Sri Lanka’s shipping industry is gearing up for exciting times. The government is licencing multiple off-shore blocks for hydrocarbon exploration and exploitation to dovetail into the national electricity generation plan. “This means oil rigs and more ships to service,” says Shehara Jayawardana, who heads Sri Lanka’s largest maritime services provider.
McLarens rakes in Rs18 billion annually, just from its maritime services. The firm services vessels both on and off-shore. Cargo, personnel, water, food, spare parts, sea marshals or bunker fuel, McLarens services all requirements. The firm needs to service more ships for the business to grow. With Sri Lanka lying just a few miles north of the world’s busiest shipping lane, the country has to build better maritime infrastructure to attract these ships to local ports. As a result, Jayawardana is also looking forward to the development of the East and West Terminals in Colombo Port. “If you take bunkering, if we get even 2% of Singapore’s business, we will more than double our monthly volume of 60,000 tonnes.”
She says that there is a possibility of McLarens forming a consortium with its shipping principals to bid for the operation of the West Terminal, although this is not one of the group’s core services.
“A question we ask ourselves often is whether we have reached that sweet spot in balancing the two aspects. I think there is a sweet spot, and we’re nearly there.”
Jayawardana is the third-generation of her family to head McLarens. She received her Bachelor of Science in Economics from the London School of Economics and a Master of Science in Shipping, Trade and Finance from the City University, Cass Business School. Her passion for economic policy led her to work at the Institute of Policy Studies, a premier think tank, very early in her career. Jayawardana also has experience working at shipping firms in Dubai and Singapore.
After learning the ropes of each business vertical McLarens was present in, Jayawardana joined the group board in 2005. She co-manages the group, which includes over 50 subsidiaries, with her husband. McLarens has a logistics and warehousing arm. It is also a manufacturer of plastic foam and bubble wrap for packaging. The group also has investments in property and hospitality and is the local dealer for ExxonMobil lubricants. Most of these businesses had begun under the first or second generations of the family. Jayawardana had introduced the 3M franchise to Sri Lanka, and digital services. She sees space for innovating digital maritime services and logistics to reduce administrative processes and costs.
To take advantage of opportunities across all its industries, the group has been transitioning to a more corporate structure under Jayawardana’s leadership over the past decade. The group had grown organically, but to expand the business, there needs to be more structures within the organisation. When she was installing modern corporate processes, Jayawardana, who now leads a young millennial team with the retirement of the old guard, realised that her family’s values formed the cornerstone of McLarens’ success; that the new structures can not supersede these values.
“The culture my father and grandfather fostered values flexibility, loyalty and going beyond the workplace to take care of the team, but I also have to install proper checks and balances with the increasing number of transactions,” Jayawardana says. Therefore, she is attempting to strike a delicate balance between the two dynamics, with which to drive innovation and remain profitable. “A question we ask ourselves often is whether we have reached that sweet spot in balancing the two aspects. I think there is a sweet spot, and we’re nearly there.”
Jayawardana is continuing to push for a strategic transformation of the group. McLarens is now evaluating further diversification within manufacturing into niche products for global value chains. These could be a component in a vehicle or other similar sophisticated machinery or gadgets. “Once you get it, it’s a guaranteed business and that will mitigate some risks for us in other sectors,” Jayawardana says. Diversification is not the only strategy being employed.
The group’s two hotels in Kandy are being considered for strategic deals, whether for management contracts or divestiture. With the rapid development of Sri Lanka’s tourism industry, Jayawardana sees others who would be capable of adding more value to the country through the two hotels than McLarens could. Despite the transformation within the group, Jayawardana says that maritime services will remain its core business.