THE END OF A CORPORATE GIANT

THE STORY OF WALKER SONS & CO LTD

by HUGH KARUNANAYAKE

THE EARLY YEARS

The firm known as Walker Sons and Co was Ceylon’s major engineering firm for over 175 years. The founder of the firm, John Walker, was born on August 24, 1819 in Doune, Scotland, the seventh child of James Walker, a cobbler, and his wife Charistina (nee Strang). He attended school in Deanston and was thereafter apprenticed in the engineering shop of Deanston Cotton Mill operated by James Finlay and Co.

In 1842 he travelled to Ceylon to work as an engineer for Wilson, Ritchie and Co. which owned the Hulftsdorf Mills and which revolutionized coconut oil production through the invention patented by David Wilson. John Walker thereafter worked in a number of firms in Ceylon before returning to Scotland in 1854.In Scotland he met William Turner an engineer who he had known in Ceylon, and who encouraged him to return to Ceylon to work in Turner’s engineering business in Kandy.

Walker arrived in Ceylon in 1854 and established his own engineering firm John Walker and Co at Trincomalee Street in Kandy, manufacturing machinery for the country’s rapidly developing coffee industry. The invention of a disc pulping machine patented in 1860 saw machinery exports to other coffee producing countries like Java, Southern India, and Brazil.

In a letter written by John Walker to his brother William in Glasgow in circa 1856 he stated that the buildings owned by the nascent company may be valued at £400 sterling. “The motive power is the Malabar cooly, as we have not enough water for the blacksmiths troughs, and fuel is expensive! Our customers are 300 planters scattered over the Central Province. As a class I would call them good customers, but some are are very long in paying”. In 1854 William became the buying agent for his brother John, and they established themselves in Glasgow under the name Walker Brothers.

In 1862 William joined John as a partner and by 1870 the company had opened branches in Badulla, and Haldumulla, and by1873 branches in Dickoya and Dimbulla. In 1873 Walker founded a new company Walker and Greig to supply machinery to the new tea plantations. In 1880 the company manufactured the first tea rolling machine. Walker brothers based their headquarters in Kandy, and thrived during the coffee boom, but as early as in 1864 the company contemplated moving to Colombo and leased out premises which however were never occupied.

With the construction of the South West breakwater in the Colombo harbour, in the 1870s, shipping out of, and into Colombo was the favoured option. The Company first leased out the premises known as “the Corner” at the corner of York Street and Main Street in 1881 and it moved its headquarters and workshops there. The premises were later acquired by the Company and in later years during the twentieth century housed its head offices, and show rooms there, while the workshops including the foundry, and dockyard were constructed on 15 acres of land in Mutwal leased out from the government for 99 years in 1912.

At a dinner given in London by the Ceylon Association in London in honour of the then Governor designate of Ceylon Sir Hugh Clifford, G.C.M.G.,C.B.E., Mr JL Loudon Shand who presided gave an interesting review of the planting history of Ceylon, and in the course of his speech made the following remarks:

“There are many other things that we planters have to be thankful for among others, is the Engineering genius which has attended all our efforts in Ceylon. Wherever we have foremost in coffee, tea, and rubber it is in invention and in having the highest Engineering enterprise at our disposal, and I am glad to see here tonight, representatives of the firm of Messrs Walker Sons and Company, who have done so much for us in Ceylon”.

John Walker retired at the age of 60 after steering the company for over 30 years, but continued as head of Walker and Greig. Walker Sons was thereafter headed by his brother William who became Senior Partner. John Walker died in Scotland in 1888 and his son John came out to Ceylon to take over the running of the company. In 1891 the firm was incorporated as a limited liability company by the name Walker Sons and Company Ltd and registered on the London Stock Exchange

EXPANSION- NEW AGENCIES

Walker Sons and Co grew to be one of the earliest corporate giants in Sri Lanka, having dominated the country’s engineering sphere for almost two centuries. It was arguably the company which had the greatest impact on the economic development of Ceylon up to the 20^th Century. It was to play a dominant role in the transformation of the country’s economy from a peasant based one to a more export oriented plantation economy a process which was well in hand by the end of the 19^th Century.

The company prospered and expanded during the first half of the twentieth Century having being appointed as sole agents in Ceylon for much sought after British made engineering products and services. Those agencies included Austin Motor Vehicles, Otis elevators , Carrier air conditioning, Formica products, Lucas batteries and Crittall windows. The first passenger lift in Ceylon was installed by Walkers Sons in the Galle Face Hotel in 1911. Likewise the first electric fans in Ceylon were installed by Walkers in the Bristol Hotel in the 1890s. Among its engineering services were Power installation, Oil engines for tea and rubber factories, a foundry with capacity for castings up to 10 tons in weight, a machine shop served with a 15 ton electric travelling crane, a heavy machine shop with electrically driven overhead cranes, a blacksmith’s shop, and a machinery repair shop, all based in the Mutwal facility.

MOTOR ENGINEERING

Walkers have been associated with the growth and expansion of the automotive sector in Ceylon more than any other institution in the country. The first motor car was imported to Ceylon in 1902, and in the very same year Walkers imported its first motor car, the “Locomobile” Thereafter it held the agency for Austin cars, and lorries, which were predominant in the nations fleet of motor vehicles. It was also the agent for Lucas batteries. The company acquired a two acre property in Galle Road Kollupitiya to serve exclusively as a motor service centre. The branch in Kandy as well as other branches of the company in Talawakelle, Ratnapura, Bandarawela, and Galle also were equipped with motor repair and service facilities.

MARINE ENGINEERING

Sri Lanka being an island with many bays around its shores, some of which were used as harbours for a range of shipping craft, would have been an ideal location for a regional maritime service hub, but somehow only Walker Sons rose to the challenge. The graving dock constructed by the company together with the adjacent nine acres of land comprised the Colombo Iron Works, known popularly as CIW which became the nerve center for all of the company’s engineering enterprise. The slipway of the company with a cradle 120 ft long was suitable for repair and maintenance work of craft. The company owned two ships the Lady McCallum and Lady Blake which operated around the shores of Ceylon were both commissioned by Walkers.

During the early 20th Century. In September 1926, the company launched the oil barge ” Mahaweli” built and powered to suit special requirements. During the Second World War the firm repaired and refitted 167 major warships, 322 minor warships and 1,932 merchant vessels, including the aircraft carrier HMS Eagle, cruiser HMS Cornwall, HMS Cumberland, HMS Devonshire, HMS Gloucester, HMS Kent, HMS Manchester HMS Liverpool, and cruise liners RMS Queen Elizabeth and RMS Queen Mary.

BUILDINGS

The metropolis of Colombo had as its nucleus the Fort of Colombo first built by the Portuguese, further fortified by the Dutch and British till the fortifications were removed in the late 19 th century. The area encompassed by the Fort continued to serve as the centre for commercial activity in the island and the emerging banking and finance sector. The many departmental stores, hotels, restaurants, and banks all came into existence during the nineteenth and twentieth centuries. Most of the buildings in the Fort are of unique Victorian design and architecture representing the lifestyles of a bygone era. Almost all the 19th/20 th Century buildings within the Fort were designed and constructed by Walkers.

Buildings constructed by Walkers during the late 19th century include; the Galle Face Hotel, Australia Building, the Victoria Building, the P& O Offices, the National Bank of India Ltd, the Kandy Post Office, Messrs Cargills Ltd, Whiteaway Laidlaw and Co, Millers Ltd, The Scots Kirk

During the first half of the 20th Century the company built the Hongkong and Shanghai Bank, Imperial Bank of India, National Bank of India, the McKinnon McKenzie block, the new Customs House, the Grand Stand Ceylon Turf Club, the new Observer office, the Times of Ceylon building, the YMCA building, the new hostel for YMCA, the Soldiers and Sailors Institute, the Elphinstone Theatre, Pettah Police Barracks, St Bridgets Convent, etc etc. It could be said without fear of contradiction, that most of the significant buildings in the Fort including the 16 storied Ceylinco Building built in 1957 were all constructed by Walkers.

STAFFING

During the 1950s when the company was at its peak, with its workshops in Colombo in full gear meeting the nation’s demand for engineering goods and services, it had a skilled and semi skilled labour force of about 4,000 workers in Colombo and in the Branch establishments. Office staff included some 50 covenanted staff (Senior Executives), 120 Junior Executives; clerical and other office staff of about 500., possibly the largest for any single company in the island. During the 1950s, the Chairman of the parent company in London was Mr Osborne Walker, while the Ceylon operations were controlled by Mr E A Badman.

Most of the Senior Executives were Britishers, but feeling the need for Ceylonisation after Independence was granted to the country in 1948,Mr Badman recruited Ceylonese with outstanding sporting records and a good secondary education as Executives. Most of them were men who were educated at Royal College in Colombo and included Vivian de Kretser who captained the Royal College cricket team in 1945, Mahes Rodrigo who captained the Royal cricket team in 1946, Ashroff Cader who Captained the Royal rugby fifteen in 1949, Lucien de Zoysa who played in the Royal cricket team in 1935/36, and C. Ivers Gunasekera who played cricket for Royal in 1937/36/39.

REVERSAL OF FORTUNES

While it is difficult to pinpoint the source of the decline of the company’s fortunes, given that the history of its finances are not available now, it may not be unreasonable to surmise that the rot began in the early 1960s when the first signs of exchange controls and import restrictions appeared. That, despite the fact that the previous decade saw unrestricted imports following the Korean boom which sent rubber and tea prices spiralling upwards. The country enjoyed the benefits of that boon as did Walkers, but it failed to conserve and consolidate thus exposing itself to future vulnerabilities in the foreign exchange sector.

Walkers was a company largely dependant on imports and import based production and the first restrictions on imports imposed in 1961 saw a total ban on car and other imports which were ‘bread and butter’ lines for the company. Another very significant factor especially when gradual relaxation of controls took place in later years, was the emergence of suppliers from non traditional sources into the national imports basket. Post 1960 imports saw a significant drop in imports from the traditional British suppliers, and a diversification of import sources.

Countries like Japan, Korea, and non British Europe began to assume dominant positions. This was true even in Great Britain, where the domestic market was flooded with imports from the emerging nations of the Far East with access to superior production technologies inspired from the USA. Walkers however, despite these pressures had a reasonable foothold in the estate engineering sector, and also rose up to the challenges by diversification into areas such as fibre glass boat production, and making inroads into the tourism and hospitality sectors.

To add another unexpected blow to the company’s fortunes, the Government of the day in 1971 chose to compulsorily acquire its Head Office buildings in Prince Street, Fort paying the company a meagre Rs 700,000 as compensation. The building was acquired to house the State Pharmaceutical Corporation whose necessity to be located within the Fort was a question that went a begging, but never answered. Matters were compounded by the departure of the last of the Walker family, AC (Johnny ) Walker who handed over the company to Mackwoods Ltd, who were appointed Managing Agents for the Company for a stipulated period.

The attempt to restore financial stability by Mackwoods by selling off some prime real estate of the company was met with some opposition by the work force. The work force went on strike for several months bringing on more financial burdens to the company. In the mid 1970s George Steuart and Co were appointed managing agents for Walkers for three years.. Its Directors Trevor Moy, Scott Direckze, and Trevor Rosemale-Cocq, were appointed working Directors, and the company reached a degree of stability. George Steuarts however declined the opportunity to renew the agreement for a further three years.

In 1978, a new government liberalised import export trading and the possibility of a reversal of fortunes were envisaged by foreign investors looking for healthy returns on investment. The Anglo-Indonesian Corporation part of the Sime Darby Group, headed by John Nightingale, and Charles Berry negotiated successfully with the Walker family who relinquished their controlling interest in the company.

In around 1980 the controlling interest of the company was purchased by the Indian conglomerate the Tata Group which nominated two working directors to manage the company. They both resided in the Hotel Oberoi from where they made their daily visits to the different operations of the company. Kapila Heavy Equipment purchased the company in 1990. In 2009 a Malaysian based company MTD Capital Berhad purchased the Company which now goes as MTD Walkers PLC

While the Company has relinquished its role as a strategic component of plantation development in sri Lanka, and also in its key position in marine engineering, it has since stabilised itself as a major construction company focussing on infrastructure development. It is the market leader in pile driving operations and continues to sustain and maintain the nearly two century old traditions of Walker Sons and Co.

To conclude, it may be appropriate to quote William Walker the Founding Partner of the firm when he visited Ceylon in 1886.” I desire as much to be your friend as your master. I think that the firm with which I have been connected for so long as its head has done good work for Ceylon. We have brought works to the island that were never brought before. We also have paid large amounts in wages every month to the Sinhalese and Tamil workmen. But we think we can go on a step further and do better.

‘’The first thing I will try to do for you will be to afford you medical aid in times of sickness. I wish also that some provision be made for anyone who meets with any accident or in case of protracted illness. The next thing I wish is that something be provided for our men when old age comes on and you are not able to work. If this is carried out, no old and steady worker in the Company’s service will ever have to apply to the Friend in Need Society. (“Ref: Pioneers of Ceylon, Life of William Walker.Bedford publishing Co, Bedford 1897)

The above shows that the founding partners of the firm were inspired to expand its activities but also showed benevolence to is workforce- a sure formula for success.

(The writer worked on the Covenanted staff of Walker Sons And Co as Market Research Manager for five years in the mid 1970s)