Sunshine Holdings’ pursuit of stability and growth
Even the covid-19 pandemic didn’t stop this conglomerate from coming out on top.
Sunshine Holdings PLC is one of Sri Lanka’s most esteemed conglomerates with a core area focus on healthcare, agribusiness, consumer goods and renewable energy. They base the business on ‘responsible entrepreneurship’ and strong family values that cultivate long-standing human relationships. Executive Director, Shyam Sathasivam, shares how Sunshine Holdings has continued to grow despite the challenges hurled at them.
How did Sunshine Holdings respond to the challenges presented over the last two years?
What makes a business stable is how quickly it can rebound. After the 2019 Easter attacks, healthcare and consumer goods—our two largest sectors—bounced back to what they were pre-bombings. Similarly, by mid-April this year, we could move forward because we are in products that everybody requires across the country. Our healthcare reaches around 3,000 pharmacies, and our tea product portfolio cuts across the economic strata. So in that context, our stable business allows us to withstand such large shocks. We’re affected in a broad way like consumer sentiment, since people have less income than they expected, and it will affect growth. Still, we benefit from being in large, stable segments of the economy.
What does “reset” mean for Sunshine Holdings?
We are a family business that’s publicly listed. We stay involved in the management and are accountable to our shareholders, and all investors. By nature, we are conservative, and given what the Sri Lankan economy has been for the last three to four decades, we are more prone to shocks than many other countries. So our ability to sustain shocks has been a part of our strategy. The sectors we are in can also balance any surprises. Technology, for example, has been the most significant disrupter over the last three years. However, we invested in technology well before these disruptions since we understood the sentiments of our consumers and stakeholders. Sometimes, it was as simple as reaching out to pharmacies with sales force automation very early on to get timely deliveries in. But COVID-19 and the lockdowns further stretched us. Even though our data is technically on the cloud, we were still working nine-to-five in
the office every day. However, we adapted rapidly and continue to do so each month with more staff working from home. Our retail business, Healthguard, was already present online, but it was only after COVID we figured we should partner with PickMe. So the little things helped, and we’re following a robust strategy and escalating. We’re resetting some of our tactics in terms of plans, and focusing on healthcare and consumer goods.
How has the group performed in 2020?
The period from January to March was very good for us. We have strong service brands and products, particularly healthcare and wellness. In the consumer business, we have products across the economic strata at different price points, from our premium products like Zesta to our baseline products like Ran Kahata. And, we focused a lot on creating availability across the 20 million plus population. It worked well and continues to sustain us through challenges. At the start of the financial year, from April to June, all our businesses went through significant challenges but rebounded quickly. We’ve just released results for six months as of September, and we are growing versus last year. What I think is important to note is that irrespective of a pandemic and the lockdowns, we have shown resilience and can grow in a period of uncertainty.
We also have strategic investments in agribusiness, palm oil plantations, and dairy, which have also shown resilience. Renewable energy is another investment by the group. We have a mix of brands that have continued to be relevant post-supply chain shocks, along with a business that has rebounded. We also have regulated businesses, like healthcare, that by nature, move slowly compared to the tech industry. Our view is to take a long-term view of the multiple businesses in our portfolio. Further, our balance sheet is solid — as a group, we have kept debt at manageable levels.
What are the main macroeconomic patterns that drive growth in the many business verticals of the group?
Our concern is the low consumer income and the general feeling of uncertainty. We’re confident there will be a vaccine, but when it comes, it will have a short, feel-good element — the uncertainties will continue to exist. It will take time to repair the economy, businesses, and overcome shocks at a consumer level, muting consumer income and spending. With essentials like our tea business, and now our acquisition of Daintee in confectionery, we see little impact, but we have to look at the larger picture. Any plans to launch new products will have to be with that in mind.
Healthcare and wellness investments require more significant consumer income and willingness to spend. ‘Is our consumer investing more in wellness, and is this income-related?’ is a question we ask ourselves. If you look at markets with double our GDP, you will see a significant spike in elective surgeries, for example. It’s not that they’re ill per se — they just address issues which don’t get tackled in our economy. So I believe our outlook needs to be about how we position ourselves for the growth that is to come, and figure out how we play out the next three to four years as things resettle.
What is the group’s business strategy to reset fast across verticals? And what are your plans for the future?
All of our employees will become more digitally productive. We will look at how we can enable and augment every individual to become more productive at twice the pace than initially expected. This means significant investment in training to re-tool people. We’re heavy on business intelligence, and we expect teams to use these tools online and even on-the-go. We aim to drive this data usage across the board.
There is a lot more willingness for people to change their job roles. People’s mobility has been crucial. And, if there’s one thing I would want to retain from the whole pandemic is that flexibility – that anyone can do different things each day. We’re growing accustomed to location mobility — working from anywhere — now we need to realize we can also do multiple things. This mindset switch needs to start at the corporate level. We also aim to understand what our consumers will forever do differently. Healthguard, our retail business, will always have a far more significant and rapid response online. We went from delivering products in two days to delivery in two hours. So we figured out how to do it in a crisis. Now, we want to do it in a typical scenario at an efficient level we can scale.
As with any group trying to build value, very early on, we realized the only way we can scale is by ensuring our talent can perform
Can you elaborate further on the role of digitisation across the company?
Most things we did before required manual interaction. Our goal is to see how we can eliminate this. It was only during the lockdown that we figured out how to digitise processes like approvals, so the business can move forward. Now I hardly sign anything physically — it’s just not on the cards anymore. I want to enable a sales representative on the ground to suggest a campaign to the area sales manager via a request online, which in turn moves to the relevant decision makers and gets approved
The technology will be key and will ensure that decision making will be faster. We’ve always had the technology and devices — it was a question of how we could use it across the business. At the consumer level, from where Healthguard is and communicating with customers, we have a far better understanding of consumer patterns and their concerns, because of the rich interaction we’ve had with them. In the pharma business, one thing we did was to make sure the staff was available to pick up a call and have those conversations with our customers, rather than merely using data points on our website. Now it’s up to us to use the data to figure out what solutions we need to implement, be it consumer-insight or business-process insight.
How important is it for employees to improve mobility in terms of functionality? And how do you do that?
As with any group trying to build value, very early on, we realized the only way we can scale is by ensuring our talent can perform. The only sustainable route to success is attracting and retaining talent. The most successful companies around the world are the ones with teams that can pivot and make the changes necessary to keep growing. As a family business, we clearly understood that, and it has helped us in the past. We have fostered an environment where people feel trusted and empowered with their issues addressed.
Recently, Great Place To Work (GPTW) recognised six out of our eight companies, and one area we scored well was in enabling the use of technology so people can produce more. We have re-engaged with employees now that we’re working from home and we will encourage them to consider the flexibilities and the challenges that have come with it, and incorporate them into the business. Our opportunity to stay relevant will depend on learning from some of these issues. So while our businesses have been stable, our business processes have had to reset. I think there will be two types of businesses: Those that go back to the old processes, where vaccination will enable them to revert to exactly how things were before; and those who will attempt to make big changes to flip the switch and do things differently. We’re eager to make sure we are a part of the latter and not fall into the comfortable groove of the old normal. It is how we will continue to grow — we can’t reward employees with a lack of growth.
Dr. Jehan Perera - Executive Director National Peace Council