ReStructure or Perish The Hayleys Experience

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Re-Structure or PerishThe Hayleys Experience
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Purpose

• To demonstrate the benefits and process of
  Re-structuring
• As experienced by Hayleys
• Based on The MTI Way

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Hayleys

• Accounts for
• 1.8 of Sri Lanka's export income
• 1.2 of its GDP
• 5.7 of market capitalisation on CSE

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Hayleys

• Exports - Coir, Rubber, Environment
• Transportation, Plantations and Toursim
• JVs Insurance / Telecom / Textile
• Inland Marketing

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HayleysThe Inland Marketing Sector

• 15 Companies
• 32 Business Units, including
• Bayer Agro, Consumer
• Fuji
• Philips
• Blue Cross
• Xerox
• Conqueror
• Volvo Penta

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Hayleys Inland MarketingBottom-line (PBT)

• 2000/1
• SLR 90 Million
• Significantly influenced by 2 of the companies
• 2001/2
• Early signs of a significant drop

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Hayleys Inland MarketingThe Problem (as of July
2001)

• Most the following reasons are as a result of
  un-checked growth, some healthy, some unhealthy

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Hayleys Inland MarketingThe Problem (as of July
2001)

• Fragmentation of companies / business units
• 15 Companies
• 32 Business Units

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Hayleys Inland MarketingThe Problem (as of July
2001)

• Unrelated businesses / groupings
• Example Haytech Marketing
• Pharmaceuticals
• Textile Dyes
• Industrial Raw Material
• Animal Health
• Household Brushes
• Synergies not optimised

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Hayleys Inland MarketingThe Problem (as of July
2001)

• In-breeding and duplication of Support Services
• 22 Accountants / Assistant Accountants
• Over 10 warehouses

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Hayleys Inland MarketingThe Problem (as of July
2001)

• Top-heavy structure
• Over Staffing?
• Sub-optimised / over lapping distribution

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Hayleys Inland MarketingThe Problem (as of July
2001)

• Reducing margins due to high cost of working
  capital
• Example One Hayleys Company
• SLR 28 Million (almost 1 ½ months stock cover)
  over 120 days

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Hayleys Inland MarketingThe Problem (as of July
2001)

• Lack of bottom-line focus
• Un-challenged culture

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Where are we today?

• Almost 2 years since re-structuring
• Staff numbers down from 750 to 525
• 3 highly customer focussed companies

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3 Highly Focussed Companies

• Hayleys Consumer
• Hayleys Agro
• Hayleys Industrial
• Each with customer need focussed business units
• Total of 15 business units for the 3 companies

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• Consumer Lighting
• Consumer Durables
• Photo-Imaging
• Health Care
• Home Care / Pest Control

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• Crop Protection
• Crop Production
• Agro-Equipment
• Agro Commodities (Crop Protection)
• Animal Health

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Hayleys Industrial Solutions

• Power Generation
• Industrial Lighting
• Print Needs
• Pigments and Emulsions
• Industrial Raw Material

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The Bottom-line
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Other benefits that will hit the Bottom-line

• Performance-driven culture
• Business Initiative Success

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• Fuji takes the digital high ground
• Philips Lighting consolidates leadership
  supremacy
• Consumer Electronics back in the black, new
  agencies, revitalised channels

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• S C Johnsons partners Hayleys Consumer
• Hayleys Agro redefines profitability and social
  responsibility

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• ABB partners with Hayleys Industrial
• Industrial Raw Materials tops Hayleys Industrial
  Solutions

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Re-Structuring The MTI Way(The 11 Principles)

• Top Management Commitment and Involvement
• Ruthless, laser-beam bottom-line focus
• Start with Ground Zero
• Forced Self Realisation
• Strategy before Structure
• Via ConsuLearning Workshops
• Business Focus Vs. Functional Excellence
• Lean and Mean
• Bias for Action / Closure
• Staff after Structure
• Implementation Links