Bata overcomes bad patch

Shirajiv Sirimane

The Bata Shoe Company is now in the path of recovery says Managing Director Bata Shoe Company of Ceylon Ltd, Raphael J. Mollo.

Speaking to the Daily News Business new feature 'Expat Chit Chat' he said the company went through a bad patch two years ago due to industrial action. "We have now come to a collective agreement with the unions. However this action initiated by the Unions in 2004 had a crippling effect on the operations. Its effects are still evident. However we are on the path of recovery," he said.

He said that despite these problems the company had achieved its target set by their international office. "Next year seems brighter," he said.

He however said other players in the market during the time had taken advantage of the trade union action and they are now looking at a more aggressive marketing campaign for 2008.

What are the plans for 2008?

The company has to catch the lost market share and for this we are planning to open more retail shops. The most recent one was opened in Negombo. In addition we are also in the process of refurbishing 13 existing shops this year.

Bata has aligned with H.S. Clothing Private Limited - the exclusive Adidas Distributor for Sri Lanka, to make available Adidas footwear, in selected Bata retail outlets.

Adidas footwear will initially be available only at the Bata outlets in the Majestic City and Liberty Plaza malls and will be extended to other Bata outlets gradually.

What is the capital expenditure budget for 2008?

We are looking to invest around Rs. 30 million. These would be for shop refurbishments, new machinery would be installed at the factory and for marketing.

With cheap imports and new players entering the market is Bata still a major player?

Yes it is. This is one advantage the company is still proud of. The fact that brand identity still exists gives us a major edge over our competitors for marketing. The factory is still running below capacity and we will increase capacity and intensify our exports too.

What is the shoe fashion statement in Sri Lanka?

Today people are going in for more fashion shoes and we too are gearing to this new emerging market. The local Bata designers have identified this trend and are moving with times. The company has been doing well in the schools segment and our slogan 'first to Bata and then to school' still catches on.

What are the industry problems?

The escalating cost of raw materials both locally and internationally is always a challenge. The imports too create problems. We do not mind legal imports and fair competition. However illegal imports are a problem to the Government as well since it kills the shoe cottage industry and deprives revenue by way of tax. Serious thought has to be given to this.

The high electricity charges too are another area of concern and at Bata we will soon introduce energy saving features.

Are wages for the industry in par with other countries?

Yes they are. However I am not sure if people can manage with the high cost of living.

You have been in Sri Lanka for over a year. How do you see Sri Lanka?

I did not take along time to adjust to the local culture. I do not feel unsafe in Sri Lanka and the business environment too is encouraging. The transport system needs to improve and this is a grey area. It's a beautiful country with great bio-diversity. I love the beaches and the up country as its beautiful. People are friendly and I love their genuine smile.

However as for food I am still getting used to eating Sri Lankan spice food. I am beginning to like them and string hoppers seem to be my favourite. The living standards in the City too are very high and the entertainment offered is the same as in other countries.

An employee with Bata global for over 33 years Mollo was last posted in Indonesia as Managing Director for two years.

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Bata Company

Fact file

The company was founded in 1894 in Czechoslovakia by the siblings Tomas, Anna and Antonin Bata. Innovative from the beginning it departs from century old traditions of the one-man cobblers' workshop.

Following year Antonin leaves the company to join the army, his sister Anna follows shortly after to get married. Tomas Bata takes over the company leadership alone and takes the business to Europe where it became very successful.

Bata was set up in Sri Lanka in 1950's.

Today Bata is one of the world's leading footwear retailers and manufacturers with operations across five continents managed by four regional meaningful business units (MBUs).

Bata's strength lies in its worldwide presence. While local companies are self-governing, each one benefits from its link to the international organisation for back-office systems, product innovations and sourcing.

Although Bata operates in a wide variety of markets, climates and buying power Bata companies share the same leadership points. Two important ones are product concept development and constant improvement of business processes in order to offer customers great value and the best possible service.

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Bata today:

Serves 1 million customers per day

Employs more than 40,000 people

Operates 5000 retail stores

Manages a retail presence in over 50 countries

Manages 40 production facilities across 26 countries

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My Boss

Cryshelle Van Dort has been with the Bata Shoe Company Ratmalana for over 27 years and has been working with expatriates for many years. Having joined the company as a secretary to the Purchasing Department and being in that position for 18 years her good management skills have driven her to be the Secretary for the Managing Director.

How challenging is it to work for an expat?

I really feel it's not difficult. If I look back I should say that it is easier than working with Sri Lankans. I feel I can be more independent when working with expats and this is something I like.

Do they ask a lot of questions about the country?

Yes, they always like to learn about the attitudes and culture of the country.

Do you think they feel lost in this country?

No. They are very confident as they have experience in working in other countries. They also double check the easiest way to get from one point to another as some times, roads can be confusing. I like to advise them not only on roads but on the perfect place to spend a holiday with his family.

They depend on my judgment which has always been pleasing for them. I love to be the travel coordinator.

Do you have to work long hours?

Some times yes. But I am used to it as I am a hard working person.

How does he spend his free time?

He likes to be with his family and likes the internet too to keep in touch with Bata international operations.