News

NCE awards boon to exporters

"Exporters have a challenging task ahead given the situation in the country and overseas markets," says Athula Edirisingha, chairman of the awards committee of the NCE, while NCE chairman Patrick Amarasinghe said it was important in this context to give exporters a prominent place.

Export earnings have fallen in the first half of this year, according to Central Bank data. Garments have been particularly affected by a recession in the west. Last week's rebel attack on the Katunayake airport and neighbouring military base triggered a sharp rise in insurance premiums and raised the cost of air freight, posing another problem for exporters.

Last week NCE officials briefed the media on the 9th annual NCE awards ceremony to be held on August 17. This year's competition – held for the past eight years without a break – has drawn a record 122 entries this year, a 30 percent growth in applications compared to 2000.

The awards scheme is only for members of the chamber with the objective being not only to recognise their commitment and contribution to the NCE but also to the country's export drive and the economy.

Officials said applications have been invited for seven sectors – traditional agriculture, non-traditional agriculture, industry, gems and jewellery, and service providers to exporters. The categories fall into small, medium and large while a new extra-large category has been included this year.

Awards are being presented for the most outstanding exporter under each sector and a runners-up prize, the best woman exporter, the best Sri Lankan brand exporter and the most value-added and innovative product. A prize for the agriculture value added tea sector has also been brought in for the first time.

The panel of judges comprises Dr. Saman Kelegama (IPS), Lal Nanayakkara (former CIMA president), G.L. Hewawasam (EDB), M.M. Attanayake (Central Bank), Shirani Weragoda (SLSI), Nalin Attygalle (SLIM), H.D. Premaratne (Tea Board), Sudharman Seneratne and Pravir Samarasinghe (both CIMA).

The principal sponsors of the awards scheme are the Anchor group, Bank of Ceylon, HSBC, Mobitel, NDB, Sampath Bank, Sri Lanka Exporters and Union Assurance. There are several other co-sponsors of the event.

NCE officials said the global environment was becoming more competitive for Sri Lankan exporters with China and India leading the race.

Stock Market Report

By Ashwin Hemmanthagama

Monday's trading session was dominated by a foreign investor buying 400,000 shares of Ceylon Tobacco Company Ltd, which gained by between Rs. 0.50 to Rs. 23.00 enhancing the All Share Price Index by 0.91 points to 419.41 and the Milanka Price Index by 2.6 to 623.12, which in return increased the turnover by 9.2 million rupees to 13.8 million rupees. The rising turnover was exclusively due to the foreign transaction.

With Unilever Ceylon Ltd deciding to close its one billion rupee Walls ice cream plant in Banduragoda due to a labour dispute led by the JVP-backed trade union, the Colombo bourse remained stagnant with moderate foreign interest in blue chip conglomerate John Keells Holdings. On Tuesday 195,000 shares of John Keells Holdings were traded which ended flat at Rs. 33.50 while National Development Bank lost Rs. 0.50 to finish at Rs. 32.00 due to heavy foreign selling. With the closure of the Walls factory Elephant House ice cream is likely to regain its market monopoly after hectic "street" battles in the past for a larger slice of the market. Walls innovative promotions and cycle sales in a way also helped Elephant House as the demand for ice cream grew.

Thursday, the last trading day of the week, was a poor day despite some good news where SLT got back its AA+ rating from Fitch Ratings watch list. The government is apparently looking for a buyer for its 61.5 percent stake in Sri Lanka Telecom with plans to make Japan's Nippon Telegraph and Telephone Corp, which presently owns 35.2 percent, a technical partner.

Otara interviewed on CNBC-Asia

CNBC-Asia's reach spans most Asian countries, apart from being telecast across the globe as well. CNBC-Asia is watched by decision-makers and business corporations globally since it monitors market movements in the East, as well as focuses on the movers and shakers in business, and tracks economic trends. 

Interviewees for the business show are selected only after certain stringent criteria are met, an Odel press release said.

Odel will also be featured in CNBC-Asia's "Asian Entrepreneurs". 

COL affects alcohol consumption

By Diana Mathews

"Even though the public perception towards the consumption of alcohol has changed, 85 percent of the Sri Lankan adult population consume liquor," he said.

The company, launched seven years ago and operating in Hokandara, has a range of products with names like Extra Special Randenigala Arrack and Blue Deer old arrack. The company is to introduce more products to the market – Extra Special, Extra Strong and Holland Black.

"For some, alcohol has become habitual and they require at least one glass of alcohol per day. Since there is a market for alcohol, we are introducing new products into the market," said Weerasena.

He said, however, there would be a change in consumption among the middle class with the rising cost of living. "People do not have money for alcohol now," he said.

Referring to the liquor market in general, he stated that kassippu has a share of 50 percent of the alcohol market.

Economic repercussions of airport attack

POINT OF VIEW

By Dr. S. Colombage, former Central Banker

It is reported that one half of the total fleet of the SriLankan Airlines was damaged. Hopefully, the monetary losses may be recovered through insurance cover and the airline might be able to be fully operational in due course.

Nevertheless, the damage caused by the attack to the battered economy looks more permanent and traumatic. This attack has signalled to the world again that Sri Lanka is a high-risk country. Prospective tourists are advised by their respective governments to avoid visiting Sri Lanka as much as possible. Meanwhile, airlines flying to Sri Lanka have already raised their airfares, as they are liable to pay a heavy surcharge on insurance premia as a result of the attack. The attack will also be a further deterrent to foreign investments, which, in any case, showed a downward trend in recent years. As a result, it would be further difficult to augment domestic investment, which is badly needed to overcome the economic stagnation. As the country risk has gone up following the attack, Sri Lanka's creditworthiness has fallen further. This means that foreign lenders will take into account, inter alia, the high-risk element before offering any credit-lines to Sri Lanka. This makes it more difficult and costly for us to borrow from international capital markets.

The adverse effects of the attack should be viewed in the background of the weak economic fundamentals that we have been encountering for some time. Foreign reserves are falling despite the so-called rupee float implemented by the Central Bank with much fanfare. 

By end May total reserves of the country fell by 3 percent and official reserves by 2 percent, compared with end 2000. In the first three months of the year, private remittances fell by 17 percent. In the first five months, total export earnings fell by 1 percent. Industrial exports declined by 2 percent. Imports also fell during the same period. Intermediate goods imports fell by 5 percent and investment goods imports by 19 percent. 

As both intermediate and investment goods are essential for production purposes, a decline in such imports has adverse effects on production growth. Although tourist earnings increased by 9 percent in the first five months, it is feared that the terrorist attack may reverse this trend. All these factors point to a slowing down of economic growth.

The cost of living is also rather alarming. The annual average inflation rate rose to 12.4 per cent in July as compared with 4 percent a year ago. But the Central Bank claims that inflation is moderating and as a result, interest rates will come down and the exchange rate will be more stable. The validity of these claims in the context of the present high inflation scenario is questionable.

It is clear from the above that the airport attack came at a time when the economy was encountering severe difficulties. Unfortunately, the attack has led to speed up the economic downfall.

Bank mergers won't help industrialists

Letter

Because of competition from the bankers, we have been able to get the best package, based on our terms rather than theirs. It may be a rate of interest, commission on a guarantee or Letter of Credit, collection and payment of cash from our factory - whatever the issue, we now have the privilege of checking with at least four different banks before selecting. I have always found that the rates offered first are reduced in the face of competition.

This is totally different to the situation that prevailed way back in 1977 when I set up my business. For the benefit of those who have not experienced the bad old days of two state and two private banks, I would recount a personal experience.

Having left the CEB with the change of government in 1977, I decided to go on my own and went with my plans to one of the two state banks, since that was the only place a small man could go to at that time. The staff was extremely helpful but I was referred to about five different units and finally after eight months, a term loan was approved. I would have visited the bank at least on 50 occasions during that period. At lest 15 bank officials would have visited the proposed factory location for various inspections, supervisions, progress reports and so on. All this trouble was for a six-year term loan of Rs. 150,000. All along I was made to feel that they were doing me a favour.

Having built on that foundation, I am now one of the better-established industrialists in the zone and I experience a total difference when I need any banking facility today. I only have to call up the managers of the private banks operating in Jaela and Ekala and within two or three days they are calling me back with their offers, always prepared to improve the package to meet competition. In fact their service doesn't stop at giving a loan. It even extends to offering loans and credit cards for the staff, handing salary payments at the factory, taking us on overseas tours and all such benefits which about 20 years ago would not have been offered even to blue chip companies.

If some banks are trying to reduce competition by merging and acquiring other banks, the Central Bank must look at the overall picture as to whether this would be detrimental to competition and the industry. Any reduction in bank numbers will only take us back to the pre-1977 era where industrialists had to go begging behind bankers instead of bankers coming behind us, and once again this creates a monopoly.

Susantha Premawardene
Palangature
Negombo

Suntel in Badulla

Since the launch of Suntel in 1996, the company has connected over 100,000 subscribers (including rural subscribers as per TRCSL norms), spanning a large geographical area.

The company's state-of-the-art digital network includes three AXE switches in Colombo and Kandy coupled with proven transmission and access technologies from world-renowned suppliers, a Suntel statement said.

Food scientists hungry for investment

The grass pea is a plant that thrives in countries such as Bangladesh, China, Ethiopia and India when other crops fail owing to drought or flooding, but which causes irreversible paralysis below the waist when eaten in large amounts.

But researchers said proponents of biotechnology may never discover whether their hunch is right. For one thing, many people object to genetic modification on environmental and ethical grounds. For another, the research depends on public sector research and the public sector is desperately short of funds.

The poor and hungry are always with us but the question of unconventional crops has taken on a new urgency in the past few years. This is partly because biotechnology has created new tools and opportunities, which some scientists say must be seized. Behind these calls are issues highlighted by the international wrangling over AIDS drugs - how to deliver to poorer countries the technological wealth of the rich world, which is often protected by strong patents. The urgency is also partly because the population is growing, while the scope to put more land under the plough is limited by such things as urban sprawl and desertification.

A UNDP report called for extra spending on public research, to be raised by increases in overseas aid from donor governments and contributions from private industry. Sub-Saharan countries could finance more work by cutting arms spending.

"Most of the 20th century saw substantial increases in agricultural research around the globe," says the International Food Policy Research Institute, one of 16 international research centres run by the Consultative Group of International Agricultural Research (CGIAR), veterans of the green revolution of the 1960s and 1970s and funded by national governments and international bodies such as the World Bank. Now there is an unprecedented slowing down.

Many of its centres, which are highly respected, have embraced biotechnology within "public good" principles of equity, with regard to long-term impact and appropriate trusteeship of the ownership of genetic resources. Their research projects include the grass pea, genetically modified bananas and golden rice.

However, the CGIAR's annual budget of about $330 million-of which $25 million now goes on biotech, is stagnant and cannot compare with the private sector research spending - more than $14 billion in 1995, according to the UNDP 's annual report, published this month. (Courtesy-Financial Times)

Ceylon chamber organises discussion on Lanka's crisis

The seminar, aimed at creating public awareness and drawing the attention of the government and law enforcement authorities, will look at the problems of drug abuse and prevention, rising crime, the factors which undermine the effectiveness and efficiency of law enforcement in Sri Lanka and a lack of confidence in the judicial system.

It will be held on Thursday, 9th August at 2.30 p.m. on the Ground Floor Auditorium of the Ceylon Chamber of Commerce.

The following resource persons will lead the discussion: Deva Rodrigo, Chairman - Law & Order Sub-Committee and Deputy Chairman-CCC, Ranjith Abeysuriya, President's Council, Dr. Ravindra Fernando, Chairman of the National Dangerous Drugs Control Board and Dr. Paikiasothy Saravanamuttu, Executive Director of the Centre for Policy Alternatives.

Need to be competitive in job market

Mr. Armyne Wirasinha, chairman of Skills Development Fund Ltd and chairman of several leading private and public sector enterprises, addressing a group of around four hundred undergraduates representing different fields of study, said that given the theme of the meeting it was more pertinent to ask, "How ready are you?"

He emphasised that the open economy had paved the way for people with knowledge and competence to fill jobs in a competitive business world.

Addressing the large undergraduate body together with representatives from around 50 top companies in Sri Lanka like Ceylon Tobacco and Millennium Technologies, he said, "Your degree is only an entry ticket to the business world and as such your performance should be geared to retain the competitive edge you have established within the university system."

"It is by knowing where the opportunities lie that one prepares to recognise the priorities. This can be done effectively by studying the corporate sector, attracting their attention and following up by living up to their demands and expectations. As such one can go about this endeavour individually or collectively," he noted.

He advised corporate leaders present at the gathering to utilise the graduates as a resource bank to fulfil their future recruitment needs.

MTN, DMC Stratex networks in million dollar deal

DMC Stratex Networks better known as DMC will be supplying high capacity SDH Radios as well as PDH Radios to MTN networks for their phase VI expansion programme.

Dr. Hans Wijesuriya, Chief Executive of MTN Networks said that there are over 160 base stations in operation covering all major cities in Sri Lanka and the new expansion programme will enable the network to be rolled out to the rural areas. He said Dialog is the only network that offered a wide range of value added services such as WAP, SMS and also international roaming covering over 80 countries.

Mr. Roshan Tissera, Chief Executive Officer of Metropolitan Telecom Services (Pvt) Ltd, a subsidiary of the Metropolitan Group, specialising in telecommunication infrastructure and also the local partner for DMC Stratex Networks said that he was extremely pleased that MTN Networks has continued to place confidence in DMC as the main supplier for transmission equipment. 

He said that DMC has been associated with MTN Networks since 1996 and considered Dialog to be the largest customer for DMC Radios in Sri Lanka with over 100 shops installed.

Enhanced courses from University of Wales

The institute, which is the only validated centre of the University of Wales in South Asia, announced this week that students enrolling for the September 2001 intake now have a choice of subjects such as e-commerce, computing, information systems and law at the pre-university access and diploma levels, which provides exemption from the first year of the university's degree programmes.

The Imperial Institute of Higher Education is governed by a board comprising several eminent business and academic personalities, including Mr. Mahendra Amarasuriya, Mr. Jit Warnakulasuriya, Mr. Rohan Wijeratne, Mr. Bimal Perera, Dr. Mahes Indralingam, and Mr. Daya Jayasinghe.

Unilever SL shuts ice cream unit

The company said in a statement last Wednesday that it now plans to source its ice cream from an alternative supplier for the Sri Lankan market.

The closure follows a two-week work stoppage by the employees of the factory at Banduragoda in the Kurunegala district following disciplinary action taken against two employees who disrupted production schedules earlier. "Prior to this the Walls management had received several demands from the branch union which is a member of the Inter-Company Workers' Union affiliated to the JVP," the statement said.

The JVP, the third largest political force in Sri Lanka, was also responsible for worker unrest at Unilever's main factory in Colombo in April. At that time, Unilever Ceylon chairman Mike Thompson said that if the labour crisis worsens the company may consider shifting its production facility out of Sri Lanka.

The Marxist group in recent years has made inroads into the trade union movement, ousting more established unions like the Ceylon Mercantile Union from some top Colombo firms as the union for companies to worry about. Industrialists have expressed concern over JVP demands in the workplaces for increased salaries and other benefits, saying it was not possible to accede to these demands at a time when the economy has been affected by high interest rates and high production costs.

JVP officials have a different perspective – the cost of living makes it necessary for companies to look after their employees better. "Companies don't grudge paying high salaries, increasing it often and offering upmarket perks to senior executives and board directors. Why the discrimination when minor employees ask for a raise?" one union official queried.

Unilever said demands by Walls employees have been rejected as unreasonable and the subsequent (work stoppage) action is seen as holding the company to ransom. "This is despite the Wall's business providing good salaries and working conditions of the highest standard. Unilever Ceylon is not prepared to put the safety of its staff at risk amid speculation that intimidation could take place," the statement said.

The Wall's factory, established five years ago at a cost of some one billion rupees, is one of Unilever Ceylon's major investment projects. The statement didn't say what would happen to the staff and the factory premises.

Industry sources said the company is likely to import the ice cream from one of the South Asian subsidiaries.

Consumer prices fall in July

The tapering off of the full impact of administered price revisions experienced in previous months and a more stable exchange rate also contributed to these favourable price developments, it said.

The Colombo Consumer's Price Index (CCPT), the official measure of inflation published by the Department of Census and Statistics, registered 2948.8 in July indicating a monthly decrease of 0.9 per cent in the CCPI. The index in July 2001 when compared with July 2000 (the point to point change) rose by 13.4 percent, lower than 14.7 percent in June, which indicated a further moderation of inflation. The annual average inflation rate was 12.4 percent, moderately higher than the 12.2 percent recorded in June.

The Colombo District Consumer Price Index (CDCPI) computed by the Central Bank of Sri Lanka, which covers a wider geographical area, recorded an increase of 9.2 percent on a point-to-point basis, which compares with an increase of 10.2 per cent in June. The annual average inflation up to July 2001 was 8.9 per cent, which was slightly higher than the 8.7 percent observed in June 2001.

The food and liquor, tobacco, betel and arecanuts categories were the major sub-sectors that contributed to the overall decrease in the index in July 2001. In the food sub-index, prices of some varieties of vegetables, red onions, green chilies, some varieties of fresh fish, coconuts, pepper, rice (par- boiled and samba), sugar, green gram and some varieties of dried fish decreased during the month. Price decreases were partially offset by the increases in the prices of eggs, Maldive fish, limes, salt, big onions, dried chilies, some varieties of low country vegetables, potatoes, chicken, beef, rice (kekulu) and coconut oil.

Launch of Sri Lanka's newest business programme

BENCHMARK is the result of three diverse but complementary organisations working to a mutually beneficial conclusion: Media Services, the publishers of LMD, Sri Lanka's pioneering business magazine, will present the show. BENCHMARK's content will, therefore, have a perspective similar to LMD's – an unbiased look at the big-picture issues facing Sri Lanka today. 

The Wrap Factory, Sri Lanka's leading TV production house, will ensure that international production standards envisioned for BENCHMARK are maintained, commencing with international-class anchors; and Dynavision, which will air the show, thereby marking its own entry into the airing of programmes produced in Sri Lanka. 

Dynavision envisions airing similar shows in the near future, with an emphasis on innovation.

"In these crisis-ridden times, with the nation seemingly in an endless downward spiral, it is perhaps the duty of the nation's business community to step forward and play a more constructive role," a spokesperson for BENCHMARK said. 

"It is our hope that Sri Lanka's business leaders will step forward and use BENCHMARK as a vehicle to get their perspective across to the nation's political leaders" the spokesperson added.

BENCHMARK's content comprises a mixture of business news, key business indicators an economic commentary, and a Q&A segment, which focuses on the big picture. LMD says it has identified the following as issues of national importance, at present: peace, politicisation and political instability, bribery and corruption, productivity, infrastructure, law and order, energy and resources, fiscal policies, and poverty.

BENCHMARK will be anchored by Simone Christoffelsz, while the Q&A segment, which will feature one-on-one interviews with the nation's business leaders, will be hosted by Rohan Ponniah. BENCHMARK is co-sponsored by Compaq Computers and First Capital. Dynavision says it expects a significant segment of its general audience (250,000) to watch BENCHMARK each week.

LMD will also publish a BENCHMARK supplement every month, "which means that the programme will benefit from exposure to LMD's high-profile readership (some 50,000)," a spokesperson for Dynavision said in the press release.

SLT regains AA+ rating

The rating takes into consideration SLT's dominant position in the fixed line segment, stable operating cashflows and flexible capital expenditure requirements. SLT's cashflows have remained stable despite a significant fall in profitability, largely due to increased depreciation and foreign exchange losses.

Fitch said in a press release that the non-realisation of anticipated revenue increases on SLT's main tariff items as part of the ongoing tariff rebalancing exercise was a primary contributor to depressed operating performance for the year ending December 2000. Consequently, capital expenditure was curtailed significantly by 45 percent to Rs. 8.7 billion from the previous years figure of Rs. 15.8 billion resulting in internal cash as a percentage of capital expenditure rising to 146.5 percent.

Mauritius stock exchange fourth to get Millennium IT software

Millennium IT's Effimark equities trading software suite has been adopted by exchanges, depositories and brokerages in Croatia, Malaysia, Singapore and Sri Lanka. It is currently evoking serious interest from major players in the US and European exchanges, a company statement said.

"Mauritius is our fourth business win for Effimark," says Tony Weeresinghe, Millennium IT's CEO. "This time, it was as much about the challenge and heading off competition as it is about the money."

Though the system at the Mauritius exchange was only officially inaugurated last Wednesday, the software has been running more or less bug free on the tiny exchange since June 29.

"We had to do a lot of on-site adaptation," says Jit Seneviratne, Millennium IT's head of consulting. 

"The environment demanded it. A unique feature of the Mauritius trading system is that it is designed to support trading in debt instruments (debentures and the commercial paper) was well as equities (stocks and shares).

There's no denying that the new software has given trading on the SEM a boost, facilitating trade and attracting interest from investors and brokers alike. SEM's CEO, Sunil Benimadhu, regards it as "a major step in making the exchange more user-friendly - and that means more people are using it." 

He adds that the efficiency of the software is already creating big cost savings per trade. In a relatively modest economy like Mauritius, small savings add up.

Top MAST officials visit Suntel

MAST is one of the flagship telecom networks of Suntel.

The MAST IT team reviewed the present operations of Suntel and also looked into the possibilities of enhancing the features of the Suntel network provided to the largest garments manufacturing group in Sri Lanka, a Suntel press release said.

"A" grade certificate for Deli Market

The "A" grade certificate of commendation is awarded to food establishments in the city which have adhered to and maintained high standards of hygiene, safety and housekeeping, Deli Market said in a statement.

The upmarket Colombo restaurant is among a few that have received this certificate. "We at the Deli Market are committed to quality, hygiene, value for money and cleanliness and strive at all times to maintain high standards," said Tiron Oorloff, Executive Director, Operations, at the restaurant. The five-year-old restaurant is owned and operated by Hospitality Management Services (Pvt) Ltd.

HSBC - best trade documentation bank

"There was stiff competition in this category this year," noted a representative of Trade Finance magazine adding that the number of votes in each category had risen significantly.

"With competition as intense as it is, maintaining the top position is a commendable feat," said Mr. Nik Cherrill, CEO, HSBC Sri Lanka. "The results of the poll are determined by the magazine's readers, who are also customers of various banks. So winning the award is significant, not because of the award alone, but because of what it stands for - the customers' trust. As always we will strive to maintain that trust while continuing to improve our trade services."

HSBC's trade services have played a key role in international commerce since 1865, when the Hongkong and Shanghai Banking Corporation Limited, the founding member of the HSBC Group, was established to finance growing trade between the south China coast, Europe and the United States. HSBC Trade Services have constantly developed products, services, people and international networks to keep its customers ahead in an increasingly complex trading world.

Trade Finance published its Awards for Excellence in the June issue of the magazine.

Ambuja Cements' quality improvement programmes

The company's Technical Services Manager, Jayantha Bandara, said they decided to have these programmes since the cement blocks used in local construction were of poor quality and not up to the standards of the Sri Lanka Standards Institute (SLSI). Ambuja Cements is conducting these seminars in collaboration with the SLSI to help cement block makers adhere to SLSI specifications.

Manufacturers from Kalutara, parts of Colombo and Gampaha took part in the first programme held at the Ambuja Cements' Customer Service Laboratory in Peliyagoda.

Unilever Ceylon Ltd, a fully-owned company of the Anglo-Dutch multinational Unilever Plc, said it was shutting down its Walls Ice Cream unit outside Colombo due to worker unrest triggered by JVP unions.

The company said in a statement last Wednesday that it now plans to source its ice cream from an alternative supplier for the Sri Lankan market.

The closure follows a two-week work stoppage by the employees of the factory at Banduragoda in the Kurunegala district following disciplinary action taken against two employees who disrupted production schedules earlier. "Prior to this the Walls management had received several demands from the branch union which is a member of the Inter-Company Workers' Union affiliated to the JVP," the statement said.

The JVP, the third largest political force in Sri Lanka, was also responsible for worker unrest at Unilever's main factory in Colombo in April. At that time, Unilever Ceylon chairman Mike Thompson said that if the labour crisis worsens the company may consider shifting its production facility out of Sri Lanka.

The Marxist group in recent years has made inroads into the trade union movement, ousting more established unions like the Ceylon Mercantile Union from some top Colombo firms as the union for companies to worry about. Industrialists have expressed concern over JVP demands in the workplaces for increased salaries and other benefits, saying it was not possible to accede to these demands at a time when the economy has been affected by high interest rates and high production costs.

JVP officials have a different perspective – the cost of living makes it necessary for companies to look after their employees better. "Companies don't grudge paying high salaries, increasing it often and offering upmarket perks to senior executives and board directors. Why the discrimination when minor employees ask for a raise?" one union official queried.

Unilever said demands by Walls employees have been rejected as unreasonable and the subsequent (work stoppage) action is seen as holding the company to ransom. "This is despite the Wall's business providing good salaries and working conditions of the highest standard. Unilever Ceylon is not prepared to put the safety of its staff at risk amid speculation that intimidation could take place," the statement said.

The Wall's factory, established five years ago at a cost of some one billion rupees, is one of Unilever Ceylon's major investment projects. The statement didn't say what would happen to the staff and the factory premises.

Industry sources said the company is likely to import the ice cream from one of the South Asian subsidiaries.

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