Business Unusual
By Hiran Senewiratne
A Sri Lankan veterinary surgeon, who quit government service to dabble in business ten years ago, has emerged as one of the strongest players in the animal food industry, successfully competing with multinational brands.
Dr. Walter Samara-singhe, owner of the Super Feed animal feed company located in Kegalle, declared proudly that his company is now one of the leading manufacturers braving competition from multinational brands and local products.
Launched with a startup capital of Rs. 10,000 and just three employees in 1991, Super Feed now has an annual turnover of Rs. 20 million.
"I did not get any support from government agencies or banks, financial or otherwise, but the company had been able to grow despite the current economic crisis," Dr. Samarasinghe recalled in an interview with The Sunday Times Business.
He said his products are cheaper than those marketed by multinational companies due to the maximum utilisation of local raw materials.
He said his company is ranked fifth among the ten largest poultry food manufacturers in the country which include Ceylon Grain Elevators (Prima), Coin Feed Mills and Nutrena.
Dr. Samarasinghe said initially production was entirely a manual process until he invested Rs. 5 million on machinery which resulted in an increase in capacity to 1,500 metric tonnes a month.
Today Super Feed enjoys a five percent market share with an annual growth of ten percent inspite of the current economic crisis. Super Feed has 30 employees with quality standards being carried out by the Veterinary Research Institute, he said. The company, which produces powdered feed, is planning to invest another Rs. 5 million to manufacture a pelleting machine for broilers, he added.
Dr. Samarasinghe said the poultry industry is facing a crisis due to rising production costs and hoped the new government would revise the present tax structure to create a more finance-friendly environment for the industry. Super Feed also manufactures small quantities of vitamins and mineral mixtures for the local market and the company envisages exporting to countries like Vietnam and Bangladesh.
"There is a big demand in these countries for vitamins and mineral mixtures and if government support is provided we can expand into the export market," he said.
By Eriko Amaha
TOKYO, (Reuters) - Tomoo Ishizaki was steadily climbing the corporate ladder at a top Japanese chip and electronics conglomerate, but he couldn't shake off the uneasy feeling that his career was going nowhere.
As a chief systems engineer, he designed computer systems for reservations and other data at a railway company, a project too important to his employer's reputation to allow any risky experimentation with cutting-edge technology.
"I'd said I wanted to do something different, but they told me I was needed in my division and wouldn't transfer me," he said.
"In the old days, if you knew one area, you were able to support your family as an engineer. But now I think we need to learn new things so you can propose or design new systems."
Japanese engineers traditionally spent their entire career at a single company and entrusted most of their career decisions to superiors.
But job frustration and doubts over whether they can rely on their employer these days to give them a secure, long-term livelihood mean that engineers are increasingly mobile.
"The biggest reason for people to leave their job is fear about the company," said Takahiro Maruyama, chief executive officer of Kreis and Co, a Japanese head-hunting firm.
"Many people have become aware no one will help them and they have to plan their own future."
Manabu Sato, a manager at job agency Recruit Ablic Inc, said an exodus from major companies began in the early 1990s when Japan's so-called bubble economy burst and the Internet boom lured away engineers, although the flow has slowed in the past few years with the high-tech slump.
While restructuring schemes at struggling high-tech companies and the search for a better career are spurring departures, he believed a more important factor was concern about their employer's future.
Uncertain future
Electronics manufacturers have announced plans to cut 70,000 jobs this year, or more than half the 120,000 announced by publicly listed firms, according to a survey last month by financial daily Nihon Keizai Shimbun.
According to a Recruit survey this summer of more than 2,000 engineers who had changed jobs, respondents in their thirties in particular were more likely to list uncertainty about their future, rather than salary, as a reason for jumping ship.
Ishizaki echoed this view. "I was at a big company that lacked a sense of speed," the 35-year-old engineer said. "They also did not venture into new fields. That made me wonder whether I should stay with a company like this."
He said many engineers also fear their company will lock them into a dead-end division or move them to an area in which they have little interest.
His own concerns grew as he realised that his department, a relatively minor entity within the company, could become subject to downsizing.
After glancing through job openings at big electronics and computer manufacturers in Japan, he chose Nomura Research Institute Ltd, a mid-sized computer system integrator that is scheduled to go public on Monday.
In June, he left his old job after 11 years of service. Yukitaka Takemura, a 30-year-old engineer who joined computer software venture Cognitive Research Laboratories Inc in July of last year, baled out of his job at a big electronics manufacturer when he realised he had little control over his career.
The Colombo Port risks losing business to other container ports in the region if it does not take urgent action to improve productivity and the turnaround time of vessels, according to John Buckley, chief executive officer of South Asia Gateway Terminals (SAGT), the international consortium led by P&O Ports that is running the Queen Elizabeth Quay (QEQ) facility.
Fundamental problems
"Colombo's biggest problem is Colombo," he said, adding that if the port does not "hurry up and fix the fundamental problems that makes Colombo an unreliable and lazy port" then other regional ports will continue to benefit from Colombo's inefficiency.
He was responding to a query about P&O's investment to develop container facilities in the south Indian port of Chennai and comments by Ganesh Raj, the new CEO of the Chennai container terminal, which has just been taken over by P&O, that the port plans to attract transshipment traffic from Colombo.
The threat of competition from other ports in the region, especially in India, is growing with international port operators considering investments in building new container handling facilities capable of berthing deep draught vessels.
Right now Colombo is the only port in the South Asian region that has the draught and the terminal facilities to handle big container ships.
P&O Ports has just won the concession to develop modern container handling facilities in Chennai and it has already placed orders for $27 million worth of equipment, cranes, spares and workshops.
The local shipping community has expressed fears that P&O's investments in Indian ports could pose a threat to Colombo's future as a transshipment hub, but Buckley said there was no conflict between P&O's investment in Chennai and that in Colombo.
"I view the businesses of SAGT and Chennai not to be comparable in the sense that Colombo is already a significant transshipment port with potential to become a major transshipment hub for the region," he said. "Chennai will not be a major transshipment hub for the region but will grow to be a significant Indian O&D (origin and destination) port and will, in time, attract direct calls rather than merely being a feeder port."
P&O's investment in Chennai does not violate the SAGT agreement which only prevents the company from developing rival facilities capable of handling 1.5 million boxes with 40 percent transshipment traffic within five years of the deal being signed, he said.
"Neither Cochin nor Chennai are in that bracket," Buckley said. "Compared with the Port of Colombo they are currently small businesses." He said Colombo's biggest threat is its inability to modernise and address fundamental efficiency problems and truly compete with regional port threats.
"If the other ports all grow rapidly (as several are) it is because of inaction by successive administrations over many years for which Colombo is now paying the price," Buckley said. "If the inaction continues the situation can only deteriorate."
The one exception to the inaction, he said, was the establishment of SAGT that has managed to increase the efficiency of the QEQ and is installing modern cranes to handle big container ships.
Indian situation
Last week, India announced that Jawaharlal Nehru Port (JN Port), near Mumbai, has attracted more than half a dozen foreign port operators, including P&O Ports, PSA Corp,
Hutchison, Port Klang, Maersk Sealand and Evergreen, to build and operate a new container terminal over a 30-year period. P&O Ports already runs a private container terminal in JN Port and has also bid to develop facilities in Cochin.
Foreign consultants, including Japan International Co-operation Agency, have suggested the building of a modern container terminal in Mumbai to handle large vessels at the port, which is currently unable to handle modern containerships due to draught restrictions.
Sri Lanka's Business Chamber of Commerce says the urgent need of the country is disciplined governance in all areas of life predominantly in macro-economics.
In a statement, the chamber while congratulating new Prime Minister Ranil Wickremesinghe on the United National Front (UNF) victory at last week's election, hoped that a group of eminent and gifted personalities could emerge from the new government to take this country forward.
"We are confident that under Ranil Wickremesinghe's astute and experienced leadership Sri Lanka will enter an era of peace and prosperity in the years ahead," it said adding that among the well-known attributes of the present leaders of the UNF is their professionalism and proven ability at the highest levels of economic management.
"With the inherent private sector orientation within the new administration the business community could confidently look forward to a healthy business environment which is vital for growth."
Nilkamal Eswaran Plastics (Pvt) Ltd has introduced its wood finish range of plastic moulded furniture, in an array of pleasing colours which capture the elegance of wood, the company said.
It said Nilkamal, the largest moulded furniture manufacturer in Asia, launched the new range of furniture both in India and Sri Lanka at the same time.
Moulded plastic furniture has gained popularity as indoor home furniture over the past few years. Plastic furniture is also seen as an environment friendly option as opposed to wooden furniture which requires the felling of several thousand trees a year, the statement said.
By Sonali Siriwardena
Countries that fail to heed the call of globalisation suffer a comparative disadvantage in terms of competitiveness and technology, said Sriyan de Silva, Deputy Director of the International Labour Organisation, speaking at a recent Colombo symposium on the topic of globalisation.
Economic integration through forms of trade liberalisation, foreign direct investment and the increased mobility of people which characterise globalisation, provide enhanced opportunities for nations to develop in the context of the changing face of trade and investment. But this does not mean that globalisation is not without its flaws.
This highlights the need for each country to utilise the concept to its advantage by formulating adaptive policies, said de Silva addressing a conference titled, "Globalisation competitiveness and socio-economic development" organised by the ILO and Employers' Federation of Ceylon.
He said nations that have successfully risen to the challenge now enjoy a substantial advantage over others as seen in the comparison between South Asia and South East and East Asia.
However, trade liberalisation alone would not lead to job growth and capital flow, asserted de Silva, because it requires good management and domestic policies that compliments the change in economic outlook.
He said political institutions are one of many factors that act as barriers in achieving this objective - because an open economy is not workable without democratisation. Weak market institutions that lack supporting and enhancing schemes also contribute towards eroding competitiveness, be it due to the absence of a corrupt free bureaucracy or sound macro-economic policies. So although globalisation creates the potential for reaping many benefits, obtaining them requires political, economic, legal and institutional reforms.
Other challenges faced by countries wishing to globalise include tariff and non-tariff barriers on competitive products, inability of industries to adjust to rapid changing competition and avoiding destabilising effects of capital flows.
As for the claim that globalisation lowers labour standards as a way of attracting FDI and producing cheaper goods, de Silva pointed out that this is not true because investors are rarely interested in low labour conditions as they lead to unproductive and low skilled workforce. On the contrary economic integration creates the base or capacity for improving labour standards through advancements in technology and promotion of human resource development. This makes it a better alternative to a closed economy though it does not in fact provide a complete solution to all problems, he said.
Rich countries currently spend seven times more on agricultural subsidies than what they spend on development aid, according to news reports from Africa.
The World Bank, in a statement highlighting a report on making globalisation work for Africa, says rich countries' subsidies on agriculture presently stand at US $350 billion a year. African countries have long argued and complained that agricultural subsidies by rich nations were a form of trade barrier, which disadvantages them from fair global trade.
World Bank Director of Development Policy, Ian Goldin, said the extent of poverty in Africa makes decisive action on removing tariff and other barriers to foreign trade and investment all the more urgent. African countries are expected to draw more benefits from increased access to each other's markets as barriers between them are perceived to be higher than those they face in rich countries.
Goldin said while other developing regions have diversified their exports, many African states remain dependent or have even increased dependency on a few primary commodities. Zambia is still largely dependent on copper which accounts for about 80 percent of the nation's total earnings but prices have not been so favourable and have been slumping this year.
The Doha declaration [from last month's WTO meeting] improves prospects for phasing out subsidies of agricultural exports, although eliminating the myriad of barriers to trade in agricultural and agri-food products will prove extremely difficult, the news reports said.
The Commercial Bank of Ceylon recently inaugurated two more "MiniCom" supermarket banks at Cargills Food City outlets in Maharagama and Kurunegala, enabling shoppers to carry out banking transactions virtually 365 days of the year.
At the new MiniComs, shoppers are able to open savings and other deposit accounts, make cash deposits and withdrawals from personal accounts upto Rs. 50,000, encash foreign currency and travellers cheques, pay utility bills and make MasterCard settlements. Commercial Bank now operates five MiniCom units, which are computer linked to all other Commercial Bank branches islandwide, a bank statement said.
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