This article was originally written and published by Land O’Lakes International Development here.
Imagine you ran a factory. Imagine you had to vacate your premises, staff and heavy equipment at a moment’s notice. Not once, but nineteen times, amid a bloody civil war. Where most would have given up, Thomas Selvarajan and his team possessed the steely determination to safeguard their metalwork business, against all odds.
Today, Sarah Industries remains the first and largest metalwork factory in Northern Sri Lanka, and is set to grow exponentially following the post-war construction boom in the city of Jaffna and its surrounding regions. Current demand for nuts and bolts is 40,000 kilograms a month, and the operation is enlarging to supply this and more by offering 100% local hardware products and metalwork services that out-market traditional ‘imports’ from the South of the island in cost, time and distance.
In 2013, the company entered a US$1.5 million partnership with VEGA/BIZ+ – a four year program funded by the United States Agency for International Development (USAID). Led by the Volunteers for Economic Growth Alliance (VEGA) and implemented by Land O’Lakes International Development, VEGA/BIZ+ is committed to boosting small and medium-sized enterprises with the potential for economic growth and job creation in economically lagging areas of Sri Lanka.
The business initially started during wartime 1992, offering metal shearing and electroplating. In 1995, Mr. Selvarajan had to flee the fighting, recommencing operations three years later at his present city workshop. Sky-high loan repayments and no government concessions meant restricted growth. As Sarah became one of VEGA/BIZ+’s first grantees, they were finally able to construct a new, 1800 square meter factory in the Achchuveli Industrial Zone. This development made them one of BIZ+’s largest partners – and the Park’s first entrant. A $400,000 in-kind grant by VEGA/BIZ+ procured two new machines for hardware products and two for customized metalwork services like lathe procedures and metal-bending.
A purification plant at Achchuveli processes waste water from electroplating, ensuring energy efficiency, while ‘peak’ and ‘off-peak’ work shifts also optimize costs. Further, the partnership has created 130 fulltime jobs worth $240,000. “At full production the company employs 100+ and each worker supports one family,” explained Mr. Selvarajan. Some positions have been given to rehabilitate ex-combatants.
To warrant sustainability, VEGA/BIZ+ insists on co-investment – which in Sarah’s case was a higher than average $1.1 million. BIZ+ has also built the enterprise’s capacity with technical assistance in areas like maintenance, finance, and stock management. Other key implementations include an occupational Health & Safety audit, workers’ insurance, and HR development.
“If not for the partnership with VEGA/BIZ+, it would have taken my business another 15 years to reach this level of success. Our dreams, our ambitions, the future, have all been brought closer as a result,” enthused Sarah’s owner. As expansion continues he envisages, “…improved sustainability and the cancelation of liabilities.”
In industry terms, the inspiring survivor wants to see more qualified trainers, accurate price prediction systems on imports, and tax-free allowances for start-ups. Currently awaiting Sri Lanka Standards Institution approval for overseas exports, Sarah Industries is confident of soon supplying North Sri Lanka’s construction industry in toto. The future of the metalwork outfit from Jaffna is certainly gleaming.