Janashakthi records one billion rupee income 

The company said it has been maintaining an exceptional annual growth rate since its inception in 1994 despite being in the insurance business only for seven years.

"Reaching a premium income of Rs. 1 billion reflects the confidence and the trust placed in Janashakthi by our customers. Indeed we're honoured by this expression," JICL Managing Director and CEO Chandra Schaffter said.

He pointed out that this achievement was reached in 2001 despite the year, being the most difficult for the Sri Lankan economy. "The resilience of Janashakthi amidst economic turmoil and social instability and the growing confidence placed in the company and its products and services have strengthened our resolve to offer more excellence in our offerings to customers," Schaffter said.

"Before we started Janashakthi, we did extensive research of the existing solutions available for people interested in insurance. We found out what makes customers happy and what drove them off from an insurance company. As we launched Janashakthi and progressed year-on-year since 1994, we have met diverse and discerning needs of the insurance market and provided them with innovative solutions," Schaffter said.

Japan to fund Upper Kotmale project

The total cost of the project is US$ 350 million and is likely to be funded through the Japanese Bank for International Cooperation. 

It is intended to commence the project by April, a Finance Ministry statement said.

Most of the preliminary work has already been completed but the completion of the scheme has become urgent in view of the present power crisis, the minister told the ambassador.

The Japanese ambassador said his government was examining the funding of this project and a decision will be made shortly. Japanese aid already accounts for 20% of Sri Lanka's production of electricity.

Choksy also requested Japan to consider project development in the northern and eastern provinces in view of the serious effort being made by the government to end the present conflict. 

The ambassador said galvanised roofing material worth Rs. 94 million would be provided as a grant to low-income families in Vavuniya, Batticaloa, Ampara and Trincomalee. Approximately 5,500 families will benefit in housing construction.

UAL's interactive web-based life insurance policy

The emphasis is on convenience and minimum involvement from the client's point of view. 

The proposal form is therefore short and simplified. In keeping with its theme, the policy is available for purchase through the Web via Sri Lanka's first interactive life proposal form.

The prospective policyholder is able to calculate his premium by entering his date of birth, mode of payment and sum insured.

Real Life Plus is an endowment policy for a fixed term of ten years and is a package cover where a level premium is payable throughout the ten-year period. 

This policy is unique in that no medical examination is required.

UAL's reinsurance partner in this product asserts that this is the first such insurance policy in South East Asia.

The Real Life website: www.union-assurance.com/reallife

Malaysia says RRI comments on oil palm completely baseless

Malaysia's Primary Industries Minister, Datuk Seri Dr. Lim Keng Yaik said last week the statement was baseless and showed his (Tillekeratne's) ignorance of oil palm's versatility.

"For the head of the Rubber Research Institute of Sri Lanka with little experience in oil palm cultivation, making such a sweeping statement clearly shows that he is ignorant of the various uses of oil palm," Lim was quoted as saying in Malaysia's state-owned Bernama news agency. "Ask our people, they will tell you that we have successfully discovered the versatility of oil palm."

Replacing rubber plantations with oil palm without serious scientific study could damage Sri Lanka's environment and economy, Tillekeratne said last month in a statement on oil palm as an alternative crop for rubber. "Rubber is more versatile and has greater potential for value addition than oil palm," he said.

Tillekeratne's comments came after attacks in October on oil palm plantations in Sri Lanka's southern region by politically motivated interests brought into sharp focus the benefits of such a crop for Sri Lanka.

Trial plantations of 3,000 acres of oil palm set up in rubber growing areas should not be extended without carefully considering all the effects of such a move and without consulting the RRI, he said.

Rubber helps protect the remaining forest reserves by catering to the firewood requirements of domestic cooking and industry as well as providing timber for use in the furniture and construction industries, he said.

"But from the trunk and branches of oil palm no other uses have been reported," Tillekeratne said adding that the only value addition possible in the palm oil industry was to convert the oil into margarine and soap.

Bernama said the Malaysian Palm Oil Board (MPOB), a local renowned entity in the palm oil industry, has set up its research and development department to identify and widen the use of oil palm.

At present, the MPOB and the German research institute, the Fraunhofer Wilhelm-Klauditz-Institut WKI, which had established a three-year research collaboration, have said that oil palm biomass could be processed to produce Medium Density Fibreboards (MDF), a substance which could be used in furniture making.

Potential

Tenaga National Bhd (TNB), Malaysia's power entity, uses biomass to successfully convert it to energy to run its power plant in the country. Apart from MDF, it was also proven that oil palm pulps have the potential to be used in producing papers, Bernama said.

Meanwhile, the Sri Lankan RRI director – in Kuala Lumpur for a conference – defended his controversial statement saying the comments were applicable to the Sri Lanka situation. "What I said was for the Sri Lanka scenario only, not applicable to Malaysia," he told Bernama.

Tillekeratne said that rubber was an important crop as against oil palm because the country and a large section of the people were dependent on the rubber industry. "The rubber-based industry is identified as the most important thrust industry for the future (of Sri Lanka)," he said.

Firewood

"If there are no rubber trees, they would have no other material for cooking purposes and we will be in a terrible situation," he said adding that the replanting of rubber with oil palm in Sri Lanka would result in a job loss for over 30,000 people who are working in rubber-based industries. "Some 150,000 families would also be affected."

Citing another situation where rubber planting is crucial to Sri Lanka, he said the country imports its timber from Indonesia, but Indonesia has taken a decision not to export its forest wood after 2005.

As such, the replanting of rubber with oil palm will result in a shortage of wood resources for its board-making and furniture industries. "We don't have enough wood for furniture manufacture. So rubber-tree wood furniture manufacturing at the moment is at a very low level," he said.
Right of Reply

HNB's ill-advised investments

However, he noted with regret the predicament the writer of this letter is in as a holder of HNB shares. Wijetilleke said:

"We wish to assure him that all investments by HNB have been made very prudently and after careful consideration. The present board of directors has managed this bank over the last 12-15 years in the most successful manner and we wish to assure you that we will continue to do so at all times and ensure that the stakeholders' interests are looked after and their returns maximised at all times. In the economic environment, which we experienced during the recent past, investments in every sector had depreciated without any reasonable returns. However, our bank is very confident that all investments currently made by HNB will bring in very good results in the short and medium term."

Fashion Optic launches Internet marketing 

"This technology will give customers the chance not only to get detailed images of spectacles but also turn and twist the product on-line," said Temptation Technology CEO, Bahi Vimalachandra. Both are Sri Lankan firms.

The new 3D imaging "wear and see" technology and search engine are important tools for local manufacturers venturing into foreign markets in this era of e-commerce, Vimalachandra said.

This on-line store would enable fashion savvy customers to try out the entire range of sunglasses, spectacles and contact lenses from the comfort of his or her office, said Jehan Rajapakse, chairman of the Fashion Optic. Temptation Technologies has been providing its 3D imaging technologies to international clients.

Practical ways of avoiding disruptive power cuts

By Lal de Mel

The misery of two-and-a-half-hour power cuts and Prof. Mohan Munasinghe's interview in the Sunday Times on 20 January has prompted me to appraise readers on how we can avoid power cuts by harnessing the installed generation capacity and encouraging energy conservation. I give below some points from the interview given by Prof. Munasinghe.

- Commercial and industrial establishments have large power installations that they use mainly during power cut hours, as it is cheaper for them to buy power from the CEB.

- The power that can be generated from this source is 300 to 400 megawatts. If some inducement is made, these establishments can be made to generate their own electricity within a week or ten days.

- CEB has a deficit of 100 to 200 megawatts of power and this will continue until the end of February. Shortly industrial and commercial units will have to pay more for CEB to recover from the cash deficit of Rs. 16 billion. The Sri Lanka Insurance Corporation has estimated the cost of a unit of electricity supplied by CEB to be Rs. 10 per unit if they use only CEB power but the cost increases to Rs. 12 per unit if they generate part of the power. This is a result of the maximum demand meter, which discourages self-generation of power. The break-even cost of running entirely on the standby power plant of 375 kva is Rs. 15 per unit. The new Minister of Consumer Affairs has promised to introduce transparent pricing for fuel, based on the monthly average international oil prices. This is a necessity to run the CEB and CPC as viable units.

The US $ exchange rate has moved from Rs. 67.78 at the end of 1998 to Rs. 93.40, which is an increase of 37.8 percent. The power prices, which have not been adjusted accordingly, need to be revised. Increasing the price of power to industrial and commercial establishments by Rs. 3 per unit and the offer of a rebate of Rs. 2 per unit of energy saved, will encourage the use of their standby power plants. This is likely to result in a reduction of the power consumption of this segment by 100 to 200 megawatts within one week. The CEB can publish the energy saving and the corresponding reduction in power cuts until the power cut is withdrawn. This is a short-term solution.

The new Minister of Power is a practical businessman with a proven record of accomplishments, who has vowed to eliminate power cuts within 180 days. I have no doubt that he and his new team will deliver the goods. I fully endorse the multi-pronged approach adapted by the new team, other than their plans to purchase 100 megawatts of power to meet short-term needs, without fully utilising the installed capacity in the commercial and industrial establishments. One reason is the transmission loss, which increased from 18.8 % in 1998 to 20.7 % in 1999 and further, increased in 2000.

This means if CEB succeeds in buying power at Rs.10 per unit, they need to charge Rs. 12.60 to recover the transmission loss. It is better to pay a subsidy of Rs. 2 per unit for self-generation, than waste Rs. 2.60 on transmission losses, aided, and abetted by the supply of power without meters to certain individuals and organisations. The transmission losses need to be given special consideration in power planning. When taking into consideration the poor financial position of the CEB, and the high cost of generating power (which exceeds US $ one million per megawatt), the better strategy is to expedite the removal of the monopoly of power generation by the CEB and tender for the supply of power directly to selected sites such as the industrial zones and the bigger towns. We need to make use of the infrastructure already in place such as the Trincomalee oil tanks and the Shell LPG terminal, to reduce lead times and costs. The people of the northern and eastern provinces will soon get all the power they need without any security concerns.

There have been many letters to the editors on the need to encourage the use of compact fluorescent lamps and fluorescent tubes. Urgent action needs to be taken to remove GST and NSL from energy saving devices and non-oil based power generation units required for mini hydro power plants, wind power plants and solar panels. The discriminatory power purchase pricing structure needs to be abolished and replaced by an environmentally friendly pricing structure, to encourage the generation of power from such sources. I hope this letter will have some impact on minimising the power cuts and the adoption of sound strategies to provide power at the lowest possible prices to the nation.