Merrill J. Fernando surveyed the tea industry in 1950s Sri Lanka and decided that it had to change. Although Sri Lankans grew the tea and processed it, they did not profit from what was a world-wide trade. At that time there were not even any Sri Lankan tea-tasters – the first step to professional recognition in the industry. Bulk tea was exported and value was added overseas, where the real profits were to be made.
The first step for Fernando was a personal one – an ambition to lead, but it was also an ambition to link the lowest steps of the tea production chain to an already globalised industry. Embedded in that industry were strong links with other diverse cultures, especially the major consumer markets in the British Commonwealth and the then USSR, where tea itself was a cultural institution. Sri Lanka had an established tea brand – Ceylon tea. Fernando saw that his country needed a new model of behaviour for its corporate producers.
The steps to achieve these goals seemed clear to Fernando, if challenging. First, he secured training and then a position as a taster, with an established firm, AF Jones & Co, a British company, in 1954. Through a single-minded pursuit of gaining professional recognition and skill, followed by employment, investment, corporate purchases and divestments, the building of his own firm, and implementation of new processes and products, his profile in the industry grew rapidly. By 1973 his then-firm, Merrill J. Fernando Co Ltd, was yielding the highest net profit per pound of tea sold in Sri Lanka. In 1985 the Russian market provided his company with an opportunity to sell pre-packed tea into a major world market. In 1988 Dilmah Tea was formally launched, to supply the Australian market with pre-packaged tea.
Dilmah from its earliest days repudiated the profit motive as its sole raison d’être; nevertheless, it also showed business acumen. It chose a more challenging path than its competitors within Sri Lanka in seeking to export pre-packaged teas, targeting specific markets and building new ones that had express preferences for a particular quality and for varieties of teas. In a market that seemed secure, with little impetus to change its fundamental structures and practices, Fernando's vision was as much revolution as innovation. Not unexpectedly, his quest attracted resistance.