World Bank warns government agencies

The Sri Lankan government must show progress in imposing hard budget constraints on the biggest state loss makers - CPC, CEB and the Railway Department - by February 2002, in order to receive funding through World Bank's Private Sector Development Programme, bank officials said.

The World Bank has set an appraisal date for February 2002, to evaluate the government's progress in implementing public sector reforms. If satisfied with the results, the WB will disburse approximately US$ 130 million during the early part of 2002.

"We are not concerned about the MoU with the JVP. It is up to the government to take action before the February appraisal. The government has indicated that it expects international funding from March 2002," Bradford Herbert, Operations Advisor, World Bank told a news conference last week.

The budgetary constraints include staff reductions and pricing adjustments, in order to make these ailing giants commercially viable. However, the government is unlikely to implement the reforms by February next year due to its weak political position and the strong JVP influence in policy making, according to analysts.

The government is also expected to present a Poverty Reduction Strategy Paper (PRSP), before December 2002. The Ministry of Finance has already hired consultants to draw the paper and the first draft is expected in the near future.

Both the IMF and the WB will be carrying out a joint appraisal on the paper and it could realise up to US$ 500 million under the IMF's Poverty Reduction Growth Fund.

World Bank officials said they too will fund the poverty reduction programme under the Poverty Reduction Support Credit Programme, but declined to state the amount.

They added that the WB has not imposed any pre-conditions involving economic reforms but would expect to see the reforms necessary for poverty reduction in the government's paper.

"The quality of public sector expenditure will be looked at in the paper," Herbert said.

Voices of hope and reason

* "It is difficult to market in a war environment. But remember no tourist has been harmed in Sri Lanka unlike in Egypt and Israel where tourists are targets. We need to get this message across. Yes, there are places which are unsafe but these could be easily avoided."

* "It is useless sitting back and saying this won't work out. We need to be positive," says Suzanne Filippin, a German national who is executive director at Tropical Leisure Management Ltd, managers and designers of The Elephant Corridor, praising Sri Lankan authorities – especially the Tourist Board – for responding positively after the Katunayake attacks in getting the airport quickly back on track.

* "If I say there is no peace and we can't do anything, then nothing will happen. We need to do something … we need to be positive," remarks M.P.T. Cooray, DDG at the Board of Investment during a press conference, when asked how Sri Lanka could attract investments in an environment affected by an 18-year old conflict.

* "I think our export sector can recover in a year's time," asserts Felix Yahampath, newly-appointed chairman of Sri Lanka's Export Development Board (EDB). Yahampath, who is holding a series of meetings with industrialists and others connected with exports, is positive on the future and says: "we should be positive because being positive means there is hope."

* "The Tourism Board will rise to the occasion. We have lived through this ordeal for 18 years and know how to rise to the occasion when it matters most," noted Sri Lanka Tourist Board chairman, Renton de Alwis, at a recent lecture in Colombo.

Sri Lankans big biscuit consumers in Asia

Ceylon Biscuits Ltd (CBL), manufacturers of the Munchee brand of biscuits, is aiming for a turnover of Rs. 3 billion in 2002 following its recent expansion into the Indian market.

Company officials said out of this, approximately Rs. 250 million is expected to be generated from the Indian manufacturing plant.

CBL has achieved an impressive growth from a 28 percent market share in the local market three years ago to the present market leader position. "This is mainly due to the superior quality achieved by our computerised manufacturing facility. We also employ nine foreign qualified food technicians who constantly innovate new biscuit types," said M.P. Wickramasingha, chairman, CBL. Sri Lanka has the highest per capita biscuit consumption in the Asian region. According to Wickramasingha, this is due to the nutrition programmes of the donor countries which gave biscuits to school children during the 1960's and 70's. "Sri Lankans got used to biscuits during the early part of their childhood. The habit still continues."

Following the expansion, CBL has set itself an ambitious target of achieving a five percent market share in India. "Quality-wise we are far superior to the Indian competitors. But our manufacturing productivity in local plants is far below that of our Indian competitors," Wickramasingha said.

Despite the use of advanced technology, CBL's Pannipitiya plant achieves a productivity of nine kg per person. This is far below that of Indian competitors where the productivity is in the region of 22 kg per person. "Indians are more hardworking than Sri Lankans and they value their jobs more because of the higher population and fewer employment opportunities," Wickramasingha said. "The trade union influence is also much less than in Sri Lanka."

Sri Lankan investment mission to tap Korean investors

A Sri Lankan business and investment mission visits South Korea between October 28 and November 2 in a tour organised by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) in association with the Board of Investment (BOI).

A FCCISL statement said arrangements in Seoul are being handled by the Sri Lankan embassy along with the Korea Chamber of Commerce & Industry (KCCI), Korea Industries and Trade Association (KITA) and Korea Federation of Small Business (KFSB).

Since 1978, Korean companies have had an increasingly significant presence in Sri Lanka and are the largest investor group in the export oriented manufacturing sector. Presently 140 Korean projects are in commercial operation with that country responsible for 10 percent of the total exports of Sri Lanka. South Korea is also considered the largest single employer in Sri Lanka, employing more than 60,000 persons directly.

A large number of companies in South Korea - a newly industrialised country - are looking for new investment locations in view of high production costs in Korea and the easy market access to other countries in the region from Colombo.

Secret of success of three top brands

Odel, the upmarket Colombo fashion store, is looking at the possibility of entering international markets, the store owner said.

"Our experience with the Odel warehouse has given us some valuable insights.

Entering international markets is a distinct possibility," said Odel's MD, Otara Chandiram.

The Odel brand has gained wide recognition overseas after visits to its Colombo outlets by tourists.

Three locally developed brands - Odel, DSI and NSB gained recognition at the recently concluded National Brand Symposium.

Chandiram added that there is a possibility of introducing new brand extensions - Odel sports and Odel teens.

DSI, Sri Lanka's leading footwear marketer, narrated their success story, starting from humble beginnings in the Pettah pavement to their current status as market leader.

Summing up the presentation, J.R. Rajapaksa, son of DSI founder D. S. Rajapaksa, said the main reason for their success was, "Believing strongly that in Rome you do as Romans do, we used the Sinhala language and idioms to our best advantage. People gradually noticed our brand and this fuelled our success in the market."

The presentation from the NSB team mainly focused on the success of their well-targeted advertising campaigns. The advertising campaign launched by LDB Lintas was able to change the customer perception of the bank being a typical bureaucratic government institution.

"We were able to create a crisp, dynamic image for the bank and attract the new generation to bank with us." NSB said in its presentation.

Smart Media sponsors chartered accountants' National Conference

Smart Media Productions, known for its handling of annual reports of companies, and the Institute of Chartered Accountants of Sri Lanka (ICASL) recently signed the principal sponsorship agreement for the 22nd National Conference to be held from December 6 to 8.

This year's National Conference is titled, "Creating value a new economy" and is expected to draw a record response from a cross section of the corporate and professional community. Ranel T. Wijesinha, president of the institute, was quoted as saying in an ICASL press release, that the national conference is the key event of the year in the chartered accountants' diary.

Rochelle Kannangara, Smart Media's CEO, said Smart Media is committed to supporting the development of the accounting profession in Sri Lanka and was happy to sponsor this event.

Yohan Perera and Indrajith Fernando, joint chairmen of the National Conference committee said this year's conference is expected to draw over 500 participants given the profile of speakers both from Sri Lanka and overseas.

LB Finance expands its services

LB Finance, a pioneer real estate firm and a recognised financial company with a pawning service, says it is expanding its services to meet the needs of customers.

The company said in a press release that while two specialised pawning centres are operational in Maradana and Grandpass, three more centres are being planned for Kirulapona, Dematagoda and Borella.

LB's real estate forays have a three-pronged approach - development of real estate, joint ventures with clients and owner behalf sales, it said.

Shell solar to power 12,000 homes

Shell Renewables Lanka Ltd recently signed a supplementary agreement with the Board of Investment (BOI) for a period of two years, during which time the company will expand operations throughout the island and provide solar powered electricity to 12,000 homes.

The company said in a press release that under the terms of the agreement, Shell Renewables Lanka Ltd would be entitled to undertake the provision of solar power electricity to rural villages in several districts, during the period of two years. These areas include, Anuradhapura, Polonnaruwa, Matara, Hambantota, Puttalam and Moneragala.

A key feature of the agreement between the BOI and the company is the latter's commitment to invest Rs. 100 million within the project implementation period.

Chairman/Managing Director, Shell Company in Sri Lanka, Roberto M. Moran said Shell was committed to providing alternative energy sources to reach rural villages.

"Our efforts towards rural energy are part of our commitment to helping develop the country particularly in areas which need it the most. Some of the more successful areas have been a direct result of support extended by provincial councils to provide the financial resources to bring solar power to the people," he was quoted as saying in the release.

Shell Renewables Lanka Ltd, commenced operations in 1998, after the Shell Company bought over Solar Power and Light Company. Since then the company has provided solar power to over 5,000 homes in rural Sri Lanka and invested over Rs. 20 million in the business. They operate 13 regional solar service centres, around the island, to supply and install the solar system.

SriLankan launches new package tours

SriLankan Airlines last week said it was relaunching its holidays and stopovers programme under the SriLankan banner as well as the launch of two innovative holiday packages – SriLankan Exotica and SriLankan Adventure, on October 1.

SriLankan Holidays and Stopovers is an attractively re-designed programme offering customers packages from one to four days or more in Sri Lanka.

A stopover holiday package includes transfers from airport to hotel and vice-versa and hotel accommodation with breakfast.

The airline said in a press release that a typical tour includes the beaches in the south, the hill country including Kandy and Nuwara Eliya and the Cultural Triangle.

Under the SriLankan Exotica package the airline is introducing ayurveda holidays, archaeology tours, meditation retreats, pilgrim tours, gemming, photography, etc.

Customers can opt to get married Sri Lankan style under the SriLankan Exotica programme or take a rail or agriculture tour. The Sri Lankan Adventure range offers holidays which include water sports, hiking, walking, trekking, canoeing and kayaking, white-water rafting, fishing, cave visiting and more.