Cyberpura at Malabe 

It should attract people from all over the country who will come here to gain the knowledge and skills necessary to become world-class professionals in the new, global business of knowledge and information management. The new campus will train 1,200 persons a year, supplying about 50 per cent of Sri Lanka's needs. Private sector institutions of equal excellence are expected to supply the remainder. On 14 September the foundation stone was laid for the building complex of the Sri Lanka Institute of Information Technology's Cyber Campus at Malabe in Kaduwela. 

One nine storey and two other extensive buildings will make up the nucleus around which the new campus will grow and develop, hopefully, into a South Asian centre for excellence.

lt is estimated to cost around Rs. 500 million and the major share is being contributed from and out of Mahapola Trust funds.

The 10-hectare (25-acre) site is Mahapola Trust land that has been made available to 'grow' South Asia's first information and communications technology campus. It is hoped to develop it into a benchmark for IT education not only in Sri Lanka but also throughout South Asia. It has already developed links with the prestigious Uppsala University in Sweden, Curtin University in Australia, with IT giants, Microsoft Corporation and the global IT giant, IBM, in order to ensure the highest standards of professional excellence.

The next generation of IT companies in Sri Lanka would need to develop advanced technology to keep pace with and take advantage of the opportunities in the global dot.com economy now rapidly emerging. Coupled to and with the new advanced business technology incubator, Conceptnursery.com, the new campus is expected to become a fertile seedbed for advanced research, innovations and developments in information and communications technology.

Sri Lanka joins asianvendors. com

The portal, described as "the new global market place for exporters from Asia" is owned, managed and hosted by Asian Vendors Inc., a USA-based company, whose member partner in Sri Lanka is Lanka Super Pages (LSP) the strategic alliance of Directories Lanka (Pvt) Ltd., (DLPL) and ITMIN Internet Services Ltd., (IISL), a news release said. 

The agreement appointing LSP as the official marketer of asianvendors. com in Sri Lanka, was formally signed in Colombo on September 8, by Asian Vendors CEO Ramesh Gupta, LSP Chairman Lt. Gen. Dennis Perera and LSP Director Tissa Jayaweera. 

Already, more than 1200 catalogues of exporters in partner countries such as Indonesia, Thailand, Singapore, and India (with 70,000 listings) have been brought on line, and the entire Asia-Pacific region is expected to be covered in the near future, Mr Gupta said.

Merger mania and low dividend blues 

By Lionel Gulawita Secretary/Director - Finance Diriya Foundation 

The unique AOL-Time Warner Inc. - the biggest merger in the world so far, encompassing Internet and e-mail development, entertainment, cable network, TV and movies, cartoons, publishing etc., took place in the first week May 2000. It is a massive thrust kicked off into the future in the opening year of the new millennium. The new company with well over 80,000 employees and 20 million subscribers hopes to bring Internet as close to peoples' lives as telephone and TV. America, On Line, the biggest Internet Company agreed to purchase Time Warner, the massive media empire, for a stupendous sum of US$ 172 billion. The new company intends to continue existing businesses on global scale. Amongst the developments the global subscriber is in, include cable access, which is a dominant data pipeline and a well assured digital future.

Yet another important merger in May 2000 was London-Frankfurt Stock Exchange combine. The investor-benefit is the prime advantage arising out of this grand combination. Easier access to sources of investment, streamlined capital markets, quick funding for startups of ventures are some of the benefits this European milestone-merger could provide to global investor.

Earlier in March 2000 Paris joined hands with Amsterdam and Brussels exchanges opening up possibilities for far-reaching financial transformations in Europe. 

Mergers such as these benefit the people and development of business with direct cost reduction, time saving and marked convenience to the stock market dealings.

Bill Gates, the richest in the world and his Microsoft were unlucky and failed to receive Federal Government's approval for global expansion of software business. After a lengthy investigation and nearly three months of court proceedings, US judge Thomas Penfield Jackson ordered the break up of Microsoft Company. Following the US government's antitrust action, the judgment delivered is to split the Microsoft under "Ops Company" to continue Microsoft Windows operating system, while applications like Office would be the concern of "Apps Company". The idea behind the judgment is to permit two different companies to develop software for rival companies and make others too like Linux to strongly compete with Windows. Whatever could happen in the appeal by the techno-zillionaire Bill Gates, the Federal Government's intention in the lawsuit is to discourage unfair competition.

Large companies and even the governments abroad reportedly spy and eavesdrop on rivals to get the vital data relating to contracts, merger deals and trade secrets. The US Government is accused of sharing the secrets with Britain, which is closer to Americans in family relationship, than to European businessmen. Recently it was revealed in the European Parliament that America is snooping on its friends in order to maintain its economic dominance. The US and many other allies, it is alleged, uses 'high tech listening posts' to get information from EU companies and uses such information to beat foreign competitors, despite denials by British Prime Minister, Tony Blair. 

Locally mergers are much l ess. The latest news is a Commercial Bank of recent origin's move to perhaps extend business, with more of commercial products, merging with another institution of which the declared objectives are not those of commercial nature. Mergers are good so far as their purpose is worthy.

The greater calamity small investor in Sri Lanka is assailed with is the low-dividend situation. Peopelization encouraged investment in shares and the people responded well. When we peruse financial statements and annual reports of quoted companies we sometimes wonder whether crises is really there for some companies to abstain from paying dividends to shareholders. Let us take an example from the estate sector. Many companies pay good dividends and treat their employees well. Some do the both poorly. Few companies do not pay any dividend at all.

In the estate sector, the general management techniques, agricultural/field practices and manufacturing, process employed are almost identical. In many cases the profitable estates and so-called 'non profitable estates' are also located within the same climatic zone with physical conditions and agricultural standards of hardly any significant variation. Those selected to be estate management directors in charge and planters in superintendence too are said to be of top quality possessing wealth of practical experience. Yet strangely, wide variations exist in the per unit profitability of some of the companies.

Some companies seem to think that the annual report is optional on their part and they take the liberty not to send it to the shareholder, though they are obliged to reveal material information relating to the pattern to trading, interest the directors had on the contracts entered into by the company etc., during the period under review.

The salaries, perks, bonuses, the value of 'on account purchases', and private mileage, education allowances, tax paid by company etc., allowed to company chairman, directors and top executives are a closely guarded secret. In peoplised ventures, the quantum of 25% profit share received by the managing company prior to appropriation, is also not discernible on the 'financial statements' sent to the shareholder. 

The minority shareholder is nonplused and finds himself in an unfriendly and uncared for environment quite in contrast to the time of his investment application seeking allotment of shares admits the rosy prospectus and inspiring advertisements around him. Utter disappointment and loss are his dividends now. Grudgingly he throws aside the papers and tries to forget yet another unpleasant episode of his preferred corporate body, which failed to give him a fair return. 

The regulatory bodies expected to look into perennial losses incurred by quoted companies can hardly be depended upon to successfully interfere and bring about a different picture. Rarely a shareholder complains. His silence is golden for the company. Furthermore the regulatory body works on logics rather than to the shareholders benefit. The circumstances eventually turn out to be that there is no case or an iota of reason for intervention at all. Everything goes swiftly under the carpet.

Normally 5 years from the date of the commencement of business, the company dividends are tax-free. Non receipt of dividend in the first few years therefore is a matter of concern to him. Generally all shareholders suffer out of non-payment of dividend. But major shareholders enjoy other privileges while the minority shareholders pay the price.

The liberalized global business environment today is on a fast tract and if not unnatural for the tycoon to seek greater empires for their endeavours. Yet Fair Trading Regulations and Anti-trust and Anti-monopolistic laws should save the fair competition minority-shareholder. 

ITI to benefit from UNIDO project 

This project is a part of the UNIDO Integrated Industrial Support programme for Sri Lanka on the component 'Quality, Standardization and Metrology.' This component of the UNIDO project has the main objective of strengthening the quality, standardization, metrology and testing capabilities in the country, with particular emphasis on certification of quality and environmental management systems and development of accredited chemical and microbiology testing laboratories. 

A request for UNIDO assistance for upgrading the Calibration and Measurement capabilities and capabilities of the IT. SLSI and the MUSSD was initially made by the Ministry of Science & Technology. The MUSSD at present carries out all activities pertaining to legal metrology including the maintenance of National primary standards. The Calibration and Measurement Unit of the ITI provides metrology services to both public and private sector industry whilst the SLSI which is the national standards body in the country provides services similar to those provided by ITI. The MUSSD and the ITI have not had any upgrading of their capacities or capabilities in the recent past, even though the SLSI has received assistance during the period 1984 to 1991, from UNIDO/UNDP and more recently in 1998 from the Government of Japan for upgrading their calibration facilities. 

The upgrading of the equipment and the capabilities of the staff of all institutions working in this area has become a dire necessity due to the rapid escalation of the demand for metrology services in the country. This escalation is mainly due to the fact that calibration of measuring and testing equipment is essential for manufacturing and service organizations seeking ISO 9000 and ISO 14000 certification as well as for testing laboratories seeking ISO/IEC 17025 Accreditation. These standards impose more exact demands with respect to quality and environmental management systems and a developing country such as Sri Lanka has to meet the requirements of international standards and offer competitive levels of product quality if we are to benefit fully from increasing liberalization of world trade. 

The UNIDO project component relating to metrology started in May 2000 with the recruitment of Dr. G. M. S. de Silva, a national metrology expert. As a first step an assessment of the present status of the metrology institutional infrastructure together with a survey of the equipment and facilities available in the country has been carried out. A quantitative assessment of the measurement and calibration requirements of the country's industrial and commercial organizations has also been completed. 

Presentation on E-Business by PricewaterhouseCoopers

The presentation focused especially on the growing significance of online electronic exchanges, or "e-markets" and their impact on Business to Business (B2B) commerce, and how e-markets are already altering the competitive economic landscape. Using Internet techologies, E-markets allow suppliers, manufacturers, distributors - virtually all the participants in a supply chain of an industry, to negotiate and transact business with relatively little restriction or cost, in a very short space of time, and across geographic boundaries.

Major changes are already taking place in the relationships between large manufacturing and distribution organisations and their network of suppliers. 

The recent example of the competing motor manufacturers Daimler-Chrysler, Ford and General Motors, where each had separate electronic "exchanges" linking their suppliers on an exclusive basis, effectively collapsed and merged into one combined e-market, showed how technology has changed the very basis of competition. It also demonstrated the shifting balance of power from the giant manufacturing companies to other groups, says a news release.

Globally, Pricewaterh–ouseCoopers has moved aggressively to play a leading role in the E-Business revolution by building internal skills, partnerships with leading vendors and leveraging its strong presence in IT consulting.

A CD-ROM containing PricewaterhouseCoopers' annual "Technology Forecast" - a publication of the firm's US based Technology Centre which embodies the results of in-depth research by in-house experts, was distributed to participants at this event.

The speakers on this occasion were Mr. Roopen Roy who leads the Management Consulting Services division of PricewaterhouseCoopers India and Dr. Prithwis Mukherjee, a partner of PricewaterhouseCoopers India, and specialist in e-business consulting. Mr. Amal Ganguly, Senior partner of PricewaterhouseCoopers India, Dr. Ravi Corea and Mr. Herman Amerasekera, both Directors of Pricewate–rhouseCoopers Lanka (Pvt) Ltd, presided at this event.

HNB ties with RCU to issue VISA Affinity Credit Card

By Akhry Ameer

The card is exclusively for RCU members and carries an imprint of the school on the face of the card. The card can be used both locally and overseas and benefits the RCU fund, without any additional charge to the cardholder.

In addition to the general benefits to the cardholder like interest free credit up to 45 days, various discount schemes arranged by the bank; the successful applicants will not incur a joining fee. The RCU in turn will receive a sum of Rs. 350/- for each card subscribed every year. Further, HNB will also give 0.1% of the transaction value to the RCU on every transaction made through these cards.

The secretary of the union Mr. Nirmal Dias Jayasinha said that, out of a 7000 membership if 5000 members were to subscribe for these cards the RCU will stand to gain Rs. 1.75m per annum. Also if these 5000 cardholders use their cards for an average value of Rs. 20,000/- per month the RCU will stand to gain an additional Rs. 1.2m per annum, at no cost to the cardholder.

Speaking at the launch ceremony the principal of Royal College Mr. H.L.B. Gomes said that this scheme is being launched at a much needed time where the school is trying to raise funds for a sports complex. He also thanked HNB for their contribution of Rs. 3.5m towards this.

Hatton National Bank was recently ranked 400th largest in Asia in terms of total assets, on its Top 500 ranking by Asiaweek. HNB with an asset base of over US$ 1 billion has wide spread coverage with many branches across the island and extension offices in India and Pakistan. The bank in recent times has also set up school savings schemes in over 70 schools.

Mumbai Fair generates Rs. 186.9 million

Seventy six exporters representing almost the entire export sector of the country participated at the Single Country Exhibition in Mumbai. A number of other events too were organised projecting the total country image. An Investment and Business Development Seminar by the Board of Investment, Cultural Shows by Sri Lankan artistes, travel and tourism events by the Tourist Board and a Sri Lanka film festival were the other major events.

The immediate orders were for spices, essential oils, apparel, umbrellas, tea, furniture, coconut based products, processed food, furniture and weighing scales, paints and varnishes, leather, rubber products, gems and jewellery, liquor and handicrafts. Joints venture opportunities were offered for cut flowers and tea. Most of the exporters were successful in establishing contacts with distributors, agents and wholesalers, in addition to getting direct orders.

CIMA to address ERP and implementation issues 

Aimed at CEOs, Directors, Managers and Executives, the seminar is organised by the Chartered Institute of Management Accountants (CIMA) in association with John Keells Computer Services, to come to grips with outstanding ERP issues.

Dr. B. Mahadevan, Associate Professor in Production and Operations Management at the Indian Institute of Management Bangalore (IIMB), who holds a M.Tech and Ph.D. from the Indian Institute of Technology (IIT), Madras will be the key resource person for the seminar.

Prior to joining IIMB in 1992, Dr. Mahadevan has taught at other premier Indian educational institutes. He was a visiting scholar at The Amos Tuck School of Business Administration, Dartmouth College, USA for nine months.

Subjects to be covered are: to understand the role of ERP systems in today's business; challenges in implementing ERP systems; successful ERP Implementation from the experiences of firms world wide; identify other support systems required for gainful exploitation of ERP systems. 

The seminar is scheduled for Friday September 29, 2000 marking CIMA the Global Business Management Week in Sri Lanka.

Give more to grow more

By Chanakya Dissanayake

The Sri Lankan government recognised the need for commercial agri-projects that were export oriented and involved advance agri-technology in late 1980 s. This was mainly because traditional state agricultural policies were based on helping the rural, small scale farmer and did not have significant commercial objectives. Commercial scale agriculture was seen as the best remedy for rural poverty alleviation and faster socio-economic growth in newly populated areas especially in the dry zone. The main drive towards Commercial Agriculture started in the Mahaweli system B in the early 1990 s.

The funding and technical assistance came from a number of international agencies including IMF and the USAID. Detailed research was carried out including soil suitability surveys and marketing research for food crops. The main aim was to create Mahaweli system B a centre for agriculture investment in Sri Lanka. Many firms accepted the invitation to invest in large scale agriculture and within a short period of time fruits and other agricultural produce from System B was seen in many international markets. Especially, Gherkins gained popularity among the firms and some even adopted out-grower schemes to grow and export Gherkins.

However today the system has changed. Many Colombo based firms have abandoned their agricultural projects due to various difficulties. Even-though Commercial Agriculture is seen as the only way to increase agri- productivity, increasingly less government and privte sector involvement is evident in the sector. The Sunday Times Business visited the sites of the remaining large scale agriculture projects and spoke to the management about the issues facing commercial agriculture in Sri Lanka. 

Informatics Ltd entered the field of commercial agriculture in response to a government invitation in 1990. The farm is situated in a 2000 acre lease hold land granted by the government, in Dehiattakandiya, Mahaweli system B. Informatics invested heavily into agri technology and today the farm boasts of the largest drip irrigation system in Sri Lanka. The drip irrigation system established with the technical assistance of Israeli experts, covers an extent of 1000 acres.

The crops under cultivation include, 500 acres of Cashew, 250 acres of coconuts, 175 acres of teak and 40 acres of high yielding tissue cultured bananas. Papaw is also grown as an intercrop with coconuts. Managing Director Inf-ormatics, Mr Gamini Wickramasinghe said the investment since 1990 has been over 100 million. " Government is not very interested in commercial agriculture. Authorities care less after they hand over the land. If the government really wants to improve commercial agriculture, they should give good land and not the marginal land we got. They should take steps to make water available and make basic infrastructure such as electricity available".

Speaking about modern agricultural methods, Mr Wickramasinghe said modern water management and fertilisation techniques should be actively promoted by the government. "Few years back, India started subsidising agri technological innovations in farms. Farmers got subsidies upto 50% on drip irrigation systems. As a result there was a vast improvement in agri technology usage by the farmer and today India boasts of high agri productivity induced by technology".

The high cost of financing, has also deterred growth in commercial agriculture in Sri Lanka. Commercial banks have long since shunned mass scale agriculture as the high risk commercial venture. Many a bankers mindset has been accustomed to think agriculture as a failure rather than a high growth sector of the economy with a great potential. "We can not borrow at market rates and invest in agriculture. At the initial stages there are many trials and errors, crops fail , we need around five years to get our act together and start making profits. This is a common scenario to any commercial agri venture anywhere in the world. The government should venture out to the international financing community and attract funds that could be deployed in agriculture at low interest rates" , said a pioneer investor in commercial agriculture. The need for a national agri economic system, also has been an issue raised by experts for some time. A proper agri economic system will ensure that there is no over supply of a certain crop to the market, thus protecting the producer and it will also prevent shortages of a certain crop , thus protecting the consumer. This is done by obtaining forecasts for the domestic requirement for food crops and co-ordinating them with production plans of different crops in the main agricultural areas. This will prevent farmers from excessively producing a certain crop at the time of high market prices and later suffering when prices crash due to oversupply. A move of this nature is seen as the most effective method to reduce the uncertainty and price fluctuations in the agri sector.

Green Farms Limited entered the field of commercial agriculture under the GCEC scheme in 1979. The main farm is situated in Marawila on a 45 acre land. The whole cultivation is made up of tropical ornamental plants aimed at the export market. Today the farm exports between 250 and 300 tons of foliage plants annually by air. It also employs reefer containers to the Far East and Orient for the transport of bigger material to clients in Japan.

Of the 45 acres under cultivation , approximately 100,000 sqm are under shade net. Fibre dust from surrounding fibre mills is mixed to the soil to increase the water holding capacity and to provide a better growing medium. At the centre of the farm is a large water tank and an automatic irrigation system has been installed for the whole farm. This also includes a fog system for the propagation area. The system measures the water level in the soil and automatically controls the water supply , minimising the waste and improving the plant quality. Fertiliser is also sent through the irrigation system. Mr. Arni Svinningen, Managing Director, Green Farms said that although Sri Lanka was a top ten player in the international ornamental plants market in 1980 s now its position has fallen down to the thirties. Even at this position Sri Lanka earns approximately Rs. 500 million annually from plant exports. Green Farms Limited also maintains a state of art research and quality control facility at the farm.

Sri Lanka must realise its agricultural potential. Sometimes due to lack of cargo capacity of Air Lanka our consignments get delayed, losing its quality and value. Officials should realise that a consignment of ornamental plants earn more foreign currency than a consignment of garments", he added.

CIC Ltd ventured into agriculture by taking over the Thalawa farm from the Agriculture Department. In 1998 CIC Ltd took over the largest and the most loved farm from the Department, namely, the Hingurakgoda farm which has an extent of 800 acres. Since taking over, CIC has been able to revolutionise the conventional agricultural methods especially in paddy cultivation. Methods such as scientific fertiliser usage , advance weed control and usage of Combine Harvesters saw the yield increase from 58 bushels per acre during the State run days to 90 bushels per acre.

CIC Ltd also initiated the concept of entering into forward contracts with out-growers. This was signed with paddy seed cultivators in the surrounding areas , giving them a guaranteed price and technical assistance from planting to harvesting. The main aim of the Hingurakgoda farm is to produce high quality seed paddy, for which an extent of 650 acres are devoted. However the farm has lived upto the true sense of a multi crop farm by adopting innovative horticultural methods.

One of the main barriers for growth in commercial agriculture remains the lack of high quality planting material. High yield and uniformity that is essential for commercial scale crops cannot be obtained by the local planting material . This is very evident when comparing the yield figures of foreign planting material with the local plants. Tissue cultured banana plants imported from Israel and India gives a yield of approximately 50 tons per hectare. In contrast yields obtained by the best locally produced banana plants rarely exceed 7 tons per hectare. However most of the time, imports of high quality planting material are restricted by the government according to the prevailing quarantine laws.

"We agree that the government should enforce strict controls when allowing foreign planting material, to safeguard our country from disease. But the fact remains that the plants we import are from the best tissue culture facilities in the world. These are certified to be disease free from international recognised laboratory and also approved by the national authorities in those countries. Even after we obtain all the necessary approvals, most of our supplies are blocked at the airport and unnecessary delays were created. These plants come in refrigerated packages and with each delay their quality drops. Many companies who imported high quality tissue cultured banana plants from India and Israel faced serious difficulties in the hands of the authorities. The irony is that out of the six virus diseases known for banana, already five exists in Sri Lanka", said an independent horticulture consultant. 

With the elections just around the corner and politicians once again talking agriculture, the few remaining firms in commercial agriculture are calling for deeds not words. "Government should recognise our pioneering efforts in jungles of Anuradapura and in the Maduru Oya basin. All developed economies started with developing agriculture". New firms are not entering the field due to the high risk. Government should intervene to reduce the individual risk and to encourage new firms to invest in agriculture". 

Ironically, Sri Lanka led the field of agriculture 2000 years ago with innovative mass irrigation systems that even amazed 20th century engineers. To many it seems as Sri Lanka lost its innovativeness in agriculture ever since.

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