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Autumn/Winter ’06<br />
Volume 42/No.2<br />
Launching Our New Identity
Contents<br />
Articles<br />
View from the MD’s Desk 4<br />
Rupert Hogg charts a fundamental process of change within<br />
the Group’s structure and communications systems.<br />
Rethinking the Brand 6<br />
Creating a consistent look and feel for all our businesses.<br />
Project Lily 10<br />
Flowers go East.<br />
The Interaction Factor 11<br />
JF (Colombo) moves Human Resources up the agenda.<br />
Open Sesame! 12<br />
A dramatic new look for 186 Vauxhall Street, Colombo.<br />
Linking the Coffee Chain 14<br />
‘Our purpose is to serve our farmers’: a fresh view of<br />
the Colombian market.<br />
‘A Special Place in the Heart’ 16<br />
Revisiting the High Range, ‘a jewel in the former Finlay crown’.<br />
Pensioners’ Reunion 18<br />
Friends and former colleagues catch up.<br />
<strong>News</strong><br />
Head Office 19<br />
Tea Estates 19<br />
Tea Trading 22<br />
Tea Extracts 23<br />
Beverages 23<br />
Flowers 26<br />
Sri Lanka 27<br />
US 28<br />
Pakistan 29<br />
Announcements<br />
Births & Marriages 30<br />
Deaths inside back cover<br />
Front Cover A fresh new look for <strong>Finlays</strong>, but tea remains a constant.<br />
Inside Front Cover Roses, Flowers' primary crop, sleeved and ready for shipment.<br />
Back Cover Instant identification, from London to Nanjing: a soluble tea product sports<br />
our new logo.<br />
3
4<br />
View from the MD’s Desk Rupert Hogg<br />
The decision to make this move has not<br />
been taken lightly. <strong>Finlays</strong> is an old and<br />
venerable Scottish company, established<br />
as long ago as 1750, only five years after<br />
the battle of Culloden. During much of<br />
the ensuing 250 years the company<br />
has played a prominent role in the civic<br />
and commercial affairs of the city of<br />
Glasgow as well in the communities of<br />
Catrine and Deanston.<br />
However, we have not had a Scottish-based<br />
operational business for a decade and the<br />
larger of those former businesses were<br />
closed or sold in the decades prior<br />
to that. It is also the case that many of<br />
the smaller businesses that were started<br />
during the same period, such as Flowers,<br />
Tea Trading and Tea Extracts, have grown or<br />
evolved considerably to become significant<br />
businesses in their own right and have real<br />
prospects for rapid growth.<br />
First steps into China: the new joint venture tea extracts<br />
plant at Nanjing takes shape. Tony Barcroft (r) is seen here<br />
with George Chan (l), Director <strong>Finlays</strong> Hong Kong and<br />
David Jiang, Chairman of the Damin International Group.<br />
There is much going on at present, both within James Finlay<br />
and the broader markets in which we operate; I will make<br />
mention of some of these trends later in this article. However,<br />
without question, the most important piece of news that I have<br />
to report is tinged with sadness: that is the fact that the Head<br />
Office and Glasgow operations of James Finlay Limited are to<br />
move to London as of the middle of next year.<br />
These businesses are now led and managed<br />
from London. In addition, as some of the<br />
articles in this edition may illustrate, many<br />
of the competitive and consumer trends to<br />
which the individual group companies<br />
identify and respond now require a far<br />
greater degree of coordination across the<br />
Group than has been the case in the past.<br />
Thus, the driving thrust behind the decision<br />
to move the head office closer to some of<br />
our subsidiaries is underpinned by the<br />
desire to improve our ability to coordinate<br />
and communicate internally and therefore<br />
to improve the products and services that<br />
we offer our customers externally.<br />
That is the rationale behind the decision to<br />
move the head office to London and that is<br />
what we intend to achieve by so doing.<br />
However, none of this diminishes the fact<br />
that the move represents the end of an era<br />
and that, more importantly, it is likely to<br />
mean redundancies for the great majority of<br />
the current team that have worked in the<br />
Glasgow office and contributed so much to<br />
<strong>Finlays</strong>. I can only state that the Directors<br />
and Shareholders appreciate this and that<br />
the writing of this article offers me the<br />
opportunity to publicly thank those<br />
concerned for that contribution and for<br />
their continued support until the transition<br />
is complete.<br />
I hope that the reader will notice that this<br />
edition of <strong>Finlays</strong> Magazine has a new look<br />
and that the traditional tea leaf motif has<br />
evolved too. These changes result from a<br />
re-branding exercise that is described<br />
elsewhere in this edition (page 6).<br />
While the outcome may be visually striking,<br />
the exercise itself is but a logical step in a<br />
more fundamental process of change<br />
within <strong>Finlays</strong>.<br />
The first objective has been to move<br />
towards a functional and divisional<br />
structure and away from the Group’s<br />
traditional geographic basis. This process is<br />
incomplete as yet but, as an indication,<br />
several of the subsidiary businesses now<br />
have Managing Directors who are<br />
responsible for all of the activities of their<br />
division on a global basis, a much simpler<br />
and more customer-focused proposition.<br />
The second objective, to which I have<br />
already referred, comes from within the<br />
Group itself: the need for the Group to be<br />
more cohesive and coordinated in its<br />
approach to the market and to our major<br />
customers on issues that impact us all and<br />
which are important to that wider customer<br />
base. From a communications perspective,<br />
the inference of such trends is obvious; we<br />
need a common look and feel across the<br />
Group and we need to become more<br />
uniform and consistent in the way in which<br />
we present ourselves. I believe that this<br />
exercise has managed that evolution well<br />
and injected a desirable dose of freshness<br />
and modernity to our ‘look’ in the process.<br />
<strong>Finlays</strong> has a fine record for social and<br />
environmental responsibility; I hope that<br />
what we do on the ground demonstrates<br />
that there is real substance behind such a<br />
claim. To a great degree, the Fairtrade<br />
accreditation scheme, of which many<br />
consumers are aware, acknowledges these<br />
credentials. All of our flower farms and<br />
some of our tea estates have either obtained<br />
or are in the final stages of obtaining
Tea Estates Tea Trading Tea Extracts Beverages Flowers Logistics Services<br />
Kenya UK<br />
Tea<br />
Decaffeination<br />
UK<br />
UK UK<br />
Uganda<br />
Kenya<br />
China<br />
Sri Lanka Kenya<br />
Sri Lanka<br />
Malawi<br />
USA<br />
China<br />
USA<br />
Gulf<br />
Vietnam<br />
Kenya<br />
Fairtrade accreditation and they also<br />
comply with a series of other bodies that<br />
audit against material evidence of social<br />
and environmental standards.<br />
This is important for <strong>Finlays</strong>, not least<br />
because it resonates with our values and<br />
beliefs, but also because it is important to<br />
our customers; they take their<br />
responsibilities seriously in this regard. It is<br />
quite clear that they wish to source<br />
products from suppliers who can<br />
demonstrate a proven track record and who<br />
are genuinely interested in improving<br />
further in these areas; we are placing<br />
additional resources and a high priority on<br />
our Corporate Social Responsibility<br />
programme as a result.<br />
The current debate on climate change adds<br />
further impetus in this regard. There is<br />
broad consensus within <strong>Finlays</strong> that man’s<br />
activities have influenced and continue to<br />
influence the world’s climate and there is a<br />
strong desire to ensure that we do our bit<br />
to minimise our own impact. It is equally<br />
important that any plans that we develop<br />
are informed by fact and we have<br />
commissioned a Group-wide study to<br />
determine <strong>Finlays</strong> ‘carbon footprint’: what<br />
we emit but also what we might absorb, and<br />
to give us a quantifiable baseline from<br />
which to improve. I am confident we can<br />
make real progress here too; opportunites<br />
in the area of clean energy provision is one<br />
example of where work is already at a<br />
relatively advanced stage.<br />
From an operational and business<br />
development perspective there is activity<br />
aplenty too. The year 2007 will mark the<br />
Omniflora<br />
Germany<br />
USA<br />
Jetflowers<br />
Kenya<br />
Sri Lanka<br />
Temperature<br />
Controlled<br />
Logistics<br />
USA<br />
Inventory<br />
Management<br />
first stage of the Group’s expansion into<br />
China. There are two projects of note: the<br />
first, the establishment of a flower farm in<br />
Kunming is reported on (page 10).<br />
Sri Lanka<br />
Agencies<br />
Environmental<br />
Services<br />
Insurance<br />
Pakistan<br />
The second initiative is the establishment of<br />
a joint venture with the Damin Group to<br />
build and operate a tea extracts plant in<br />
Nanjing. The Tea Extracts division has<br />
worked closely and productively with<br />
Damin over the last two years. In addition<br />
to other businesses, Damin International, a<br />
Xiamen-based company, is the largest<br />
producer of tea extracts in China and has<br />
expanded rapidly and successfully in the<br />
domestic PRC market. <strong>Finlays</strong> and Damin<br />
have had a joint sales agreement to<br />
promote and sell each other’s products in<br />
their respective markets for some time. The<br />
new plant in Nanjing will allow both parties<br />
to strengthen their ties and to offer a<br />
broader product range to their mutual<br />
customers. The plant is due to be<br />
commissioned in 2007.<br />
2006 has been a satisfactory year for<br />
<strong>Finlays</strong>: the results reflect a mix of fortunes<br />
across the various companies but, overall,<br />
the highs outweigh the lows and we have<br />
made real progress against our business<br />
plans in all of the subsidiaries.<br />
It only remains for me to acknowledge that<br />
Pat Lockett, who has held the position of<br />
Group Finance Director for the last 11 years,<br />
has decided that he would prefer not to<br />
make the move to London and has instead<br />
opted to leave <strong>Finlays</strong> at the end of this<br />
year. This, I hope and suspect, does not<br />
mean that his active life in Scottish business<br />
circles will not continue. Pat has held an<br />
instrumental position over a period of<br />
<strong>Finlays</strong>' move away from its traditional<br />
geographic basis towards a functional and<br />
divisional structure is reflected by its new and<br />
consistent brand image.<br />
great change,<br />
encompassing the<br />
change of<br />
ownership and the<br />
transition from<br />
being a public to a<br />
private company;<br />
also the rapid<br />
development of<br />
many of the<br />
Pat Lockett<br />
subsidiary<br />
businesses.<br />
The Group has benefited from his presence<br />
and I know that he will be missed on a<br />
personal basis by many employees, past<br />
and present. Pat has promised to write an<br />
article for the next edition, reflecting on<br />
his time with the company; in the meantime<br />
we send him and Erica our best wishes for<br />
the future.<br />
5
6<br />
Rethinking the Brand Simon Large<br />
At the beginning of 2006 we decided to conduct<br />
a review of our brand. That is, we wanted to take<br />
a long hard look at how and what we communicate<br />
to our employees, customers and stakeholders,<br />
in order to understand how we are perceived<br />
and what we stand for.<br />
Having called upon the services of<br />
a London-based brand consultancy –<br />
FutureBrand – and many people<br />
across different parts of the business,<br />
it became immediately apparent<br />
that our current visual identity was<br />
inconsistently applied. Across the<br />
globe we have different company<br />
names, logos, websites, typefaces,<br />
taglines and signage (see above).<br />
This was delivering an inconsistent<br />
message and tone of voice.<br />
One of the main reasons for the<br />
lack of consistency was the limited<br />
guidelines and advice previously<br />
provided to the Group on the<br />
application and delivery of a clear,<br />
single, visual message. With the<br />
growth, expansion and increasing<br />
competition that we are experiencing,<br />
it was imperative to re-establish our<br />
brand’s personality, institute a<br />
clearer set of values and develop<br />
a new and unified visual brand identity.<br />
To start with, a detailed questionnaire<br />
was circulated to different people<br />
across the group, and supported<br />
with creative workshops. This work<br />
not only helped to evaluate us against<br />
our competition and establish what<br />
makes us unique, it enabled us to<br />
agree what we should stand for,<br />
going forward.<br />
Three main themes arose from<br />
this exploratory phase. First, we<br />
established that our rich heritage<br />
and tradition is fundamental to<br />
what we are today, and we are<br />
unanimously proud of it.<br />
Secondly, our knowledge and our<br />
passion for our products are equally<br />
prevalent. Thirdly, the care we<br />
have for the environment, our<br />
people and our communities is<br />
integral to our organisation and<br />
the way we behave. These values<br />
were considered along with our<br />
natural, contemporary and<br />
multicultural personality to inform<br />
and shape our new visual brand<br />
identity and the way we will<br />
communicate in the future.
Going forward, we will be identified<br />
as a single brand, with a single name –<br />
<strong>Finlays</strong> – which will be applied right<br />
across the Group. This conveys a<br />
strong, simple and consistent branded<br />
message to all stakeholders: that we<br />
are proud of the <strong>Finlays</strong> name and all<br />
that it has come to stand for. Therefore,<br />
all functions within the business, from<br />
Tea Extracts, to Flowers to Logistics,<br />
will adopt the ‘<strong>Finlays</strong>’ brand.<br />
We have created a new visual identity<br />
that’s fresh and contemporary, that will<br />
be consistently applied across all<br />
touchpoints, and supported with a<br />
set of clear and comprehensive<br />
guidelines. The visual identity still<br />
retains strong links with our heritage<br />
and exudes naturalness through a<br />
core green colour palette.<br />
One of the main drivers for refreshing<br />
our visual identity was our current<br />
corporate logo. Despite the fact that<br />
the tea leaf icon is representative<br />
of our heritage and experience in<br />
cultivating, distributing and packaging<br />
tea, it is not distinctive (many companies<br />
now have tea leaf logos), and no<br />
longer accurately reflects our diverse<br />
business functions. Our new logo is<br />
unique, contemporary and impactful,<br />
and more aligned with all our<br />
business divisions.<br />
Continued overleaf...<br />
7
8<br />
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To enable our offices and employees<br />
to create and develop platforms<br />
and materials for communications,<br />
we have created a range of applications<br />
along with our new brand guidelines.<br />
This includes new corporate<br />
stationery, printed literature,<br />
signage, vehicle livery and<br />
photography (which will be<br />
expanded in the future), all of<br />
which have the consistency that<br />
was previously lacking. We have<br />
also established clear standards<br />
for the application of the Swire<br />
brand to endorse the <strong>Finlays</strong><br />
brand. Again this was an area<br />
which had previously been very<br />
erratic due to the lack of guidelines.
We have created a distinctive<br />
visual identity for our Flowers,<br />
Services and Logistics businesses,<br />
in order to differentiate them<br />
from the tea and beverages<br />
businesses within the Group and<br />
provide them with a stronger<br />
presence within their markets.<br />
They retain the Group brand<br />
identity, but feature colour<br />
palettes that are inspired by their<br />
products, services and<br />
environments. The Flowers visual<br />
identity – comprising warm tones<br />
– is inspired by the flowers we<br />
grow and nurture on our estates<br />
in Kenya, whilst the colour palette<br />
for our Services and Logistics<br />
businesses – comprising cool tones –<br />
has been inspired by the<br />
functions of the cold storage and<br />
logistics business.<br />
Developing our new visual identity<br />
and creating the guidelines was<br />
the first necessary stage in<br />
re-launching the brand. The next<br />
crucial steps will be its consistent<br />
implementation across the Group,<br />
as well as our future adherence to<br />
these new standards.<br />
Simon Large<br />
Commercial Director<br />
Temperature<br />
Controlled<br />
Logistics<br />
Site A<br />
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massa.<br />
9
10<br />
Project Lily Nev Harries<br />
In 1996 Finlay Flowers established a joint<br />
venture with Hilverda Plant Technology, a<br />
well known and respected Dutch company<br />
specialising in the breeding and<br />
propagation of carnation, alstroemeria and<br />
limonium plants. The joint venture is<br />
involved in the production of standard<br />
and spray carnation cuttings here on our<br />
tea estates in Kericho. From a production<br />
area of 3 Ha, over 20 million cuttings are<br />
produced annually, of which a substantial<br />
proportion are exported to international<br />
markets including Japan.<br />
In an increasingly competitive market,<br />
rising airfreight rates represent a major<br />
cost. As a result, Hilverda are considering<br />
setting up satellite production facilities<br />
closer to key markets and have been<br />
exploring the potential of establishing a<br />
production facility in China. Since the start<br />
of our joint venture the relationship<br />
between our two companies has grown from<br />
strength to strength; Hilverda approached<br />
<strong>Finlays</strong> last year with a proposal to develop<br />
a project together in China where the<br />
former would operate a cuttings production<br />
facility in partnership with a <strong>Finlays</strong> cut<br />
flower project. A visit to Kunming was<br />
arranged in April this year when Tim<br />
Blackburn and I accompanied Hilverda<br />
Directors Jan Hilverda and Marius Tas and<br />
their China Representative Pieter Strooper.<br />
Kunming is the capital of Yunnan province,<br />
located in the south west of China. The<br />
Province has been at the forefront of cut<br />
flower development in China. Due to a<br />
unique combination of climate, topography<br />
and altitude, which enable a wide variety of<br />
flowers to be grown year round, the area<br />
surrounding Kunming and nearby Yuxi<br />
cities is ideally suited for cut flower<br />
production. The growth in this sector has<br />
been very rapid in Yunnan. Amazingly, the<br />
first farms were started as recently as the<br />
late ’eighties; yet, today, there are over<br />
4,000 Ha of flowers cultivated in this<br />
region, accounting for over 50% of China’s<br />
total cut flower production. In 2002 alone<br />
over 2 billion flowers were produced.<br />
The ten-year old joint<br />
venture between<br />
Finlay Flowers and<br />
Hilverda Plant<br />
Technology has put<br />
out a promising new<br />
shoot. Nev Harries,<br />
Assistant Executive<br />
Finlay Flowers,<br />
goes East.<br />
Yoshikazu Suzuki (Fuji-Plants), Yuuki Ban (Florist), Jan<br />
Hilverda, Pieter Strooper (Hilverda B.V.), Yoshihiro Sugai<br />
(Nissho Iwai), Marius Tas (Hilverda B.V.), Tim Blackburn,<br />
Nev Harries (<strong>Finlays</strong>) and representatives of Yingmao.<br />
The rapid development of the domestic<br />
market and proximity to regional markets,<br />
Japan in particular, are key factors in the<br />
success of the proposed venture, where<br />
<strong>Finlays</strong> would be looking to produce<br />
certified, premium quality cut flowers for<br />
niche markets. With this in mind we visited<br />
several farms to review operations. Whilst in<br />
Kenya it is not uncommon for flower farms<br />
to be in excess of 50 hectares, the majority<br />
of farms in Yunnan are family-run<br />
smallholdings, varying in size from a few<br />
hundred square metres up to half a hectare<br />
with very few projects over ten hectares.<br />
The visit highlighted the potential of this<br />
venture and the significant advantages<br />
which our Kenyan experience could afford.<br />
Since this initial visit we have been working<br />
closely with our Swire colleagues in Beijing<br />
and Hong Kong and with representatives of<br />
the Yunnan Flower Association to identify<br />
potential locations for the development of a<br />
commercial project. At this stage two<br />
potential sites have been identified with the<br />
preferred candidate situated approximately<br />
one hour’s drive northwest of Kunming in<br />
the Songming area. In addition to excellent<br />
road and utilities infrastructure, an<br />
additional advantage of this potential site is<br />
that the new Kunming Airport, due to be<br />
completed in 2009, is located on the<br />
Songming side of the city, presenting rapid<br />
and convenient access to market. At the<br />
time of writing, a further visit to Kunming<br />
was planned for November.
The Interaction Factor Mithraka Fernando<br />
A conscious effort has been made to foster<br />
open, two-way communication through a<br />
number of initiatives. For the past 15<br />
months, a monthly Core Team Brief by the<br />
Chairman has successfully disseminated<br />
important news and information to the<br />
Executive Committee. Thereafter, each<br />
divisional head adds a local brief and<br />
communicates the findings to all staff.<br />
Recently this process was extended to<br />
cover all manual workers as well. At the<br />
local brief, employees are encouraged to<br />
ask questions. Those that divisional heads<br />
are unable to answer are referred to the<br />
directors for answers.<br />
The new Chairman Kumar Jayasuriya, who<br />
assumed office in April this year, has<br />
initiated discussions with staff officers,<br />
sharing his vision for the Company and also<br />
listening to their ideas and answering<br />
questions. It is hoped to maintain this new<br />
line of open communication by repeating<br />
the exercise twice a year.<br />
A suggestion scheme, branded<br />
“Brainwaves”, was launched in May, with an<br />
encouraging 118 suggestions being received.<br />
Cash prizes were awarded to those who<br />
made the eight best suggestions which the<br />
Company felt able to implement.<br />
Special Brainwaves boxes have been<br />
installed prominently in every location<br />
to make the submission process simple.<br />
The competition will be held twice a year<br />
in future, with the winners being<br />
rewarded, recognized and featured in<br />
the Company <strong>News</strong>letter.<br />
A formal grievance-handling process is in<br />
the development stage; this, it is hoped, will<br />
provide employees with a channel through<br />
which complaints can be addressed and<br />
minor issues prevented from escalating into<br />
bigger problems. In the interim, anyone with<br />
a grievance has been requested to write to<br />
the HR division; he or she has the promise<br />
of a written response after consultations<br />
with the necessary personnel.<br />
Beginning with the October 2006 issue, the<br />
company newsletter <strong>Finlays</strong> <strong>News</strong> aims to<br />
reach out to the bulk of the workforce by<br />
publishing two pages in Sinhala. The<br />
circulation of the newsletter was also<br />
increased with every single employee<br />
receiving an individual copy. Depending on<br />
feedback, the next step is likely to be the<br />
launch of a separate, Sinhala language<br />
publication, tailor-made for its readership.<br />
The newsletter, in addition to disseminating<br />
information, also acts as a forum where<br />
employees are able to express their views<br />
and exercise their creative talents. Typically,<br />
employees would take the newsletter home,<br />
offering management a means by which to<br />
communicate with the former’s family<br />
members as well.<br />
The resounding success of the inaugural<br />
<strong>Finlays</strong> Kiddies’ Art Competition in 2005<br />
has made the event an annual feature,<br />
providing an opportunity for children of<br />
all employees, whether director or worker,<br />
to sit together and take part in the fun as<br />
members of a single family. The featuring<br />
of winning entries as Christmas cards acts<br />
as an added incentive for employees to<br />
enter their children for the competition.<br />
The traditional year-end party, hitherto<br />
confined to higher-ranking staff, will be<br />
thrown open, from this year onwards, to<br />
cover every single employee of the Group.<br />
The Company hired an entertainment<br />
park in Colombo for this year’s event at<br />
which around 1500 <strong>Finlays</strong> employees and<br />
their family members converged (see page<br />
27). Other Group-wide sports and<br />
recreational activities have included a<br />
six-a-side cricket tournament in July and a<br />
Sports Carnival in September where<br />
For over a century James Finlay<br />
& Co. (Colombo) has focused on<br />
steady growth. Today, says Mithraka<br />
Fernando, Head of Human Resources<br />
Development, ambitious new targets<br />
and objectives centre on the<br />
workforce, currently identified as<br />
the key element in transforming<br />
the Company’s future.<br />
The Childrens’ Art Competition: fun for one big family.<br />
employees were given the opportunity to<br />
display their sporting prowess.<br />
The refurbishment of the Colombo office<br />
(see page 12) has been carried out in line<br />
with the open office concept - breaking<br />
down physical barriers and providing an<br />
environment which enables people to<br />
interact and work across divisions. The<br />
concept initially resulted in culture shock;<br />
most employees were used to working in<br />
office environments with rooms and<br />
cubicles! However, it is hoped that the<br />
obvious advantages of the open office<br />
system will, in the long term, foster<br />
increased integration and interaction.<br />
The training and development activities of<br />
the Company have been accelerated, the<br />
emphasis being on creating a ‘learning’<br />
organization. Two noteworthy initiatives in<br />
this regard were the JF Management<br />
Proficiency Program and the JF Certificate in<br />
Basic Management which saw around 50<br />
managers and executives taken through an<br />
eight-session, management development<br />
program. Group assignments were set, with<br />
each group having to write a report on<br />
<strong>Finlays</strong>-specific topics and to make a<br />
presentation to the Executive Committee.<br />
Ongoing training initiatives for all<br />
categories include productivity based<br />
training, safety and health, and a Groupwide<br />
awareness program on HIV/AIDS. A<br />
guest lecture series was also inaugurated so<br />
that employees in the executive grade could<br />
learn from the success stories of those in<br />
business as well as other areas.<br />
In keeping with the Company’s tag line:<br />
“Enriched by the past, transforming the<br />
future”, the HR initiatives described above<br />
will, it is hoped, transform working life for<br />
the people in whose hands lies <strong>Finlays</strong>’<br />
exciting future.<br />
11
12<br />
Designing an open plan office to promote greater<br />
interaction between <strong>Finlays</strong> Colombo staff was the<br />
challenge recently undertaken by Srinath Jayasuriya,<br />
Manager Buildings Division. He and his team had<br />
previously done re-modeling jobs on minor sections<br />
of the premises, but here was something far more<br />
exciting. The results, says Srinath, were to prove<br />
well beyond expectations.
Open Sesame! Srinath Jayasuriya<br />
I count myself fortunate in having been<br />
chosen to coordinate almost all of such<br />
transformations at 186 Vauxhall Street,<br />
between my stints at the Tea Warehouse<br />
and stage one of the Cold Storage, located<br />
in Welisara. Looking back: in 2002, what<br />
had been the tea blending floor for many<br />
years underwent a dramatic change in<br />
becoming the present office of Cathay<br />
Pacific, our Airline Division. Two years<br />
later the upper floor of the same building,<br />
having languished as storage space for the<br />
paper sacks which replaced the traditional<br />
tea chests, was transformed for renting as<br />
top-of-the-range office space.<br />
So, in April this year, I and the handful<br />
of colleagues who formed the Buildings<br />
Department, took it upon ourselves to<br />
re-seat virtually all of the divisions in<br />
Colombo on two floors of the same<br />
main office building.<br />
Our new chairman, Kumar Jayasuriya,<br />
required a model, open-plan office, to<br />
promote staff interaction and<br />
communication, a concept that had<br />
already shaped many of the business<br />
houses in Colombo.<br />
Contracting out the various tasks was<br />
quickly done but it took weeks to work out<br />
when the last person would take his seat.<br />
The logistics were very demanding; given<br />
the fact that some people already<br />
working on the ground floor were<br />
awaiting relocation to the floor above,<br />
the refurbishment had to be tackled in<br />
two stages.<br />
Noise, dust and the lack of air conditioning<br />
were potential irritants but our colleagues<br />
deserve high praise for the great degree of<br />
tolerance they displayed towards me and<br />
my support staff.<br />
The supplier of furniture to <strong>Finlays</strong> for<br />
many years produced drawing after<br />
drawing, determined, with every change, to<br />
achieve an ideal outcome. The final tally, for<br />
both floors, was a mind-blowing 30<br />
drawings. I even had a temporary desk at<br />
the supplier’s office at which I spent a good<br />
part of the first few days of the project.<br />
We now accommodate six different divisions<br />
of the Company on the ground floor and<br />
seven on the upper floor, each with varying<br />
head counts. Both floors have meeting<br />
rooms in keeping with their particular<br />
requirements, also separate document<br />
storage areas; these latter will subsequently<br />
be racked as their contents grow.<br />
Although the office looks compact with<br />
regard to the positioning of staff, there is<br />
provision for reasonable expansion within<br />
each division The bright, white walls will<br />
soon be hung with prints of the now<br />
diversified Finlay operations. In years gone<br />
by these same walls lent their ears to the<br />
sounds of grading, tasting and sampling,<br />
the main operation here before the Tea<br />
Division re-located to Welisara.<br />
Window blinds are of pinhead perforation<br />
which permits ample daylight and provides<br />
a welcome view of the well laid out garden,<br />
cherished and admired by generations of<br />
Finlay employees. Energy saving fixtures<br />
control the electricity, cutting out the use of<br />
unnecessary artificial lighting.<br />
We did not forget the washrooms which<br />
have been re-modeled to the highest<br />
standards, with the latest in modern<br />
washroom hygiene gadgetry chosen by<br />
Thushara Agus who heads the Healthcare<br />
division. Taking the initiative here,<br />
Thushara led an almost all-ladies team,<br />
which moved into occupation during the<br />
stages of work-in-progress. They even went<br />
to the extent of celebrating the occasion by<br />
organizing a traditional breakfast of milk<br />
rice and sweetmeats for all ‘colleagues to<br />
be’ in this shared working environment.<br />
Among the many other stalwarts who put<br />
their shoulders to the wheel, appreciation is<br />
due to Mithraka Fernando, the Head of HR,<br />
who perfectly timed two workshops on the<br />
‘5S’ method of office procedure for every<br />
one of us. I should also mention the<br />
commitment of the young IT team lead by<br />
Vamadevan Parthiban. During times of night<br />
work, we relied on such knowledgeable<br />
gentlemen as Sudesh Wijethilaka and the<br />
new recruit Nimantha Arambegedera, who<br />
coordinated the cabling works for power,<br />
telephones and computers.<br />
We now run a system of access control<br />
for the office by means of redesigned<br />
Company ID cards which operate on<br />
proximity readers.<br />
With interaction the name of the game, the<br />
tea breaks provide all of us with an<br />
opportunity to meet on the top floor while<br />
preparing our own cups of tea. It’s farewell<br />
to memories of a khaki-clad tea boy pouring<br />
from a kettle! Remarkably, this new form of<br />
tea service has turned out to be popular<br />
with all levels of staff. Another popular<br />
innovation has been the creation of an<br />
office pastry shop in an area with main<br />
road frontage; we now have a place to pick a<br />
lunch or order a birthday cake on behalf of<br />
a colleague.<br />
With the refurbished office up and running<br />
and given plenty of enthusiasm for change,<br />
we are all working in the utmost harmony!<br />
13
Clockwise:<br />
Colombian farmer, Orlando, examining his coffee crop.<br />
Alan Davies (r) gets to work with Expocafe’s chief<br />
taster, Steven Diaz.<br />
Orlando shows the visitors his coffee pulping machine.<br />
Alan with Expocafe’s Trading and Operations Chief,<br />
Alvaro Ramirez.
Linking the Coffee Chain Alan Davies and Michael Pennant-Jones<br />
Finlay Beverages is the largest private label roast and ground coffee packer in<br />
the UK supplying private label coffee to major retailers. Colombia is important<br />
to us, as the single largest origin for our business and a crucial component of<br />
many of our blends. Finlay Beverages purchase over 700mt of Colombian coffee<br />
per annum, and yet staff had little first-hand experience of how the coffee was<br />
processed, sourced and marketed. Coffee Buyer and Blender Alan Davies and<br />
CSR Manager Michael Pennant-Jones set off to explore the coffee chain.<br />
The high Andean mountains stretch from<br />
the borders of Ecuador and Peru in the<br />
South to the Caribbean Sea in the North,<br />
abutting the Pacific Ocean in the West and<br />
the rainforests of the Amazon Basin in the<br />
East. This vast area accommodates a host<br />
of micro climates and soil types which<br />
facilitate the production of a rich and<br />
diverse variety of an important crop for<br />
<strong>Finlays</strong>, coffee.<br />
Colombia is the largest producer of fully<br />
washed arabica coffee in the world, with<br />
an average crop of over 11 million bags<br />
(660,000 mt). The majority of the coffee<br />
that we purchase comes from the Central<br />
Andean growing areas, forming a triangle<br />
cornered by Bogota, Periera and Medellin,<br />
and marketed under the generic name of<br />
“Medellin Excelso”. These plantations are<br />
amongst the oldest in Colombia, being<br />
established in the 19th century; they<br />
produce a full bodied coffee with a nutty<br />
flavour and light acidity.<br />
Our visit took in meetings with the<br />
marketing bodies, the Federation of<br />
National Coffee Growers (FNC) and<br />
Expocafe; the farmers’ representatives from<br />
whom we buy our coffee directly; farmers in<br />
both the Periera and Bogota areas; and the<br />
mills where the coffee is sorted and bagged.<br />
‘Our purpose is to serve our farmers’,<br />
remarked an employee of the FNC during a<br />
presentation at the Federation’s offices.<br />
Typical marketing speak, some might say;<br />
however, after a few days in Colombia we<br />
realised that this philosophy genuinely<br />
underpins the country’s coffee industry. It<br />
explains why Colombia has one of the most<br />
sophisticated and successful smallholder<br />
systems in the world, renowned for its<br />
consistent high quality of coffee.<br />
Founded over 80 years ago, the FNC was set<br />
up to organise small farmers in the coffee<br />
industry. Its ownership is a complex web,<br />
stretching between the farmers, their cooperatives<br />
and mills to ensure that there<br />
are checks and balances at all levels.<br />
This cross-ownership gives a stable<br />
platform but also allows freedom for the<br />
farmer to sell coffee to anyone, and to do<br />
what is best for him. Intense market<br />
competition within a heavily organised<br />
sector, focused at all levels on serving the<br />
farmers, has resulted in growth and huge<br />
benefits for the latter and for the country.<br />
The FNC guarantees not only a minimum<br />
price for Colombian coffee, based on<br />
international markets, but also guarantees<br />
to purchase that coffee at the minimum<br />
price; this ensures that all competitors have<br />
to buy above it. Guaranteeing a minimum<br />
price is not enough to ensure that this<br />
system works; thus, only high quality<br />
coffees can be exported from Colombia,<br />
after first being checked by the FNC.<br />
An amazingly multi-functional organisation,<br />
the FNC not only works as a support and<br />
trading house for coffee, but also<br />
undertakes shipment checks on all coffee<br />
exported, to ensure that nothing of substandard<br />
quality leaves the country.<br />
Additionally, it also works on agricultural<br />
extension, infrastructure projects,<br />
purchasing coffee, trading and shipping<br />
coffee around the world and has<br />
shareholdings in all member co-operatives.<br />
Interestingly, at the time when FNC<br />
purchased 80% of Colombian coffee there<br />
was a realisation that this was not good for<br />
the farmer as there was little competition.<br />
The solution was to set-up another<br />
company, Expocafe, to compete with them<br />
in buying coffee from smallholders. Today<br />
Finlay Beverages source directly from both<br />
these companies.<br />
Overall, we were deeply impressed with the<br />
professionalism and organisation of the<br />
farmers who are truly passionate about<br />
their coffee; also with the excellent levels of<br />
quality control and, at the end of the day,<br />
with a superb range of coffees. It has to be<br />
said Colombian coffee will never taste the<br />
same again.<br />
Orlando, owner of a coffee smallholding on<br />
a mountainside in the Risaralda, took us on<br />
a tour of his property. The coffee grows on<br />
steep slopes, with riparian strips by a<br />
stream; bamboo is planted to absorb the<br />
water and provide building material; there<br />
are a couple of hectares of coffee and<br />
washing and drying areas for the crop, all<br />
laid out with good practices in mind.<br />
On the plateau below, large areas of<br />
grassland now under cattle were, until a few<br />
years ago, largely coffee farms. These are<br />
disappearing not only because the lower<br />
quality of coffee they produce is prone to<br />
disease, but also due to a growing economy<br />
where labour costs have risen substantially.<br />
On Orlando’s farm the extended family is<br />
used to assist at cropping times; and the<br />
personal attention he can give to the bushes<br />
helps keep disease to a minimum and<br />
farming sustainable.<br />
In common with many smallholders,<br />
Orlando is continually investing in his farm;<br />
the standards he maintains compare<br />
favourably with some of the larger farms.<br />
Sustainable practices are well evident, with<br />
minimal use of chemicals through increased<br />
inspection and management of the bushes.<br />
The FNC provides technical support even to<br />
the level of developing mycorrhizas to<br />
replace fertiliser. To support smallholders<br />
like Orlando the FNC have been exploring<br />
product diversification programmes<br />
including the growing of fruit trees,<br />
macadamia nuts, and bamboo for building;<br />
also partnerships with large companies<br />
such as Dole of the USA on plantain.<br />
All this ongoing work and constant<br />
improvement will, hopefully, assist farmers<br />
like Orlando to continue to meet the<br />
expectations of the market, yet allow him to<br />
profit from his investment in and his<br />
attention to a high quality product that is<br />
the mainstay of <strong>Finlays</strong> coffees.<br />
15
16<br />
‘A Special Place in the Heart’ William Henderson<br />
The historic landscape of tea in the Indian<br />
Subcontinent has recently undergone<br />
seismic change. After more than 120<br />
years, <strong>Finlays</strong> called a halt to its<br />
operations in Bangladesh (see our last<br />
edition). Meanwhile, an employee buy-out<br />
by the 12000-strong work force in 2005<br />
once again changed the fortunes of Tata<br />
Tea Limited’s South India Plantation<br />
Division, founded in 1878 by James Finlay<br />
& Co. Ltd., and run by the company until<br />
its Indian estates were finally sold to Tata<br />
in 1982. We asked Bill Henderson, a<br />
former High Range General Manager and<br />
co-author of ‘Facets of a Hundred Years<br />
Planting’, to take a nostalgic look back at<br />
early days in South India’s incomparably<br />
beautiful Kanan Devan Hills, a place<br />
regarded by an earlier generation as the<br />
jewel in the company’s crown.<br />
The original company was formed in 1895<br />
within the area of the Kanan Devan<br />
Concession - some 230 square miles, first<br />
granted in 1877 to one John Daniel Munro.<br />
The area, known as the High Ranges, by<br />
virtue of their wild and rugged nature,<br />
includes Aneimudi, the highest mountain in<br />
India south of the Himalayas. All this was to<br />
be transformed, by generations of<br />
venturesome planters into a veritable<br />
Shangri-la.<br />
Under the Finlay umbrella, former<br />
proprietary plantations were developed and<br />
new extensions opened, initially in rubber,<br />
chinchona and coffee. Life in those times for<br />
both planter and labourer was no sinecure:<br />
travel in and out of the hills was by bullockcart,<br />
horse-back, 'dooly' (litter) or, in<br />
extremis, 'shanks pony'.<br />
Torrential monsoon rains often washed out<br />
bridges and roads. The year 1924 saw a<br />
particularly savage monsoon devastate great<br />
swathes of the district, take many lives and<br />
go down in High Range history as a date<br />
never to be forgotten. The Light Railway had<br />
to be discontinued after extensive damage,<br />
factories were destroyed along with labour<br />
lines, bridges, buildings and people.<br />
The flood nevertheless resulted in the<br />
development of district-wide roads and,<br />
later, an aerial ropeway. These greatly aided<br />
the Munnar township's ability to provide<br />
basic necessities to management, staff and<br />
labour, previously frequently bereft of<br />
supplies for weeks on end.<br />
It also focused attention on the urgent<br />
necessity of improving health measures in<br />
the face of plague and cholera, both<br />
prevalent in the low-country and brought in<br />
by recruited labour, despite the installation<br />
of plague check-posts. The General Hospital,<br />
established in the early days just outside the<br />
town, was completely renovated and moved<br />
into the town centre, while medical facilities<br />
were extended to each plantation. As selfsufficiency<br />
became vital, plans were laid for<br />
the establishment of a farm in the Kundaly<br />
Valley and for a store at Munnar. Thus, the<br />
MSA or Munnar Supply Association came<br />
into being and remains so today.<br />
Finlay's forged ahead with a programme of<br />
improvement; by 1915 there were 16<br />
modernised tea factories, some hydro<br />
driven, others by electricity supplied by two<br />
power houses built in 1900 and 1910 at<br />
Pullivassal and Periakanal; other motive<br />
power derived from turbines and waterdriven<br />
Pelton wheels. Side by side with these
improvements, transportation for the<br />
movement of leaf, teas and machinery<br />
evolved slowly, until the arrival of the<br />
tractor transformed plucking and<br />
processing standards.<br />
The horse, however, was the planter's<br />
mainstay for decades, until motorcycles<br />
became generally available. In 1904, a<br />
Mounted Infantry Company known as The<br />
Southern Provinces Mounted Rifles(SPMR)<br />
was formed; this led to the introduction of<br />
horses to the High Range where they<br />
rapidly became integral not only to<br />
plantation supervision, but to the planters’<br />
social life, facilitating visits to neighbours<br />
and to the Club.<br />
Stories of such visits, some perhaps<br />
apocryphal, abound. One evening, after<br />
much conviviality, two senior planters exited<br />
the Club, mounted up, bade each other<br />
goodnight and rode off - each to wake up<br />
the following morning in the other's<br />
bungalow! From the Club, a path meanders<br />
up through the tea to a junction of several<br />
other routes where it was customary for a<br />
group to pause for a last smoke before<br />
heading back to their respective estates,<br />
their path lit only by the glow of a stirruplantern.<br />
This was, and to this day still is,<br />
called Cigarette Point.<br />
In 1910, an allowance of Rupees 30 was paid<br />
to maintain a horse, but inflationary spirals<br />
took their toll as always and, in 1971, the<br />
last allowance paid was Rupees 300. It is<br />
interesting to note that in the same year,<br />
an Assistant Manager received, on marrying,<br />
only an additional Rupees 125 on his<br />
Dearness Allowance - but then horses<br />
do eat more!<br />
Travel times, of course, decreased with the<br />
introduction of the motorcycle, car, lorry<br />
and tractor. In the 1920s, planters going<br />
from Munnar to play rugby in the Nilgiri<br />
Hills, required to take a week's leave as the<br />
150 mile journey alone took three to four<br />
days. The same journey, by car today is<br />
achieved in about four to five hours.<br />
The early planters may have worked and<br />
played hard but did not neglect the<br />
spiritual. The absence of a church resulted<br />
in one committee minute recording: "One<br />
gentleman remarked that he had heard<br />
discontent voiced at the Club library being<br />
made use of for church services, thus<br />
preventing members from making use of<br />
the billiard room".<br />
A pretty little church was duly built and<br />
consecrated in 1911. Despite inconsistencies<br />
of religious enthusiasm over the years,<br />
Christ Church continues to be used by all<br />
Protestant denominations, including the<br />
local Tamil and Malayali congregations.<br />
New Assistants had always been required to<br />
learn the Tamil language; in the 1950s, the<br />
reward was either Rupees 1000 - or a re-sit;<br />
failure earned a passage home! One such<br />
new entrant, a decade earlier, was advised<br />
by the then General Manager of this<br />
requirement. His manager helpfully chimed<br />
in, "Yes sir, of course. I actually learnt my<br />
Tamil from 'Inge Va' (a local textbook whose<br />
title translates as 'Come Here'). In answer<br />
the GM roared: "I don't care what her name<br />
was. This boy must learn the vernacular!"<br />
The High Range has always held a special<br />
place in the hearts of its planters and was<br />
the envy of many other districts: primarily<br />
for the sheer natural beauty of its situation,<br />
its social life and its renowned hospitality to<br />
all incomers. Those of us who spent long<br />
periods of our lives there were privileged to<br />
have experienced a unique existence.<br />
William Henderson<br />
St Andrews<br />
17
18<br />
Pensioners’ Reunion<br />
The lunch party to celebrate <strong>Finlays</strong> Pensioners’ 26th annual Reunion was<br />
held on 30 June. Almost 100 guests: present-day directors, executives and<br />
staff, as well as former employees, gathered in the graceful surroundings<br />
of The Painters’ Hall in the City of London to catch up with old friends and<br />
colleagues, hear the latest news of developments within the group and<br />
enjoy a superb meal.<br />
Those present....<br />
DIRECTORS, EXECUTIVES AND STAFF<br />
JAMES FINLAY LIMITED<br />
Michael & Caroline Todhunter<br />
Rupert Hogg<br />
Michael Ferguson<br />
Duncan Gilmour<br />
James Hughes-Hallett<br />
Peter Johansen<br />
Simon Large<br />
Pat Lockett<br />
Giles Weaver<br />
Tim & Susie Blackburn<br />
Nev Davies<br />
Paul Wythe<br />
Debbie Burke<br />
FINLAY TEA SOLUTIONS UK LIMITED<br />
Richard & Marie-Alice Darlington<br />
Tony & Maureen Barcroft<br />
Rob Corsan<br />
Mike & Clare Jones<br />
Mike Mellins<br />
Anna Schiavo<br />
Sue Wills<br />
FINLAY BEVERAGES LIMITED<br />
Neil Willsher<br />
Paul Jasper<br />
PENSIONERS OF JAMES FINLAY LIMITED<br />
Albert Baigent<br />
Clifford & Dorothy Bell<br />
Val Homer<br />
Ronnie Monk<br />
Peter & Jan Smail<br />
Bill & Maureen Stone<br />
PENSIONERS OF FINLAY BEVERAGES<br />
Irene & Harry Adams<br />
Audrey Arnold<br />
John & June Bryant<br />
Margaret Burrows<br />
Terry Cheetham<br />
Tony & Dorothy Clark<br />
Barbara Cromarty<br />
Ethna Duffy<br />
Honor Elvin<br />
Jan Feltham<br />
Shirley & Bob Garnett<br />
Barry & Susan Gibson<br />
Dorothie Hardy<br />
John & Rita Heath<br />
Gordon & Rhona Hill<br />
Ted Jones & Marilyn Carpenter<br />
Ernie Morgan<br />
Raymond & Anneke Orr<br />
Elfi & Fred Osborn<br />
Sidney & Gladys Paine<br />
David & Hilary Payne<br />
Olive Rimmer & Rosemary Lacey<br />
Mike & Mari Robbins<br />
Ron & Sylvia Smith<br />
John Tomlinson & Jenny Tomlinson Walsh<br />
Eric Webb<br />
Elsie Wilshire & Diana Childs<br />
PENSIONERS OF TEA COMPANIES<br />
Tim & Anthea Barton<br />
Jim Coutts<br />
Geoff Field<br />
Norman & Fleur Frew<br />
Chris & Mitzi Marley<br />
Gillian Ryan<br />
Leslie & Pat Stewart-Smith<br />
Hugo & Gillie Yorke-Davies<br />
PENSIONERS OF S H LOCK & CO LIMITED<br />
William & Caroline Atkins<br />
John & Pearl Large<br />
PENSIONERS OF BUCHANANS<br />
WAREHOUSES LIMITED<br />
Roy Olive<br />
John Reid
<strong>News</strong><br />
Head Office<br />
Glasgow Office Outing<br />
Tea Estates<br />
Kenya Update Nev Davies<br />
At the time I<br />
prepared the last<br />
update, Kenya was<br />
recovering from a<br />
severe drought which<br />
had very significantly<br />
reduced the<br />
availability of all<br />
grades of tea on the Mombasa auction.<br />
By the end of March, production of leaf<br />
tea had fallen to 45% of budget. There<br />
was an upside to this, however, in that<br />
prices returned to levels that had not<br />
been experienced since the late ’90’s,<br />
and although crop levels on the JF(K)<br />
estates were well below budget,<br />
nevertheless the good prices have more<br />
than compensated for the shortfall over<br />
the balance of the year. By late August<br />
the much stronger tea supply position<br />
in Mombasa had resulted in a fall in the<br />
prices for all teas; however, they have<br />
remained reasonably firm and at levels<br />
better than budget. The JF(K) estates<br />
have recovered well from the effects of<br />
the drought, and production is now at<br />
normal levels.<br />
The old adage states that every cloud has<br />
a silver lining but, in the case of JF(K),<br />
some Estate Managers have come to<br />
associate that ‘silver’ with hail. The<br />
damage as a result of hail-stones has<br />
been particularly bad this year, with<br />
some areas being repeatedly subjected to<br />
severe storms and hail damage. In years<br />
gone by, attempts were made to reduce<br />
the severity of hail damage by ‘seeding’<br />
the storm clouds with microscopic<br />
crystals, launched from sky-rockets, but<br />
the cost of doing so usually exceeded any<br />
benefit. The problem with hail is that it<br />
affects everything from a pluckable shoot<br />
down to a new bud; it takes about two<br />
months for a shoot to form from a new<br />
bud.<br />
As a strategic response to the long-term<br />
trend of falling tea prices, rapidly<br />
escalating labour costs and a stubbornly<br />
strong Kenya Shilling, the decision had<br />
been taken to significantly expand the<br />
area being mechanically harvested. On<br />
the one hand, this offered an opportunity<br />
to significantly lower costs of production,<br />
but the programme has not been without<br />
its challenges. Although the Company<br />
The Full <strong>Finlays</strong>!<br />
Glasgow staff (l-r)<br />
Pat Lockett, Duncan<br />
Gilmour, Kerr Napier<br />
and Peter Stabler<br />
strut their stuff at the<br />
office outing to a local<br />
adventure centre on<br />
25 August.<br />
had repeatedly stated that employees<br />
would not be made redundant as a result<br />
of this change of policy, unfortunately<br />
this development was interpreted by<br />
various parties as being against the best<br />
interests of the Government and the<br />
Trade Union movement. Fortunately, this<br />
issue has now been amicably resolved<br />
and the mechanisation programme is<br />
being successfully introduced.<br />
A very thorough study has been<br />
completed, which revealed that the<br />
estates do not have sufficient reserves of<br />
eucalyptus to provide the renewable<br />
energy requirements for the future needs<br />
of the Kericho-based businesses. JF(K) has<br />
now embarked on a five-year programme<br />
which will see a large area of the old, lowyielding<br />
tea replaced with eucalyptus.<br />
Some of the old tea will be replaced with<br />
new varieties of high-yielding clonal tea,<br />
to ensure an adequate supply of leaf to<br />
both the black tea factories and the Tea<br />
Extracts Division. The clonal tea is much<br />
better suited to mechanical harvesting,<br />
and this advantage provides a much more<br />
attractive return on the very significant<br />
investment required.<br />
19
20<br />
<strong>News</strong><br />
Tea Estates continued...<br />
Kenya <strong>News</strong><br />
A Home for Kericho's Orphans Duncan Gilmour<br />
It is a sad fact that the spread of HIV/Aids<br />
and related illnesses is now the most<br />
frequent cause of death in Kenya. All too<br />
often this results in an ever increasing<br />
number of orphaned children, many of<br />
whom are also born with the disease.<br />
For a number of years James Finlay (Kenya)<br />
has collaborated with the Walter Reed<br />
Foundation to help fight HIV/Aids by the<br />
provision of medicines and appropriate<br />
education programmes. For some time,<br />
however, Nev Davies and his team have<br />
been considering how best to help some of<br />
the many orphaned children in Kericho and<br />
the surrounding community. In particular<br />
they wanted to provide a facility which<br />
would give the children the opportunity to<br />
build the secure future they might otherwise<br />
be denied.<br />
To this end they conceived the idea of<br />
building a children’s home on a plot of land<br />
on the Company’s Estate, with construction<br />
and running costs being met by way of<br />
charitable donations. Almost before the<br />
idea got off the ground, the project<br />
received an amazing boost as a result<br />
of the generosity shown by participants<br />
on the 2006 Executive Programme at<br />
Stanford University in California.<br />
Rupert Hogg, who had been on this course<br />
in 2005 and was aware that a fund raising<br />
Uganda Update Laurie Davies<br />
After a very<br />
disappointing<br />
performance in 2005, this<br />
year looks set to be a<br />
record year for JFU,<br />
certainly in terms of<br />
average selling prices for<br />
our black tea and in<br />
profitability.<br />
The regional drought that was experienced at<br />
the end of last year, going into the first quarter<br />
of this year, was less severe in the west of<br />
Uganda than in many other parts of the region.<br />
As a result, tea production volumes were not<br />
significantly below targets, while the auction<br />
prices ratcheted up significantly due to the<br />
shortage of teas in Mombasa.<br />
This higher level of auction prices was<br />
sustained for the first eight months of the<br />
year, but has more recently dropped back to<br />
lower levels. The outcome for JFU was a very<br />
strong performance in the first three quarters,<br />
which will not be matched in the final quarter,<br />
but will still result in a very satisfactory<br />
outcome for the year.<br />
event would be held at the end of the<br />
programme, asked JB Rae-Smith of Swire<br />
Pacific Offshore, who attended this year’s<br />
programme, to persuade his colleagues to<br />
adopt the children’s home as a focus for<br />
this year’s fund raising efforts. They did<br />
not need much persuasion; as a result in<br />
excess of US $200k was raised, a sum<br />
which, initial estimates suggest, should be<br />
sufficient to fund substantially all of the<br />
construction costs.<br />
Running for young lives (l-r): Ivan Chu, Wing Cheuk, Lars<br />
Moerch, Martin Zing, Morten Nielsen, Eric Jackson and<br />
Dominiek Arnout.<br />
In Kenya, a task force headed by Nev’s wife<br />
Petalynn has been investigating similar<br />
homes in and around Nairobi to ensure that<br />
the Kericho home incorporates all those<br />
features and facilities found to best enhance<br />
the quality of life for the children as well as<br />
ensuring the right working environment for<br />
carers and staff.<br />
A by-product of the regional drought was a<br />
drop in the water levels of Lake Victoria,<br />
which is the source of the hydro generated<br />
electricity for Uganda. This factor, together<br />
with other capacity constraints, has lead to a<br />
severe shortage of utility electricity<br />
throughout the country; this has impacted<br />
on our factories, all of which have had to<br />
adapt to these trying circumstances. To the<br />
credit of the factory and engineering staff,<br />
the challenge has been met with minimal loss<br />
of production volume or quality, although<br />
cost of production has been impacted.<br />
As it seems that such power shortages will<br />
remain a feature for several years, there is an<br />
increasing interest in the gasifier trial being<br />
conducted at our Muzizi factory. This<br />
technology uses renewable eucalyptus<br />
firewood from our forest areas to produce<br />
gas fuel for a generator engine at a much<br />
lower unit cost than the traditional diesel<br />
generators. The Muzizi trial was<br />
commissioned at the end of last year and has<br />
been undergoing a period of testing and<br />
performance evaluation. Despite teething<br />
Getting a generous<br />
ball rolling: the<br />
president of the<br />
auction committee,<br />
Kim Wright-Violich.<br />
A site has now been<br />
identified and preliminary<br />
plans drawn up with the<br />
aim of starting<br />
construction before the<br />
end of the year. The initial<br />
intention is to build a<br />
home for approximately<br />
20 children. In addition to<br />
the home itself,<br />
accommodation will be<br />
required for carers and<br />
staff. All being well the home should be<br />
ready to welcome its first children before<br />
the end of next year.<br />
As the project begins to take shape, those<br />
involved have become increasingly aware of<br />
the considerable amount of work required<br />
to ensure success but all are relishing the<br />
challenge. Work is being carried out to<br />
agree an appropriate legal structure and<br />
on drafting a constitution which will<br />
include guidelines covering the criteria<br />
for admission.<br />
Readers will be kept up to date with<br />
progress on the construction of this much<br />
needed facility. The generosity of those<br />
attending the Stanford Executive Programme<br />
cannot be overestimated. It is largely due to<br />
their efforts that the project will be realised<br />
sooner than might have been expected.<br />
problems, there is optimism that a<br />
successful operating level can be sustained.<br />
Nigel Leakey has joined JFU as Field<br />
Executive and with his family, is a welcome<br />
addition to the Mwenge community. He had<br />
previously been involved in <strong>Finlays</strong> Flowers<br />
in Kericho and, much more recently, as a<br />
Buildings and Civil Engineering consultant at<br />
JFU. His input into Field operations is<br />
targeted at raising yields and husbandry<br />
standards around all the estates. Nick<br />
Paterson, with his many years of experience<br />
in Kenya, has been enlisted as a Visiting<br />
Agent to assist Nigel in his new post. Nick<br />
knows JFU from its early days, during the<br />
factory and field rehabilitation phase, and<br />
is proving invaluable in planning with<br />
Nigel the next phase of optimizing the<br />
field operations.<br />
There is every hope that progress with the<br />
initiatives referred to above will be reflected<br />
in the results for next year.
Sri Lanka Update Naresh Ratwatte<br />
It has been an<br />
interesting nine months<br />
for <strong>Finlays</strong> Sri Lanka Tea<br />
Estates which, first and<br />
most importantly, have<br />
seen an improved<br />
financial performance<br />
over those of the past<br />
five years; secondly, a successful debt restructuring<br />
and, thirdly, the move of the<br />
Estates’ head office from Ratnapura to a<br />
state of the art new building in Ingiriya,<br />
one and a quarter hours’ drive, south of<br />
the capital city of Colombo.<br />
The strong tea prices for the small leaf<br />
grades and the boom in the rubber market<br />
during the first nine months of the year,<br />
strengthened by the contribution from the<br />
sale of timber, have resulted in a healthy<br />
financial performance to date this year with<br />
both companies exceeding budget.<br />
The reduction in tea production during the<br />
first half of the season is yet to be recouped.<br />
The Sri Lankan national production<br />
has fallen behind 2005 by 2%.The drop in<br />
volumes at the Colombo Auctions and the<br />
Sri Lanka <strong>News</strong><br />
Awards Night<br />
Finlay Tea Estates annual Awards Night was held at a glittering<br />
ceremony at Waters’ Edge, Battaramulla, on 30 August, an event<br />
recognising the achievements of estates and factories throughout the<br />
year 2005.<br />
The inaugural speech, by Naresh Ratwatte, Chairman Finlay<br />
Plantations Sri Lanka, was followed by an address by Simon Large,<br />
Commercial Director James Finlay Limited, on tour from Glasgow.<br />
Nilantha de Silva, Superintendent of Oodoowerre Estate, concluded<br />
with a vote of thanks for a truly memorable evening.<br />
Best Rubber Estate: Bibile Rubber Estate<br />
Best Tea Estate: Oodoowerre Tea Estate<br />
Most Consistently Performing Estate: Park Estate<br />
Best Tea Factory: Park Estate<br />
Most Consistently Performing Tea Factory: Court Lodge Estate<br />
Most Consistently Performing Estate: Bibile Estate<br />
G.W. Wijekoon, Superintendent of Bibile Rubber Estate,<br />
receiving the award for Best Rubber Estate from JF<br />
(Colombo) Chairman Kumar Jayasuriya. Bibile also<br />
topped the ‘Most Consistently Performing Estate’<br />
category.<br />
shortfall in the Kenyan production had an<br />
impact on auction prices, especially for the<br />
small leaf grades and the CTC teas which<br />
sold at very attractive levels.<br />
The rubber market continues to be strong -<br />
consistently over 2 US$ per kg. Production<br />
too during the first nine months has been<br />
encouraging with our young rubber planted<br />
in the mid 1990’s in full production.<br />
The harvesting of timber along with its<br />
replacement is on schedule and, in<br />
accordance with our Forestry Management<br />
Plan, approved by the respective authorities.<br />
The accelerated planting programme for<br />
rubber and timber, drawn up by Jim<br />
Sandom, General Manager, Finlay Forest<br />
Products, is most appropriate for Sri Lankan<br />
Estates. We aim, in the medium and long<br />
term, to produce a diversity of crops; this<br />
should mitigate any ups and downs<br />
experienced by our core crop, tea, which<br />
may result from the vagaries of the weather<br />
and the influence of global market trends.<br />
We have completed our planned factory<br />
investments: the Duckwari Estate new<br />
CTC/CFU and a drier; a new drier on<br />
A new award this year<br />
was for the best<br />
maintained<br />
Bungalow/Garden for<br />
both Superintendents<br />
and Assistant<br />
Superintendents, a way<br />
of looking after our<br />
wonderful assets.<br />
Hapugastenne winners<br />
were Demodera and<br />
Rosssett (Rookatenne<br />
Estate) Bungalows<br />
respectively; while<br />
Udapussellawa winners<br />
were Duckwari and<br />
Heatherset Bungalows.<br />
New Head Office<br />
Finlay Tea Estates Sri<br />
Lanka moved to their new<br />
head office at Ingirya on<br />
31 August. Completed in a<br />
record three months, it<br />
was declared open by<br />
<strong>Finlays</strong> Commercial<br />
Director, Simon Large who,<br />
at a simple ceremony,<br />
thanked everyone who was<br />
involved in the project and<br />
Hapugastenne is also in place. These<br />
investments have enabled us to increase<br />
both the intake of out growers’ leaf and<br />
factory efficiencies, especially in the<br />
consumption of fuel wood. Experiments in<br />
stack withering and the installation of<br />
lightweight fans for conserving energy are<br />
ongoing projects showing very encouraging<br />
results to date.<br />
The recruitment of a full time Marketer,<br />
employed to focus on our estate teas has<br />
strengthened our controls over the required<br />
product quality and the brokers. This should<br />
flow through to the bottom line through<br />
higher prices for our products: a belated but<br />
good investment.<br />
We have obtained ETP certification for all<br />
our tea factories; nine factories are HACCP<br />
certified and ten factories are ISO certified.<br />
Two of our factories, Shawlands and<br />
Oodoowerre, were awarded the Ceylon<br />
Quality Certificate by the Sri Lanka Tea<br />
Board. These are the only two factories<br />
amongst the Plantation Companies that were<br />
selected for this prestigious award at a<br />
ceremony telecast live internationally.<br />
planted a tree to mark the event. JF (Colombo) Directors Romesh<br />
Croos Moraes and Sanjoy Ray were also present.<br />
Ceylon Tea Stars<br />
Opening the new office at Ingiriya, Simon Large (c)<br />
and Naresh Ratwatte.<br />
Shawlands Estate and Oodoowerre Estate of Hapugastenne<br />
Plantations, were awarded the Ceylon Tea Quality Certificate – One<br />
Star at a ceremony organized by the Sri Lanka Tea Board, held on<br />
11 October in Colombo,. These are the first two estates among all<br />
the regional plantation companies to achieve this honour.<br />
Both estates have been certified for ISO 9001-2000 and HACCP,<br />
so vital in meeting global requirements. Now, both aim to win the<br />
coveted Five-Star status.<br />
Oodoowerre Estate workers and staff celebrate awards from both <strong>Finlays</strong> and the<br />
Sri Lanka Tea Board.<br />
21
22<br />
<strong>News</strong><br />
Tea Estates continued...<br />
Sri Lanka <strong>News</strong> continued...<br />
John Keells Awards<br />
Finlay Tea Estates Sri Lanka swept the<br />
board with nine awards at the annual<br />
ceremony held in Colombo on 15 July by<br />
tea brokers John Keells to recognize the<br />
top performing estates in the plantation<br />
industry for the year 2005.<br />
Shawlands Estate which, over the years,<br />
has consistently produced top liquoring<br />
OP grade teas, achieved no less than 110<br />
top prices in the category Uva Teas.<br />
Shawlands achieved two all-time record<br />
prices, RS.1200/- and RS 1060/- for a<br />
liquoring OP1 Grade in the same category.<br />
Demodera Estate achieved the highest<br />
quantity of tea produced by a single<br />
Tea Factory in the category Uva Teas,<br />
having sold 1,020,312 kgs of pure<br />
orthodox teas. Both Shawlands and<br />
Demodera have obtained ISO 9001<br />
and HACCP Certification.<br />
Adawatte Estate, in Lunugala, was also<br />
recognized for its high sale average of<br />
Rs.179.71 in the John Keells’ Catalogue<br />
Uva Teas category. The above three estates<br />
are managed by Hapugastenne Plantations.<br />
Madulkelle Estate, under Udupussellawa<br />
Plantations, achieved the third highest<br />
average in the category Western Medium<br />
Grown Teas.<br />
Tea Trading<br />
Update Richard Darlington<br />
As usual there is much<br />
to report from the FTS<br />
Leaf Tea Division.<br />
Mombasa continues to<br />
have a good year in<br />
difficult trading<br />
conditions. At the time<br />
of writing demand<br />
remains closely balanced to supply though<br />
there are signs that more tea will come<br />
onto the market from now on, so trading<br />
conditions should become easier.<br />
The senior managers in Mombasa have<br />
undertaken a number of business trips<br />
to new markets and hopes are high that<br />
business will commence soon to these<br />
new areas.<br />
The Malawi tea growing season is about to<br />
start and the prospects look good for both<br />
the Malawi tea market as a whole and for<br />
our trading business in Blantyre. The<br />
installation of a modern automated tea<br />
blending and packing system is complete<br />
and we are now in a position to offer our<br />
clients the use of this service.<br />
Shareholders Tour<br />
Concordia<br />
On 19 May 2006 Concordia Tea Estate in<br />
Nuwara Eliya played host to shareholders<br />
of Hapugastenne (HPL) and Udapussellawa<br />
Plantations (UPL).<br />
Eleven luxury coaches brought 371<br />
shareholders on the five-hour journey<br />
from Finlay House in Colombo, to<br />
Kandapola. From here, they travelled to<br />
the chilly heights of Concordia Estate<br />
where they were welcomed with a<br />
refreshing cup of ginger tea.<br />
Tony Perera, Ranjan Kulatunga, Stewart<br />
Joseph, Roshini Ranaweera and Dalrene<br />
Thirukumar acted as tour guides,<br />
explaining the tea manufacturing process<br />
in detail for the groups of shareholders.<br />
On the ground floor the guests saw made<br />
tea in bags awaiting transport out of the<br />
factory; on the first floor, the roller and<br />
tea processing machinery; then, one flight<br />
up, came what one described as ‘The most<br />
pleasing sight of golden green: two leaves<br />
and a bud, in vast quantities, spread out<br />
on a drier’.<br />
Finlay Gulf is now in its third full year of<br />
trading and is performing well ahead of our<br />
expectations. Business has been concluded<br />
to buyers in many of the countries that<br />
surround the UAE. The branch has been<br />
able to put our Hanoi, Mombasa and<br />
Colombo offices in touch with new clients<br />
for Vietnamese, Kenyan and Sri Lankan<br />
teas. The branch is certainly seeing the<br />
benefit of being a prominent sponsor at the<br />
Dubai Tea Forum at the end of February.<br />
In Hanoi our new trader, James Paling, is<br />
settling into the Finlay family. Our General<br />
Manager, Iain Lang, is spending much of his<br />
time at the Van Hung factory guiding its<br />
owners through the process of converting<br />
the factory from orthodox to CTC<br />
production. <strong>Finlays</strong> is a sizeable investor in<br />
this project and tea will be available from<br />
the factory by the time this magazine goes<br />
to print. In the next issue we will give<br />
readers a full report on the project.<br />
Under Chris Luckhurst in our Morristown<br />
office the United States business is doing<br />
Guests were highly appreciative of the<br />
sumptuous lunch prepared for them, a<br />
feast accompanied by beautiful floral<br />
arrangements, a live saxophonist and,<br />
later, a troupe of dancers. They thanked<br />
all the staff of Concordia Factory for<br />
making the tour a warm and unforgettable<br />
learning experience.<br />
Appointment<br />
Rasika Perera joined<br />
Finlay Plantations Sri<br />
Lanka as Marketing<br />
Manager from 1 August<br />
2006. Previously, Rasika<br />
had spent nearly 10<br />
years with John Keells,<br />
the leading tea brokers<br />
arm in Sri Lanka,<br />
latterly as Manager Tea. Rasika brings vast<br />
experience in tea marketing; we welcome<br />
him to our team and wish him all the best.<br />
Retirements<br />
From Hapugastenne Estate: M.Ramasamy,<br />
after 29 years’ service and R.K.K.Joseph,<br />
after 26 years; from Bibile Estate, G.A.<br />
Manatunga, after 27 years of service.<br />
well and is busily preparing for the start of<br />
the new Argentine season.<br />
Our tea decaffeination business in Hull<br />
continues to have a good year. Of the<br />
many challenges faced by the team this<br />
year the removal of a 100ft brick lined,<br />
wrought iron chimney stack was perhaps<br />
the most interesting. Put up in 1900 it<br />
survived a fire in 1932 that destroyed the<br />
rest of the factory. Its safe removal was<br />
made more complicated by its position but<br />
the team managed the dismantling without<br />
any problems. The old chimney has been<br />
replaced by a new one which we hope will<br />
last for as long as the last one though, also,<br />
that it will not have to survive a fire!
Tea Extracts<br />
Update Tony Barcroft<br />
The tea extracts<br />
business is doing very<br />
well worldwide, with<br />
excellent volume<br />
growth in North<br />
America and Europe.<br />
The cause of this is<br />
quite simple. Ready to<br />
drink (RTD) teas are<br />
seen as a natural and<br />
healthier alternative to carbonated drinks<br />
and so, each year, as demand grows at the<br />
consumer end, it filters back to increased<br />
demand for our products. This is likely to<br />
accelerate even further as the major<br />
beverage companies have started to push<br />
this trend even harder, with a record<br />
number of new products being launched<br />
this year.<br />
Additionally, the range of speciality tea<br />
products is increasing, with green, white<br />
and Rooibos teas being particular<br />
favourites amongst the launches this year.<br />
Another trend that you might have seen is<br />
the steady growth in what we call<br />
“functional” teas – those that make health<br />
claims. Obesity is a major and growing<br />
Beverages<br />
UK Update Neil Willsher<br />
I am delighted to report<br />
that a year of varied<br />
challenges for Finlay<br />
Beverages, has<br />
continued to progress<br />
well.<br />
The company’s main raw<br />
inputs, tea and coffee,<br />
saw prices moving<br />
higher during the year, albeit for entirely<br />
different reasons. Tea purchased under a<br />
traditional auction system saw prices<br />
doubling at the end of 2005, as a result of<br />
the well publicised drought experienced in<br />
Kenya. These increases were passed on in<br />
part to the customer in August, when tea<br />
prices rose throughout the UK retail<br />
industry. These moves assisted in resolving<br />
an unsustainable situation which was<br />
negatively affecting our bottom line. Simply<br />
put, tea was being sold to our customers at<br />
a lower price than the price for which it<br />
was purchased. The situation has improved<br />
although prices remain stubbornly high<br />
with, at the time of writing, all eyes on<br />
whether the Kenyan short rains would<br />
arrive in November. The coffee market rose<br />
to seven year highs in September for<br />
entirely different reasons. Coffee is traded<br />
as a commodity on the futures markets. As<br />
such its price is subject to speculation<br />
which may or may not be based on accurate<br />
information. In 2006, fund speculation,<br />
issue in the Western world and tea contains<br />
a group of chemicals called Catechins that<br />
accelerate fat burning. Thus it is no<br />
surprise that we are seeing RTD tea<br />
products with high Catechin content<br />
coming onto the market, claiming weight<br />
reducing properties. We expect this trend<br />
to continue and gather momentum.<br />
We are working hard to develop our<br />
technology to be able to give our<br />
customers products which are rich in<br />
these “functional” chemicals.<br />
Historically, <strong>Finlays</strong> has focused on Western<br />
markets, with a strong and growing<br />
business in North America and Europe.<br />
However, it is imperative that we start to<br />
move our sights more towards markets in<br />
Asia. The reason is quite simple.<br />
By 2010, China and Japan will together<br />
consume eight times the volume of RTD<br />
tea as North America and ten times the<br />
volume of Europe. In the next issue of<br />
<strong>Finlays</strong> Magazine, I will be explaining<br />
more about what we are doing in Asia<br />
to accelerate our progress.<br />
As this is my first review of the Tea<br />
Extracts business since becoming Managing<br />
based upon dubious volume estimates from<br />
Vietnam and Brazil, in combination with<br />
huge rises in oil and copper positions,<br />
drove prices higher.<br />
The UK market for private label packing in<br />
which we operate, consolidated in late 2005<br />
with Apeejay becoming the new owners of<br />
Typhoo tea and subsequently joining forces<br />
with Gold Crown. These changes will result<br />
in further challenges due to the alteration<br />
in the competitive dynamic within the<br />
industry, especially when the continued<br />
battle of the brands is taken into account.<br />
It is pleasing to report that Sainsbury’s, our<br />
largest customer, continue to reap the just<br />
rewards resulting from the successful<br />
implementation of their turnaround plans.<br />
The new Asda business, which commenced<br />
in April, progressed well following its<br />
seamless integration into our normal<br />
operations. The growth achieved in 2006<br />
has established Finlay Beverages as the<br />
largest packer of private label tea in the UK<br />
retail market. We continue to work with our<br />
employees and customers in striving to<br />
remain the partner of choice within the<br />
industry.<br />
This growth in our business, combined with<br />
a fundamental belief in the need for<br />
continual change and improvement in order<br />
to sustain our operations, resulted in a<br />
decision being taken earlier this year to re-<br />
Director in April 2006, I should like to take<br />
the opportunity to introduce myself and<br />
explain something of my background.<br />
After studying Chemistry at the University<br />
of Sheffield I spent the early years of my<br />
career as a scientist with Glaxo Smith-Kline<br />
(pharmaceuticals) and Courtaulds (paints). I<br />
then moved over to marketing, spending<br />
nine years with Procter & Gamble, running<br />
businesses ranging from detergents to<br />
beauty care products, in the UK and<br />
Europe. This was followed by 14 years in<br />
the retail bakery business, as Managing<br />
Director of a large UK business, turning it<br />
from a loss-maker into a solid, profitable<br />
concern. After a spell in consulting for<br />
Wolseley (an International building<br />
products company) I joined Finlay Tea<br />
Extracts as Managing Director.<br />
In conclusion, I want to say that I am very<br />
proud to be involved with <strong>Finlays</strong>. I think<br />
we have a great business, with excellent<br />
hard working people and good future<br />
prospects. Our best years are yet to come.<br />
organise the tea factory. The project, due<br />
for completion in 2007, will increase<br />
capacities and efficiencies, whilst<br />
introducing innovative flexibility to both<br />
our processes and product.<br />
Underpinning all the progress achieved to<br />
date are the changes brought about within<br />
our culture. Key focus has been placed<br />
upon teamwork, support and respect for<br />
one another, knowledge sharing,<br />
communication and expertise. The positive<br />
consequences of our actions to date have<br />
seen improved employee motivation and<br />
morale.<br />
There have been some interesting<br />
developments during the course of the year<br />
within the areas of Corporate Social<br />
Responsibility and Ethical Trading, where<br />
greater consumer awareness has been<br />
reflected in initiatives by our retail<br />
partners. This has always been at the heart<br />
of the Group’s businesses, with<br />
commitment to employees, communities<br />
and the environment paramount; they are<br />
areas we feel well placed to address.<br />
The changing environment in which we<br />
operate with both its competitive and<br />
ethical dimensions will remain a key<br />
challenge, creating in turn both new and<br />
diverse opportunities for both Finlay<br />
Beverages and the group as a whole.<br />
23
24<br />
<strong>News</strong><br />
Beverages continued...<br />
UK <strong>News</strong><br />
Expanding Contracts<br />
In April Finlay Beverages secured a contract<br />
from HM Prison Service for 100% of their tea<br />
requirements. This improved on the part-share<br />
contract previously in place.<br />
Following the success of the Virgin Trains<br />
contract, FB hot beverage products are now on<br />
trial test with South West Trains and South East<br />
Trains franchises.<br />
Visits<br />
Finlay Beverages’ engineers have been crisscrossing<br />
the Channel, commissioning new<br />
machinery as part of Project One at South<br />
Elmsall, learning its uses and running trials.<br />
Gary Little and Nigel Sutton have made several<br />
trips to International Packaging Systems in<br />
In September, a team of tea production operatives, engineers<br />
and managers from South Elmsall visited UVA (Universal<br />
Packaging Machines) in Eindhoven, Holland for training<br />
ahead of delivery of a new polybag machine for the factory.<br />
Crailshiem, Germany to commission teabag<br />
machines, while engineers John Cheesmond and<br />
Chris Ward later underwent related control<br />
systems training. In September Mike Hickson,<br />
Project Engineering Manager, and Joe Stenton,<br />
Production Engineer, visited IMA in Italy to<br />
undertake a factory acceptance trial on a new<br />
caddy overwrapping machine.<br />
Appointments<br />
John Neale joined the Tea<br />
Sales Room team in March<br />
as Tea Buyer and Blender.<br />
John has worked in the tea<br />
trade since 1962 when he<br />
started as a trainee with a<br />
firm of tea brokers. John<br />
has known the <strong>Finlays</strong><br />
buying teams in South Elmsall and London for<br />
many years, and has become a welcome member<br />
of the <strong>Finlays</strong> family.<br />
In June, Tom Blackwall<br />
joined Finlay Beverages<br />
from Northern Foods and<br />
has now settled into our<br />
Coffee Sales department<br />
as assistant Coffee Buyer<br />
and Blender. Tom has a<br />
food technology<br />
background and will use his skills in coffee<br />
blend development and in learning the<br />
commercial aspects of the coffee trade.<br />
In July Daniel Dawson<br />
joined Finlay Beverages as a<br />
Business Manager for<br />
Sainsbury’s account. Daniel<br />
previously worked for Red<br />
Mill Snack Foods where he<br />
managed their JS, Co-op,<br />
Morrisons, Somerfield,<br />
Waitrose and Lidl accounts.<br />
In July Doug Moseley joined<br />
Finlay Beverages from Del<br />
Monte Foods International<br />
where he worked for over<br />
five years as Account<br />
Manager for their Asda,<br />
Waitrose and Morrisons<br />
business. Doug has 20<br />
years’ grocery industry experience, spanning<br />
food service, impulse & convenience and, more<br />
recently, the major multiple trade sectors. Doug<br />
has been appointed Business Manager for Asda’s<br />
account.<br />
Family Fun Day<br />
Supersize fun<br />
Finlay Beverages’ first Family Fun Day for<br />
employees and their families was held on<br />
27 August at Frickley Cricket Club.<br />
The event was organised by a group of<br />
volunteers comprising Robert Landers,<br />
Suzanne Mason, Aileen Robinson, Paul Iveson,<br />
Julie Lowery, Cain Atkinson, Terri Waterhouse,<br />
Joann Witton and Royston Mould.<br />
Amusements included bouncy castles, a<br />
penalty shoot-out, face painting, a bungee run,<br />
a Punch & Judy Show and Sumo wrestling, all<br />
of which kept the children and most of the<br />
adults amused. Barbecued burgers and hot<br />
dogs were served while Paul and Julie manned<br />
the bar. A tombola stall run by Maureen<br />
Holden and Margaret Millward raised £415 for<br />
the local hospice.<br />
Long Service Awards<br />
Mike Hickson receiving his 35-year award from Finance<br />
Director Paul Jasper<br />
Mike Hickson completed 35 years’ service with<br />
the company in August. Mike started work<br />
with George Payne in 1971 in the R&D<br />
department in Croydon. His first project was<br />
to design a tilting dragee pan for chocolate<br />
coating Payne’s ‘Poppets’. Mike moved to<br />
Beverages in Yorkshire in July 1996, since<br />
when his business travels have taken him all<br />
over Europe. He has worked on many projects<br />
over the years including the Swindon Tea<br />
Factory, the building of South Elmsall Tea<br />
Factory and extension, the South Elmsall<br />
Coffee Factory, the closure and relocation of<br />
Croydon Coffee Factory, the South Elmsall<br />
Administrative building and the new Loading<br />
Dock at South Elmsall. Mike is currently<br />
working on Projects One and Two in South<br />
Elmsall.<br />
The following have received awards to mark<br />
15 years’ service with the company: Martin<br />
Cliff, Stock Controller; Dawn Weston,<br />
Tea Operative; Mark Thompson, QA<br />
department; George Head, Warehouse: Ann<br />
Lumb, Tea Operative: Colin Waterhouse,<br />
Support Operative: Brian Magill, Engineering<br />
Team Leader: Gina Oxley, C21 Machine<br />
Operator.<br />
George Payne Shield<br />
Golf victor Jon McCormack with Paul Bacon<br />
On 2 September the 2006 George Payne golf<br />
tournament took place at Woolley Park Golf<br />
Club, West Yorkshire. After a very wet and<br />
windy start, the weather improved and scores<br />
ended very close. Warehouse Team Leader<br />
Jon McCormack (pictured with the shield) was<br />
the winner; second place went to Tea Engineer<br />
Chris Parker and in third place was IT<br />
Manager Paul Bacon. Prizes were awarded<br />
after a meal in the clubhouse.<br />
Employee Conference<br />
‘Taking our People With Us’: Diana<br />
Breeze of Sainsbury's addressing<br />
the conference.<br />
The third Finlay<br />
Beverages<br />
Employee<br />
Conference took<br />
place on 29<br />
September at The<br />
Grove, South<br />
Kirkby.<br />
Production<br />
ceased for the<br />
day as all 250<br />
employees<br />
attended the<br />
programme of<br />
presentations<br />
(see ‘Walking the<br />
Talk’ right).<br />
Everyone enjoyed<br />
a meal and<br />
entertainment by Doncaster comedian Gary<br />
Marshall before the evening’s fun and games<br />
which, this year, included casino tables, bingo,<br />
laser shooting and crazy golf.
Walking the Talk Lee Byers<br />
At Finlay Beverages’ third annual Employee Conference, guest<br />
presenters Diana Breeze of Sainsbury’s and Ian Bettles of<br />
Smallpeice Enterprises, focused on different ways in which<br />
employees can be empowered to attain improved business<br />
results through culture change programmes.<br />
Diana, on behalf of Sainsbury’s, one of our longest established<br />
customers, explained how their Chief Executive Justin King,<br />
appointed in 2002, set in motion a major culture change<br />
programme: ‘Taking Our People With Us’. Various initiatives<br />
included a ‘Tell Justin’ scheme whereby all 30,000 Sainsbury staff<br />
were encouraged to send ideas and suggestions for business<br />
improvement direct to the Chief Executive for reply and action.<br />
Others involved employees tasting and recommending Sainsbury’s<br />
products to friends and family; leadership training; colleague<br />
councils for all managers; and daily ‘huddle’ meetings to discuss<br />
and agree key priorities for the business. Diana was pleased to<br />
report that Sainsbury’s have just posted their seventh consecutive<br />
quarterly improvement in sales growth since the programme began.<br />
The Asda training quality team meet Finlay Beverages' Russ Fowlkes, Commercial<br />
Director; Doug Moseley, Asda Business Manager; and Lee Byers, Marketing Controller.<br />
Ian Bettles of Smallpeice Enterprises entertained the conference<br />
with a highly individual presentation on better ways of working<br />
using ‘lean’ principles gleaned from years of experience with<br />
world class organisations. As an educational charity, Smallpeice<br />
improves business results by helping organisations to remove<br />
waste from the production process. The presentation gave<br />
numerous examples of how simple small changes can make a big<br />
difference to the end result through careful attention to detail;<br />
it included some hilarious examples of poor work execution.<br />
Finlay Beverages then took the opportunity to celebrate their<br />
success (reported in the Spring edition of <strong>Finlays</strong> Magazine) in<br />
gaining substantive new business from Asda, part of Wal Mart and<br />
one of the world’s largest retailers. The Asda Project Team, with<br />
Russ Fowlkes as sponsor and Lee Byers as Project Leader, used a<br />
professional video presentation, combining footage from around<br />
the South Elmsall site with vox pop style interviews, to explain<br />
how, in less than nine months, Finlay Beverages had been able to<br />
deliver a complex project from a blank sheet of paper to a<br />
complete range of finished products. The video was first class<br />
and combined footage from around the South Elmsall site<br />
together with Vox Pop style interviews with team members to tell<br />
the Asda story. It celebrated the work of everyone involved in<br />
preparing, pitching for and securing the Asda tea business.<br />
Finlay Beverages had targeted Asda on the basis that the business<br />
opportunity was both substantial and a good fit with our existing<br />
customers, including Sainsbury’s who appeal to a slightly<br />
different shopper profile.<br />
The Asda buying and quality team reviewing tea samples at South Elmsall<br />
(left to right: Dave Cresswell Trading Assistant; Stuart Menzies Trading Manager;<br />
Sophie Benter, Marketing Manage; Katherine Shipley Product/Quality Manager)<br />
Beginning with an in-depth analysis of the market and extensive<br />
store visits, our initial presentation to Asda focused on how we<br />
might take their tea business forward. A visit in October 2005 by<br />
Asda to our site in South Elmsall was to prove crucial. Finlay’s<br />
passion for quality and attention to detail was successfully<br />
demonstrated in every aspect of our operation.<br />
Having quoted for Asda’s tea business we began preparations by<br />
undergoing formal training in project management techniques.<br />
With only three months to launch, the pressure was on to deliver<br />
a full range of products from scratch. This presented a number of<br />
major challenges including the recruitment and training of a night<br />
shift. It is a tribute to everyone at Finlay Beverages that in such a<br />
short time we were able to deliver Asda products on schedule<br />
whilst meeting their stringent quality standards; we even<br />
managed to deliver some products two weeks early!<br />
Most rewarding of all, however, is that we were able to achieve all<br />
of this without letting our normal standards of excellence slip for<br />
existing customers. In fact, over this same period, we achieved<br />
Sainsbury’s Hero Supplier status for superlative customer service<br />
in delivering the right quality, at the right time in the right<br />
quantity. We were also awarded ‘The Grocer’ magazine Gold<br />
Award 2006 for Best Own Label Supplier (hot beverages category).<br />
The challenge, as ever, will be to continue to deliver on quality<br />
and service each and every day. We can only do this by ‘Taking<br />
Our People With Us’.<br />
25
26<br />
<strong>News</strong><br />
Flowers<br />
Update Tim Blackburn<br />
2006 has been a<br />
difficult year<br />
for Flowers.<br />
The combination of<br />
changing market<br />
requirements in the UK,<br />
pressure on prices,<br />
unfavourable exchange<br />
rates and rising energy<br />
costs has presented numerous challenges.<br />
However I am very pleased to report that,<br />
thanks to the enthusiasm and commitment<br />
shown by all the management and staff at<br />
Flowers, we are now better prepared to<br />
meet the vagaries of the market and<br />
remain optimistic about the future.<br />
The exceptionally warm European summer<br />
had an adverse effect on the industry in<br />
general but our Fairtrade markets performed<br />
well and we are now in the final stages of<br />
FLO certification of Lemotit farm at<br />
Londiani; this means that 100% of <strong>Finlays</strong><br />
production will be Fairtrade accredited from<br />
2007. The extensive investment in crop R&D<br />
over the last few years is paying dividends<br />
as our production team completes the<br />
<strong>News</strong><br />
Fairtrade and Finmax Edgar Mutai<br />
The FinMax Community Based Group dates<br />
from January 2003 when, as we reported in<br />
these pages, Finlay Flowers was accredited<br />
to the Swiss Fairtrade organisation, Max<br />
Havelaar. The benefit of this accreditation<br />
could be summed up as continued access to<br />
the growing Fairtrade market, using the<br />
Max Havelaar label; and earned premiums<br />
from the sale of our products to this same<br />
market.<br />
The premiums earned are used to assist our<br />
workers and members of the surrounding<br />
community to improve their quality of life<br />
through socio-welfare and environmental<br />
programmes. The funds are managed by a<br />
Joint Body, a committee that includes four<br />
management representatives and 18 elected<br />
general workers.<br />
A delegates system links the general workers<br />
and the Joint Body committee. The object of<br />
the system is to assist in the dissemination<br />
of information and in identifying projects<br />
which the workers would like to see<br />
implemented. Each delegate serves a three<br />
year term.<br />
In 2004 Finlay Flowers became accredited to<br />
Flower Labeling Organization International<br />
(FLO) which has a working relationship with<br />
Max Havelaar. The resulting increased access<br />
to a larger Fairtrade market has led to a<br />
growth in sales which, in turn, has meant<br />
higher premiums for FinMax.<br />
In June 2006, Max Havelaar merged with<br />
Flower Labeling organization (FLO) under the<br />
Fairtrade logo and with its headquarters in<br />
Bonn, Germany.<br />
Here are some of the projects supported<br />
by FinMax<br />
● Two anaesthesia machines have been<br />
purchased, one each for the Central<br />
Hospital and the Kericho District Hospital.<br />
● Ndege Chai Loan Scheme: FinMax has<br />
deposited Ksh 10,000,000 with Ndege Chai<br />
important transition from trials to<br />
commercial production. Specifically spray<br />
roses, alstromerias, freesias, zantadeschias<br />
and lilies are now all in commercial<br />
production and we have high hopes for the<br />
extensive list of fillers and summer crops<br />
being developed both in Kericho and at<br />
Londiani.<br />
Perhaps the most significant project<br />
currently underway is the extensive rose<br />
replanting program at FF1 and FF2 where<br />
Nev Harries and Fred Okinda in particular<br />
have worked extremely hard to identify and<br />
select varieties which will perform well in<br />
our conditions, delivering a carefully<br />
balanced combination of quality, headsize<br />
and yield. This program is an important<br />
step in ensuring that <strong>Finlays</strong> continues to<br />
remain competitive with industry<br />
benchmarks whilst ensuring that we<br />
do not compromise on quality.<br />
The development of Lemotit farm is almost<br />
complete with 20.2ha now in production,<br />
the dam filling ahead of initial forecast and<br />
post harvest facilities in the final stages of<br />
construction. John Magara and his team<br />
to be used as a revolving loan fund for<br />
employees of James Finlay (Kenya) who are<br />
eligible for union membership. Based in<br />
Kericho, the fund is intended to be used<br />
for emergency loans at a subsidized<br />
interest rate of 10% per annum, for a<br />
maximum period of 12 months.<br />
FinMax Chairman James Bwana presents an anaesthesia<br />
machine, financed by the community-based fund, to Dr Betty<br />
Langat, superintendent of Kericho General Hospital. On the left<br />
is Eric Korir, Legal and Personnel Affairs Manager, Chepkembe.<br />
● A Bursary Scheme for JF(K) employees’<br />
children ensures that 20 boys and 20 girls<br />
who have earned good passes gain entry to<br />
national secondary schools.<br />
● FinMax donated 320 desks and chairs to<br />
Flower 2 Primary School and purchased<br />
teaching equipment including two<br />
computers and a photocopier.<br />
● Friends of the Mau Watershed: FinMax<br />
bought two motorbikes for FOMAWA field<br />
staff.<br />
● FinMax donated sports equipment to 13<br />
company primary schools and to Marinyin<br />
Secondary School.<br />
● A FinMax Bursary Scheme has given part<br />
sponsorship to three university students,<br />
from Kericho, Bomet and Bureti districts,<br />
for the duration of their courses.<br />
● Support for the physically disabled and<br />
for babies in care homes established due<br />
to the ravages of HIV/AIDS<br />
have done an excellent job in the field to<br />
ensure that this project is sustainable,<br />
successful and provides a template for any<br />
expansion programs in the future.<br />
Significant progress has been made across<br />
the board in the less glamorous areas of<br />
cost management, more efficient<br />
purchasing and procurement practices; the<br />
roll-out of the JF(K) Enterprise Resource<br />
Planning system has required substantial<br />
management attention. All these initiatives<br />
will pay dividends in 2007 but it is<br />
essential that we continue to improve<br />
productivity and seek out efficiencies<br />
wherever possible.<br />
As we look forward to 2007 we should<br />
reflect on the significant achievements of<br />
2006 which included the acquisition of<br />
Omniflora and Jet Flowers in February.<br />
These, in conjunction with our traditional<br />
commercial relationships in the UK, have<br />
presented interesting opportunities on the<br />
Continent which we look forward to<br />
developing together in the future.<br />
● The purchase of eight tents for use by<br />
employees and their dependants in their<br />
social programmes.<br />
● Tree nursery project in support of<br />
reforestation: all JF(K) employees can<br />
purchase seedlings at a subsidised price<br />
from the FinMax tree project. A variety of<br />
indigenous, exotic and fruit tree seedlings<br />
are available. 17,000 seedlings had been<br />
sold by the end of September 2006.<br />
● Baby day care centers are up and running<br />
in both Flower 1 and 2. Currently there are<br />
a total of 150 children enrolled in both<br />
crèches.<br />
● Training schemes continue to build the<br />
capacities of the Joint Body committee.<br />
New projects continue to be identified.<br />
Appointment<br />
Flavio Pelizzoli joined<br />
<strong>Finlays</strong> in November, as<br />
Director of Supply<br />
Chain Logistics<br />
(Omniflora / Finlay<br />
Flowers) based in<br />
Nairobi. Flavio, who is<br />
Canadian, has come<br />
from Dubai where he<br />
was regional general manager of Barloworld<br />
Logistics Middle East LLC. He brings over<br />
16 years of business-related management<br />
and advisory experience in Sub-Saharan<br />
Africa to his new job. His role, divided<br />
equally between Finlay Flowers and<br />
Omniflora/<br />
Jet is to improve the close cooperation<br />
between the various parties involved in<br />
the production, post-harvest handling,<br />
road and air-transport of cut flowers in<br />
order to improve quality control and<br />
integrity of the cool chain.
Sri Lanka<br />
Update Kumar Jayasuriya<br />
“Enriched by the past,<br />
transforming the<br />
future”: that’s the<br />
winning catchphrase<br />
one of our divisions<br />
came up with to capture<br />
the essence of Finlay’s<br />
Colombo operations.<br />
With the Company having been involved<br />
with commerce and industry in Sri Lanka<br />
since 1893, the first part of the phrase is<br />
self evident. Today, defining the years, if<br />
not decades to come is exactly what’s<br />
happening.<br />
In July of this year we invested in the<br />
installation of three brand new IMA C27<br />
machines for a total amount of USD 2.1<br />
million at our facility in Welisara on the<br />
outskirts of Colombo, the first company in<br />
Asia to invest in this cutting-edge<br />
technology. Catering to an increasingly<br />
environmentally aware and concerned<br />
consumer, the machines will produce<br />
“stapleless” teabags. These will be fully<br />
natural, with the string being attached to<br />
the bag by a knot. The three machines<br />
will significantly increase the overall<br />
production capacity.<br />
<strong>News</strong><br />
Cathay’s Rebranding Incentive Julian Lyden<br />
Cathay Pacific’s innovative campaign, Paint<br />
the Town Green, has changed the thinking<br />
behind conventional branding practices in<br />
the air travel industry of Sri Lanka says<br />
Julian Lyden, Country Manager for Cathay<br />
Pacific, Sri Lanka and The Maldives.<br />
The campaign took the form of a<br />
competition, in which local travel agents<br />
were requested to decorate their premises<br />
using green, Cathay’s corporate colour, along<br />
with other branding material. The<br />
promotion was partly aimed at building<br />
goodwill between the Company and its<br />
stakeholders; Cathay Pacific believes that<br />
much of their success depends on their<br />
value chain partners.<br />
The challenge was well received and a<br />
number of agencies - duly provided with cut<br />
out models, posters, model aircraft and<br />
other display material - enthusiastically took<br />
Sports Carnival<br />
Recreational activities include staff of all segments.<br />
Our existing markets have served us well,<br />
but we are now actively seeking to create<br />
new avenues and buyers for our value added<br />
products. A few prospective customers in<br />
Europe and America have evinced interest<br />
in this respect. I personally believe that<br />
there is great potential for expanding in<br />
India as well.<br />
The temperature controlled warehousing<br />
and logistics division, which is now in its<br />
second year of operation, has recorded<br />
encouraging performance on the back of<br />
healthy occupancy levels, whilst catering to<br />
some of Sri Lanka’s (and internationally)<br />
best known brands for frozen and chilled<br />
products. To meet increasing demand and to<br />
meet the evident need for international<br />
standards of cold chain compliance, the<br />
Company is nearing completion of an<br />
extension to the existing facility that will<br />
double present capacity (see page 28). The<br />
additional space will deliver economies of<br />
scale through greater operational<br />
efficiencies incorporated in the design and<br />
lower incidence of fixed costs. We also hope<br />
to capitalize on our first mover advantage by<br />
branching off into logistics and distribution<br />
services to selected clients, so as to provide<br />
the full cycle of cold chain compliance.<br />
part in decorating their offices, always<br />
following the Cathay logo guidelines.<br />
They reported having enjoyed the novel<br />
opportunity of getting a break from busy<br />
schedules and spending some creative time<br />
with their colleagues.<br />
Rewarding our travel partners for their time<br />
and innovative thinking, Cathay Pacific gave<br />
away seven return air tickets to Singapore or<br />
Bangkok as the first prize, whilst the second<br />
and third runners-up received exclusive<br />
Cathay branded gift items for the whole<br />
office team.<br />
In tandem with the travel agents’ unique<br />
branding exercise, a major facelift has added<br />
colour and exuberance to the Cathay Pacific<br />
City Office in Colombo. Our premises have<br />
been given a corporate identity in keeping<br />
with our superior product - a global<br />
network, a staff and a service straight from<br />
More than 700 employees of the James<br />
Finlay Group and their families took part<br />
in a Sports Carnival held on 17 September<br />
at the Bloomfield Sports Ground in<br />
Colombo.<br />
Participants, representing James Finlay & Co.<br />
(Colombo) and its subsidiary and associate<br />
companies, were divided into four teams or<br />
houses, each named after a different local<br />
herb believed to generate strength.<br />
The morning got off to a good start with<br />
such athletic events as the marathon, 100<br />
metres races for women and men and a 400<br />
metres men’s race. The post-lunch session<br />
Human resources have been the other area<br />
of focus during the last few months, where a<br />
range of initiatives from improving working<br />
conditions to fostering greater employee<br />
participation in decision making, promoting<br />
team spirit and, most importantly, building<br />
up the capability of our people through<br />
training and development have been<br />
launched. As far as is practically possible,<br />
company recreational activities now include<br />
staff of all segments.<br />
Our social responsibility programs are now<br />
drilled down to the divisions with each<br />
making efforts to participate actively in the<br />
programs selected. Needless to say that<br />
health and safety teams are formalized<br />
and are active at each worksite.<br />
Our financial results at the end of the third<br />
quarter have been generally satisfactory<br />
with Group overall profit comfortably<br />
exceeding the budgeted profit even<br />
excluding a one-off profit earned on sale<br />
of investments during the year.<br />
Despite the problems and issues, in Sri<br />
Lanka the opportunities for business abound<br />
and continue to flourish with each of our<br />
resilient businesses creating environments<br />
in which to flourish and grow.<br />
the heart which have won us the title of<br />
Airline of the Year, for the third time.<br />
The new branding provides our walk-in<br />
customers with a warmer and more friendly<br />
ambience, appropriate both to promoting<br />
confidence in flying with Cathay Pacific<br />
Airways and as a backdrop to the highly<br />
professional service provided by our<br />
dedicated front line staff at the counters.<br />
Cathay’s Colombo office facelift sets the pace<br />
was dedicated to fun and games including a<br />
tug-of-war, bucket relay and three-legged<br />
race. Special events were also held for the<br />
managers and guests while, for the children,<br />
there was a drawing competition.<br />
Prizes were also awarded for the best<br />
cheering squad and for the best decorated<br />
“house”.<br />
Winners of the individual and group events<br />
were awarded handsome prizes. The overall<br />
winner was Harthavariya House, made up of<br />
employees of the Tea Estates sector.<br />
27
28<br />
<strong>News</strong><br />
Sri Lanka continued...<br />
Twice the Freeze Gihan Jayasinghe<br />
External view of the existing facility<br />
Our Cold Storage operation at Welisara has expanded with the<br />
addition of a further 4,500 pallet spaces, thus consolidating<br />
its position as the largest and most sophisticated cold store in<br />
Sri Lanka.<br />
The second phase, inaugurated in November this year, will provide<br />
an additional 30,000 cubic meters (1 million cubic feet) of<br />
refrigerated storage space and will not only permit greater efficiency<br />
in operation but also greater flexibility in the type of products<br />
stored and services offered.<br />
US<br />
Finlay Industries Update Darrell Armbruster<br />
Through August, the<br />
year 2006 resulted in<br />
new record sales<br />
revenue for Finlay<br />
Industries. YTD<br />
revenues are ahead of<br />
2005 by $1.8 million.<br />
This continued growth<br />
in revenue is largely<br />
attributable to the<br />
sustained growth of new inbound<br />
inventory from our existing<br />
manufacturing customers. Based on<br />
YTD figures, Finlay Industries is likely<br />
to receive over 7 million pounds of new<br />
inventory by year-end. This exceeds<br />
prior year record levels by over<br />
500,000 pounds.<br />
In order to accommodate this increase of<br />
inbound inventory we have had to re-think<br />
our retention levels of older, slower moving<br />
inventory. Rather than continue to build<br />
new warehouses to accommodate the<br />
receiving of fresh inventory, we have been<br />
working with the OEM’s and our operations<br />
department to develop more aggressive<br />
purge algorithms, which sooner identify<br />
"dead" inventory in our warehouses. Once<br />
this "dead" inventory has been identified, we<br />
pluck it out of our facilities, freeing up<br />
space for new inventory.<br />
The Company’s focus is on the premium end of the cold storage<br />
market, offering a broad spectrum of value-added services, such<br />
as order picking, loading/ dispatching according to customer<br />
requirements, inventory management using a state-of-the-art online<br />
warehouse management system and more, whilst servicing a<br />
number of industries including Dairy, Poultry, Agriculture and<br />
Processed Meats, to name but a few.<br />
Says Group Chairman, Kumar Jayasuriya: “This build was a natural<br />
progression for us. We listened to our customers’ needs and growth<br />
plans and were confident that we could offer a premium product,<br />
exceeding their expectations; this explains our expansion plans<br />
within a year of starting commercial operations”.<br />
Work is progressing on a new freezer room.<br />
We have coined the term "mining" for the<br />
process, which efficiently removes the dead<br />
inventory without disrupting the majority of<br />
the warehouse. We can actually purge<br />
inventory out of a facility and, at the same<br />
time, keep approximately 85-90% of the<br />
facility’s inventory available for sale. In<br />
addition to freeing up substantial space, the<br />
purging process results in the older<br />
warehouses becoming a great deal more<br />
productive in revenue generation.<br />
Through the first eight months of 2006, the<br />
purging department was able to remove<br />
approximately 10,000 pallets of dead<br />
inventory, freeing this space for new,<br />
inbound inventory. For this year, at our<br />
current rate of purging, we should be able<br />
to absorb approximately 90% of our entire<br />
incoming inventory into existing older<br />
facilities, without expanding into our newest<br />
facility building #23.<br />
With the automotive industry exceeding<br />
over 59% of our business, we have made the<br />
initiative to spread our business risks over<br />
multiple industries. As a result of this plan<br />
the sales department has recently signed<br />
our newest customer, Bucyrus International.<br />
Bucyrus is based in North America and<br />
is the world’s largest manufacturer of<br />
mining drag lines and electric shovels.<br />
The company was started in 1880; they<br />
supplied 77 of the 102 steam shovels used<br />
to dig the Panama Canal in 1904. The<br />
company currently has approximately<br />
70,000 machines operating in various parts<br />
of the world. Although the program will<br />
start slowly, we expect Bucyrus to contribute<br />
revenues of approximately $250,00 by the<br />
end of year one. Other prospective<br />
customers include Kohler (commercial<br />
plumbing), Ditch Witch (cable trenching)<br />
and Astec Underground (trenching).<br />
Safety continues to be paramount at Finlay<br />
Industries. In addition to our monthly<br />
safety meetings, ergonomic audits, daily<br />
stretching exercises, and annual employee<br />
health risk assessments, I am pleased to<br />
announce we have reached a new plateau<br />
regarding employees’ zero lost time days at<br />
work. At the end of September 2006 we<br />
reached 1,385 safe workdays without lost<br />
work time. This equates to approximately<br />
five calendar years. In the US this type of<br />
safety record is very rare (less than one<br />
tenth of one percent of companies ever<br />
achieve it). If all goes well, by February<br />
2007 we hope to celebrate 1,500 continuous<br />
safe workdays at Finlay Industries. We are<br />
very proud of this accomplishment and I<br />
personally thank all our employees for<br />
keeping safety first and foremost in both<br />
their work and personal lives.
US continued...<br />
Finlay Industries <strong>News</strong><br />
Appointment<br />
James A. Butterbrodt has<br />
been promoted to Vice<br />
President of Finance and<br />
Chief Financial Officer,<br />
effective 1 July 2006.<br />
In addition to being<br />
responsible for all treasury<br />
and accounting related<br />
activities, Jim will oversee<br />
the Human Resource<br />
functions..<br />
Jim has recently completed his MBA course work<br />
and graduated with distinction from Keller<br />
Graduate School in Milwaukee. In addition he has<br />
earned a B.A. degree from Upper Iowa University<br />
and a CMA certificate from the Institute of<br />
Management Accounts. Jim has been with the<br />
company 11 years and lives in Beaver Dam with<br />
his wife Jayne and three children.<br />
Pakistan<br />
Update Irfan Vazeer<br />
The year to date has<br />
seen a further<br />
improvement in<br />
earnings from all the<br />
main divisions of<br />
<strong>Finlays</strong> Pakistan.<br />
The results from the<br />
P&I Division, while<br />
slightly down on budget,<br />
are of course dependent on the demand<br />
from our Principals. Nevertheless, through<br />
sustained marketing efforts and superior<br />
performance, we have proven in the past<br />
that revenue can be improved through an<br />
insistence on high levels of customer<br />
Pakistan <strong>News</strong><br />
Karachi Visitors<br />
Among the visitors welcomed to<br />
Pakistan this year have been:<br />
Graham Sanders, of Swire Cold Storage;<br />
Kobayashi Yasutada, Director of NYK Line,<br />
India; Steve Shin Masuda, General<br />
Manager of NYK Line, Asia; Masumi<br />
Sahashi, Deputy General Manager of TSK<br />
Lines; Anthony L. Cruz, Director/General<br />
Manager of NYK-FilJapan Shipping E-<br />
Services Corporation (TSK Line Manila<br />
Asia Marketing Center); and Leandro J.<br />
Ramos, Assistant Team Leader of the<br />
same company.<br />
Long Services Awards<br />
On 26 September, Finlay Industries, Inc. held its Length of Service Awards banquet at Old Hickory Country<br />
Club. Honorees this year are (front row, l-r): Deborah Neuman, Beverly Kotulski (20 years), Ellen Wallendal<br />
and Donna Vick; (middle row, l-r): Linda Carter, Bonnie Steindorf, Debra Sires and Mary Karst; (back row, l-r):<br />
Arland Kluewer (30 years), Michael Matuszeske, Jeffrey Gilhart and Michael Stange (25 years).<br />
service. As a result we are confident that<br />
the Division will close the year with an<br />
improved performance during the last<br />
quarter. The Survey and Tally Division goes<br />
from strength to strength and is beginning<br />
to become a significant contributor to<br />
Branch revenues<br />
During the year we have had some success<br />
in increasing the income stream from<br />
tenants renting space in Finlay House<br />
in Karachi.<br />
The Shipping Division which is responsible<br />
for generating the bulk of the Branch’s<br />
profits has had a good year with continued<br />
growth arising from a particular focus on<br />
NYK/JF Golf Tournament<br />
A golf tournament, sponsored by chief<br />
hosts NYK Line with James Finlay Limited,<br />
was held by the Karachi Japanese<br />
Association on 27 April at the Arabian Sea<br />
Country Club.<br />
Among the guests were staff of the Japanese<br />
Consulate and the Japanese School, More<br />
than 10 major Japanese trading houses were<br />
represented by Arae San of Indus Motors<br />
The event was much appreciated among the<br />
influential Japanese community which<br />
enjoys an excellent relationship with its<br />
counterparts in Karachi’s business circles.<br />
inbound movements from Japan and from<br />
Far and South East Asia. Outbound<br />
business to North America continues to be<br />
important with both volumes and revenues<br />
experiencing healthy growth. A new, direct,<br />
larger capacity service has been introduced<br />
between Japan and Karachi which will<br />
further increase volumes resulting in a<br />
corresponding improvement in revenues.<br />
We foresee the current trends continuing<br />
for the remainder of the year and are<br />
confident of again achieving a record<br />
pre-tax profit for the Branch.<br />
Operations Manager Salim Khan presents the trophy to<br />
K. Ayukawa, CEO of Suzuki Motor Company, Pakistan.<br />
29
30<br />
Announcements<br />
Births<br />
Adil<br />
On May 24 2006, to Sara, wife of<br />
Adil Mughal, Junior Officer, Accounts<br />
Department, JF Pakistan, a son<br />
Hammad Adil.<br />
Brohier<br />
On 5 March 2006, to Mayumi and<br />
Alvin Brohier, a son, Ethan Dale.<br />
Mayumi is Ticketing & Reservations<br />
Officer, Airline Division, JF & Co.<br />
(Colombo).<br />
Canning<br />
On 9 June 2006, to Geraldine Gundill,<br />
Machine Operator in Finlay Beverages’<br />
Tea Factory, South Elmsall, and<br />
John William Canning, a son<br />
John William (jnr).<br />
Ferdinando<br />
On 22 May 2006, to Natasha, and<br />
Dilum Ferdinando, a daughter,<br />
Neshi Clare. Both parents work for<br />
JF & Co (Colombo), Natasha as General<br />
Clerk, Insurance Department and Dilum<br />
as Staff Officer, Tea Department.<br />
Hughes<br />
On 9 August 2006, to Heather and<br />
Craig Hughes, a son, Carter Thomas.<br />
Heather is the Cash Application<br />
Specialist/ Receptionist at Finlay<br />
Industries, Beaver Dam, Wisconsin.<br />
McCormack<br />
On 11 August 2006 to Michelle<br />
Robinson and Jon McCormack,<br />
a daughter, Kaitlin. Jon is team leader<br />
in Finlay Beverages’ Coffee Factory.<br />
Nanayakkara<br />
On 4 August 2006, to Shanika, wife<br />
of Dinendra Nanayakkara, Group<br />
Systems Auditor, JF & Co. (Colombo),<br />
a son, Dhiren Nevaan.<br />
Perera<br />
On 3 September 2006, to Jeeva, wife<br />
of Samantha Perera, Messenger, Tea<br />
department, JF & Co. (Colombo),<br />
a son, Jerom Sashene.<br />
Rajapaksha<br />
On 4 July, 2006, to Madhu, wife of<br />
Shanaka Rajapaksha, Senior IT<br />
Executive, JF & Co. (Colombo),<br />
a son, Rivinu Nesara.<br />
Sarfaraz<br />
On July 19 2006, to Farzana, wife<br />
of Sarfaraz Ahmed, Junior Officer,<br />
Accounts Department, JF Pakistan,<br />
a son, Muhammad Noman.<br />
Sesath<br />
On 16 August 2006, to Dilhani, wife<br />
of Indika Sesath, Staff Officer, Tea<br />
department, JF& Co. (Colombo),<br />
a daughter, Enuri Methmali.<br />
Siddique<br />
On 15 May 2006, to Mehnaz, wife<br />
of Mr. Siddique, Domestic Staff, PNI<br />
Department, JF Pakistan,<br />
a daughter, Fiza.<br />
Singh<br />
On May 24 2006, to Kanta, wife<br />
of Deepak Singh, Domestic Staff,<br />
PNI Department, JF Pakistan,<br />
a daughter, Darpreet Kour.<br />
Thamira<br />
On 2 September 2006, to Shalini,<br />
wife of Mahesh Thamira, Staff Officer,<br />
Finance & Accounts Division, JF & Co.<br />
(Colombo), a son, Randyn Shalinka.<br />
Toqueer<br />
On 22 June 2006, to Atiya, wife<br />
of Toqueer-ul-Hassan, Junior Officer,<br />
Accounts Department, JF Pakistan,<br />
a daughter, Iqra Tul Iman.<br />
Weeraratne<br />
On 21 August 2006, to Chamari, wife<br />
of Roshan Weeraratne, Cargo Services<br />
Supervisor, Airline Division, JF & Co.<br />
(Colombo), a son, Yashira Nikith.<br />
Weston<br />
On 29 July 2006, to Dawn and<br />
Stuart Weston, a son, Luke James.<br />
Both parents work at Finlay Beverages,<br />
Dawn in the Tea Factory and Stuart<br />
in Engineering.<br />
Marriages<br />
De Silva – Perera<br />
On 4 May 2006, in Colombo,<br />
Nalin De Silva, Storekeeper, Export<br />
Processing Department, JF & Co.<br />
(Colombo), to Arshula Perera.<br />
Lokuge – Senadhipathira<br />
On 22 June 2006, in Colombo,<br />
Sulochana Senadhipathira, Staff<br />
Officer, Agencies Division, JF & Co.<br />
(Colombo), to Lasitha Lokuge.<br />
Silva – Wanniarachchi<br />
On 12 August 2006, In Colombo,<br />
Suresh Silva, Storekeeper, Export<br />
Processing department, JF & Co.<br />
(Colombo), to Dulani Wanniarachchi.
Deaths<br />
Boyce<br />
On 29 April 2006, at Guildford,<br />
Joyce Constance, aged 78, widow of the<br />
late Thomas Boyce, ex George Payne.<br />
Briam<br />
On 7 August 2006, at Eastbourne,<br />
Reginald Henry Briam, aged 86, retired<br />
Clerical Supervisor with George Payne<br />
1959-1984.<br />
Coen<br />
On 2 July 2006 in London, Ontario,<br />
Cecil Malcolm (Sammy) Coen, aged 86,<br />
late of James Finlay’s London office.<br />
He leaves a widow, Isabel.<br />
Dobson<br />
On 1 August 2006, in Dumfries,<br />
James Dobson, aged 72. Jimmy retired<br />
in 1994 as commissionaire at James<br />
Finlay’s Glasgow office. He is survived<br />
by his widow, Janette.<br />
Emms<br />
On 21 August 2006, aged 71,<br />
Raymond Andrew Acfield Emms,<br />
of Lupiac, France. He retired from<br />
The African Highlands Produce Co.<br />
in 1977 and leaves a widow, Annette<br />
Sheila.<br />
Farnell-Watson<br />
On 27 October 2006, in London,<br />
Arthur Vivian Farnell-Watson,<br />
aged 84, former Director of S.H.Lock.<br />
Fenlon<br />
On 22 April 2006, at East Grinstead,<br />
Surrey, Winifred May Taggart, aged 93,<br />
widow of Eric Victor Fenlon, late of<br />
P.R. Buchanan.<br />
Foames<br />
On 6 April 2006, at Southwark,<br />
Ann Elizabeth, aged 68, retired<br />
Production Worker with George Payne<br />
at Tower Bridge, 1977-1991.<br />
Gates<br />
On 29 May 2006, at Epsom,<br />
Ethel Beatrice (Pauline), aged 80,<br />
widow of the late P. B. Gates, Sales<br />
Manager with George Payne.<br />
Ilieve<br />
On 20 February 2006, at Reigate,<br />
Nancy Olive Passmore, aged 85,<br />
widow of the late Ernest James Edwin<br />
Ilieve, Company Director (Tea),<br />
George Payne.<br />
MacPhail<br />
On 9 April 2006, in Rutherglen,<br />
Jessie MacPhail, aged 86. Miss<br />
MacPhail, a former secretary at James<br />
Finlay’s Glasgow office, retired in 1974.<br />
Mitra<br />
On 30 July 2006, Samir Kumar Mitra,<br />
aged 84, formerly Cost Accountant<br />
Manager in the Calcutta office of<br />
James Finlay/Tata-Finlay/Tata Tea.<br />
He leaves his widow, Krishna,<br />
and daughter, Anuradha.<br />
Murchie<br />
On 16 July 2006, at Invergordon,<br />
Marguerite Murchie, aged 89, widow<br />
of William Hunter Murchie, late tea<br />
planter with The Consolidated Tea<br />
& Lands Co. in Bangladesh.<br />
Paul<br />
On 11 September 2006, at Tunbridge<br />
Wells, Beatrice Rose, aged 87, formerly<br />
Sweet Factory Supervisor (Paper Stores)<br />
with George Payne, 1932-1978.<br />
Prior<br />
On 10 April 2006, in the London<br />
Borough of Sutton, Albert George,<br />
aged 91, retired Stock Control<br />
Supervisor, George Payne.<br />
Whicker<br />
On 7 August 2006, in Croydon,<br />
David Albert, aged 66, retired<br />
Factory Worker with George Payne.