Ceylon Pencil Co: The building of a dynamic brand

When your company has a rich history of 50 plus years, manoeuvring through good and bad times, some of it rather significant at watershed moments in Sri Lankan history, you have arrived not just as a business, but as one with a heritage deeply tied to the roots of Sri Lanka. 

With Ceylon Pencil Co, a Sri Lankan company with a rich history and an even richer present, Nirmal Madanayake, its second generation MD, has nurtured it from troubling times to a powerhouse of world-class stationery.

Madanayake’s insights into a business that started out and still remains a unique Sri Lankan business entity are derived from both the company’s history and his own experience at running it as MD since 1995. 

It personifies the capacity and the capability of a Sri Lankan company to scale the heights and emerge a stronger and more efficiently run powerhouse that has successfully overcome all the odds, even in an age when tough competition exists.  

 

Early steps

 Ceylon Pencil Co was founded by D.S. Madanayake, Nirmal’s father, over 50 years ago. The Madanayakes operated a bus service and an insurance company – MJ Insurance and MJ Buses – which were successful ventures when they were nationalised back in the late ‹50s. “There’s still an old board of the company, hanging outside, in front of the Fort Railway Station,” Nirmal Madanayake reveals.

Following his education at Cambridge University, D.S. Madanayake joined the Central Bank but left in 1959 and started the Ceylon Pencil Co with Japanese technical collaboration. 

Despite the ’60s being tough times, the company pioneered the manufacture of pencils and continued to grow exponentially. In 1970, it initiated a joint venture with Atlas Pencils of the UK, a rare feat at the time, and engaged in exportation. 

“Sri Lanka is one of the best sources of quality graphite and we exported high quality pencil lead to the UK,” Nirmal states. Old pictures show him beside his father and several of the company’s employees, ready to export a shipment the old-fashioned way to the UK.

In 1973, the family migrated to Australia, leaving the company in the hands of a relative. Nirmal’s father returned in 1977. Nirmal himself came to Sri Lanka in 1992 for a six-month stint, as he called it at the time. It was a culture shock for him but he was able to somehow fit in and was determined to steer the company out of troubled times. 

In 1995, he took over as MD of the company when it was facing tough times– financial debt was mounting but the young man at the helm persevered. An export order that came at the right time turned the company’s fortunes around.

“I remember sitting down with the staff members to personally pack the order; it was a lifeline for us,” he recalls. “These were the days before India and China were opening up and we were able to actively engage in the export of pencils.”

 

Resurgence

 Nirmal eventually found himself steering the company past several of the country’s and the company’s most trying times – from a strike that was caused through misinformation to being challenged by the LTTE for a tax. 

“We can proudly say that we have never bribed our way nor compromised our integrity at any point in our journey,” he says. “That was how this company was built and that’s why we are proud of our journey.”

Under Nirmal’s guidance, the company grew. He appointed young graduates to the management team and ensured that they were trained and given proper exposure. Today they run a vibrant and successful company that has grown into a powerhouse of stationery and related items. In 2012, A.C. Neilsen placed Atlas in the top 7% of brands in a global survey index of 8,551 brands surveyed in 73 countries.  

“We have always focused on introducing and maintaining the highest quality but with mass market appeal. We do have premium ranges such as the stationery and books manufactured under the license of global brands such as Ben Ten, Barbie and Disney – our quality is world-class and our products meet the highest quality standards, proudly manufactured in Sri Lanka,” Nirmal added.

The company has experienced double-digit growth and maintains a strong market share throughout the island. Nirmal sees a future of growth and tremendous possibilities.

“Sri Lanka’s GDP is estimated to surpass that of China in five years. We are likely to see a bigger focus on the education sector, which would expand the market.”

Commenting on the industry, Nirmal is of the view that during the past few years, competition has become more intense across all business categories. However he asserts that Atlas has been successful in overcoming all these challenges and maintains a commanding market leadership position. 

Nirmal remains hands-on but is confident of a dynamic team headed by CEO Hamza Mohamed taking the company to a new level of growth and expansion. 

“It is an exciting time for us all. As the economy takes off and the country is poised for a new phase, Ceylon Pencil Co is confident of the possibilities the future brings.”