The Sunday Leader

Dipped Products Awaiting ‘Green Light’

By Faraz Shauketaly

Map showing pH variation

The Chairman of Hayleys Plc – the ultimate owning company of Dipped Products Plc – the company at the epicentre of the recent controversy in Weliweriya in the Gampaha district, has confirmed that the company will be complying with the directive given by the Head of State. Mohan Pandithage the Chairman of Hayleys also confirmed that the group is hopeful of resuming operations once they receive the ‘green light’ from the authorities.

Dipped Products Plc was established over 18 years ago in Weliweriya and admits that the demographics then were significantly different to what it is now.

The water basin in the area has been subjected to a detailed study by the Ministry of Irrigation and Water Resources Management and Water Resources Board in the past. Serious concerns have been expressed in the report about the entirety of the area’s water basin. The bulk of the water basin for the area – 772 Sq Km – shows a low pH content averaging 5.5.

The Attanagalu Oya basin is situated between two major river basins – the Kelani and Maha Oya and has an area extent of some 727 Sq Km. Based on that study geo-chemical maps were prepared for the entire basin.
The intervention of the President in the Weliweriya tragedy has been welcomed by all stakeholders including the industrialists and residents of the area. The Presidential directive is that some companies be asked to relocate and that in the future, new guidelines will prevail.

These new proposed guidelines will ensure that in the future new industrial units will be located only within designated industrial zones.

In a related development, we reliably understand that a report had been commissioned on the water situation and the Industrial Technology Institute had submitted a report in this respect. The report dated on or around the 19th of July 2013 has exonerated Dipped Products Plc’s plant in Weliweriya of any involvement in the current pH content of water in that area.

However a report by the Water Resources Board has found that the pH level in the water surrounding the factory at Weliweriya is low. Water Resources Board Chairman Bandula Munasinghe said that the pH level in the water had dropped to 4 from the accepted level of 6-7. He said that this had been mentioned in a report based on tests carried out on the water starting at 50 meters from the factory to 8 kms away.

Munasinghe said that the report was handed over to the Gampaha Government Agent. He said that the World Health Organisation (WHO) standards for water which is safe for drinking should have a pH level of between 6-7.

Munasinghe said that 1,000 samples had been taken from the water for the test.
Meanwhile, he said the Human Rights Commission of Sri Lanka had questioned the Water Resources Board on the water at Weliweriya.

The Board has also decided to carry out tests on water near factories around the country.
The Sunday Leader spoke to the Chairman of Hayleys Group, who is also its Chief Executive, Mohan Pandithage. A product of the Hayleys Group, with a 43-year experience record, Mohan Pandithage spoke frankly about his company’s current predicament at their Weliweriya plant and refused to point the blame at anyone specific but did allude to ‘dark forces with interests other than the best interest of Sri Lanka at heart”.

No compromise on compliance – Mohan Pandithage

“There is absolutely no way that we have compromised on compliance”.

Q: In financial terms can you give me an indication of the size of your operation in Weliweriya?
A: Average revenue between 2002 and 2010 was Rs 5.9 Billion. After I took over as Chairman the revenue has shown a steady increase; in 2011 Rs 11.7 Billion, 2012 Rs 13.4 Billion and in 2013 Rs 14.6 Billion. This explosion in revenue is attributable to the close attention we have paid to our customers. We started a system of continuously listening to our customers. The factory in Weliweriya accounts for some Rs 3.5 Billion of Dipped Products revenue or between 40 – 45% of our total company revenue.

Q: How far ahead do you have orders for?
A: Some of our clients order well in advance even six months ahead.

Q: In simple terms what is the problem? Your company is seemingly steaming ahead, very gilded prospects for 2013 and so on?
A: Obviously this water issue has become the problem. It is however a perceived problem because our company has been fully compliant and has the necessary licences from the BOI and the CEA for example, until October 2013 when it comes up for renewal.

Q: You have a responsibility towards your shareholders to ensure that these controversies do not compromise the operations – what did you do to address these potential risks?
A: We already have in place our annual licenses issued by various authorities including the BOI and the CEA. We have complied fully. When these issues were coming up we did get people to come and test our effluence.
In fact it transpired at the meeting with the President that our effluence had a pH rating of over 7 whereas the wells outside were much lower about 4 points. It of course raised eyebrows and cast aspersions on our results. But facts are facts! Any independent test will demonstrate that without ambiguity.

Q: How committed are you towards full compliance? Is there any way that this compliance could have been compromised in any way?
A: Under my stewardship I will not allow anything unethical to be done. We want the best and we work towards that. We will not damage our image at any cost. Our clientele who are mainly overseas insist on the highest of CSR standards including issues on labour, child labour and environmental protection, etc. We seek to continuously better ourselves. There is absolutely no way that we have compromised on compliance. Our integrity is very high and nothing will deter us from maintaining that.

Q: Tell me about the capacity of your effluent plant. What is its capacity? Is it true that it cannot cope with the current production, that it is inadequate?
A: Quite the contrary. Our plant is continuously updated and regularly maintained. The current facility we have can handle double our capacity. We have records demonstrating our commitment towards maintenance. Of course there is innuendo but facts speak for themselves.

Q: How will your company be exonerated after these allegations?
A: A number of reports are in the process of being compiled and expect to be published soon. Our own tests have shown that our effluent water has a pH value of 7. Yes I believe that we will be.

Q: Have you had reason to terminate any staff recently?
A: Yes we did.In January this year nearly 120 staff belonging to a strong union went on an illegal strike while a collective agreement was in force. They disregard our request to return to work. After consulting the Employers’ Federation of Ceylon, action was taken to consider they vacated their jobs. We strongly suspect that some of the people from this group have had a hand in creating this situation. At this point I must mention that our Group is easily the largest single employer with over 36,000 employees.

Q: What is the contribution of your company to Sri Lanka’s economy?
A: Our Company is among the Top 5 internationally. That is a record we are all very proud of. I have spent 43 years at Hayleys and I am very much a “Hayleys” product and I will not have it any other way. We contribute 3.17% of the total of Sri Lanka’s exports. We also must point out that over 60% of earnings are from foreign exchange; together with our freight forwarding and shipping of 7% in foreign exchange; a total of over 70% of our revenue is foreign exchange earnings.

Q: Can you say if your company relies on off-shore companies and the use of accounts overseas to retain monies outside of Sri Lanka.
A: None whatsoever. All monies made overseas are remitted back to Sri Lanka.

Q: What is hurting you the most about the Dipped Products affair?
A: The first three months of this year saw us cruising towards a record year of performance. Now that looks like it will not happen. Along with that some of our key clients have now moved their business away – out of Sri Lanka in fact. Now that hurts. It is entirely possible that even after we commence operations again, we will not be able to attract these clients again. A lot of hard teamwork has been compromised. Our staff is all collectively hurting at what has happened. This is in spite of the fact that our neighbours the local residents gave us their backing and asked us to restart. Certain dark forces have clearly conspired with their own agenda.

Q: Will you consider moving out of Sri Lanka?
A: We are a world class company; our clients are world class buyers. We know our priorities and we know of our responsibilities to our staff, to our stakeholders and to the people of our country. No never, is the answer. If we continue to be closed or if we are asked to stay shut for 12 months for example, we will have to look at other options including like what we have already done, farming out work to other companies. We may also have to give some of our work to our factory in Thailand.

 

Q: What is your reaction to the Head of State’s directive in terms of relocation?
A: Ours is a law abiding Group and company too. We will fully comply with any directive from the Head of State.

4 Comments for “Dipped Products Awaiting ‘Green Light’”

  1. Donald Peter Perera

    These Directors behave like they does everything on earth for poor people and their companies are the best governed. Read LMD they are the best. They go to temples holding Bodhi Poojas always behaving like they will be taken by good making them saints. They need to sit back and think if they are correct in front of their gods why this type of issues take place – retribution maybe.
    Just see the debacle they created in Weliveriya – this is what you call Hakkay Budu ras Bokkay dadamas !

  2. Lakna

    The extreme professional approach demonstrated by the CEO is commendable in clarifying matters raised. The position he defends seems to be unassailable unless new contradictory facts are discovered. Hope this costly controversy ends soon with much needed enlightenment all-round. This is a great window of opportunity for this environmentally sustainable and wealth creating industry to generate a fact based highly positive public opinion towards it as the public will be receptive now and willing to listen to both sides. Latex glove industry’s business sustainability will be invariably linked to positive public opinion.

  3. jay gunasekara

    Faraz you did not ask the main issue, that being, production was increased by having additional machines installed than what they were approved for. Srilanka is the capital of the world for conspiracy theories lurking behind every bush and tree.

  4. Upali

    While pH4 indicates a situation outside limits recommended for drinking water, it is not unusual to have occasional situations of pH 4-5 in our water. I myself experienced this situation in examining bottled water in Sri lanka and guided the industry producing bottled water at low pH to take immediate corrective measures pointing out the origin of the problem.
    With regard to Ratupaswela situation, what should be examined is not the pH, but the other components of the acid (anion) which is probably causing the toxicity. pH is only an indicator of a probable problem, but not the causative factor. The responsible institutions Please take a more broader view by looking for and identifying probable anion of the acid, which may be the cause of the complains reported by public.

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