Biscuits Beyond Borders

Maliban Biscuit Manufactories, a household name in Sri Lanka with a rich history spanning 70 years, stands at a pivotal point in its journey. As the Sri Lankan market reaches saturation in its segment, Maliban is strategically shifting its focus towards global expansion while consolidating its presence at home. 
In an exclusive interview with Mirror Business, Maliban Group Managing Director A. G. Kumudika Fernando and Group Chief Executive Officer Ravi Jayawardena share insights into the company’s strategies for sustainable growth, navigating regulatory challenges, going the extra mile to enhance efficiency and quality. 
The duo provided insights on Maliban’s vision to become a truly global brand while continuing to uphold its legacy of delivering quality products to consumers worldwide.

As a family-owned company with a rich history spanning 70 years in the Sri Lankan market, how do you balance the company’s longstanding traditions and values with the need for innovation and adaptation in today’s rapidly changing business landscape?

Fernando: As a manufacturer, there are certain things we won’t change, such as delivering value and maintaining the highest standards of quality. Our commitment to providing top-quality biscuits, products, and recipes remains unwavering. We will not compromise on the foundation we have built over 70 years. However, we are also keenly aware of the importance of innovation and staying abreast of new trends.
While we have evolved and diversified our product lines to include milk powder, cereals, and agricultural products, among others, our core commitment to quality remains unchanged. It is crucial for us to strike a balance between honouring our traditions and embracing innovation. This balance is key to our success and ensuring that we continue to meet the evolving needs of our customers while staying true to our roots.

Maliban Biscuit Manufactories has maintained a strong presence and reputation in the Sri Lankan market for decades. How do you envision the company’s growth trajectory in the coming years, particularly considering the increasing competition and evolving consumer preferences in the confectionery industry? 

Fernando: At Maliban, we are deeply committed to meeting the evolving needs and preferences of our consumers. We understand that consumer preferences are constantly changing, and we strive to adapt to these changes while maintaining our commitment to quality and taste. One of our key focuses is on providing products that enable consumers to make healthier choices. We have introduced changes in our products, such as reducing sugar content and highlighting nutritional information, to cater to the growing demand for healthier options.
Our R&D efforts are centered on incorporating new, natural ingredients and fibers to enhance the nutritional profile of our products. We work closely with top R&D teams in Europe to ensure that we stay ahead of the curve in terms of product innovation. This approach has allowed us to evolve our product lines, such as the Marie biscuit and Lemon Puff, to appeal to a wider range of consumers, including those who are more health-conscious.
Jayawardena: In the coming years, we envision further expansion of our product range to cater to the needs of the health-conscious consumer. We are confident that our focus on innovation and quality will continue to drive positive growth.

As a female leader in the biscuit manufacturing industry, what unique perspectives or experiences do you bring to your role as Managing Director of Maliban Biscuit Manufactories?

Fernando: I believe my perspective as a female leader brings a good understanding of gender dynamics and challenges in the workplace. Being in what was traditionally a male-dominated industry, I bring a fresh approach to leadership that emphasizes inclusivity and empowerment. My experiences have taught me the importance of fostering a supportive and inclusive work environment where everyone feels valued and respected, regardless of gender.

How do you navigate and overcome challenges in relation to gender diversity and inclusion within the company? What steps are you taking to promote diversity?

Fernando: We are actively working to promote gender diversity and inclusion at all levels. We have made significant strides in this area, with key leadership roles now occupied by women, including our R&D Head and a significant portion of our finance department and marketing. We are committed to creating a more diverse and inclusive workforce, and we are implementing policies such as flexible working hours to accommodate the needs of working mothers. This includes allowing for flexible arrival and departure times to accommodate school drop-offs and pickups.  Our efforts have been well-received, with many employees appreciating the supportive and inclusive environment we have cultivated. However, I must stress that these are also extended to our male employees so that they too can contribute in establishing a healthy work life balance.

With the increasing globalization of businesses, how does Maliban approach global expansion? Can you share insights into the company’s market entry strategies in relation to international markets?

Jayawardena: With the increasing globalization of businesses, we approach global expansion strategically, focusing on our core business of biscuits. We export to 50 countries across all six continents, achieving a major breakthrough in India through a partnership with Reliance. This partnership not only opens doors to the Indian market but also provides a gateway to other markets like Bangladesh.
In India, the cost of production is significantly lower, about 40% less than in Sri Lanka. This cost advantage, combined with our commitment to quality, has given us a competitive edge in the global market.
To further strengthen our global presence, we plan to establish two to three production bases outside Sri Lanka within the next three years. This strategic move will help us reduce costs and improve efficiency, ensuring our continued success in international markets.
Given that manufacturing outside is cheaper, do you think more companies will move operations overseas?
Jayawardena: As a company, we recognize the benefits of moving operations overseas to reduce costs and offer products at more affordable rates to consumers. While there is a pride in local manufacturing, the reality is that input costs, particularly in Sri Lanka, can be prohibitive.
Customers, especially in international markets, prioritize quality and affordability over the country of manufacture. For example, if we were to manufacture a product like Marie biscuits outside Sri Lanka and bring it back, we could sell it at a much lower price compared to the current market price. We can sell it for about Rs. 40. The current price is Rs. 90. so that’s the difference.
Fernando: I believe Sri Lankan companies should prioritize building global brands. This strategy can bring significant benefits to the country. Our vision at Maliban aligns with this belief, as we aim to make Maliban a truly global brand. We are committed to achieving this goal and contributing to the growth and recognition of Sri Lankan brands on the global stage.

Sustainability is gaining importance across the world and in Sri Lanka as well. Can you elaborate on Maliban’s commitment to sustainability?

Fernando: Maliban is committed to sustainability and has taken several initiatives in this regard. We have already started using renewable energy sources, such as solar power, and aim to expand this initiative to more locations within the next six months.
In terms of packaging, we are aware of the importance of sustainable packaging solutions. However, one of the challenges we face is the availability of raw materials for such packaging. Opting for sustainable packaging could increase costs, which may be challenging for consumers, especially in developing countries like Sri Lanka. While we want to embrace sustainable packaging, it will be a gradual process to ensure it does not burden consumers.
Despite these challenges, we have a program in place to recycle the packaging of damaged goods.  Maliban is proud to be the first biscuit manufacturing company in Sri Lanka to have a carbon footprint certification, demonstrating our commitment to reducing our environmental impact.

In terms of technology, how is Maliban leveraging technology and automation to improve efficiency and quality?

Jayawardena: We have been using an ERP system which has been instrumental in improving efficiency and quality. This system provides real-time information across our production system and factory. For example, we can now track operations in real time and identify areas where efficiencies can be improved. Our sales representatives, numbering around 600 to 650, also use technology to manage operations and sales at outlets, including mom-and-pop shops. This allows us to track sales by product, enabling better planning and decision-making.
The implementation of ERP systems has helped us reduce wastage significantly. Additionally, we have started using robotics in our operations, a project that began about three to four years ago. 

What are some of the key challenges faced in the local confectionery industry, and how does the company navigate these challenges to ensure sustainable growth within the local market?

Fernando:  One of the key challenges faced in the local confectionery industry is the higher cost of production, which cannot always be passed on to the consumer. At Maliban, maintaining quality and taste is non-negotiable, a principle we have upheld from the beginning. To navigate this challenge, we focus on cost efficiencies rather than cost cutting. For example, we continuously work on improving efficiency in our supply chain, which accounts for 60 percent of our costs. By focusing on aspects within our control, we strive to manage costs effectively while maintaining the quality and taste that our customers expect.

Can you give me a percentage of how much costs have increased, since COVID as a benchmark?

Jayawardena: Since COVID, costs had increased by a significant 60 percent. However, in the last six months, there has been a decrease, although it remains higher than pre-COVID levels. We hope for more stability in the future.

How have you seen consumption trends change since then?

Jayawardena: The volume of consumption in the confectionery category has declined by about 35 percent since COVID . While consumption is slowly recovering, it is still about 15 percent lower than pre-COVID levels. This trend reflects a shift in consumer behaviour away from traditional tea-time rituals, impacting overall consumption patterns in the confectionery sector.

Are there any regulatory challenges or bottlenecks that the confectionery industry faces in Sri Lanka? What changes or improvements in the regulatory environment would you recommend to facilitate industry growth?

Jayawardena: We are currently negotiating with the government regarding 21 new regulations from the health ministries. One example of these regulations is the requirement to include three languages on packaging instead of two. While this may seem like a simple change, it has significant cost implications, especially for smaller companies. For the industry as a whole, the cost implication is about 1 billion rupees due to the need to change packaging and labels. India, for example, has many languages, making compliance with such regulations a complex and costly endeavour.
The deadline for compliance with these new regulations is next year, and as an industry, we have lobbied for consideration of these regulations. One example of a challenging regulation is the requirement to show all advertisements to health ministry officials for approval. This process is impractical, as health ministry officials may not have the expertise to assess advertisements effectively.
Fernando: We believe that government bodies should work collaboratively with industry representatives to develop regulations. When regulations are developed in isolation, they can lead to impractical requirements. It’s important for regulators to consider global standards and practices, particularly in countries like Europe and America, to ensure that regulations are reasonable and effective.

What measures or policies do you believe the government should implement to provide targeted support to the confectionery sector in Sri Lanka?

Jayawardena: We stress that regulatory bodies work closely with the industry and consult with us before implementing new rules and regulations. This collaborative approach can help prevent any adverse impacts on the industry as a whole. By working together, we can ensure that regulations are practical, effective, and beneficial for both the industry and consumers.

Looking ahead, what role does Maliban sees itself in contributing to Sri Lanka’s economic growth? 

Fernando: Our strategy involves further consolidation in Sri Lanka while aggressively pursuing global expansion. The Sri Lankan market, particularly in our segment, has become saturated, limiting growth opportunities. Our focus is on entering new markets and expanding our presence in existing ones. The partnership with Reliance is our first step in this direction. Additionally, we are exploring opportunities in the production industry in Sri Lanka to diversify our operations. Overall, our goal is to establish Maliban as a global brand known for quality and innovation.

Crunchy yet humble beginnings

The story begins in the early 1900s, when a determined young man from the southern region of Ceylon, ventured to Colombo in pursuit of new horizons.
Angulugaha Gamage Hinnyappuhamy’s humble beginnings saw him set up a modest tea kiosk on First Cross Street in Colombo. Fuelled by ambition and unwavering dedication, his entrepreneurial spirit thrived, leading to the establishment of Maliban Hotel at 62, Maliban Street in Pettah, in 1935. Joined by his brothers, A G Wickramapala and A G Jinadasa, the trio steered the burgeoning business towards prosperity.
The success of Maliban Hotel paved the way for further expansion, prompting Hinnyappuhamy to venture into the realm of artisanal bakery in Kotahena. The exceptional quality and taste of their products soon captured the hearts and palates of customers, driving demand to unprecedented heights. To meet this burgeoning demand, the decision was made to introduce mechanized manufacturing processes, heralding the inauguration of Sri Lanka’s first mechanized biscuit manufacturing facility in August 1954.
In the ensuing years, Maliban biscuits became synonymous with unparalleled taste and quality, captivating the discerning palates of confectionery enthusiasts. Today, Maliban stands tall as one of Sri Lanka’s most revered and trusted brands, a testament to its unwavering commitment to excellence.
Maliban’s product portfolio, which includes a diverse range of crackers, cookies, and wafers, is available in over 100,000 stores across Sri Lanka. Its global footprint spans more than 35 countries across five continents, underscoring its status as a global ambassador of Sri Lankan culinary craftsmanship.