Sunshine Holdings is an important player in multiple segments. These include healthcare, consumer brands, plantations and renewable energy. Shyam Sathasivam suggests the company’s presence in numerous sectors is because the Sri Lankan market is relatively small, and that the entrepreneurial ambition is greater than what one industry could hold.
Sathasivam views the challenge of diversification as not being present across industries, but as being relevant to consumer needs. That includes building brands in each of these segments. Sathasivam uses Zesta tea and Healthguard, a pharmacy chain, as examples of how their choosing a different route has led to success in building brands. Both brands are now household names that inspire consumer confidence.
“Every business unit has an element of international collaboration, whether it be partnering with global leaders, or taking their brands overseas.”
Sathasivam, a graduate from the London School of Economics and Political Science, U.K., with a master’s from the Kellogg School of Management, U.S., says the group’s strategy also includes building brands that can appeal gloablly. Every business unit has an element of international collaboration, whether it be partnering with global leaders, or taking their brands overseas.
Sunshine Holdings is a family business. Founded 52 years ago by Sathasivam’s father, it started as a small pharmacy and a one-van medical supplies delivery service company. Sathasivam puts the company’s rags-to-riches success down to hard work – in his eyes, a typical old-fashioned entrepreneurial story. In the 90s however, Sunshine Holdings partnered with Tata Tea, moving into plantations.
In 2005, Sunshine Holdings re-entered the pharmaceutical retail space by launching the Healthguard chain. Once again, with a strong focus on securing the brand, their approach challenged traditional perceptions of pharmacies. It introduced wellness and wellness-led beauty care brands to its pharmacies. The group acquired the pharma business of listed Hayleys Group.
Sunshine Holdings employing over 9,600 people, reported group revenue of Rs22.6 billion for the year ending March 2019. It’s healthcare business which includes the pharmacy venture and a medical devices business contributed 40% to group revenue—dairy farming and plantations contributed 31%; consumer goods, namely its tea brands, 25%; and an energy unit consisting of mini-hydro and rooftop solar 4%.
Watawala Dairy, a subsidiary, averaged 18.70 litres of milk yield per cow daily in 2018, compared to a national average of around 4.4 litres. The farm has 1,285 cows, including 851 milkers. In its first full year of operations it produced 6 million litres of milk, compared to 2 million litres the previous year.
The drive to stay relevant wasn’t achieved without trial. Sathasivam is quick to point out that the four industries where their strengths lie, was the result of undertaking multiple more ventures in the past. But the next challenge in staying current is without a doubt having a strong foothold in tech. None of the segments in which Sunshine Holdings plays in today includes an emphasis on tech. This is something that he’s aware will be a disadvantage going into the next decade. “I can’t believe that we as a group will survive without being in a technology business,” he says. “But that’s how it should be.
The market shouldn’t be so comfortable that businesses just hang around, right? We need to be competitive, and consumers are expecting something different.” As a public limited company, Sathasivam is keen to ensure that his family connection isn’t called into question. “We have to do what’s best for all shareholders. It shouldn’t matter if I’m a family member. If someone can run the business better than I can, they should be allowed to.”
This hands-off approach to the day-to-day running of the business is something that Sathasivam says helps keep the entrepreneurial passion alive. He suggests that entrepreneurs, by nature, lose interest without moving on to the next challenge. He thinks that his handing over of operations to a professional chief executives, has helped him to continue scaling the business.
“I think most families destroy wealth by staying in management for far too long.” Sathasivam believes there comes a point at which professionals should aspire to change careers. “Social equity is tied up too much in what your last big corporate role has been,” says Sathasivam. Whether becoming an angel investor, or retiring from the scene altogether, Sathasivam believes that moving on to new pastures should be encouraged in society.