Today, ‘Entrepreneurship’ has become a trending topic. However, it was not the same, 25 years ago. Deshabandu W.K.H. Wegapitiya; the Founder and the Executive Chairman of Laugfs Holdings Limited, who rose from absolutely nothing, is now one of the leading entrepreneurs in the country. He is the utmost courage behind this diversified enterprise in Sri Lanka, which has remarked its glory in a vast range of businesses. His entrepreneurial achievements have been recognized locally and regionally, whilst he was honored with the ‘Deshabandu’ title for his outstanding contributions to the advancement of the nation. His thirst to make his vision a reality, strong determination, and strategic mindset have never stopped him by the painful track he drove through. Exposition brings you its prime enlightener ‘Deshabandu W. K. H. Wegapitiya’ to unfold the bigger picture to illustrate what the world holds in front of you by ‘Seeing the Unseen!’
Being one of the prime entrepreneurs in Sri Lanka, there must be a story behind you. Could you tell us a little bit about your journey on the road of life so far?
Let me explain to you how I became an entrepreneur while shedding a light on the management and theoretical perspective of it.
Throughout the last 25 years, I have gained a lot of experiences and a lot of perspectives to put forward for anyone to understand the journey of an entrepreneur. I was born into a poor farming family. Even though I was poor in material perspective, I was very rich from the angle of living with nature. What molded me to become an entrepreneur was all the basic ingredients that were embedded into me during the early stage of my life. When you study about famous entrepreneurs in the world, there is one commonality that you can find. It is that most of them had a very difficult and disturbing childhood. Talking about my childhood, it was also a rough period of time. It is like you are molding a beautiful statue out of clay. The initial stage is about choosing the best clay, and the best composition which will stay strong over a long period of time. I had to work in the farm and paddy fields and was exposed to a very harsh environment. We did not have electricity. We did not even have enough clothes. I had to walk about 5 kilometers every morning to go to my single-building school in a rural area. However, it gave me a lot of courage to become a resilient, visionary, and creative person.
Only the environment can create challenges, not humans. Humans create obstacles. For example, take this COVID-19 pandemic or Tsunami. All the other things are created by bureaucrats, politicians, and other people in the society. Those are obstacles. An entrepreneur should know how to survive the challenges created by the environment. The biggest challenge to human beings created by the environment is “hunger”. How do you survive when you want to eat but have no food, no money, and nowhere to go? I have faced that on numerous occasions during my early university times. During human evolution, all the new inventions came up when nature challenged the status quo.
My childhood was very unique. I was selected to the University of Sri Jayawardanapura when I was 19 years old and came to Colombo. In terms of resources, I did not have a single thing. Yet, I was equipped with a lot of other talents. The resilience, untamable desire, winning thirst, my vision, and the ability to see the unseen are all that were embedded in me during my early childhood. The 4 year period I spent at the University of Sri Jayewardenepura gave me another dimensional aspect to my life from which I learned management. I compared what I learned through experience with the theoretical aspects of management.
In addition to that, if you want to become a successful entrepreneur, there are two types of capital needed. One is the financial capital. However, it is a bit irrelevant if you have an entrepreneurial orientation. Entrepreneurship and entrepreneurial orientation are two things. Entrepreneurship is all about ‘What to do?’. Entrepreneurial orientation is ‘How to do it?’. Most people find what to do but they do not know how to do it. That is why almost 80% of startup businesses demise within the first two years. The other most important thing that needs to become a successful entrepreneur is social capital. If you have a strong social capital; in the sense, having strong connections and networking with people, you can overcome the vacuum of not having a strong financial capital. You can leverage that to gain financial capital. During the 4 years of my university time, I gathered more social capital than the theoretical aspect of my management skills. Therefore, by combining all these three things I mentioned before, I became a successful entrepreneur.
Looking back, what were the key drivers that led you to become successful?
Number one is seeing the big picture. My father was a poor ordinary farmer, but he was an inventor and a naturalist. He was the one who taught me how to see the bigger picture of things. Nowadays, a lot of youngsters do not see the bigger picture. That is the major reason for not having enough entrepreneurs in our nation.
What I have learned is, aiming small is a crime. You have to have a great target. To give an example from my life, I did not have a job soon after I graduated. I got my first job for a salary of just 20 rupees. I was a casual trainee at Ceylon Shipping Corporation. While I was working there, I saw ships every evening and I loved watching them. I had a dream of becoming a shipowner one day. Yet, I only had 25 cents in my pocket. However, after 10 years, my dream became a reality when I bought my first ship. Today I have the largest LPG ships operating from Arabian Gulf to Sri Lanka, in the Indian Ocean, Maldives, Myanmar, Bangladesh, Africa, and all the places. Likewise, when you have a crazy dream in front of you, you work hard with a very clear aim and perseverance, and one day you do that. Thus, likewise, my childhood always created an environment to see the big picture and to see the unseen.
Moreover, there are two types of entrepreneurs that you will find. The majority are imitative entrepreneurs. They want to see something that someone else has started. The other type is innovative entrepreneurs. If you look at what I have created, the LAUGFS; no one else could enter into it so far. I am the only person who managed to enter into the LPG Business in Sri Lanka for the last 60 or 70 years. Adding to that, I am the 3rd largest Petroleum retailer next to CEYPETCO and Indian Oil Corporation. Likewise, I created that “no competition”. In Porter’s five forces model he says there are five forces that decide the vulnerability of a business. If we consider the LPG business, there will be no threat of substitutes for another 25 to 30 years. On the other hand, it is a very difficult market to enter into. Even though the supplier power is there, the buyer power is low. Finally, the rivalry among competitors is between just two industry players. We can analyze those factors related to our business’s context to realize the behavior of our surroundings.
Moreover, there are few emotional dimensions for entrepreneurship as entrepreneurship, entrepreneurial orientation, and entrepreneurial mindset. Nowadays, when someone starts a business, they are categorized as an entrepreneur. It is just a label. The actual way of measuring entrepreneurial capability is determined by several other factors. One thing is how successfully the founder ensures that the business will survive beyond his lifetime. Another one is, how successfully the management and ownership are handed over to the successors. That is what seeing the big picture is about. Seeing the unseen!
Laughs Group has diversified and expanded into many different business areas and industries, locally and as well as overseas. As a person with such a wide range of involvements, what challenges have you come across throughout this journey?
Well, the biggest challenge is the inability to build a team that can understand my vision. There is something called Entrepreneurial Fingerprint. A fingerprint differs from one person to another. You cannot find two people with the same fingerprint. Like that, when I share my big picture with my team, they do not see it in my way. Therefore, the biggest challenge I am having is finding a person with the same entrepreneurial fingerprint as me. It is painful when you have an amazing idea but your team can not see it. I am facing this challenge even today.
The second biggest challenge is the external environment. In Sri Lanka only 1.5 – 2 % of the population are entrepreneurs. Even so, if you go to India, it is nearly 10%. In Thailand, it is 18%. In African countries, it would be a value of more than 20%. Entrepreneurs are born when the environment is right for them. When we consider our education system, it does not encourage entrepreneurship. Especially in schools, they want every student to be doctors, engineers, accountants, etc. Basically, it is an employee-creating education system. Then there is the external economic environment. In 1948, at the time when we got independence, we were within the top 20 in the Global Prosperity Index. We were number 2 in Asia, next to Japan. Now the situation has changed. Why? That is because we do not have a value-creating environment now. We do not see the value of becoming entrepreneurs. These are social issues. Then comes our financial system. Until the recent past, we were a country with the highest interest rate. In other countries, there are development banks, to support the upcoming entrepreneurs. We are the only country in this part of Asia which has no development banks. Like that, our finance system is really discouraging.
The third challenge is our attitudes. Our attitude over the past 70 years was that, ‘We are a dependent nation’. We import almost all the things that we eat. We do not encourage our nation to be a manufacturing nation. Although the textbooks say that we are rich in agriculture, we import things from other countries. These are the main challenges an entrepreneur faces here in Sri Lanka.
As a person who has huge responsibilities, how do you manage time for yourself and keep a consoled mind?
I believe that becoming an entrepreneur means that you possess all the capabilities. My company is almost 25 years of age now. When considering the average life span of the enterprises in Asia, it is 25 years. This is when the company’s curve starts coming down. When the company reaches 20 years, there are two main things that every sensible and proactive entrepreneur should plan for its survival in the industry.
One is professionalization; which means you differentiate and separate the entrepreneur and the enterprise letting it survive on its own. That is what I did for the ‘Wegapitiya’ and ‘LAUGHS’ brands. 20 years ago, ‘Wegapitiya’ was the strongest brand until it switched to ‘LAUGHS’ which was becoming a vibrant and an independent brand, which leads while surviving. If this does not happen, the curve does not get the bell shape. It is important as otherwise it is proved that 70% of the starting enterprises get demised. Only 30% survive to the second generation, 13% to the third, and only 3% beyond that. This is known as the ‘Three Generation Survival Trap’.
Hence, when a certain enterprise is reached to 20 years, you have to bring professionals and institutionalization of that professionalism into that. That is what I did by listing a part of my company, broad-basing ownership, and bringing good governance. Now even If I’m not there, the company is managing, surviving, and growing. We have a management system consisting of a strong board of directors, board sub-committees, independent committees, systems, processes, and procedures. Maybe not 100%, but at least 80-90 % is there.
The other one is succession planning, which is passing on the leadership role of the company within the next 5 years. I have already done that and handed over the entire management for the professionals. Now I am retired from most of my responsibilities. I enjoy my time playing golf while spending time completing my Ph.D. Therefore, time is something that you can always manage.
However, you should have hands-on experience. I have knowledge of manufacturing tyres, blend lubricants to LPG shipping, LPG trading, LPG bottling, LPG transporting, and supermarkets. I can do these on my own. It is important to understand the life cycle of the enterprise and let it move on its own without any interference.
Throughout your inspiring entrepreneurial journey in the business world, you have won several awards which must have motivated you. Can you brief us on those?
Success is neither about becoming rich nor becoming educated. In business, success is defined differently. I am not the richest person in Sri Lanka. However, to become successful in business, we follow several principles. We are not engaged in any business that harms mother nature via slaughtering animals, killing people, selling arms, ammunition, gambling, alcohol, and gaining advantages through bribing politicians. We are involved in businesses that are beneficial for our nation.
When you were born, your mother would find the best solutions and opportunities for you until you reach your highest destination. The question is, when you die, what is the purpose of your life? What are you looking for, in this life? You do everything but you cannot even carry 25 cents with you when you die.
Therefore, if you want to become a successful person, there are four pillars that you need to achieve. One thing is financial wealth which you have to earn positively and ethically. The second one is your knowledge pillar. You will find people who are very rich, but not well educated. It is essential in today’s knowledge-driven economy. You have to keep learning till the death bed. I am currently reading for my Ph.D. which is the highest that I can achieve in my knowledge pillar.
The next one is the social pillar i.e. social recognition. In my social pillar, I have been awarded as the ‘Sri Lankan Entrepreneur of the Year’ for several years for my entrepreneurial accomplishments. I have been awarded the “Deshabandu” award in 2017 and recognized in the Asia Pacific Entrepreneurship Awards in 2012.
The final pillar is how you are recognized in society and your social contribution. For example, I was the past Chairman of the Chamber of the Young Lankan Entrepreneurs (COYLE), also served as the Senior Vice President of FCCISL, an Executive Council Member of FCCISL, an Executive Committee Member of Ceylon Chamber of Commerce, and I was invited for many government positions as well.
I believe these are the four pillars that one should accomplish. You can become rich by doing various things. However, at the end of life’s journey, people have to celebrate you. It can be done not only by becoming an entrepreneur, but also by being a singer, painter, gardener, and so on. Whatever the role, you have the ability to attain it. That is the accomplishment of life at the end of the day.
The whole world took a greater hit due to the COVID-19 pandemic. How would you define the key learning points of this uncertainty?
This is not the first time that mankind has faced similar challenges. In the evolution of the human race, their next step had been always decided by these kinds of natural challenges. Let me give you an example. When I was schooling, I had 30+ cousins and siblings in my family. However, nowadays there are very few in a family. Why is that? Those days the life expectancy was very low. Therefore, they expected that at least 5 out of 10 of their children could survive to engage in agriculture, for the survival of the other members of the family. As a solution for the low rate of life expectancy, people researched and found antibiotics and vaccines.
A similar situation has risen up, due to this pandemic situation. A great and unique opportunity has been created for creative people who can imagine and see the “big picture”. Take the person who invented the COVID vaccine. Every living person has to use this vaccine. Hence, the people will focus more on areas such as healthcare, lifecare, nutraceutical, and pharmaceutical. Therefore, if you are very open to the environment and see what is happening out there, you can find lots of opportunities right in front of you. It is a huge turning point for the entire mankind. Your entire living style will undergo a change. Thus, you should clearly identify that.
As one of the leading businessmen in Sri Lanka, how important do you consider Corporate Social Responsibility (CSR) is, especially when there is a global pandemic taking place?
I would say that the CSR concept is a camouflage. In actuality, a company’s existence in itself should be socially beneficial. As an example, if we think of companies producing either cigarettes or alcohol spending billions of rupees on CSR projects, how would we feel about it? What is more important is that your business philosophy and business principles are being socially responsible; so that your mere existence benefits society. I strongly believe that this is sufficient rather than the elaborating projects and methods which are defined as CSR by most corporates. Social responsibility needs to be protected in the products and services that they offer. The core of the organization is what should hold the highest importance.
How do you see the current socio-economic environment of Sri Lanka for entrepreneurs, compared to other countries?
Compared with the past, there have been a lot of changes that have taken place over the past 25 years in the Sri Lankan corporate environment for entrepreneurs. To move forward as a country, we have to educate people from their early ages to become entrepreneurs and to be creative and innovative. From my experience, I think that we should let them live with nature.
Entrepreneurial ideas emerge with nature; our surroundings. In my childhood, we were very sensitive towards the environment. I used to forecast the weather by observing the behaviour of animals, especially birds like “Kerala”, smelling the dust, and looking at the sky. Nature gives so many insights to the changes that are going to happen.
However, we are living with a thumb generation, where you live away from nature. I believe that is the biggest problem. You cannot change the world like that. The greater you find that the environment is difficult, you will identify more unique business opportunities.
As a businessman who has invested in both renewable and non-renewable energy, how do you view the increasing global trend towards renewable energy sources?
As we all know the world has faced a great challenge; the COVID-19. Today, though you are rich, you cannot use the money to travel, to buy things, as the movements are restricted. The world is moving towards a new era, where the people will understand the values of lives, human rights, equal opportunities, and the importance of having a healthy environment. I think that, 25 years from now you have to live in a totally different world.
Sustainable development and renewable energy will become more valuable concepts. Society will appreciate and demand these solutions in the future. Therefore, renewable energy will become a major source of power generation for the entire world. People will explore wind power, solar power, and geothermal energy. We too have invested in solar power while looking for other possibilities. In my point of view, that is a very good potential.
How do you view the strategic geographical location of Sri Lanka, from the perspective of a businessman with the knowledge of freight shipping services?
The first thing that came to mind upon hearing this question, is an economic theory, which some of you may have come across as well. From Adam Smith to David Ricardo, to modern-day Michael Porter, all of them seamlessly talk about one economic theory, named the competitive advantages of nations. This explains that a country should produce products that are advantageous for them.
According to this theory, it is said that a country becomes either rich or poor based on two factors. The first factor is “Factor endowment”, or the resources the country has at its disposal to be utilized for manufacturing. The second factor is the ‘Location-specific advantage’. If we go by simply assuming that those two factors are true, Sri Lanka would be one of the richest countries in the world. One reason I say this is because we are located in a very strategic location in the world map, practically the epicenter of Asia. On the other hand, we practically have every natural resource from oil, gas, iron ore, to coal. We have everything in our soil other than diamonds, whether or other. Unfortunately, all we seem to have been doing for the last 60 or 70 years, is sitting and debating. Sri Lanka has the best Ilmenite and Phosphate, and even if you take only 25% out of it, in the next 25 years, this Ilmenite can be converted into Titanium, Rutile, and various other chemicals. Still, we have only been exporting raw Ilmenite. Some of our other resources have not been even touched.
If we consider Singapore as an example, they have very few significant natural resources, and in terms of location, only the Malacca Strait. This makes it evident that there are a few more factors that affect the financial status of a country. Hence, the third factor is an entrepreneurial nation capable of utilizing the first two aspects in order to create value. Finally, the fourth factor is a very strong visionary leadership for the country. As we all know Mahathir Mohamad and Lee Kuan Yew are such charismatic leaders who significantly improved their countries.
That explanation aside, for 400 years the global economic supremacy was placed in the West, but now it is shifting to the East. You cannot find a single nation in the West with over 5% GDP. By 2025, 50% of the global population will be in Asia. 48% of the global GDP is also produced in Asia. What should be noted is that this economic transition is happening through our doorstep, as we are at the epicenter of it. It is frankly the reason for the interest that nations like China and India have in our country. The strategic geographical location of Sri Lanka makes it an ideal location to act as a maritime hub, energy hub, aviation hub, and an industrial hub. It is vital to understand the importance of this country and leverage it in the nation’s best interest.
Since you are involved with a range of business areas, in what professional areas have you noticed a lack of attraction among the Sri Lankan workforce?
I would say it is quite tricky to give a single answer to this question, but simply said, it is “Innovation”. As you know, ‘Innovation’ is a very broad word and a concept, and I believe it would be the key to solving this issue. Basically, it implies that you must create new things, and for that it is necessary to foster a forward-thinking generation. This must take place from an early stage of an individual. Therefore, it is a cultural transformation that our nation requires.
When thinking of innovation, it is said that “Necessity is the mother of innovation”, but if we consider a simple example to understand the extent of the issue we face, it is quite unfortunate to see that, as an island nation surrounded by the Indian Ocean, we still import our edible salt. Sri Lanka was an industrial nation. Among the other industries, we used to grow cotton, make fabrics, and export. Yet, presently, we face this situation, which I believe is partly because we handled our economy without proper planning.
The business environment is evolving rapidly. What are your future plans and goals for leading this ever-changing world of business?
On the subject of future plans, mine are mainly of two aspects; future plans for myself or my personal life, and my plans for my business. Businesswise, we are getting into certain sectors such as the pharmaceutical sector, and we are setting up Sri Lanka’s first saline manufacturing plant. I am happy to say that within the next six months or so, you will be able to see saline manufactured locally supplied to Sri Lankans. Another area we are focusing on is nutraceuticals. When considering the company’s future, my aim is to establish professionalization as well as succession planning; involving who is going to take over different companies and the grooming of leaders, which I believe is my duty. Further, there are plans regarding ownership succession.
From the aspect of my personal being, I want to simply enjoy my life. No one will live forever whether we like it or not. It is better to have that understanding and act accordingly. I have been getting into the field of agriculture, as it is something that brings me great satisfaction. I have started a farm in the Thanamalwila area, and I am going to the rural villages again and becoming a farmer, in order to help the villagers and youth there. I would not want to be the richest in the cemetery, instead, I would want to be the richest whilst I am alive; and here, by rich, I do not mean rich in worldly treasures, but to be rich in mind.
Today, entrepreneurship has become a viral topic among the young community in Sri Lanka. Being a successful entrepreneur, what advice can you give them?
As the final piece of advice, I would say it is important to be simple and sensitive to the environment. You do not need to be a very complex personality in order to be successful. Try to become a seminal person; rather than trying to become Jack Ma or Bill Gates, try to become your own personality!