A GRAND VISION: BUILDING A CONGLOMERATE FOR EVERYONE

What is your vision for the Janashakthi Group?

We are aiming to position Janashakthi among the leading conglomerates in the country. Ten years from now, we aspire to be among top ten listed companies in terms of market capitalisation. In terms of strategy, we are exploring opportunities raising capital, even a public listing, in an attempt to become a larger company with a broader base of businesses and more diversity in what we do as well. We are pushing the boundaries of insurance, finance, and real-estate so that we can create value for our customers, shareholders, people employed across the group, our business partners, our communities, and people from all walks of life.

What is the group’s approach to investing in people across its businesses? And importantly how do you align them to a common vision?

“Janashakthi” means strength of the people, and it is the core of what we do. As a group, we have invested considerably in people and relationships. We are proud of the family culture that Janashakthi is recognized for. However, as we expand organically and inorganically, we need to formalize these structures and processes. We have just gone through a process of evaluating what Janashakthi stands for, what we represent and what our values are, and we are rolling that out to employees across the group: so irrespective of the industry or business, every Janashakthi Group employee will advocate and represent these values which will contribute to making Janashakthi Group a workplace we are proud of.

We have allocated large amounts of resources across the board that will help develop our team in achieving their full potential. Homegrown talent developing over time and reaching higher levels of management is a credit to us and a delight to see!

Customers are an important aspect of our business as well, especially since we are primarily in the service industry. The loyalty and commitment of our staff are essential to delivering the sort of service and standards that we promise. Our number one priority is reputation. If we had to choose between making a profit or keeping our reputation, we would forfeit profit, to maintain our reputation.

Our communities around us are as important. As a group, we are committed to the development of the nation with our businesses in insurance, finance, fund management and property development, and our strategy also includes empowering marginalized communities. As a business, we have a responsibility for the people around us and in the coming years, we will be rolling out strategies to empower communities and to serve them as much as we would serve our shareholders and other stakeholders.

What about your role both challenges and excites you?

I look forward to challenges as it excites me. Being present in the middle of an acquisition excites me and I would work all night to ensure that we close the deal. So, I am in that perfect position because I get to manage a portfolio of businesses and give guidance and clarity on the bigger picture.

Acquisitions are a part of our DNA as a group since 1993. We have looked at one acquisition after another, some small and some large, and have grown the business horizontally and vertically. We are where we are today because of acquisitions such as First Capital, Orient Finance and Kelsey Homes. We have identified acquisitions as a specific growth strategy that we will be pursuing in the future.

BEYOND LIFE INSURANCE

What are the factors shaping the future of the industry?

Firstly, the ongoing economic recession will mould the immediate future of the industry. Consumers are more focused on essentials and are not thinking about long term savings or investments right now. As such, insurers will need to focus on consumer segments that are least affected by the recession and provide products relevant to their needs.

Second, consumer behaviour is evolving and trending in several directions: the emergence of a millennial consumer group, an ageing population, changes in personal taxation, increasing smartphone penetration and social media usage, the liberalisation of education and an upsurge of medical infrastructure, among others, are changing the way consumers behave. Increasingly, predictive behaviour is a capability that needs to be honed. As the socio economic environment changes, the insurance industry has an opportunity to influence and drive positive change by empowering people with innovative insurance solutions.

How is Janashakthi life driving change or even disrupting norms for growth?

We are expanding our sphere of influence by focusing on the periphery of BFIs and NBFIs: we will certainly look for opportunities to collaborate with BFIs and NBFIs, but we are also focusing on organic growth. Innovation is key at Janashakthi Life, enabling us to predict changes in consumer behaviours and keep pace with emerging trends. In this context, we proved our capabilities by launching the world’s first comprehensive pandemic-related insurance policy called Covid Guard that covered PCR tests, vaccinations, and hospitalisation.

Investing in digital technology allows us to reach consumers everywhere with simplified and augmented insurance products. This has enabled us to build a sales force that is among the most efficient in the industry. Our investment in technology is giving us a competitive edge because we can provide accurate and swift solutions and novel customer experiences with our digital services and distribution channels.

A QUEST TO DISRUPT THE FINANCIAL SECTOR

How is First Capital disrupting existing norms in the financial sector?

Banks command 90% of the total deposit base estimated at Rs. 11 trillion. Interest rates have now declined to historic lows giving us an opportunity to showcase our alternative investment products that offer better returns, flexibility to conveniently withdraw funds and peace of mind to customers. We have a money market unit trust that is a de facto savings account.

The fund currently is yielding about 7.3%, compared favourably against an average one-year FD rate and over 3.5% above a typical savings account. So, we took this message out and had a great deal of success. In April 2020, during the lockdown, the fund was about Rs. 5 billion but a year later it has grown to Rs. 20 billion!

What is your vision for the future of First Capital?

We are building a financial powerhouse. First Capital is a fully-fledged investment institution with four main businesses: a primary dealership in government bonds, asset management which includes unit trusts, a debt structuring and corporate finance unit which is the third, followed by our stockbroking business.

The primary dealership executed trades totalling Rs. 300 billion in the 2020/21 financial year, leading the market ahead of the largest banks. Our asset management business manages funds totalling Rs. 45 billion and the debt restructuring unit executed transactions worth Rs. 25 billion during the pandemic.

Looking forward, our vision is to disrupt and revolutionise the financial services industry with a range of alternative financial products and services for corporate and retail customers alike that will give better yields and redirect financial resources to the most needed in the economy.

LEADING A CUSTOMER-CENTRIC TURNAROUND IN A RECESSION

How did you achieve a turnaround at Orient Finance during the pandemic?

When I joined Orient Finance as its CEO a year and a half ago, the company showed immense potential to grow. As a result, we quickly developed a road map to embark on this journey.

Unfortunately, the Covid-19 pandemic obstructed our execution of the recovery strategy. With the economy in a tailspin due to the lockdown adversely impacting our clients, my priority was to ensure stability and motivate our people. It was critical to be nimble and re-strategize fast and we altered our recovery plans.

We first ensured the safety and wellbeing of our staff across our network of 31 branches and our 18,000-strong client base. Our depositors were enabled to conveniently access their funds when required.

Steps were taken to ensure those who could service their loans did so on time, and we provided relief and concessions to businesses struggling to hold their heads above the water. We even gave loans to businesses that needed funds.

How did that strategy work out for the company?

In my 36 years of banking experience, one key lesson that I took away is that you need your customers to survive for you to survive. They need to grow for you to grow. We had robust due diligence and recovery processes in place, so we were able to attend to the needs of those who genuinely needed our assistance.

It was hard times for all of us, but our customers came through for us. We managed to maintain our deposit base and loan book unchanged throughout the year enabling us to achieve a positive turn around.

REVOLUTIONISING THE REAL ESTATE INDUSTRY

How is Kelsey homes driving innovation for growth?

Kelsey Homes has built a reputation for itself as a gated developer in the country that catered to an upper-middle and higher-income segment of the housing market. As a company, we are always looking at emerging trends and we discovered a new opportunity to grow the business. Sri Lanka has a growing middle-income population right now and there is a vacuum – and pent up demand – for affordable housing. Demand for affordable housing is growing and expected to boom over the coming years, so while we continue to serve the high-end segment, we embarked on new projects to develop housing units ranging from Rs. 7 million to Rs. 20 million.

What is your vision for the future of Kelsey Homes?

We want to solve the country’s housing challenge and there is tremendous potential for growth. We have an ambitious plan to become a Rs. 10 billion top-line company over the next two years, that is a growth rate of over 150% and I believe we have the right strategy in place to achieve that goal.

We have served over 2,000 clients over 35 years. Our active projects include a 30 unit gated community in Kottawa nearing completion and we are currently developing one of the best mixed residential development projects in the country, Central Park Ja-Ela: our biggest project yet! This consists of over 350 housing units and offers unparalleled services and more than 40 amenities where we have refined the concept of modern day living and we hope to replicate the same concept in other parts of the country.

We are aiming to position Janashakthi among the leading conglomerates in the country. Ten years from now, we aspire to be among top ten listed companies in terms of market capitalization