Sri Lanka

Merrill J. Fernando 

  • Founder and Chairperson, MJF Group (Tea)
Born Pallansena, Ceylon, 1930. Maris Stella College, Sri Lanka (1948).
“Profit is important, but how you will make the profit is more important.”

Video Clips

Mr. Fernando discusses the importance of establishing local brands.

Mr. Fernando describes one of Dilmah’s most daunting setbacks.

 Full-length video (accessible to holders of a valid Harvard ID)

Transcript

In this interview with the founder of the Sri Lanka’s largest and most global tea brand, Dilmah, Merrill J. Fernando recounts his early engagement with the tea industry and how he built a global brand. Born in 1930 in a rural village in British-ruled Ceylon (now Sri Lanka) he recalls how he was exposed to tea plantations from a young age. He describes his early fascination with tea, noting that the coveted positions in tea tasting and trading were usually reserved for British expatriates. He recalls his surprise when selected to join the first group of Ceylonese to be trained in tea tasting, trading, and marketing at the world’s finest tea school at Mincing Lane, London, where he learned about the blending and mixing strategies used to reduce Ceylon tea content and increase profit.

Returning to Sri Lanka years later, he was recruited by a tea exporting company called A. F. Jones and Co. Ltd. which by the mid-1950s was selling tea in bulk to international blending and packing tea companies. With a major political regime change in 1956, Fernando recounts the government beginning to seize control of foreign-owned tea estates, prompting the Jones family to leave the country. Fernando was able to acquire the estate, but after the nationalization of tea plantations in 1971-72 and conflicts with the plantation shareholders, Fernando stepped down to start his own business, MJF Exports, Ltd. MJF supplied bulk tea to international trading companies and quickly became the fourth largest exporter of bulk tea to Australia and New Zealand. One major retailer in Australia later agreed to source its brands from MJF, and by the mid-1970s all Australian retailers used MJF for sourcing their house brands.

Having earned the confidence of major retailers, Fernando recalls his decision to start his own brand, Dilmah, to “bring integrity back into tea” by introducing single origin tea to compete with commodity tea. The interview describes Fernando’s early setbacks following the outbreak of Sri Lanka’s civil war in 1983 when a terrorist threat to put arsenic in Sri Lankan exports, but discusses Dilmah’s quick recovery and growth, even though the civil war lasted until 2009. In 2016 Dilmah tea was sold in over 100 countries. Fernando repeatedly emphasizes the importance of retaining a sense of social responsibility, and in 2003 launched a charity called the MJF Charitable Foundation to provide aid to the underprivileged.

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Resources

  • Mario Fernando, Frederick Beale, Gary D. Geroy, "The Spiritual Dimension in Leadership at Dilmah Tea," Leadership & Organization Development Journal, 30 6, (2009)pp.522–539.
  • Herath, Siriyama Kanthi and Williams, R., “Patterns of management control in a family managed business in Sri Lanka: Case of Dilmah Tea.” In Critical Perspectives on Accounting Conference at Baruch College: City University of New York, Thursday, April 25th- April 27th, 2002.
  • Siriyama Kanthi Herath, Anushaka Herath, Athambawa Abdul Azeez, “Family firms and corporate culture: a case study from a Less Developed Country (LDC),” International Journal of Management and Enterprise Development, 2006.
  • D. C. Fonseka, “Visionary Leadership and the Case of Dilmah,” Sri Lankan Journal of Management, 14.2, 2008.
  • Prema-Chandra Athukorala and Sarah Rajapatirana, "Liberalization and Industrial Transformation: Lessons from the Sri Lankan Experience," Economic Development and Cultural Change, April 2000, Volume 48, No. 3, pp 543-572.
  • The MJF Foundation, http://www.mjffoundation.org/about-us/.
  • "Making Business a Matter of Human Service," YouTube video, posted by Dilmah Tea on August 20, 2012, https://www.youtube.com/watch?v=BPoeZ3WjnuE.
  • Video file of this interview available at Baker Library Historical Collections, histcollref+hbs.edu. Harvard ID holders can access the full-length video above.

  • Interview citation: "Interview with Merrill J. Fernando, interviewed by V. G. Narayanan, December 23, 2015, Creating Emerging Markets Project, Baker Library Historical Collections, Harvard Business School, http://www.hbs.edu/businesshistory/emerging-markets/."