Hayleys Consumer’s new business plan blends resources with opportunities

Hayleys Consumer Products Limited (HCPL) the owner of a large and multi-sector portfolio of leading global brands recently announced a strategic re-orientation of the company’s areas of focus that will enable the company to concentrate on its strong existing portfolio as well as on new business categories that fit well with medium and long term profit and growth targets.

In this interview, HCPL CEO Trevor Reckerman elaborates on the company’s plans and prospects.

Excerpts:

* Hayleys Consumer has confirmed it is phasing out its involvement in consumer electronics. How will this affect the company’s prospects?

We expect it to have a positive effect in channeling our energies and resources into ventures in which we are particularly strong.

* Would your exit from consumer electronics affect the confidence that principals in other business segments have in the company?

On the contrary, they will recognise our intention to put our best resources where we have the best opportunities, instead of dissipating the strengths that have been accumulated over a considerable period of time.

* What do you now consider your core business areas, and what expectations do you have for them?

Our new Business Plan recognises that our primary business is in distribution and we want to be the best in that area, which for us means being the most competitive third party distributor in town.

In representing Fuji Film and Medical, Philips Consumer and Professional Lighting, we will initially focus on Imaging and Lighting Products where we command market leadership. P&G is essentially a distribution operation where we wish to be the best-in-class.

The other developing area is Hhealth care, particularly Pharmaceutical, where we intend to shortly offer our current agency Blue Cross as well as some new agencies excellent medical coverage and distribution capabilities.

* With your exit from electronics, will you be looking at new business segments, and if so what would they be?

Clearly we will look to consolidate our distribution/agency business and then move on to manage our proprietary brands through a process of marketing our own products and making strategic acquisitions.

* How do you propose to ensure a smooth transition of representation for your consumer electronics brands?

From the very outset, we had a very clear idea that these valued brands must enjoy a sustainable succession. It is for this reason that we chose Singer who we believe share our values and in addition manages one of the best retail and hire purchase networks in the country.

* Brands like Philips have been represented by Hayleys for many years. What were the factors that led to the decision to exit from this business segment?

The retail format in Electronics had evolved over the last several years into one that involves multiple brands offering consumers a one stop shop for their needs. Philips in particular was limited to technology based audio and video products only, whereas brands like Samsung or LG offered multiple products.

Our single minded focus on Philips was perhaps a constraint that we could ill afford. The dependence on consumer credit in the electronics business required big margins and a financial model that factored long outlays, aspects that we did not sufficiently control.

* In other business segments, like photo imaging for example, Hayleys Consumer has achieved and maintained dominant market shares. What plans do you have for these well-performing segments?

Indeed we have several opportunities that will be pursued in the near future. Digital imaging is one area that we must begin to explore with greater vigor, as is digital storage systems, areas in which Fuji has great expertise and potential.

* How will these plans impact on the bottom line of Hayleys Consumer and its contribution to the Hayleys Group?

Whatever business we do in future, our plans will be designed to improve the profitability of Hayleys Consumer primarily, and then make a significant attributable contribution to the Group as a whole.

* What are the Group’s long-term expectations for Hayleys Consumer?

Hayleys Consumer represents the group very significantly in the domestic market. It must therefore look good reflecting the business acumen and corporate values which are at the heart of Hayleys.

Therefore, while it must be financially strong and profitable, it must also become more relevant to the Sri Lankan consumer in a direct tangible manner, something that we hope to demonstrate in the not so distant future.