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

For the Amaleans, it was a big break. On a global scale, it was tiny. Compared to neighbouring India and other Asian countries, Sri Lanka is a bit player in the garment industry: It accounts for about 2 percent of the $120 billion global apparel trade. (MAS accounts for about 15 to 20 percent of Sri Lanka's textile exports.) But for the country itself, the industry is huge: Textile exports bring $2.8 billion into Sri Lanka every year, making up more than half the country's foreign exchange.

And counter to the traditional cultural values that discourage women from living alone or even working outside the home, the industry is dominated by women. More than 85 percent of Sri Lankan garment workers are female. Many have left rural towns and villages to work in the urban free-trade zones—sometimes gated industrial areas crammed with factories to promote employment for local residents—for $50 to $70 per month, living in cheap hostels or half-built houses, saving money or sending it home. And though they may be the sole source of income for their families, when men advertise for wives in the newspaper, they have been known to stipulate, "No garment workers."

Against this backdrop, MAS was growing, quietly continuing its policies of higher salaries, free breakfasts, eight-hour workdays and on-site health clinics. Meanwhile, unrest was growing in Sri Lanka. Rebellion had broken out in the north and east, as Tamil separatists fought the Sinhala majority for independence. Meanwhile, in the late 1980s and early '90s, young people rioted in the cities and the southern part of the country, railing against the economic liberalization that revolutionaries said had encouraged women to leave their villages and stripped rural areas of economic opportunity. In response, then-president Ranasinghe Premadasa offered incentives to apparel-makers to build factories in rural areas. The Amaleans leaped at the opportunity, establishing factories in Horana and Pannala, several hours from Colombo. Here, too, the company paid good wages, contributing to local schools and maternity clinics.

By the time MAS hired Ravi Fernando as the director of market branding in 2003, the company was operating 15 factories in five countries. Internally, the labour practises were taken for granted. With an outsider's perspective, Fernando saw it differently. "There were pockets of excellence," he says. Career training, English classes, health clinics, athletics—the environment at MAS was markedly different from other garment factories. And different was good. MAS knew it couldn't compete with China or India in price or speed. It made high-quality lingerie, but who knew whether that would be enough to keep customers? So Fernando pitched the Amaleans on a corporate social responsibility initiative: expanding MAS' social programs and marketing the company's progressive labour practises.

The company's founders balked. The labour practises, the community development, the career training—that was just a part of business as usual at MAS, not a marketing ploy. Why invite the prying eyes of the outside world? "For the last 15 years, what we did for the people, we did from our hearts," Sharad told INSEAD emeritus professor Story. Fernando pushed. If the company failed to differentiate itself, "we wouldn't have a foot to compete on," he said. Finally, they struck a deal: Fernando could expand MAS' programs and unify them, but he couldn't spend a single dollar to promote the effort externally.

In 2004, Fernando and MAS rolled out the Women Go Beyond program. They installed a "Go Beyond" team leader in every plant. The same way an apparel manufacturer would hand over a design and technical specifications for a garment, MAS executives packaged curricula and incentive programs and distributed them to the factories.

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