News

Good Governance essential for growth

By Akhry Ameer

IMF Senior Representative Dr. Nadeem Ul Haq said that there was a need for an open economy in terms of economic and political freedom.

A good legal and judicial system is also needed to provide quality justice at a relatively good speed, he said addressing the Industrialists Association of Sri Lanka (IASL) AGM last week. 

"A small government capable of providing good governance and the importance of a country to believe and accept its smallness as necessary factors for generating growth." 

He observed that many of the South Asian countries were still lagging behind other countries in the region like Singapore, Malaysia, etc. although they were first to act on liberalisation and other issues. 

He attributed unfinished and hesitant liberalisation openness process, an inefficient and slow fiscal consolidation and the need to fast improve labour laws as some of the reasons for this. He was also of the view that the private sector should take the time and effort to conduct business with the government to achieve growth. 

Speaking on governments, he said that small countries tend to adopt large regulatory structures blindly, without considering the costs and their economic sizes and in conclusion, questioned the need for over-developed regulations.

IASL Chairman, Cubby Wijetunge in his opening address observed that according to economists estimates, the level of investment would have elevated Sri Lanka into middle-income nation status as early as 1994. He commended the government's policy of promoting private sector led export-oriented industrial growth and said that the National Productivity Decade Programme and fiscal incentive scheme for introducing advanced technology has helped increased productivity in the industrial sector. Speaking on Human resources, he acknowledged the prevalence of high unemployment among the youth as a continuing area of concern and highlighted the realistic side of the story that the people are selective although employment is offered.

While commending the GDP growth as satisfactory in light of the internal strife in the country, Wijetunge appealed to the private sector to work hard towards achieving an 8% growth without blaming it on the internal conflict, as the country has achieved this figure previously. He also observed that the fiscal performance of the country has improved significantly despite the war. He further added that in his address the previous year, he had shared a wish for an Indo- Sri Lanka Free Trade Agreement, and now that is a reality he proposed a non-provocative thought of a single currency between the Indian sub-continent and Sri Lanka.

IASL new committee for 2000/01 includes Mr. C Wijetunge (Chairman), while Armyn Weerasinghe and Sarath Weerasooriya were elected as Vice Chairmen.

Furnature an eco-friendly living concept

Furnature's factory Chemwood at Meegoda is 22,000 sq.ft with all wood working machinery. The factory is an integrated production facility which selects fresh rubber logs, converts fast to desired sizes, impregnates with chemicals, dries in boiler powered klins and makes innovative, trendy space saving furniture. 

Basically the range of over 50 designs is for the US and European markets. However, the company has decided to release all foreign designs to the local market through its showroom at Liberty Plaza in Colombo 3. 

Development of such a wide range of furniture designs did not happen overnight says CEO, Furniture Lakshman Wanniatchi in a release. Participation in international trade fairs, visits to buyers in several countries and use of state of the art technologies, all contributed. Assistance received from EDB, CBI of Holland, TIPS/USAID in Sri Lanka and NORAD of Norway were of immense help he adds.

The company is assured of continued assistance through a NORAD scheme in pollution control, technology up grade, new designs and limited market support. 

The notorious East Asian crisis knocked the company out of the Japanese market. This compelled the company to look for alternate strategies. The vast Indian market was one. Benefits offered by FTA were tempting and the directors have already visited New Delhi and are very pleased with the enthusiasm displayed. 

The concept of space saving furniture was introduced to the local market by veterans like Mr. Patrick Amarasinghe did not really get the right mileage it deserved. Chemwood continues this effort with great force facing sacrifices and reaping rewards. Today we find young couples fearlessly take away a packet containing a baby bed in their small car to assemble at home. Sometimes the chairs and tables are picnic accessories. Being light and foldable, with convenience of mobility, outdoor use of the furniture is very popular. 

When challenged first by cheap and polluting plastic furniture and next by the great invasion by way of manufacturing them in Sri Lanka, it became imperative to look for avenues of finding different niche markets for this environment friendly natural product. The Hotel sector became an obvious choice because the tourists tend to appreciate environment friendly wooden furniture. 

Rubberwood itself is environment friendly, still the company will soon be getting the certificate from Forestry Stewardship Council on the use of timber from well managed plantations, thus preserving the natural forest for future generations. 

Hotelshow 2000 to be held from 21-23 July at BMICH came as a blessing. Over 20 new designs were created, some of which are targeted exclusively for the Hotel sector. The company expects a big boost in the market awareness of its products, being pioneering in nature. 

Ebell elected new president

At the 12th Annual General Meeting of the Chartered Institute of Management Accountants Sri Lanka Division, Mr. Richard Ebell was unanimously elected President for the year 2000/2001. 

In accepting the office, Mr. Ebell said that they are on the threshold of a shift to a new, Beyond 2000 syllabus. Study systems just being launched include interactive CD-ROM training. In December 2000, CIMA begins piloting Computer Based Assessment for the new Foundation Level of the Beyond 2000 syllabus. This will eventually allow students greater flexibility to sit examinations at times convenient to them. These are exciting initiatives, of a quality and magnitude that challenge us and demand from us local activity at the highest level.

The year will hopefully see the commencement of the renovation of our Secretariat into an open learning centre, which will eventually double study capacity. We have a great capacity in Information Technology, thanks largely to the initiatives of London both in terms of communication with each other and free access to relevant information and resources. We have a well equipped IT Centre which has been widely used to develop the IT skills of our students, members and the business community; and a business library which we have long considered the best in the country. This too has been available to students, members and corporate institutions. 

Notably among Mr. Ebell's plans for the year, will be an opportunity to set up a Committee to "Pursue a greater contribution to national policy development and review", a news release said the main thrust will be directed towards: 

• Growth in membership, with increased recruitment and improved examination performance; and 
• A high level of contribution to membership and the business community generally. 

The council and the committees will strive to pursuit of these goals. These will include: 

• A focus on familiarising students, members and others on the potential and use of the internet;
• Increasing awareness of e-commerce, to promote its introduction and growth in Sri Lanka;
• A high profile programme similar to that conducted by Professor Robert Kaplan some years ago;
• Selection of one Management/Management Accounting technique for special emphasis in the year, to raise awareness and create an environment in which it can be used, and is actually used;
• Development of the so-called "soft skills" of students to enable them function more effectively in the work environment;
• Attention to raising the quality of tuition available to students locally for ClMA examinations. 

Richard Ebell is a Fellow of the Chartered Institute of Management Accountants UK, having completed its examinations in 1979. He is also a Fellow of the Institute of Chartered Accountants of Sri Lanka (ICASL) and a Member and Diploma Holder of the Chartered Institute of Marketing.

Presently Mr. Ebell is a Group Executive Director of Hayleys, which position he has held since 1986. Earlier in his career with Hayleys, he served as Accountant, Budget Controller, Group Financial Controller and Company Secretary.

In addition, Mr. Ebell has served as Vice Chairman of the Import Section of the Ceylon Chamber of Commerce, and as Chairman of the Chamber's sub-committee on Accounting Standards.

He has served as a member of the Finance sub-committee appointed by the Interim Committee of the Board of Control for Cricket in Sri Lanka.

Mr. Ebell has served as Chairman, Conference Technical Committee for the ICASL, as an examiner for that Institute, as an ICASL nominee on the Statutory Accounting Standards Committee and as a member of the ICASL's Urgent Issues Task Force.

At CIMA, Mr. Ebell has chaired the Accounting Standards and Legislation Committee from 1994-1998, the Management & Professional Development Committee (1998/99), the Secretariat & Finance Committee (1999/2000) and the Conference Technical Committee (1997 - 2000).

Tea Update

Return of the Pharaohs

The re-emergence of a past row between Egypt and Kenya promises short term gains for the Sri Lankan tea market. 

Asia Siyaka Commodities reported last week that Egypt revoked its preferential tariff agreement with Kenya. This follows Kenya's decision to withdraw tariff concessions on Egyptian rice exports. 

Officials said that Egypt would go to other markets for its tea requirements until the problem was resolved. They hope that Sri Lanka's tea trade history with Egypt would lead them to the Colombo auction once again. 

However, Egyptian newspapers say that the issue had been resolved and that there was no barrier for preferential trade between the countries. But, industry sources said that the Egyptian Trade Ministry had not yet cancelled a circular issued to revoke the preferential trade agreement. 

The issue was ignited late last year when Egypt blocked Kenyan exports over a political misunderstanding.

Sri Lanka is also working towards a preferential trade agreement with Egypt. 

This follows a recent agreement between the Egyptian Minister of Economy and Trade, Dr. Youssef Boutros Ghali and our Minister of Commerce and Food, Kinsley T. Wickremaratne to pursue a free trade pact. 

Industry officials said that an agreement would be reached by the end of the year when an Egyptian delegation is expected to visit Sri Lanka. 

While tea is high on our list of tradable commodities for free trade, a list of commodities is still on the drawing boards. 

Meanwhile, in auctions last week the local teas on offer attracted improved prices. 

It was encouraging to note that most varieties gained in price over the previous auction prices. Brokers expect this trend to continue into the following weeks, especially since improved growing conditions have been reported.
Market reports

Blue chips dominate

Foreign selling of blue chips dominated trading on the market last week. John Keells Holdings (JKH) and the National development bank (NDB) were among the blue chips who faced this onslaught. However NDB appears to have aroused the interest of high networth individuals prowling the market for investment potential.

The All share price Index slipped .28 per cent to close at 512.1 while the Milanka Price Index fell .64 per cent to register 842.78. The MBSL Midcap index dropped .62per cent to close at 891.58. Net foreign sales were Rs. 162.5 mn in a week that saw an average turnover of Rs. 72.8 mn.

"We expect further active trading in the banking sector next week but general price levels should hold pending the release of second quarter results from corporates," Head of Research, Asia Securities, Dushyanth Wijaysingha said.

"The positive spillover effects on the market as a result of the Sri Lanka Telecom Initial Public Offering (IPO) would take longer to occur with the postponement in the IPO," Head of Research, Jardine Fleming HNB securities, Amal Sanderatne said.

Analysts also said the recent currency devaluation would create an increased perception of currency risk among Foreign Institutional Investors (FII's)

Attractive offers for top Conqueror dealers 

Conqueror, the world's leading brand of fine paper and board, has offered air tickets and a host of other valuable offers to local paper product dealers in a special promotion ending February 2001.

Conqueror's sole agent in Sri Lanka, Hayleys Photoprint said dealers who purchase Conqueror products over a specified value would be rewarded at the end of the next two quarters and following the conclusion of the promotion.

According to the company, the purchases of dealers over the next eight months will have to exceed a three tier target specified by the company. 

Dealers who top the first tier would receive return air tickets to the UK while those who reach the second and third tiers would be eligible for tickets to Singapore and Bangkok respectively. 

Meanwhile, dealers who record the highest purchase value over a set target from June to August and September to November would be entitled to two hi-tech gifts, the company said.

The company said all dealers whose purchases exceed the lowest specified target would be entitled to a consolation prize of a weekend package at a five star resort hotel.

"We have targeted this promotion exclusively at dealers as a mark of our appreciation for making Conqueror the biggest player in the business stationery market," Hayleys Photoprint's Director/General Manager, Ashan Abeyesundere said. 

Bartercard's trade volume tops Rs 300M

Sri Lankan businesses have bartered goods and services to the value of Rs 300 million since the country's first cashless trade exchange opened 44 months ago, the exchange operator, Bartercard Lanka Limited has announced.

This milestone figure was achieved on June 30, 2000 at the end of three months of average trade volumes of more than Rs 10 million a month, the company said.

Bartercard's Managing Director Johnny De Saram said trading in value terms had grown significantly, from an average of under Rs 1 million in Bartercard's first year of operations to a monthly average of Rs 9 million over the next 32 months. "We have clearly established that barter trade is a viable alternative to the cash economy," Mr De Saram said. 

The exchange has to date processed more than 27,000 barter transactions at an average of about 30 per working day. The membership base exceeded 1,100 businesses at end June, and has been growing at about 90 new members per month over the last quarter, Mr De Saram said. 

Strategic Service Management from SLIM 

The Sri Lanka Institute of Marketing (SLIM) will conduct a programme on "Strategic Service Management" on the 21st and 22nd of July at the Hotel Galadari. It is aimed at the Sri Lankan service sector, a SLIM press release said. 

The programme is aimed at persons involved in selling of services in areas such as Banks, Hotels, Hospitals, Post Offices, Super Markets, Pharmacies and Public Sector Institutions such as the Department of Motor Vehicles.

Presentations by Course Director, individual exercises, group work, case studies, group discussions, role-plays are some of the techniques which will be used.

Thilan Wijesinghe to head Textile Quota Board

President Chandrika Bandaranaike Kumaratunga, in her capacity as the Minister of Industrial Development has appointed the Chairman of the Board of Investment (BOI), Thilan Wijesinghe as Acting Chairman of the Textile Quota Board ( TQB) effective from 5th July 2000. This new position is in addition to Mr Wijesinghe's present duties as the Chairman and Director General of the BOI. Industrial analysts have welcomed Mr Wijesinghe's appointment stating that this move would certainly ensure not only the growth and stability of the apparel industry, but also the maximum utilization of textile quotas available to the country. Industrial Development Ministry's Additional Secretary Roy Jayasinghe has been appointed as Acting Director General of TQB. R Jayamaha and A.J.M.U Jayasekera previously held these two positions respectively, a BOI release says.

The Textile Quota Board (TQB), established under the Textile Quota Board Act No33 of 1996 is the sole authority for management, distribution and allocation of export quotas of textiles and textile products. The main function of the TQB is to manage the export quotas of textiles and textile products granted to Sri Lanka under a bi- lateral agreement and comprises of wide representations from the private sector- ensuring transparency of its operations and serving the wider interests of the industry and the country.The textile and apparel industry is one of the most significant contributors to Sri Lanka's overall economy, and has grown over the years to become the primary export revenue earner and the single largest employer of the manufacturing industry. 

In 1999 Sri Lanka earned Rs 171 billion via its textile and textile product exports. This represents more than 50% of the total export earnings of the country. Furthermore, textiles and textile products account for about 68% of the value of the country's total industrial exports.

According to the Media Department of the BOI, the Seethawaka Industrial Park will shorly be inaugurated as "C.V Gooneratne Seethawaka International Industrial Park", in honour of the invaluable service made by the late Industrial Development Minister C.V Gooneratne to the promotion of foreign investments to Sri Lanka. The Ministry of Industrial Development will hand over the total management of this industrial park to the Board of Investment later this month.

Small business from Athwela

Athwela Vyaparika Sangarawa, the premier Sinhala business journal has joined hands with the Sri Lanka Southern Development Authority (SDA) to promote small business education. Under a joint project sponsored by the SDA, Athwela Vyaparika Sangarawa (Athwela) has published a set of six books in Sinhala, to help small business operators to enhance their knowledge levels and to improve their attitudes, a news release says. 

At the launching ceremony held at the Mahaweli Centre, Colombo recently Mr. Somapala Gunadheera, the Chairman of the SDA, who was also the Chief Guest stated that the adapting of the material to suit the local business environment and publishing in Sinhala, was done by Athwela Vyaparika Sangarawa on an invitation extended by the SDA.

The books on "Starting a Small Busineess" and "Starting a Home- Based Business" are for the beginners and the one on "Small Business Management" is for those who wish to upgrade their knowledge levels. 

The main problems of small business community such as book keeping, accounting and marketing have also been looked into. " Record Keeping for the Small Business", "Marketing for Small Business" and :"Financial Planning for Small Business" are the three other books included in the series to help those who are already in business and are planning to imprvoe their operational skills. 

ISO 9002 for Noritake

Noritake Lanka Porcelain (Pvt) Limited has received ISO 9002 certification from the National Certification Body, Sri Lanka Standards Institution, a company relase said.

Noritake the world renowned manufacturer of porcelain Table Ware, joined hands with Ceylon Ceramic Corporation in 1972 to establish the first joint venture in Sri Lanka as Lanka Porcelain Limited.

Between 1972 and year 2000 the company expanded its buildings, technology, production capacity as well as the employment opportunities four times in 1989/90, 1992/93, 1994 and 1998. They increased the production capacity from 1500 sets to 12000 sets and employment from 500 persons to 1300 persons. Today Noritake Lanka Poreclain (Pvt.) Limited, has the largest porcelain table ware factory in Southeast Asia. 

The Noritake Lanka Porcelain (Pvt) Limited, had made yet another achievement by winning three awards at the National Quality Circle Convention held at the BMICH on July 1st 2000. Noritake Lanka Porcelain (Pvt.) Limited, forwarded three quality circles named, "Minimuthu", "Apeksha" and "Cafo" for the above contest. "Minimuthu" got the award for the best quality circle in Sri Lanka whilst "Cafo" was awarded the best team using quality circle tools. The award for the best Quality Circle Manager was given to Mr. Jude Fernando, Production Manager, Noritake Lanka Procelain (Pvt) Limited. Nearly 25 large manufacturing organizations participated in the above contest. 

Quality Circle is a small group of employees who will put their heads together to identify a defect in their product, find the best solution and implement it to maintain the quality of what they produce. This concept which has devolved from Japan ensures employee involvement in decision making. 

The contest at National level is organized for the purpose of selecting the best team who had successfully completed a project for the benefit of the Organization by using modern quality tools, identifying the defects and finding the best solution. Noritake Qulaity Circle was proved the best in all above aspects.

Noritake Lanka Porcelain (Pvt.) Limited won the first and second places in the national Quality Circle Convention in 1998 and made the best presentation at the International contest held in Colombo in 1999.

In the year 2000 they won three awards for best Quality Circle and best user of Quality Circle Tools, and also the Best Manager who give leadership to these quality circles.
In the sky

In the sky

British Airways top agents in Havana 

Travel Agents who get top rating at British Airways were taken to Havana, Cuba on a familiarisation trip. In past years they have visited Acapulco in Mexico and Australia's Gold Coast. 

Gabo Peiris, Chairman of Gabo Travels (Pvt.) Limited, Bernard Wijethunga, Managing Director, George Steuarts' Travel International Limited, Trevor Rajaratnam, Managing Director of Mackinnons' Travels Limited and Ananda Dhatabaya, General Manager, Thomas Cook Overseas Limited were the travel agents selected to travel to Havana. They were accompanied by Joe Rajadurai, British Airways Country Manager for Sri Lanka and the Maldives and Terrence Pendigrast, General Manager, Air Global Limited, General Sales Agents for British Airways and Qantas in Sri Lanka. 

Entertainment lined up included a visit to the old distillery and a Cigar factory where they learned about the intricate art of creating aromatic "Havana" Cigars.

News from Emirates 

Emirates recently established First and Business Class lounges in the Dubai International Airport.

A wide range of luxury features combine to position both lounges as leading-edge amenities for First and Business Class passengers on both Emirates and SriLankan Airlines, an Emirates press release said. They include such facilities as special massage chairs, bedrooms, showers, business centres with free Internet access, separate TV viewing areas, Skywards Service desks, ramps for wheelchairs and baby-changing facilities, plus hot and cold food available round the clock. Two massage chairs will also be installed in each lounge.

SIA-Tele-Medical link

Singapore Airlines (SIA) and International SOS recently signed an agreement to assure customers of medical attention in the air if they need it.

The Tele-Medical Service will be progressively phased in later this year, and will eventually be available on all flights, an SIA Press release said.

It will be a 24 hour-a day, seven-day-a week advisory service, and will allow cabin crew to consult qualified multi-lingual medical staff on the ground if a passenger becomes ill onboard.

SIA is teaming with emergency medical assistance provider International SOS to offer the new service. Based in Singapore, SOS will have medical practitioners ready to provide immediate advice when needed.

Diary

July 18: Seminar on "Selling your products in the European Market". Organised by the Europen Chamber of Commerce of Sri Lanka and the European Business Information Centre.

July19-21: Course on " Doing Business with Europe" held under the framework of the Asia-Investmentment Programme. Organised by the European Chamber of Commerce of Sri Lanka and the European Business Information Centre. Main resource person: Mr Jan Bauwens, Senior Consultant from Belgium.

Right of reply

The Editor Sunday Times - I refer to the article which appeared in the 2nd July 2000 issue of The Sunday Times under the caption "SEC warns CDIC". 

The SEC while confirming the fact that it warned CDIC Sassoon Cumberbatch Stockbrokers (Pvt.) Ltd, as stated in the above article, wishes to stress that the warning was not in relation to changing its ownership structure as stated in the above article. - Kithsiri Gunawardena, Senior Manager, Legal.

HNB launch Singithi Setha special loan scheme

Hatton National Bank recently launched Singithi Setha, a special educational loan scheme designed for minors. The objective of the scheme is to give financial assistance for the future welfare of children in the country.

The account offers the following features:

The minimum loan amount is rupees 25,000, up to a limit of rupees 250,000. Borrower's contribution is 20 per cent. 

An interest rate of 13 per cent per annum for existing accounts with a balance greater than or equal to the proposed loan amount, and 16 per cent for existing accounts with a balance less than the proposed loan amount. 

The repayment period will be five years.

The salient feature of Singithi Setha is that a parent of the Singithi account holder or a parent who maintains any form of a deposit at HNB on behalf of a minor having permanent employment with the capacity to meet the monthly commitment on the proposed loan facility.

Insurance Corp gets new digital Ericsson PABX from Metropolitan

The National Insurance Corporation who recently acquired a brand new multi-storeyed building at D S Senanayake Mawatha, Colombo 8, has in keeping with their new premises, changed their telephone system to a state-of-the-art digital Ericsson business phone system to provide efficient up-to-date service to their clients.

According to a Metropolitan spokesman, the Ericsson system provides for a Digital El Link, which facilitates 30 digital channels to support incoming and outgoing calls. Incoming calls on the digital link provides for display of incoming callers numbers thus facilitating prompt service ad attention. Further, all extension users will be provided with direct inward dialling numbers to ensure efficiency in call handling.

Metropolitan Communications have been at the forefront of the latest developments in the communication industry with over 20 years experience, while trained technical staff provide round the clock maintenance facilities which include remote maintenance to ensure the satisfaction of all users of Ericsson equipment.

Hotelshow 2000 to showcase regional goods and services

Sri Lanka's tourism industry is set to receive a face-lift as Hotelshow 2000, the industry's premier event gets underway at the BMICH from July 21 to 23. 

The show, organised by the Ceylon Hotel School Graduates Association and host to over 200 exhibitors, will showcase all hotel goods and services and offer hoteliers and suppliers alike, from the SAARC region, an opportunity to meet under one roof.

A key player in the multi-million dollar tourism industry, with membership consisting of over 450 professionals in 90 per cent of the key positions, events of this kind reflect the organisation's commitment to its mission of being the catalyst for continuous development of the industry.

The four seminars to be held concurrently with the focus on such subjects as eco-tourism, investment mechanism, new world wines and service excellence of tourism products, will provide the participants with greater opportunities of professional development.

This, coupled with the Marie Brizard Cocktail and Bartenders Competition and the New World Wine Tasting and Training competition are set to be key promotional events.

With the backing of the government, the Sri Lankan Convention Bureau and the national carrier Sri Lankan Airlines, as well as numerous other government and non-governmental agencies, the Hotelshow 2000, the very first of the new millennium, has assumed the significance of a national event.

KBSL bags RS/6000 award for sixth year

This year's award in the RS/6000 category for Keells Business Systems Ltd. (KBSL), makes it six awards on a trot during the past six years. The recent accolades from international computer giant IBM in recognition of KBSL's commitment to market excellence in RS/6000 reconfirms the company's undisputed dominance in the local market.

KBSL's position as the only local company with its marketing and engineering teams certified by IBM is a rarity even by international standards. The awards also serve as a road map for customers hunting for a reliable vendor.

"The RS/6000 population in Sri Lanka is about 130. An international award is only natural considering that we have sold and supported over 100 of them," says a KBSL spokesperson, The company is the only IBM business partner authorised for first level support. Yet another rare distinction, he says. Bagging the RS/6000 category, KBSL has won the Product Leadership Award and the New Customer Leadership Award for 1999.

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