Case Study: MAS Holdings
An excerpt from Market Movers: Lessons from a Frontier of Innovation
Full Market Movers report, and its companion piece, Developing Value, are available at www.ifc.org/enviro and www.sustainability.com/marketmovers
Despite a violent ethnic conflict and the removal of trade protections under the Multi Fibre Arrangement (MFA), this Sri Lankan apparel manufacturer has thrived in recent years while championing women’s empowerment. In the mid-1980s, Mahesh Amalean was excited that his small textile business on the island of Sri Lanka had won an order to manufacture dresses out of synthetic fabric for a subsidiary of Limited Brands, a huge American apparel company. Then a change in quota restrictions meant that he could not fulfil the order. Mahesh had to look around for something else to manufacture. He and his two younger brothers, Sharad and Ajay, had pooled all their savings a few years earlier and bought 40 sewing machines. They needed to keep them busy. On a visit to MAST Industries’ office in Sri Lanka, Mahesh spotted Nevertheless, Mahesh decided to try and manufacture it, and he and his brothers set out to see how it was done. They travelled to Hong Kong and China to gain a deeper understanding of the manufacturing process. Mahesh also went to Ohio where he managed to persuade senior executives from Victoria’s Secret that a couple of unknown Sri Lankan entrepreneurs could produce bras to the very high standards that American consumers demand. With a vote of confidence from Victoria’s Secret, the brothers’ company, MAS Holdings, found itself with access to American customers and Sri Lankan workers. It was a potentially powerful combination. Some time later, MAS learnt that a 120-year-old German company called Triumph had the top technology for manufacturing lingerie and, two years after joining At the time, however, western buyers were focused primarily on price. China was just opening up and the cost of garments was falling sharply in real terms in both America and Europe. Besides, Sri Lanka was not a buyer’s natural first port of call. For one thing, wages there are higher than in other Asian countries such as China, Vietnam and Bangladesh. Moreover, the country has been embroiled in a civil conflict in the north and east, which has killed over 60,000 and left close to a million homeless since 1983. Under such circumstances, it is surprising that the brothers stayed at home. But the Amaleans are of sturdy cloth. From all accounts, Mahesh in particular was driven by a vision that went beyond financial performance. “He used the opportunity to create something much bigger than all of us,” says Deepthi De Silva, the group’s human-resources director and a man who, prior to MAS, worked for 20 years in the UK. “He created this feeling that we (and Sri Lanka) can be world class.” At the time the company was being set up, good textile workers were hard to find in Sri Lanka’s larger towns and cities. Moreover, the urban infrastructure could scarcely cope with a further big influx of labour – the government itself was trying to encourage the apparel industry to move to rural areas. So MAS decided to locate its plants in the countryside. “We took the work to the workers, instead of the workers to the work,” says Mahesh Amalean.
“We took the work to the workers, instead of the workers to the work.” Mahesh amalean, chairman, Mas Holdings
a Victoria’s Secret catalogue on the desk of a senior executive that he was meeting. Victoria’s Secret was (and still is) one of America’s biggest retailers of fashion lingerie. Although lingerie was outside the quota system, Sri Lanka had no expertise in dealing with the fine needlework that such products require.
hands with Victoria’s Secret, the Sri Lankan brothers struck lucky once again. Triumph had been looking to set up a plant in southern India, but the plan had just fallen through. The Amalean brothers...
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