• James Finlay in radical shift
• Is Lanka subsidising American farmer?
• Tea: Korean culture's foundation
• No second best option for coal says CEB
• Marketing matters even for small enterprises
• Business News
• Markets
• Shipping and Aviation

James Finlay in radical shift

By Dinali Goonewardene

Signaling a radical shift in policy, James Finlay & Company (Colombo ) Ltd (JFCL) recently announced it would be changing its turnover and profit based mangement fee to a profit based management fee. Hapugastenne Plantations and Udapussel-lawa Plantations which are managed by JFCL will be charged a management fee of 25 per cent of profit before interest. The new fee structure is operative from July 2000. We envisage making the company more viable and earning income, Chairman, JFCL, R.L. Juriansz said explaining the rationale behind the shift in company policy.

The company last hit the headlines when it converted its management fees to a term loan with an interest rate of 15 per cent per annum.

The two plantations were owned by the Plantation Investment and Management Company who engaged sub management agents to manage the plantations. A double-barrelled management fee resulted with PIMC charging a fee based on turnover and profit and the sub management agent levying a profit based fee. B C Plantation Services Pvt Ltd (BCPL) and Finlay Plantation Management Services Pvt Ltd (FPML) were the sub management agents. However since JFCL purchased PIMC as a going concern in 1998 the double edged management fees continued.

The majority stakeholders of plantation companies who are usually also the managing agents have long been accused of fleecing minority shareholders by charging management fees regardless of profitability.

However plantation sector analysts argue that a return on investment is a prerequisite to investment. And fluctuating profitability in the plantation sector does not permit an yearly return through conventional means. However analysts also contend that ploughing back of profits during profitable periods in order to withstand bad weather does not take place under the present system. The questions that looms over the market appears to be whether other plantation management companies will follow suit by charging profit based fees.

Plantation Turnover Profit/(Loss) Management
                      Rs. after Tax Rs Fee Rs.

At 31-12-99
Udapusellawa 581 mn (80.7)mn 26.1 mn
Hapugatanne 967.9mn (72.4)mn 43.5 mn
Watawala 1.2 bn 30.6 mn 48.3 mn
Kahawatta 711.3 mn (61.4)mn 27.8 mn
Talawakele 915.3 mn 28 mn 39.2 mn
Agalawatte 575.9 mn (39.6)mn 19.7 mn
Madulsima 582.8 mn 11.6 mn 24.5 mn
At 31-3-00
Bogawantalawa 1.34 bn 108.9 mn 43.34 mn
Namunukula 1.07 bn 16.6 mn 58.9 mn
Maskeliya 1.27 bn 136.3 mn 73.48 mn
Kelani Valley 1.02 bn 27 mn 22.6 mn
Balangoda 1.26 bn 102.6 mn 62.8 mn

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Is Lanka subsidising American farmer?

By Chanakya Dissanayake

The recent government move to reduce the wheat flour price by Rs.3 and make flour related products cheaper with the Yala paddy harvest just around the corner has raised alarm bells among the agriculture experts. Already, in the areas where the harvest was early, farmers are having enormous difficulties in selling their produce. The bulk of the Yala harvest is expected to reach the market starting from the latter part of August.

Through the years it was established that whenever wheat flour was sold cheaply there was a considerable reduction in rice consumption in Sri Lanka. It is known that successive governments used the price of bread as a election trump card. Agriculture economists point out that the lack of a concrete agriculture policy has resulted in the present dire state of agriculture. From a regional point of view, especially in India, agricultural productivity has increased by leaps and bounds due to the steady government policies supporting and protecting the agriculture sector. In contrast Sri Lanka's paddy yields have remained the same over the years.

"In order to improve productivity new agriculture methods and better nutrients must be introduced. But if the farmers are getting a very low return for their investment and effort, obviously they will not invest more on their crop. This will create a no win situation, and is very evident that countries which are now leading in the agriculture sector, made sure that farmers got adequate returns. By reducing the wheat flour price Sri Lanka is subsidising the American farmer, whereas our farmers are left with unsold paddy stocks", an agriculture expert told The Sunday Times Business.

The demand for paddy is mainly created by the rice mill owners who buy paddy from farmers and small scale stockists to mill them into rice. The low demand for rice has dealt a blow to mill operators seriously undermining their ability to buy paddy from farmers. A leading rice mill operator in Senapura told STB, " After the wheat price was brought down, demand for rice has come down to an extent where we were not even able to cover our diesel cost of lorries doing distribution".

It is also stated that, the negative results over the years from the agriculture sector owing to weak state policies have dettered commercial scale investments coming into the sector.

Tea: Korean culture's foundation

By Nilika de Silva

The first ever Korean Tea Ceremony to be held in Sri Lanka took place last Thursday, with the participation of giants in the local and regional tea industry.

Organized by the Korea Tea Culture Association and the Gachon Culture Foundation the 2000 Korea - Sri Lanka Tea Culture Exchange is taking place from the 8 - 16 of August in Colombo and Kandy.

The stated objective of the "2000 Korea - Sri Lanka Tea Culture Exchange" is to introduce traditional tea culture, etiquette and costumes of Korea to Sri Lankan and Korean residents in Sri Lanka, to enhance their understanding and interest for Korean culture, and to boost friendly relationships among tea-drinkers of the two nations in the hope of more active cultural exchange between the two nations. In introducing the tea ceremony it was shown how three main countries which represent tea culture in Asia, Korea, China and Japan identify different aspects to be the most important feature in a cup of tea. To the Chinese it was felt to be the aroma, while to the Japanese it was the colour and the Koreans believe the taste to be an important element.There is a belief that the quality of the water is all important, this is supported by an old proverb "Only good quality water can make fine tea".

"This tea ceremony is very meaningful since it is the first Korean Tea Ceremony ever held in Sri Lanka," the Korean Ambassador to Sri Lanka said, adding, I believe this Korean Tea ceremony will present a unique opportunity to allow tea connoisseurs from both SL and Korea to get better acquainted and to promote the cultural exchange between the two countries. The Chairman Sri Lanka Tea Board, Mr. C.S. Ratwatte said, "It's about time we gave a little more importance to the way we drink tea."The demonstration of the Tea Ceremony was followed by "Siyeoun", the ceremony to serve tea to guests and show the Korean peoples warm attitude towards guests. Traditional brews have traditional customs like the oldest person being served first, and usually when drinking tea that it is served three times. This was followed by a cultural pageant including a demonstration of a meeting between a bride and groom, and a young couple with in-laws and then a parade of costumes worn by Korean Kings and Queens, and culminated with the sampling of Korean teas. Tea is the foundation of the 5,000 year old Korean culture, while the tea culture of Korea has been developed during the past 1,200 years. Founded in 1951, the Korea Tea Culture Association is a non-profit organization working to preserve Korean traditional culture.

The Ambassador for Korea in Sri Lanka, H.E. Song Young-oh, the Chairman Sri Lanka Tea Board, Mr. Clifford Ratwatte, the President of the Korean Tea Culture Association Kwi Rye Lee, the Chairperson of Gachon Culture Foundation, Gil Ya Lee and the Secretary Ministry of Plantation Industries, Mr. Andrew de Silva, attended the event which took place at the Galadari Hotel Colombo. The ground arrangements are handled by Jetwing Travels.

No second best option for coal says CEB

The Ceylon Electricity Board says that they have no alternative for coal power as Sri Lanka's future energy source.

The Board, in response to recent media reports of the cancellation of the Coal Power Plant planned for Norachcholai, on the West Coast north of Puttalam, said that they have no second-best option.

"It's either coal or oil," said D.C. Wijeratne, Additional General Manager, CEB. "With rising oil prices, the country cannot afford to be dependent on oil for long-term generation."

The CEB said that it is already too late to avert a crisis situation that will occur in 2004, when demand for power is projected to overtake generation. "Even if we started work on the coal power plant tomorrow, it would be impossible to complete it in 2004. But now there is an indefinite delay in the project."

Two new thermal BOO plants are in the offing, scheduled to be completed in 2001-2002. They will each generate in the region of 164 MW of power. Kukule Ganga Hydro Electric project will be completed in 2004 ushering in another 70 Mw. Today the system has to run pell-mell with every available plant to meet the demand ( mostly due to the monsoon failure). But yearly demand grows by 100-130 Mw and in 2004 a large shortfall is expected. If the shortfall is to be met with oil-based generation, the cost per unit of electricity could well reach beyond the consumer.

According to government policy every new thermal power plant will be a private sector venture on BOO/BOT basis. Today the average price paid for a unit of electricity (one kilowatt-hour) generated by private thermal power producers is US 7 cents, or Rs. 5.60. With rupee devaluation and oil price hikes, this cost keeps rising. In contrast the coal power plant, if completed on the scheduled date in 2004 would cost a mere Rs. 3.38 per unit.

A consumer today pays an average Rs. 5 per unit of electricity. Cheap electricity generated by the hydro plants has made it possible to keep down electricity tariffs to a large extent. Viable hydro options have been all but exploited. Upper Kotmale Hydro Electric project, which was recently given the go-ahead, has to be re-evaluated since the last costing was done six years ago (ever since it was embroiled in environmental controversy). Other hydro options of Uma Oya, Gin Ganga, Broadlands and Moragolla are expensive projects costing hugely per unit of electricity generated.

Marketing matters even for small enterprises

"Marketing is critical even for small enterprises." This was one of the important lessons conveyed to a group of bankers and representatives of NGOs at a recent seminar in Colombo.At a well attended and absorbing seminar on critical issues in lending for small enterprises, organised by the small enterprise entrepreneur development association (seedeva), as much emphasis was placed on the issues of marketing as those of credit.

In fact the message was that if credit schemes for small enterprises were to succeed,then these enterprises must know their markets and respond to the needs of the market.Else small enterprises would have a very high rate of failure and lending to them would be very risky.

This emphasis was unusual,particularly in relation to small enterprises.Small enterprise development strategies often tend to

concentrate on producing commodities without adequate consideration of the tastes,preferences,needs and demands of the consumer.Production and marketing are often looked at as different operations. Good entrepreneurs know that the production process is completed only when the products are consumed.Enlightened multinational cigarette producers often say that the production of a cigarette is completed only when it is lit.

Yet lesser entrepreneurs neglect marketing research at their own peril.

One of the marketing specialists at this seminar noted that even some large organisations neglect marketing.Their management looks at marketing costs as expenditures rather than as investments.They are reluctant to spend money on market research. Even large credit organisations often do not look at the marketing aspects of their borrowers. Consequently they take high risks as the borrower's project might fail owing to it not catering to the needs of the market.

Marketing is not merely selling.It is a business philosophy of being customer oriented."The culture of marketing orientation must permeate the entire organisation", was Mr Frank Samaraweera's strong message.This is a message that is applicable to small enterprises too.Small crafts must fashion their products to cater to the market.They must change their design as the market changes its demand.They cannot afford to stand still when the world around them is changing and becoming more competitive.

They must be given the benefit of marketing knowledge and skills. The seminar concluded that the ideas and skills of market research, market analysis, target marketing, market analysis, product differentiation, product positioning,pricing and product designing to cater to market needs, were vital for small enterprises.

Therefore an institutional means of transferring this knowledge to the small man must be found.The task of doing this is not easy.It should not be the responsibility of a single organisation.It must be a broader thrust, which must be recognised as a responsibility of the government,private enterprises,banks and NGOs.

The partnership must first muster the knowledge,which is in English.It must sift it to make selective use of that knowledge, adapt it to the needs of the small enterprises,translate it into the national languages and make that knowledge available in all parts of the country through a multiplicity of organisations which serve the hinterland.

An effective programme to do this would require finances, skilled personnel and commitment. Maybe SEEDEVA could take the leadership, with support from government organisations, chambers of commerce, banks and NGOs. Will this happen or will a good idea gather dust as it often happens.The NGOs, which have various projects around the country, would require to keep the pressure on to translate this idea into an institutional reality.

It can make a vital contribution to the success of small enterprises, which are a large component of our economic activities.It can assist in reducing unemployment,increase incomes and even contribute to saving or earning foreign exchange

Have you ever failed? If so congratulations!

By Gamini Rajakaruna

The first principle of failing the way to your success is learning the Art of Asking, says Kopmeyer. "Asking is a psychological push button. You push this button of asking and others respond by doing what you ask. But ASKING is an art" he points out.

To make whatever you ask to be effective, you must ask: courteously, expectantly, reasonably, persuasively, pleasantly, positively and firmly. These are the seven important aspects of art of asking according to Kopmeyer.

Yet most of the people are afraid to ask. This is because many people are so afraid of being told "no". Many people so afraid of being told "No", that they do not persistently ask, observes Kopmeyer.

He says in the first place, you simply cannot lose by asking because, you do not now have that which you are asking. Since you do not now have it, you cannot lose it by asking he argues. You can get more by asking, but you cannot lose anything. Most people think "NO" reply is the end, but according to Kopmeyer, it is only the beginning of one of the most successful methods for getting whatever you want. Here are some tips given by Kopmeyer to handle "no" situations.

*When people say "no" when you ask what you want, it is important to understand that they are simply telling you that they are not sure that what ask will benefit them more than cost them. They are telling you that it is up to you to assure and re-assure them, furnish them more proof, positive guarantees, to make them sure. As soon as you can make them sure that what you ask will benefit them more than it will cost them, they will be eager to do whatever you ask.

*Some people say "no" just to stall for time to think it over. It's a self-defensive mechanism. They are slow thinkers and slow deciders. They say "no" just to stall for time. Don't show any sign of rushing them or high-pressuring them. In fact assure them that you want to help them reach the best decision for them. This will enable you easily to turn many of these types of "no" responses to "yes" responses.

*Of course, some people say "no' for good and valid reasons. When you positively have determined that these "no" responses are genuine, then courteously leave, and hurry to see the next person.

Understand the law of averages

The law of averages guarantees us to achieve success in any endeavour says Kopmeyer. The law of averages simply means that when you ask from a number of people, some percentage of those people will do what you ask. Therefore he emphasizes the importance of having, abundance of contacts, because the law of averages is based on the number of people you ask. The more people you ask, the possibilities are more that you will achieve the success your desire according to the law of averages.

'IF you do this you can't lose. You can't fail" affirms Kopmeyer.

When you understand that the law of averages will assure success, you don't panic at a "no" reply, argues Kopmeyer. Everybody is not going to do what you ask for the first time you ask them. Some people never are going to do what you ask, because it actually is impossible for them to do so. This should not disturb you in the least, because you know that if you constantly use the asking methods on more and more people the probabilities are more that they will do what you ask. The law of averages will produce more and more abundance for you, as you increase the number and quality of the people you ask, for whatever you want, says Kopmeyer.

To increase the number of your contacts you must "go where the people are... You must write to more and more people asking.. you must meet more people personally, advised Kopmeyer.

"Keep your success production line always filled with valuable contacts. The law of averages guarantee that you will get whatever you want," he adds.

Conquer the fear of failure

If you want to get whatever you want, one thing you have to do is conquering the fear of failure, says Kopmeyer. The first step in conquering the fear of failure, is to realise that failure is a simple routine event which happens to everybody in some degree, almost every day, and often many times a day. But the biggest reason for permanent failure, is that most people think of failure as something to be avoided. They try to avoid failure by never attempting to accomplish anything observed Kopmeyer. He says being afraid of failure attracts failure like a magnet. Such people;

Think of failure as something to be avoided.

Are ashamed of failure.

Feel that they are disgraced by failure.

Are discouraged by failure

Quit trying because of failure.

Failure conditions you for success. It strengths you to overcome adversity, believes Kopmeyer.

Draw the miraculous power within you

There is a miraculous power within us which will enable us to get whatever we want in spite of all failures, obstacles, all handicaps and all defeats. It is the Power of believing, says Kopmeyer. Without that, we are doomed to constant failure, he says. He says the Power of believing will enable:

Us to be whatever we want to be.

Do whatever we want to do.

To have whatever we want to have.

In fact the power of intense believing is the basis of all religions. If you study the great religions, you will find the one thing they all have in common is the need for and the power of believing, says Kopmeyer. He points out:

Buddha taught that "All that we are is the result of what we have thought"

The Bible says "All things are possible to him that believeth"

The Koran emphasizes the need for the power of believing and so does Hinduism.

Modern psychologists have proven that whatever the mind of man can conceive and believe-man can achieve, says Kopmeyer. He points out William James, famed philosopher and psychologist of Harvard University, who acknowledged as probably the greatest thinker in modern times as an example.

Dr. James constantly taught that "Belief creates actual fact. In any matter the important factor is our belief. Without belief there can be no successful outcome. That is fundamental. If you only care for a result, you will almost certainly attain it. If you wish to be rich, you will be rich, if you wish to learn, you will be learned. Only you must then intensely believe these things and wish them exclusively"

Kopmeyer further quotes a statement by Dr. Walter Scott, famous psychologist and President of North Western University of Chicago.

"Success or failure in business is caused more by mental attitudes than by mental capacities"

In other words, your success in business is the result of your intense belief that you will succeed and not is dependent upon your superior brain power.

The principle of believing is like dialing a telephone number says Kopmeyer. You get what you dial. If you dial the wrong number (fear, sickness or failure) that's what you get. You will get it automatically - not because of luck or fate but because you dialled it yourself.

If you dial the right number (happiness, success, health, love, riches, popularity) you will get exactly what you dial - not because you are lucky, but because you have dialled the correct number, says Kopmeyer.

Kopmeyer's studies on biographies of thousands of successful people reveals that:

Believe in their ability to succeed is the one basic essential characteristic of all of them.

He points out Edison as a fine example, because after a long series of failures, once Edison remarked, "Now we know 1000 things that won't work, so we're that much closer to finding what will."

Kopmeyer identifies, Edison as a man who failed his way to success.

Are you worried about failure? Perhaps you are not failing enough to find out enough things that won't work, so that you can learn what will work and thus gain the knowledge to what ever you want to achieve, says Kopmeyer. If you master the art of asking, understand the law of averages, concur the fear of failure and learn to believe in your own abilities, then you need not worry about failures. Because you can fail your way to success, assures Kopmeyer.

Then why not try the Kopemeyer's formulae!.. After all you have nothing to lose.

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