MY FIRST OVERSEAS BUSINESS VISIT

Excerpted from the autobiography of Merril. J. Fernando

Before I set out for Jap1an, in 1960, on my first overseas business trip, I was advised by Terrence Allan of AF Jones to be extremely careful in the manner that I dealt with our agents in Japan, H. J. Kramer Limited, a Japanese company headed by Otto Gerhardt, a German national. Apparently, Gerhardt had been very apprehensive when he heard that I was due to visit him, as, previously, he had had only British Directors of the company on business visits.

He had been very concerned for his business and the interviews we had arranged. He did not know me personally and may have been very doubtful of my competence, whilst the fact that I was an unknown and unproven Asian would have also contributed significantly to his misgivings.

My first official meeting in Japan was with our biggest importer, Mitsui Norin. Two of its Directors, Messrs. Evakura and Saito, invited me to a tasting session – much to the surprise of Gerhardt. He was very nervous about the possible outcome, as if I did anything to displease or disappoint the Japanese clients, there was the possibility of losing a very good customer.

I started tasting the teas which had been set out and, at one point, came to a very zippy tea, much like a very good Darjeeling. When my hosts asked me about the identity of the tea, quite naturally I said that it was a Darjeeling but they disagreed and said that it was a Japanese tea. I responded that it could not be since in Japan they produced only Green Tea, Sencha, as I was unaware then that Japan produced quality Black Tea.

After the tasting session Otto told our Japanese hosts that he was taking me to Atami because I wanted to see Mount Fuji and, jokingly, invited them to join. To his very pleasant surprise, they welcomed the idea and accompanied us. Atami is a picturesque seaside resort, south west of Tokyo, set within the Fuji-Hakone-Izu National Park and also the home to Mount Fuji. On our way to Fuji we broke journey and checked into a traditional Japanese hotel in Atami itself. I was shown to a rather bare room which had a clothes cupboard but no bed. When I inquired I was told that a bed would be provided.

Japanese hospitality

Soon afterwards a traditionally-dressed Japanese lady came into my room, undressed me completely, and took me into a Japanese-style bathing stall. I sat on a large cane box whilst she poured soothing warm water over me. Thereafter, I was led back in to the bedroom which, by then, had been equipped, not with a conventional bed but a Japanese-style sleeping mattress and comfortable sheets.

The dinner which followed was again of delicately-prepared Japanese dishes and local wine. Right through the meal we were attended to by Geisha type hostesses, who sat demurely by each guest’s side and, unobtrusively, but with perfect timing, anticipated our minutest needs. After two very pleasant and adventurous days, we returned to Tokyo to resume our business discussions.

To Otto’s surprise and apprehension, Evakura and Saito invited me to their office for another tea tasting session. When I arrived I was confronted with a batch of teas, which included the same Japanese equivalent of Darjeeling tea. After tasting the samples, when I identified those teas as Japanese, my hosts contradicted me and said that it was Darjeeling, despite my repeated insistence to the contrary. Notwithstanding this disagreement, the visit ended very well. I am still convinced that I was right and they were simply testing my competence as a taster. Had they been disappointed, I am certain that they would have made it known in some way.

Consequent to my visit, our business with Japan increased fourfold — much to the annoyance of Lipton, then the major supplier to Japan. In fact, Claude Godwin, Lipton’s then Managing Director, asked me not to visit Japan ever again. Indeed, my first business visit overseas on behalf of A. F. Jones resulted in very satisfactory outcomes for the company. Following the visit to Japan, at different times, I made several visits on behalf of A. F. Jones to Libya and Iraq, two of our most productive markets in that period.

My success at A. F. Jones and Co. Limited, which was appreciated by my employer, was due to both good fortune and extremely hard work. I was personally deeply satisfied by the favourable results I was able to secure, despite the fact that many aspects of the relevant operations were quite new to me.

Opening of the USSR market

The General Election of 1956, which swept out the United National Party (UNP) and brought in the Mahajana Eksath Peramuna (MEP) coalition forces led by S. W. R. D. Bandaranaike, soon had its impact on international relations between Sri Lanka and the rest of the world. The anti-imperialist orientation of Premier Bandaranaike’s regime encouraged stronger ties with Marxist governments and, in December 1958, during my time at A. F. Jones, the Union of Soviet Socialist Republics (USSR – Russia) established its first Embassy in Ceylon.

This development was a consequence of formal diplomatic relations between the two countries being established in 1957. Subsequently, the many bilateral agreements signed between the two countries included the export of tea, rubber, coconut oil, and coir products. These agreements were renewed and updated in 1964, 1975, and 1977.

Traditionally, Russians were big tea drinkers, with imports being largely Black Tea from China. The first consignments of Ceylon Tea had reached Russia in the 1890s, with exports from Ceylon going up to about 18 million pounds annually by 1910. However, this was minimalistic in comparison to imports from China, which then were around 120 million pounds. After trade relations were disrupted consequent to the 1917 Bolshevik revolution in Russia, there was a four-decade lull in trading activity with Ceylon.

The first USSR Ambassador to Ceylon, Alexander Nikolaevich Yakovlev, was introduced to me by a mutual friend. Yakovlev was a friendly man and got on well with us. He requested me to help his Trade Counsellor, Felix I. Mikailchenkov, to set up a tea tasting facility in a house on Thurstan Road leased out by them for that purpose. When it was completed in mid-1958, Felix said: “I am entrusting you with the responsibility of purchasing our entire requirements of Ceylon Tea.” I did not realize how big the business would be until their orders arrived.

They turned out to be quite substantial, around three to four million kg per month, mainly of good High Grown BOPS and Pekoes. In view of the volume of tea involved, many of the larger firms operating in Colombo attempted to secure the purchasing, but the relationship I had already established with the Russian representatives stood me, and A. F. Jones, in good stead.

That rapid and unexpected increase in Russian buying had a significant impact on the auction, as our large purchases of High Grown tea became a regular feature. It resulted in A. F. Jones becoming the sole buyer on behalf of Russia and a big player at the auction. The Jones family was very grateful for my contribution to this welcome business development and presented me with a silver plaque, inscribed with the legend ‘MOCKBA — December 8, 1958’. It is still displayed prominently in my office at Peliyagoda.

Until the sudden development of the Russian market, the bulk of the AFJ business centred on the Middle East, with strong attachments in Libya, Iraq, and Iran. Whenever a Russian ship arrived in port to collect their tea, which was often at short notice, there would be a major crisis in our office. We used to start processing just prior to arrival of the vessels, as the tea chests arriving from the estates were not opened but shipped out in bulk, in their original form.

Sightseeing in japen -1960

However, four sides of each chest had to be marked with Russian text, defining the various Russian brands under which the product would be sold in Russia. Senior Managers at the Port, especially C. D. Chinnakoon, were of great assistance to me in such emergency situations. He would buy me time by holding ships in the outer harbour, pending berthing, and somehow providing berths when we were ready with our consignment.

Our Colombo Harbour then had limited alongside berthing facilities. Chinnakoon was a great friend and I always kept in touch with him. Unfortunately, he had an untimely death and I pray that he is in the hands of God.

We serviced the Russian market until the Sri Lankan Government entered in to a direct agreement with the Russian administration, and the tea buying was entrusted to Consolexpo.The Russian rubber business was carried out by C. W. Mackie under the supervision of Karu Jayasuriya, business manager now turned politician.

My Russian connections

Yakovlev, a senior Russian diplomat even at the time he arrived in Ceylon, became well known in the country for his very effective interaction with his Ceylonese counterparts, whilst his tireless promotion of USSR interests within the country, apart from tea, earned him many friends in the business community. On conclusion of his term in Ceylon he returned to the Foreign Ministry in Moscow. He subsequently served a 10-year term (1973-1983) as Russia’s Ambassador to Canada.

He was a very powerful party official in Russia, apparently very close to Prime Minister Mikhail Gorbachev. After his return from Canada on completion of his ambassadorial assignment, he served for several years as a member of both the Politburo and the Secretariat of the Communist Party of the Soviet Union. He is identified as the primary intellectual force behind ‘Glasnost’ and `Perestroika,’ highly influential in guiding Gorbachev’s hand in the latter’s political reform initiatives.

In ‘Gorbachev’ by William Taubman, possibly the most comprehensive original English biography of the architect of Perestroika, the author refers to Yakovlev as Gorbachev’s closest ally in Government. Until his death in 2005, Yakovlev remained politically very active and was also the author of several books, on diverse aspects of Russian contemporary political history.

In 1970, Yakovlev was replaced in Ceylon by Rafiq Nishonov, again a friendly, warm-hearted man. Eventually, both he and Rano, his gracious and friendly wife, became our family friends. One of his daughters, Firouza, was actually born during his term in Sri Lanka and together, they would frequently accompany me for holidays at my upcountry retreat, Melton Estate, in Lindula.

Rafiq, of Uzbek origin, served as Russian Ambassador in Sri Lanka from 1970-1978. During his period our tea export operations, supported by generous Russian patronage, grew considerably. Rafiq was always helpful to the local tea trading community, but ensured that his country’s interests were never compromised. Consequent to his return to USSR, he became heavily involved in party activities in his native Uzbekistan and between 1986 and 1989, served terms as Chairman of the Presidium of the Supreme Soviet of the Uzbek Soviet Socialist Republic and also, as First Secretary of the Communist Party of the Uzbek SSR.

I later learnt from him that he had been actively involved in assisting then Prime Minister Gorbachev, whom he was very close to, in resolving some tricky issues connected to the Russian entanglement in Afghanistan. I also understood that they were covert operations, deliberately withheld from the public domain.

On many visits to Moscow, I had several meetings with both Rafiq and his wife. Several times I was taken to his holiday ‘dacha’ in the country and also to the special hospital reserved for senior parliamentarians when I needed any medical attention. He also introduced me to several important Government officials, including the present Foreign Minister of Russia, Sergei Lavrov, who served in Ceylon during Rafiq’s tenure as Ambassador. In fact, during Rafiq’s term as Ambassador in Ceylon, because of Lavrov’s fluent command of Sinhala, he also served as Rafiq’s interpreter on official occasions.

Rafiq’s Deputy at the USSR Embassy was the big, powerfully-built Sasha Lysenko, a man of considerable influence in local diplomatic circles. Our business association developed in to personal friendship as well, and he and his wife became great friends with me. My close interaction with Russian diplomatic and trade representatives in Sri Lanka, provided me with highly-beneficial access to their counterparts and associates in Moscow. These contacts and relationships built up over the years were of great help to me subsequently in the development of my Dilmah brand.

I made my first business visit to Russia in 1962. Most of the Russian officials serving in various capacities in Sri Lanka, who I met in the course of my business, also became great personal friends. Without exception, I found them to be warm and friendly, naturally gregarious and, as a group, with a great capacity for enjoyment. Most of the Russians I met, both in Sri Lanka and in their home country, were, by and large, Asiatic in their unaffected friendliness and camaraderie, though they did take time to measure you. Once the ice was broken, they took you into their hearts and their homes. The difference between them and the typical Westerners, with their more restrained and often-guarded responses, was easily discernible.