Reassuring Quality in Performance – Ravi Dadlani, Managing Director of CEAT Kelani Holdings

A distinguished professional, established in the manufacturing sector; Ravi Dadlani is the Managing Director of CEAT Kelani Holdings. His lengthy career with CEAT began 14 years ago as General Manager of Sales and Marketing.

Ravi received his schooling at the prestigious Royal College Colombo, and after passing his examinations with the Chartered Institute of Marketing (CIM) in the United Kingdom, he entered the profession of sales and marketing in 1989. Since then, he has participated in several international study programs, including those at the National University of Singapore, the Indian School of Business, the Japanese Union of Scientists and Engineers, and the Indian Institute of Management, Ahmedabad, all of which have given him valuable insights into business and industry.

He began his career as a Management Trainee at The Maharaja Organization Limited, working for S-Lon and then Ole Springs, PepsiCo’s local bottler, where he was part of the team that helped establish the Pepsi distribution network in Sri Lanka. Ravi’s background is diversified, and he has worked in manufacturing and operations for the majority of his career, apart from a brief stint with a venture capital firm. However, sales, marketing, and distribution have always been his strong suits.

When asked what he believes are the essential ingredients for becoming a successful entrepreneur, Ravi says he doesn’t believe there is a single set of essential ingredients or one formula for success. What has worked for him, however, is a belief system that includes confidence in his abilities and skills, a willingness to listen, understand, and devour information, and, most importantly, a passion for what he does, all of which he applies in the context of the people and environment in which he works.

We spoke to Ravi on how he handles stable and continual growth at CEAT Kelani Holdings, the most dominant domestic tyre maker. He responded that CEAT has been able to maintain its status as the overall market leader in the country despite competition from international and domestic businesses. The company has a market share of over 50%, with 44% in the radial segment and 36% in the two-wheeler tyre category. He goes on to note that over the years, Sri Lankan consumers have placed trust in CEAT because of its quality, dependability, and value for money. Aside from product quality, the secret for their success is a resolute and adaptable workforce, a solid relationship with their dealers, ongoing investments in technology, new product development, and manufacturing capacity expansions.

Furthermore, we learn that, despite the pandemic’s limitations, CEAT raised production by more than 40% across all categories and currently fulfills 100% of Sri Lanka’s truck and bus tyre requirements. The company spent substantially on distribution expansion in the two-wheeler category last year, invested in state-of-the-art machinery to enhance automobile radial tyre capacity by 45 percent and augment production by 200,000 tyres per year.

Questioned how he plans to establish the brand’s future as a market leader, Ravi answers that he recognizes the value of brand-building, especially in this challenging period when consumers may be persuaded to look for affordable substitutes. As a result, the company has been steadily funding their product, bolstering key customer benefits such as comfort, safety, and fuel economy, with plans to continue underwriting product technology to improve these offerings. CEAT will pursue investing in their channel partners, such as dealers, distributors, and tyre-related services, through a variety of initiatives to give the greatest possible customer experience.

He goes on to say that the Sri Lankan tyre market is noteworthy for the power of the CEAT brand. Due to the small nature of the market and the economies of scale required, every new manufacturer wishing to enter Sri Lanka must have at least 40 to 60% of its production-ready for export. As a result, Ravi argues, a certain amount of international connectivity will be required. He emphasizes this, as it took a long time for them to develop a 30% export market without sacrificing quality; product quality is guaranteed whether the tyres are sourced from CEAT India or CEAT Sri Lanka. He further claims that because CEAT is a smaller company in Sri Lanka, they can produce a wider choice of tyres in smaller quantities that can fit into a single container.

CEAT, according to Ravi, is widely regarded as one of the most successful Sri Lanka-India joint ventures. They have the best of both worlds, with CEAT India’s technology, R&D, and industry strength –  CEAT India’s expertise in handling huge markets and investments, as well as its focus and equipment, are all assets. From a local standpoint, the advantage is in terms of broad market knowledge, local expertise, policy management, and local industry. The reason for success is that the company has two diverse owners who are prepared to meet on the same platform to move the company forward. He believes that the current market conditions, combined with increasing competition from new local producers, will be the biggest challenges in the future. It is also concerning that consumer spending power is dwindling, while raw material prices are rising.

Asked how CEAT aligned with manufacturing processes during the ongoing Covid-19 outbreak, Ravi explains how the pandemic has harmed Sri Lanka, as well as all exporting countries. The frequent shutdowns have resulted in significant losses in terms of output and fulfillment of sales agreements affecting both international and domestic supply chains. However, the government’s decision to ban the import of specific sizes of tyres has boosted demand for domestic tyre makers, at least in the short term, amplifying the local manufacturing business.

Ravi goes on to say that CEAT committed Rs. 3 billion in investment in 2018 to boost capacity, expand the product range, and improve quality across the entire product line. He claims that these investments are continuing despite the pandemic and that the company has boosted production across all categories by more than 40%. CEAT is also investing in capacity expansion because they now need to produce more to help fulfill the deficits caused by the government’s temporary import restrictions to conserve foreign exchange. They have met the challenge of not just keeping manufacturing running while protecting staff, but also ensuring that items reach customers across the country during the pandemic.

The company’s greatest strength, according to Ravi, is its people and processes, which they’ve been investing in for a long time, and during the last few years, they’ve improved their processes and worked hard to establish a performance-based culture. In all they do, CEAT has implemented the Quality Based Management culture. The brand has grown into categories that are being manufactured for the first time in Sri Lanka, such as Truck Bus Radials, in addition to the previously mentioned production expansion. Ravi proudly notes that their brand recall is 84-95 percent across all categories in the market, going on to say that CEAT is the best brand in the ‘Motor’ category and is placed 5th among Sri Lanka’s ten strongest brands. He also points out that their brand value has increased by 40% to Rs 2 billion, and they have been given a ‘AAA’ brand rating. He inspires us to remember that we are all stories in the end. Only the contributions to society we leave behind are valued, so we must guarantee that everything is excellent.

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