Brothers in arms

How the Amalean family made MAS Holdings Sri Lanka's biggest garment manufacturer - and one of the industry's best corporate citizens.

Janet Paskin | March 2008 issue

more photos The plant was hot. Crowded. Poorly lit. Under the three previous owners, more than 400 garment workers, mostly women in their late teens and twenties, worked 12- to 14-hour days with fewer than five toilets to share. No surprise, the Sri Lankan apparel factory had a history of labour disputes. Now MAS Holdings, Sri Lanka's biggest apparel manufacturer, was promising to fix the problem. Under the new ownership, said MAS Managing Director Dian Gomes, the workers would keep their jobs. In many cases, they'd have higher salaries. And they'd have a downright nice place to go to work every day.

The women were skeptical, but Gomes wanted their confidence. So he raised the stakes. If he couldn't make good on his promises in six months, he said, he'd resign. Within four, MAS had overhauled the plant, installed air-conditioning and retrained the workers. Within a year, the plant was generating $10 million in revenue—$1 million in profit—and providing meals, health-care services and career development to workers every day.

The year was 1993. "Corporate social responsibility" wasn't yet a business school buzzword. Sweatshop conditions weren't yet an international shame. At MAS, progressive labour practises were simply business as usual, nothing to brag about. "It was the right thing to do, especially when the entire industry depends so much on women," says company chairman and founder Mahesh Amalean, a business leader who has become known for humility, respect for people and integrity, all of which form the foundation of his company.

In an industry known for exploitation and labour abuses, stories like this are rare. And with its history of civil unrest and rebellion, Sri Lanka may be an unlikely country in which to find one of garment manufacturing's best corporate citizens. Nonetheless, headquartered in a high-rise in the capital city of Colombo, MAS Holdings has emerged both as one of the country's most successful companies and as a global leader in ethical fashion.

In the last two decades, the company has increased revenues from $6 million to $700 million, and counts Victoria's Secret, Gap, Speedo and Marks and Spencer among its clients. At the same time, it's been singled out for recognition by the United Nations and the World Bank for the quality of its labour practises.

"Many of the policies MAS has implemented would do justice to companies in the developed world," says Jonathan Story, emeritus professor of international political economy at the French business school INSEAD. He found MAS so remarkable, he wrote a case study about the company. "It demonstrates very clearly a simple business point: If you treat your people well, the top line and the bottom line will move together."

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