Changes needed in debt recovery

By Hiran Senewiratne

An average of three companies in the small and medium sector fell "sick" every day during a survey conducted by the federation last year. At least 350 organisations wound up in a six-month period to July 2000, Asoka Gunasekera, a FCCISL council member told reporters last week.

"Changes to debt recovery laws, existing bankruptcy laws and parate execution procedures are urgently needed," he said, urging the government to study proposals made by the chamber on the need for such changes.

He also said that 90 percent of business organisations come under the small and medium sector category and the proposed amendments, like those suggested by the chamber, are necessary for their survival.

Gunasekera said it was unfair that while large sums borrowed by big organisations are written off by banks, small and medium scale companies struggle to settle their debts.

"Banks which have recorded Rs. 3 billion in profits during the last financial year have done so mainly through lending to the private sector," he said. However, when it comes to recovery, banks are only interested in exercising their rights rather than ensuring the survival of the aggrieved party, he added.

The number of business organisations in the country is around 10,000 and if necessary financial assistance is not provided most of them would be forced to close down.

Gunasekera urged banks to create a rehabilitation fund from the profits they make to revive troubled companies. He said accounting firms had their hands full in finalising the winding up process of sick companies.

Industries must survive for employment to be generated and protected. At least 2.1 million in Sri Lanka are unemployed while more than 50,000 seek employment annually, he said.

Before parate executions are carried out by banks they should give careful consideration to the economic and social impact of their actions, he said, stressing that current laws need to be reviewed in order to create a more business friendly credit environment.

Chamber survey on expansion plans of member firms

"The information that you provide will be used by the chamber only for the purpose of consolidation and will not be divulged to any third party including the government," chamber chairman Chandra Jayaratne said in a letter.

The survey is aimed at putting together a proposal for government consideration on economic reforms and changes needed to revive the country's battered economy.

Economic growth slumped to its lowest level in several decades last year at an estimated negative 0.6 percent. The negative growth was due to a combination of poor policies, a global recession and lower garment exports.

Last week, chamber representatives meet Finance Ministry officials to discuss the chamber's proposals and strategies for growth.

Jayaratne requested affiliate associations to submit plans for growth or expansion and new investments for the 12 months to April 2002. He said the information required by January 25 should contain details of proposed investments, value and estimated investment in fixed and working capital, expected funding sources, expected long term national economic benefits and the facilitation strategies, reforms and incentive framework required to be put in place.

The chamber and its affiliates have a membership of some 2,000 companies.

HSBC's "Wipe Out" credit card promotion

HSBC will be holding 12 monthly draws throughout 2002 to pick out the lucky credit cardholder of the month. In addition to the grand prize winner, two other HSBC cardholders will also be picked at each draw. These winners will each have Rs. 10,000 credited to their HSBC's credit card accounts.

While the rupee value of all transactions (up to a maximum monthly Wipe Out amount of Rs. 500,000) posted to the credit card account between the first and last day of each month will be credited to the winner's credit card account, outstanding amounts carried forward, debit balances from the previous month's account or any other disputed or duplicated transactions will be excluded, the statement said.

Keep ministers on their toes

He was making the keynote address at the annual conference of the Practicing Accountants' Chartered Students' Society (PACSS) held in Colombo.

Speaking on 'Effective strategic planning towards nation rebuilding', he said the people's confidence could only be won by the performance of the government. "The people should also be on their toes and push ministers (to do the right thing)," he added.

He emphasised the importance of economic reforms in various areas such as war, business confidence and power shortages in order to develop Sri Lanka.

Rizan Nazeer, past president Junior Chamber Sri Lanka, Dheerendra Abeyratne, senior vice president DFCC Bank and Suren Rajakarier, Partner KPMG Ford Rhodes Thornton and Company also spoke at the meeting.

Tanneries exhibition in Hambantota 

The objective of the exhibition and conference is to educate the public about the advantages and benefits of establishing the tanning industry at the Bataatha industrial park in the Hambantota District, to inform the public about preventive measures taken against perceived environmental hazards, to provide leather producers an opportunity to display their products and to introduce new ideas and technology in this industry.

Under a government programme, all tanneries currently located in the suburbs of Colombo must be moved to the Bataatha park by 2002.

Hotel reservations via SriLankan Airlines 

The airline said Roomsnet, to be implemented in phases, would enable SriLankan Airlines' overseas stations to directly book passengers in hotels in Sri Lanka, during their layovers in the country.

"With Roomsnet, SriLankan's offices overseas have 24-hour access to Sri Lankan hotels for inquiries and bookings," says Sunil Welivitigoda, SriLankan's Product Support Manager. "This hotel reservation system cuts down the time and effort to make hotel bookings and issue vouchers."

"What SriLankan Airlines is doing is cutting-edge in terms of technology," says Eric Wickramanayake, Managing Director of SasiaNet in Sri Lanka. "It is one of the first airlines in the world to have on-line facilities for stopover and passenger services. It is very innovative on the part of the airline."

Shell has bright ideas in Anuradhapura

A Shell statement said consecutive "Bright Ideas" workshops were held at the Post-Harvest Training Centre in Anuradhapura on December 20 and 21 with over 30 existing and potential entrepreneurs attending. It was sponsored by the Shell LiveWire Trust and organised locally by the North Central Province Participatory Rural Development Project (PRDP).

Leelasena de Silva, Assistant Director of the PRDP, said the Shell LiveWire programme was beneficial for potential entrepreneurs who required business start-up advice and also the necessary basics in planning for enterprise. He said many young entrepreneurs from the region were unable to realise their aspirations and venture into business due to a variety of reasons.

"The programmes offered by Shell LiveWire can empower youth to realise these dreams," he said. The individuals who complete the LiveWire process, which culminates in the preparation of a comprehensive business plan, are better equipped to approach a funding institution for their capital resources, etc. The PRDP also acts as an intermediary organisation and directs potential entrepreneurs to banks with proper advice.

K. R. Indrasena of Anuradhapura, a participant at the workshop and proprietor of Sandamali Kaju Products, felt that the LiveWire programme is a useful and necessary means to encourage youth to pursue their entrepreneurial spirit. Young Inoka Dilrukshi who manages a small yoghurt production business in Minneriya said she was grateful to the resource personnel of "Bright Ideas" particularly for conducting an interactive session on the profitability of their business.

Since the inception of the workshop programme in October 2000, Shell LiveWire has conducted over 85 "Bright Ideas" workshops across the island.

Regional meeting on eco-tourism

The conference is one of the six regional preparatory conferences to be held around the world as a prelude to the World Eco-tourism Summit to be held in Quebec, Canada, in May this year.

Perera was nominated by the ESSL to present his paper titled, "Eco-tourism product development and marketing in and around protected and natural areas," on a request made by Renzino Lepcha, Secretary of the Eco-tourism and Conservation Society of Sikkim, to the ESSL.

Perera is also the Vice President of the Field Ornithology Group, affiliated to Bird Life International in Sri Lanka.

ESSL President Chandra de Silva has been invited as a "high valued participant" to the conference in addition to acting as moderator at some of its working sessions.

HNB's ill-advised investments

I am one of those who disposed of Commercial Bank shares in the mid-1990s to buy HNB shares on the advice of my stockbroker. 

The situation now is so bad that I am beginning to doubt the bona fides of the advice that was given to me by brokers at that time. 

The brokering firm is no more, having wound up operations last year and I have no one to complain to. There may be many others like me who have dumped money into HNB shares anticipating it to rise.

Despite a weak financial performance, the bank is involved in investments without a proper plan or objective. Recently it was announced that HNB was increasing its stake in DFCC.

Also investing over Rs. 4 billion on a new head office complex when banks are moving away from "brick and mortar" to "virtual" banking looks like another "strategic error" that will deplete much needed resources.

Quarterly results published by the bank show a disappointing performance placing doubts on the ability of the bank to declare a dividend for ordinary shareholders. 

It looks like small shareholders like us are going to be called upon to foot the bills arising from large building projects, bad loans and ill-judged investments.

P.J. Mervyn Wijeratne
Nugegoda

City hotels agree on minimum rates

This two-year agreement was initiated by the Sri Lanka Convention Board and the Sri Lanka Tourist Board along with the Sri Lanka Association of Professional Conference and Exhibition Organisation.

Tourism Minister Gamini Lokuge, present at the signing of the agreement, said this is a significant achievement for the industry. "It is up to you to honour your pledge, we cannot police your activities. The government recognises the crucial role the industry plays not only in promoting Sri Lanka as a travel destination but also in bringing in much needed foreign exchange to the country's coffers," he said.

Sri Lanka Tourist Board Chairman, Renton de Alwis said the agreement would help the hotel industry to get out of the low pricing trap and help launch Sri Lanka not as a cheap destination but as a value-added destination.

CEAT clients can win fabulous prizes

Among the other attractive prizes on offer are return air tickets for two to Singapore, a LG double door refrigerator and a LG washing machine, the company said. Participation would be through scratch coupons issued at the time of purchase at dealer counters and a grand draw will be held in May 2002.

"This promotion is targeted exclusively at our end users whose patronage has made CEAT one of the biggest players in the local tyre market," CEAT-Kelani's Marketing Manager, Shanaka Fernando said.

CEAT-Kelani Associated Holdings recently slashed retail prices of light truck and truck tyres to make CEAT the most affordable tyre in comparison to all international brands sold in the local market. 

The company also recently announced that it had established a record in exports with consignments worth US$ 100,000 (about Rs. 9.3 million) late last year.

Tudawe Bros receive excellence award

The project costing Rs. 350 million comprises 40 luxury apartments on nine floors with 75 percent of the luxury apartments being purchased within six months of the completion of the complex in June last year.

In order to make the building last for generations, the promoters of the building told reporters that the structure is earthquake resistant.

The rooftop floor of the apartment complex has a section laid with turf that could be used for parties and other functions by residents.

Staff cuts voluntary, says Standard Chartered Bank

It was reacting to widespread opposition to the proposed reduction in staff at the bank by unions, including the Ceylon Bank Employees' Union (CBEU).

The statement said the acquisition of the Middle East and South Asia operation of Grindlays Bank by Standard Chartered Bank last year resulted in the two major international banks merging in Sri Lanka. Since then the locally merged bank has been going through the process of integration involving streamlining of the operational aspects of the two banks and introduction of new technology.

"Whilst it has impacted on the number of jobs, it has also created new opportunities for a number of staff. All divisions which functioned independently before, have now been integrated which has resulted in two divisions becoming one for the purpose of operations," it said.

Staff identified as surplus, were offered a Voluntary Retirement Scheme based on an employee's age, years of service and remaining number of years up to retirement. A substantial number of staff accepted the offer and left the service of the bank voluntarily. The bank said this whole phase was done through legally laid down procedures including an inquiry by the Labour Commissioner.

The bank said it was focusing on strengthening its consumer business especially in the areas of credit cards and consumer loans. Standard Chartered has also created a Regional IT Development Centre in Colombo. This centre currently employs 18, which is expected to grow to 30 in the next year.

Computer Literacy Day on February 4

"There are many Sri Lankans, especially those in smaller towns and villages and in the lower socio-economic sections of society who have been left out of the IT revolution sweeping this country," said Sunimal Weerasooriya, Managing Director of MMBL CyberSkills (Pvt) Ltd.

"This has resulted in the creation of a 'digital divide' within our country, with a small proportion of 'haves' who know computers and a huge section of 'have-nots' who are not equipped with even basic computer literacy skills. This is an area of concern for all of us who believe in making Sri Lanka computer literate in order to face the challenges of the future," he added.

The statement said NIIT would on February 4 launch a mass product, NIIT Swift Praveshi, which is a training course of ten-hour duration. This will be the signature product of NIIT for helping people in Sri Lanka cross the digital divide. A signature campaign is also being organised to coincide with this event to collect signatures in support of making Sri Lanka a computer literate nation.

NIIT is represented in Sri Lanka by MMBL CyberSkills (Pvt) Ltd.

50 SL firms at Dubai trade fair

The National Chamber of Exporters in collaboration with Mr. Hubert Jayakody, Chairman of Huejay International Ltd, who is organising the Sri Lankan pavilion in Dubai, is hoping to introduce small and medium scale exporters through this festival to provide them access to big markets. The companies participating at the festival will be assisted in marketing their products, Jayakody said.

More than two million people are expected to participate at the shopping festival this year. Last year, 20 Sri Lankan companies took part. Jayakody said 60 persons would be taken from here to man the Sri Lankan pavilion in Dubai. A dance troupe will also be taken to perform several times a day while gem cutting and jewellery-making exhibits will also be special features.

Minister of Commerce and Consumer Affairs, Ravi Karunanayake said he would ensure that Sri Lanka participates in every trade fair or shopping festival anywhere in the world. 

CRI trains youth for better management

The CRI said many landowners, most of who are absentee landowners, face enormous difficulties in implementing improved management practices despite high investment.

"Absentee landlords have limited time for their estates as they are busy with their professional and business involvement. They have to entrust estate development work to the estate watcher who is not educated and not trained enough to carry out these activities, resulting in poor returns on investments," CRI said.

The CRI urged landowners to employ educated and trained persons who can turnaround estates and get a reasonable return on investments.

The institute said with this in mind, it has commenced an intensive practical training programme for a batch of 25 trainees with GCE (AL) qualifications. These trainees are undergoing two months of practical training on CRI estates.

"If these trainees, after following the comprehensive course of training, are employed in private sector estates, the CRI will ensure continuous assistance in planning and implementing estate development activities," it said.

High power costs negate India's labour benefits

The survey, undertaken by the Bank and the Confederation of Indian Industry (CII), called on the state and federal governments to speed up administrative and economic reforms. "India is the only country where small and medium enterprises have their own power generators," said David Dollar, head of the macroeconomic division in the World Bank's Development Research Group.

Of the 1,099 manufacturing companies spread across ten Indian states that were surveyed in 2000, 70 percent had their own power generators.

"The cost of power is incredibly high even now," Omkar Goswami, chief economist of CII said. "When you take sectors such as garments and textiles, the cost of power is eating into the firms' profits."

Delays in customs clearance, which on average takes 15 days, and high interest rates of eight percent are also hurting India's manufacturing sector. "In the case of the garments sector, the average business cycle time is 60 days and if you add another 15 days of delay then about 25 percent of the firm's working capital costs gets eroded," Goswami said.