take up this challenge by aiding the Government as a private entity, to boost economic growth from grassroots level by increasing its service to the rural crafts community.
Koswatte says that almost all of the products sold at the store are manufactured by village- or cottage-based craftsmen, with the exception of some products being sourced by local but established manufacturers. Crafts and artefacts from Batticaloa, Puttalam and Jaffna, covering areas from North to South, are sourced by LAKARCADE.
“Products that require a quality assurance such as tea, coffee, and spa products, we have reputed and established local manufacturers who supply for us. All products are manufactured here and all resources and expertise are local; we’re not importing anything. So, the majority of the products are produced in the cottage industry,”
According to Koswatte, LAKARCADE provides the rural craftsmen the ability to demand their prices. He said that no bargaining happens on their part, and therefore the craftsmen are assured a reasonable income for their efforts. “We don’t tell them this is your price. They come with their prices and we accept.”
Koswatte added that the suppliers, the cottage industry manufacturers, are very talented, creative and efficient. However, according to certain market standards and trends, some changes needs to be made, and this is where LAKARCADE collaborates with their designers and produces an end product that has more market value. “The manufacturers are very independent people. There are as per my calculations, 3000-odd suppliers of handicraft in Si Lanka. We purchase from some of these manufacturers, either what they are producing according to their designs, or after we do our own designs and value additions.”
LAKARCADE has recruited a very famous design consultant, Senaka De Silva. His expertise is utilised into understanding current market trends, and incorporated into the products produced by the suppliers.
“Suppliers come and see the stores. They can see the consumer points, consumer behaviour, market trends, what components in their production they should enhance such as packaging and weight. It’s an exposure program for them also. This is where the manufacturer and the buyer meets. They can see for themselves how the market behaves to their products,” he explained.
With a wide range of items such as gem and jewelry, handloom, Sri Lankan batik, Ceylon spices, Ceylon tea and coffee and handicrafts, the exclusivity of a gift shop such as this is its ability to make a global presence through e-commerce, says Koswatte. “We already have the facility in place for customers to do their shopping online. We’re joining with Ikman.lk and we’re aiming to have a global presence like Amazon and Alibaba as vendors.”
“Our market segment here is 80% tourists. Some people come and order items big in size such as wooden elephants or artefacts, and we will deliver it to their doorstep through our air-freight or sea cargo,” Koswatte explained.
The team at LAKARCADE is equipped with expertise knowledge as they all have prior experience working in a similar scope. With ease, one can observe a cross-section of Sri Lankan heritage and culture at LAKARCADE.
Koswatte says that unless marketing linkage is provided, the village- or cottage-based craftsman doesn’t get reasonable prices for their efforts. He states that the backward integration in the business, from buyer to manufacturer linking, is one of its main goals. Therefore, the sustainability of this business in the long run with adequate income to the craftsman is promised when market facilities such as LAKARCADE is available in the Centre of Colombo, aiming the tourists.
“As a marketing linkage institution, LAKARCADE does not produce any items sold at the store. All these are produced in the village level, either in the cottage industry or either in a rural level craftsman-owned business. Most of the products come from the cottage industry,” Koswatte explained.
Sri Lanka has a significant advantage on gem and jewellery, being one of the major countries manufacturing gems and jewellery, in addition to tea and spices, according to Koswatte, and he further added that Sri Lanka has the competitor advantage, with the ability to demand higher prices in these categories. “If the consumers aren’t happy with our product, including our gem and jewellery, they can return it and we can pay back. We have the money-back guarantee as well.”
Koswatte says that from the point of country, LAKARCADE plays the part of brand-building or destination-marketing for Sri Lanka, and that it is their corporate responsibility, objective, vision and goal.
“The tourism industry should sustain with a good image and attractive campaign and we are part of it. Our Sri Lankan authentic products should enhance the total value of the Sri Lankan brand. I believe LAKARCADE plays a major role in providing this assurance,” Koswatte elaborated.
LAKARCADE truly Sri Lankan with a vision “To become the global representative of authentic Sri Lankan Novelty Gift & Souvenir items by preserving our heritage”.
Simon Arthur Wickramasinghe would have been a successful lawyer, had he continued to practice. Although this was not what he had in the back of his mind?
If he was the ordinary, the Ceylon Biscuits Limited (CBL) would not have flagged its way to become the Sri Lanka’s largest confectionary manufacturer, producing and marketing 11 categories of branded food products catering to the diverse palates.
In 1939, Simon W. dropped out from the law college and bought over William biscuit factory from the owner. The lawyer capitalized in it and renamed the factory which came to be known as Williams Confectionary Limited. After relocating the location from Kolonnawa to Dehiwalaand then to Akuressa during the war.
The biscuits were handmade and baked in a long-fired oven. The dough was mixed by hand,rolled out and cut into shape and placed on trays. These were then baked and cooled. They were packed into gallon tins with a round lid for sale. It was sold locally.
Simon and his wife Enid had four children, sons.
Paul was their firstborn. He was in the first batch of graduates from the University of Peradeniya. He went on to setup Ceylon Essences. Ranjith, their second son excelled in the field of Engineering. Mineka, the third, also known as Micky was the first to follow in his father’s footsteps. Ramya was the youngest. His interests lay in food Science and Technology.
Simon W. was keen to expand the production of this non-traditional snack called a biscuit. A snack introduced by the British. He wanted to find new ways to make better biscuits, a greater variability and make all this easily available. He did this by introducing high-tech manufacturing machinery to the country.
During this period Mr. S W R D Bandaranayake was the Prime Minister of the country. Due to the mishandling of the economy imports were becoming challenging. Imports of biscuits were banned. It was up to Williams and Maliban which was opened in 1954, to meet the demand and satisfy the market.
Realize this in 1957, the biscuit production line was mechanized with the introduction of Baker Parkins lines from the UK. The then Governor General of Ceylon Sir Oliver Goonethilake declared open the new building which housed the factory.
As the company grew the ‘Williams’ brand packed biscuits in branded tins called ‘Orchid Assorted’ and ‘Cheese Cuts’ with advertising taglines that said ‘Pick the Best’. Simon W. even had many British nationals working for him at his factory.
The products made were Cream Crackers, Marie, Arrowroot, Tea Ginger Nuts, Nice, Custard Cream, Bourbon and Assorted.
In 1960 Simon W. installed an automatic wafer ovenwith 12 plates for better production. It also came with cream spread attached to a cooling conveyor. After cooling, it went to a cutting machine. The packing was done manually into 4 oz. packs and bulk pack into tins.
To Simon W. and his family this was a momentous and a historical venture. It was the birth of “Munchee”. The wafer manufactured were branded as Munchee. The name Munchee was given by Mr. Edger Corray.
Simon W. and his sons Mineka and Ramya realized that new machinery with high capacity was the need of the day. To expand, the Ministry of Industries approval had to be obtained. But, the ministry was not keen as private sector industry was not encouraged. Finally the Ministry wanted Williams Confectionary Limited to show exports to grant approval
With much difficulty an export order was obtained from Saudi Arabia. With this in hand approval for expansion was gained by Simon W. At that time William Confectionary Limited did not have land for expansion. This was the next obstacle faced by Simon and his sons. Finally land was bought at Pannipitiya.
Ceylon Biscuits Limited was incorporated in 1968 as a new company under the leadership of Simon Wickramasinghe’s son Mineka Wickramasinghe.
Simon Arthur (Artie) Wickramasinghe renamed Chairman of Ceylon Biscuits Limited until August 1984 when he passed away leaving behind a legacy of fair play, both by the worker and the consumer.
Today CBL offers diversity of captivating tastes to International consumers, stormed export market gaining acceptance in 52 countries and counting.
Winning Export Awards since the year 2003, having won recognition by awarding bodies including National Chamber of Exports and Presidential Exports Awards.
When it came to Simon W. a self-made Entrepreneur, the sky was not the limit.
Entrepreneurs aren’t born, they are made. And they are made just like anything else, through hard work.