Mind your business By Business Bug

Double dealing or what ?

Why was the announcement made? To begin with, the unions were not happy with the promises made earlier and wanted a more definite statement. Then, there were also reports that the greens were planning to whip up dissent in the banking sector.

But of course, the Washington twins have also been assured that the 'restructuring' will continue as planned...

To be or not to be

Sensitive developments

The proposed location, in the heart of the city is too security sensitive to allow free public access and the developer has been told to come up with an alternative site...

Paltry deal for poultry farmers 

By Feizal Samath

"Instead of continued confrontation, these issues should be solved through dialogue with government agencies," David Anderson, managing director of USAID's AgEnt project told the annual general meeting of the All Island Poultry Association (AIPA) held in Colombo last week.

AgEnt helped set up the AIPA - some years ago which now has a membership of about 900 - and supports it financially. That support would end in September this year when the AgEnt project winds up its work in Colombo.

Anderson said the biggest threat to the industry didn't come from external sources - imports of chicken meat and eggs - but internal factors. He attributed problems faced by the industry to over-production due to poor planning, weak management, waste and lower efficiency, high cost of production and poor marketing techniques.

He said farmers shouldn't be alarmed about the import of meat and eggs since it represents a negligible percentage of domestic consumption and demand.

According to government figures, chicken imports last year totalled 1,487 tones accounting for just 2.95 percent of consumption and of this 840 tones was mechanically deboned meat used in the preparation of sausages. 

Egg imports reached 120,000 in 1999 which was a mere 0.02 percent of local consumption.

The industry first grappling with problems from imports two years ago, was faced with oversupply and an unplanned production crisis in mid-1999, resulting in thousands of kilos of chicken meat lying in cold storage in the big farms. 

Chicken prices crashed to below cost of production levels in August. Large farms having excess chicks cut losses, which ran into millions or rupees, by destroying the chicks at the rate of 120,000 per week in that month. The chicks were gassed and burned rather than be fattened and sold in a low-priced market. 

While industry blames the government for the state of affairs, government officials and US experts believe producers should take most of the flak due to improper production planning which has led to excess output.

Dr. P. Ramanujam, Secretary, Ministry of Livestock Development and Estate Infrastructure, told the AIPA meeting that most of the problems relating to the industry arose because "your members did not have the correct information."

He said the government had taken several steps to solve the industry's problems like free import of maize, duty free concessions for equipment required by farmers and processors, imposing international standards on meat imports and ensuring that GST applied to both local and imported meat instead of only locally produced chicken earlier.

Ramanujam, who came in for praise from AIPA Chairman, Dr. D.D. Wanasinghe for his understanding of the local crisis and quick response to industry needs, said imports of chicken meat for local consumption have virtually stopped now after regulations brought in by the ministry pertaining to strict quality standards and a proper pricing formula.

He dismissed industry fears over the Indo-Lanka free trade agreement saying chicken and eggs were not on the list of duty-free items. "Therefore there is no worry that India will flood the local market with duty free eggs and chicken meat. Furthermore when Sri Lanka allows duty free concessions to certain other items in the next seven years, chicken and eggs will still not be included in that list," he added.

But Ramanujam noted that no country could afford continuous protection from imports and the industry had to face up to the reality of competing with quality duty free products in the interests of the consumer.

The ministry, he said, would soon initiate a dialogue with the AIPA, processors and relevant government agencies to work out a long-term strategy for the industry to be internationally competitive.

G. Jinadasa, a veteran poultry farmer and currently managing director of Shetna Poultry Farms at Gampola, spoke of how he first entered the industry - in its infancy - in 1956.

"There was no poultry business then and I was one of the pioneers," he noted in a memory-lane presentation of the industry then and now.

Those were the days of a few farmers, little technology and a comfortable market share compared to now when the industry has advanced rapidly but still faces marketing problems and worries about imports.

Jinadasa urged the AIPA to look after the interests of small farmers by helping them to cut waste and implement proper management techniques. "The AIPA should send young experts to towns and villages to teach small farmers ways of reducing the cost of production and making their farms viable," he said adding that there was a lot of waste in small farms due to lack of knowledge and know-how.

AIPA chairman Wana-singhe traced the problems of the industry in the past few years like imports and overproduction but pointed out that the trade should not be dependent on government subsidies and tariff protection. "We need to reorganize ourselves to stand on our own feet and face the competition." He said the AIPA recently ran a very successful campaign to promote consumption of chicken meat with the assistance of AgEnt and AIPA members on the theme "chicken is cheap now."

But even before the campaign was over the introduction of GST on processed meat in addition to GST on feed at the production stage pushed the consumer price by 10-15 percent to a current 155 rupees per kg from 110 rupees.

"The AIPA fears that this increase in price would affect consumption and have a negative effect on the growth of the industry restricting employment and affecting the health of the people," he said.

The promotion campaign dispelled unnecessary consumer fears of cholesterol from eating chicken and also spoke of the substantial nutritive value from this meat source.

How effective are you? Dare to find out? 

By Gamini Rajakaruna

Having been involved in leadership development work with over a 100 of the Fortune 500 companies as well as thousands of small to medium sized businesses and education institutions in USA, Stephen Covey has identified that highly effective people posses seven habits of human effectiveness over the individuals who are misdirected, unproductive and counter-productive. The following are the hints given by Covey to anyone who wishes to be effective. 

Be proactive

People who are "Reactive" on the other hand are so because they have elected to be that way, says Covey. They are governed by their colleagues and conditions and it means they have either consciously or by default empowered those things to control their lives. The behaviour of people like this is frequently affected by the "social weather". The storms or sunshine of their spouses, colleagues or bosses dictate their performance. 

Initiative is a natural inclination, observed Covey. The "proactive muscles" or a person might be flabby but they are still there to be developed. 

A person's capacity to make and keep promises - to themselves and others is the surest way to demonstrate "proactivity". Each time we honour a commitment we build the inner strength to accept more. This is the Covey's recommendation, to build "proactive muscles". 

Begin with the end in mind

Being "busy" is not the same as being "effective". Staying aware of what matters to us is a sure guide to do things effectively, says Covey. 

Covey believes that all things are created twice. This is the principal underlying this habit. The first creation is the initial existence of the concept what we want to achieve. Concepts grow in the human mind only. 

The second creation is the physical manifestation of the concept in material terms. That is why to start building a house without any plans or even an idea how it was intended to turn out would be considered madness, he says. 

Yet many people set out their workday, career or even to launch a new business with no plan or notation of what they want to achieve, observed Covey. He wants us to remember the carpenter's rule of thumb. Measure twice, cut once. 

He also reminds us that not all "first creations" or concepts are intentional. Sometimes they are the plans or concepts handed to us by others. It is the "reactive" people who live according to these concepts and not their own, says Covey. 

Put first things first 

Think winwin

o Win lose - People who use to this thinking pattern think; "If you win, I must lose". "If I let you have your way, I am not getting mine". With this thinking pattern everything becomes a competition and every gain must cause a loss for someone else. 

o Lose/win - This is the thinking pattern of a loser mentality which always bows before the will of others. "Anything to keep the peace". People use to this thinking pattern are worse than win/lose thinkers since it has no standards or vision at all. There is no character or courage of convictions, only a desire for acceptance. 

o Lose/lose - Put two stubborn, ego driven, win/lose people together and this often can turn to an obsession about the 'enemy'. This is the pattern which drives warfare. The urge to inflict a loss on the other party takes over and even resultant self damage is ignored. 

o Win - Some people simply think "win" only. They don't hope for someone else's loss. That isn't part of their thinking. They are just focused on getting what they want. This is the most common pattern in buiness negotiations. Win thinkers go after their objectives and leave others to get their own. 

o Win/win - is a complete philosophy of human relations. It means a constant search for mutual benefit in every interaction. Its adherents are never happy unless both parties to an agreement or decisions are happy. It sees life as co-operation not as competition. 

According to Covey the most healthiest pattern of human interaction is the win/win habit. 

Seek first to understand...........then to be understood

The more attentively we learn to listen to others, the more aware we will become of the enormous difference in various people's perceptions. People's dominant habits filter the world. Some people are centred on money, some on their children. How they perceive things is directly determined by these orientation observed Covey. 

Synergies

The most effecive people are those who are humble enough to see the limitations of their own perceptions observed Covey. They know that "they see the world not as it is, but as they are" and therefore understand the power of pooling all those different views into one united effort. 

Sharpen the saw

This final habit of taking that crucial time out is necessary to ensure our labours are having their maximum effect. It means not getting so lost in our own "busyness" that we don't realise our saw is getting blunt, says Covey. Covey identifies this habit as our own personal maintenance programme. It sustains and improves our biggest asset and most powerful tool - ourselves. Here is the personal maintenance programme that Covey suggests. 

o Paying attention to our diet, and rest and sleep properly. Learning to relax regularly. Investing 30 minutes in exercise, which will repay huge dividends in our effectiveness for the rest of the day. 

o Importance of spiritual renewal, whether as a prayer, meditation or just a period of quiet reflection, which provides leadership in our all important inner life. The spiritual dimension is at the heart of our character and values which, form the base for the habit of effectiveness. 

o Importance of expanding our mind with new ideas and information. Sharpen it with challenging exercise. Read widely and immerse ourselves in the thoughts of great minds. 

People's characters are constructed out of their habits. Habits are potent forces in our lives because they are at work constantly and subconsciously. Every day they define who we are and determine how effective we are. Breaking bad ones are more than possible but cannot be done overnight. They are often strongly ingrained over many years and so their influence can be very hard to break free. 

Seven habits of human effectiveness outlined in this article are based on the primary research done by Stephan Covey. 

Covey's conclusion is that those who practice them have assimilated these principals as the foundation of their accomplishments and containment.
 

Tea Update

Demand low 

Despite the holiday, teas at the auction failed to attract strong demand. Officials said that it was not worth the while to buy tea and hold it for over a week as most of Sri Lanka would be on leave this week and hence would not be able to process it. 

Moreover, it seems that local officials are building up a campaign to promote the health aspects of tea. Two large stock brokers, Forbes and Walkers and John Keells publish extracts on the issue from various studies on the health benefits of tea. Officials feel that this would compliment the introduction of the World Food and Agriculture health log soon to be introduced. 

The FAO published its findings on the health aspects of tea last year along with the tea health logo. 

The study was funded by the largest consuming countries such as the United States, England, Pakistan and tea producing countries including Sri Lanka and India. 

The study concluded that a pack requires to contain 90 per cent plus of minus camellia senenesis to use the health logo. The Sri Lankan Tea Board is the apex body, representing the FAO in this matter in Sri Lanka. 

Market report

Foreigners buy

The All Share Price Index gained .08 per cent to close at 494.84 while the Milanka price Index rose .71 per cent to register 796.12. The MBSL Midcap Index lost 1.02 per cent to close at 880.3. Average turnover for the week was Rs. 40.9 mn.

"Considering next week is going to be a short trading week and local fund managers will be on leave, the indices are going to remain depressed," Assistant Manager, John Keells Stock Brokers, Suresh Nadarajah said. " Plantation wages are uncertain and corporate results are unexciting causing the market to remain flat," he added.

"The best price performance is in the big cap high beta stocks such as development banks which have been excessively sold down," Head of Research, Jardine Fleming HNB Securities, Amal Sanderatne said. "These are the stocks which will move fastest when the market picks up," he added.

"While the level of uncertainty has certainly increased following a series of security lapses in Colombo and the upcoming parliamentry elctions, we believe that all time low valuations should help the market consolidate at current levels," Head of Research, Asia Securities, Dushyanth Wijayasingha said.

Lambretta changes hands

JIT's investment in Lambretta (Ceylon) is a means for it to acquire a listing on the Colombo stock exchange. A listing would confer tax advantages, the ability to raise capital and a means of foreign participation in its activities. Lambretta which dealt in motor cycles and scooters in its heyday has not been trading actively for the past couple of years. Meanwhile JIT is linked to companies dealing in dairy products and insurance. Analysts expect an infusion of capital into Lambretta to enable the company to operate on similar lines.

Lambretta has an authorised share capital of 14.5 mn shares and an issued share capital of 300,000 shares. It has a diversified shareholder base of 503 shareholders with 440 shareholders holding less than 500 shares.

Money supply up for 'Avurudu'

However, the spirit of the festive season has not come over the Sinhala and Tamil community this season. Neither has the money, shopkeepers complain. Despite crowded markets and shopping centres officials' claim that sales increased only marginally. Random research shows that festivals have become somewhat of a nuisance as it involves huge cost.

Officials say that even when sales pick up during this festive season, it gets nullified as the economy goes on holiday for the whole week. Sometimes longer. This trend however, do not apply to the other famous holiday season, Christmas. Officials say this could be because of the new calendar year following Christmas. 

In addition, Central Bank statistics show that money held by the public during this period does not increase dramatically as in December. 

However, Central Bank statistics do show a slight increase in money supply in the month before, during and after. Officials said that this was attributable to companies taking out money to pay festive bonuses. 

The month before in particular witnessed a substantial increase prior to 1997 compared to increases recorded after. 

Some officials said that Central Bank statistics did not show an increase because of the increase in the cost of goods and services after the festive season and not forgetting the holiday season. They said that it was a tendency of the market to keep prices high once they went up. Central Bank statistics too show that once the money supply goes up under special circumstances it drops only marginally.

Amadeus agents receive advanced training

PowerOffice is a back office system that facilitates inventory creation and invoicing through an automatic link with the Amadeus Central System, collecting details directly from the Passenger Name Record (PNR). This is primarily to facilitate easier, more efficient operations at a travel agency and thus provide more cost-effective management. PowerOffice defines and customises Management Information System (MIS) formats for travel agencies. The system possess a comprehensive financial accounting application including the ability to generate balance sheets, one of the core functions of PowerOffice. The system avoids duplication of data at the entry level which can be a time consuming and tedious process. It also organises customer profiles, outstanding invoices, BSP reporting, passenger sales reports and daily sales records.

Amadeus began operations in Sri Lanka in 1997 to service agents' needs in the region. Today, 89 agents in the South Asian region use the Amadeus System through a network of 225 terminals. Amadeus was the first GDS to begin operations in the country. Based at the Hotel Galadari, it has provided a reliable system that incorporates a user-friendly range of products and solutions. Amadeus users benefit from an extensive and comprehensive training programme, at no cost, which are provided by Amadeus staff. The Colombo Help Desk service is available on a six-day-a-week basis and is further supported by the 24 hour Indian Sub-continent Help Desk in Delhi.

Amadeus remains the market leader in the Indian Sub-continent with 2803 terminals installed and 1822 agencies on-line in 56 cities across the country. Of the total CRS installations in India, Amadeus leads with a clear 80 per cent of the market base. The company has a worldwide data network and database of travel information that is used by more than 48,000 travel agency locations and 8,200 airline sales offices.

KPM looks to Mumbai

KPM's managing director Abdul Halim Harun said the interest in two terminals was due to the strong growth in containerised traffic. The combined volume handled by all the terminals in the Mumbai region is close to one million TEU.

The terminals, constructed during the British colonial period, measure 800m with four berths and have a depth alongside of 11m. Under the privatisation agreement, the successful bidder will have to supply handling equipment.

BA World Cargo head retires

Hatton took over as head of the business in 1993 after having been BA's general manager sales, UK and Ireland, responsible for generating some US$ 2 billion worth of sales. His successor is Gareth Kirkwood, an airline veteran and currently managing director of UL-based Brymon Airways.

BA has been quick to point out that Hatton's retirement was signalled as long as July last year and that it had no connection with the departure of Bob Ayling as the airline's CEO.

"It would be unfortunate if the finale to such a distinguished career was misconstrued," said a BA World Cargo source.

Hatton whose career started with British European Airways (BEA) in 1963, commented: "I am sad to be leaving the airline and, most of all, I will miss the great team of people in World Cargo".

"This was always going to be a tough decision but it is the right one for me and my family," he said.

ADIC-Norasia form new container line

ADCL will acquire ten state-of-the-art container vessels capable of 25 knots. Seven of the vessels have been delivered while the remaining three will be delivered by July this year.

Commercial and technical operations of the fleet are contracted with subsidiaries of Norasia. The vessels have proved their capabilities by establishing record transit times on the North Atlantic between Montreal and Europe and recently in the Pacific between Asian ports and Vancouver. With the delivery of the vessels, ADCL will through Norasia Lines, be able to provide weekly services from Asian ports to the pacific northwest (Vancouver, Seattle) and the Pacific southwest (Los Angeles, Oakland).

The total fixed assets and working capital of ADCL are in excess of US$ 400 million. Al Suffun Holdings, a wholly owned subsidiary of ADIC will hold 51 per cent of ADCL. ADIC expects to place ADCL shares held by Al Suffun with UAE institutions and strategic investors.

ADIC is a public limited liability company with headquarters in Abu Dhabi. It specialises in providing investment and corporate finance advisory services. Owned by Abu Dhabi government institutions, ADIC is one of the leading Gulf-based banks. Volumes in ADIC's dealing room, which is believed to be the largest in the region, reach up to US$ two billion a day. Earlier in the year ADIC arranged a US$ 121 million private equity investment in Teledesic LLC.

Abu Dhabi will serve as headquarters of ADCL and the port of Mina Zayed will be used as a logistics and distribution centre for the UAE and other Arabian Gulf destinations. Norasia's existing services will not be affected by the new venture.

Carriers need broader vision

"Supply chain management will be the name of the game, and the order of the day as well," said Poon at the Container Shipping Summit concluded in November last year.

Calling for a broader vision in the shipping industry, Poon urged ocean carriers to review their marketing strategies. "By defining ourselves as providers of transportation by ocean, carriers have created a marketing myopia and commoditised their businesses," he said.

"Logistics, or supply chain management, is a way for carriers to position themselves as more than transport providers."

Both shipping lines and freight forwarders will need to redefine their strategies, he added. "Today the forwarding industry is entering a consolidation process similar to what shipping lines have gone through. It will not be surprising to see some globally operating companies capable of providing global shipping and logistics services while not owning or even operating any sea-based assets.

GCI rewards loyal customers

o Free one-way use of containers (no per diem or drop-off charges)
o Free one-year long term lease
o Free container purchases for a customer's owned fleet
o Pick-up credits
o Free container surveys

In the second phase, Gateway will expand the scope of BoxPoints by adding multiple partners that will redeem the company's BoxPoints for other types of award. The company is seeking award partners that will allow customers to redeem their points for savings across all sectors of container management, from acquisition to operation to disposal. Four major manufacturers have already committed to support Gateway by offering purchase of containers for customer's account: Jindo, Hyundai, Singamas and CIMC. Gateway will also allow free redemption for free surveys through Uncon. The programme was rolled out to two customers at the end of November last year. Customers are able to receive free containers for long term use or outright ownership at no obligation.

"Gateway BoxPoints is not geared to increased activity from our customers, we are not expecting them to lease at greater volumes," said the president of Gateway. "We are simply rewarding them for the relationships they allowed us to build as we have grown our business. Now we are turning the tables to help our customers reduce operating costs and capital expenditures."

TSA to discuss bunker rates

While 'all-in' freight rates, including various surcharges are generally accepted for cargoes out of Asia, TSA considers it inevitable to levy separate BAF in view of the recent steep rise in spot bunker prices in excess of US$ 200 per ton.

Three freight conferences of carriers serving South, West and East Africa and two rate groups serving the East and West coasts of South America from Japan, have decided to double their emergency BAF beginning this month.

Other freight conferences and groups are also out to collect their BAF and other surcharges completely.

The emergency BAF system proposed by TSA is intended to separate the BAF from the all-in freight rates, so that the margin of a BAF raise may be doubled in May.

The freight conferences of carriers serving South Africa, which introduced an emergency BAF of US$ 50 per 20-footer and those serving the East and West coasts of South America have decided to double their BAF to US$ 150 effective this month.

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