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Trying to smoke out critics
By John Breusch
It is an understatement to say that the tobacco industry suffers from an image problem.

So when Ceylon Tobacco Company (CTC) this week embarked on its latest initiative to project itself as a good corporate citizen, it called on the full might of its public relations arsenal.

To the theme music from "Mission Impossible," the mandatory corporate video kicked off with images of vandalised cigarette shops before switching to pictures of smiling CTC workers, a rock climber scaling an impossible peak, and the sounds of "Reach" - Gloria Estefan's theme song from the 1996 Atlanta Olympics.

The symbolism was hopefully lost on few of those enjoying the free drinks, food and cigarettes on the 36th floor of the World Trade Centre.

As dance music and swirling spotlights transformed the room into a nightclub, an announcer introduced CTC managing director Fred Combe with so much enthusiasm that some guests would have been excused for expecting British soccer superstar David Beckham to step onto the podium.

What announcement could possibly generate so much excitement? The answer was CTC's inaugural Social Report, an audited and immaculately prepared document that details the company's efforts to be socially responsible and to listen to its stakeholders.

Handed out to the crowd by models in slinky black dresses, the report is the first of its kind to be prepared by a Sri Lankan company. It is also the first to be launched by CTC's 17 billion pound parent, British American Tobacco (BAT), in any of the 190 countries in which it operates.

BAT subsidiaries will release 12 more social reports this year. BAT's regional director for South Asia, Brendan Brady, gave two reasons for the company's decision to embark on such a massive exercise.

One was that companies are now under more public scrutiny than ever, creating a demand for greater transparency. The other reason was more specific to BAT's industry.

"We market a product that is controversial; it comes with risks," Brady said.
"We are open about what the risks are and our customers understand them."
Companies across all sectors are increasingly coming under criticism from the public and community groups for chasing profits to the detriment of society.
But for cigarette manufacturers, public scrutiny and resentment are nothing new.
The tobacco industry faces a simple problem: it produces a product that can kill people.

For years, the industry denied a string of accusations levelled against it: that cigarettes cause major health problems, including lung cancer; that smoking is harmful to those who "passively" inhale cigarette fumes; that nicotine is addictive; and that the industry has deliberately targeted the youth market.

But as a result of some public pressure and some massive lawsuits, it has been forced to come clean on many of these accusations. Not only has the prospect of crippling court awards increased, but tobacco companies have to survive in a regulatory environment that increasingly outlaws marketing. However, the industry refuses to lie down. Instead, it has gone on the offensive - the public relations offensive.

And as this week's launch of the 2001 Social Report shows, it is prepared to spend a lot of money in the process. The report, entitled "Looking Beyond," is drenched with words like "transparency," "responsibility" and "accountability".
"As a responsible company it is imperative that we act responsibly," it says at one point.

"CTC is prepared to face the implications of acting in such a responsible manner."
CTC invited 84 stakeholders to its "dialogue sessions" and 51 turned up.
The anti-smoking lobby, though invited, was not among them.

Among those who did show, 30 percent were "valued business partners" of CTC, 12 percent were consumers and 8 percent non-government organisations (NGOs).
At the sessions, 220 expectations of CTC were raised and the company responded to every one.

Throughout the report, it answers its critics: it does not market to minors and that it actively campaigns to discourage under-age smoking; it does not engage actors, role models and celebrities to subversively market their product by smoking; it provides customers with complete information about the health effects of smoking, allowing them to make an informed choice.

It also described the ways in which the company acts as a good corporate citizen: self-regulation; superior worker conditions; environmental responsibility; community programmes; and sponsorship. Will the anti-smoking lobby be convinced?
Judging by their non-attendance, it seems unlikely.


Super cracker from Munchee
Ceylon Biscuits Ltd, the manufacturers of renowned Munchee Biscuits, has launched yet another innovative product to the market - The "Super Cream Cracker".
The launch event, called "Super Sangeeth" was held earlier this month at the Chandra Silva Stadium at Rajagiriya in the form of a musical extravaganza that brought together superstars, celebrities and the general public for an evening of music and festivity.

Simultaneously on the same evening the Munchee "Super Cream Cracker' was launched at the Thopawewa Ground in Polonnaruwa before a gathering of about 40,000 people.

The universal cracker, loved by people of all ages, has now got even better thanks to Munchee's innovative product development, a company statement said. The "Munchee Super Cream Cracker" is crunchier and crispier than conventional crackers. It is also more nutritious being enriched with vitamins A, B, B3, B5, B6, B12, D, E and K7.

Business Standard on the newsstands
The Business Standard, said by the publisher to be Sri Lanka's first business newspaper, was launched at a gala ceremony on June 7 with the first issue of the paper also coming out on this day.

A broadsheet newspaper with 12 pages, the new paper will be published ever Friday. In addition to developments in the business field, the newspaper covers related aspects including finance, banking, stocks, the economy and politics.

The Business Standard is published by Seico Publications (Pvt) Ltd and its chairman is Sumith Ekanayake, a Sri Lankan businessman based in Japan. He has other business ventures as well in Sri Lanka and abroad. The paper's managing editor is veteran journalist Lakshman Jayawardene while the editor is Gamini Abeywardene, an experienced business journalist. Dalton de Silva, a former Reuters' bureau chief in Colombo and veteran in the media field, is the associate editor.

Seylan Merchant Bank launches Fortune 2002
Seylan Merchant Bank (SMB) plans to increase its client base by attracting new investments over the next seven months, with an exciting new campaign branded 'Fortune 2002'.

The bank said over 500 prizes would be on offer through this campaign to investors from June to December 2002. 'Fortune 2002' is modelled on the successful 'Fortune 2001' campaign of Seylan Merchant Bank but carries significant improvements to its predecessor, SMB Assistant General Manager, Treasury, Janaka Grero said.
The Fortune 2002 campaign will be more focused, concentrating mainly on broadbasing the SMB customer base.

The minimum investment amount has been reduced to Rs. 5,000 from Rs. 10,000, in the hope of attracting more small investors, he said. The first prize at the grand draw is a Honda Civic car worth Rs. 1.2 million. Other prizes include motorbikes, colour televisions, refrigerators, washing machines and VCD players.

The prizes at the monthly draws held at selected branches include sovereign gold coins and half sovereign gold coins.

NDB Bank declares branch strategy
NDB opened its first branch at Navam Mawatha on June 12 - next door to its sister company, the National Development Bank.

It was declared open by NDB Bank chairman S.K. Wickremesinghe along with NDB's Director/General Manager Nihal Welikala and NDB Bank's CEO, Eran Wickramaratne.

NDB Bank began operations in October last year, with the acquisition of the Sri Lankan branch of ABN AMRO Bank. The new entity inherited ABN's customer base of private sector corporates and high net-worth individuals, its experienced and customer-focused team of bankers, and well established banking policies and practices.

"We are committed to investing in new technology and multiple delivery channels to build up the infrastructure we need to provide customers with the best service levels.
The Navam Mawatha branch is the first of several branches the bank intends to open during the course of this year.

These branches will be complemented by ATM's and phone banking and, in the future, Internet banking facilities as well," said NDB Bank CEO Wickramaratne.

Freight forwarders want end to monopoly
Freight forwarders have called for an end to the national carrier, SriLankan Airlines', monopoly on cargo handling.

"It is high time, the government gave self-handling permission to other airlines, which would be a step towards Sri Lanka becoming a regional hub, Diren Hallock, President of the Federation of Asia Pacific Air Cargo Associations, told "The Sunday Times Business".

Sri Lanka has all the potential, compared with other countries in the region, to become a cargo hub within the next few years because of its suitable location, he said.
The government needs to urgently implement plans to develop airport infrastructure to be able to compete with other hubs, Hallock said. Hallock also said that in many developed countries in the region, such as Dubai and Singapore, 98 percent of ground handling was done electronically.

"Therefore, to achieve regional hub status, we have to change our present manual system to an electronic handling system to compete with those countries," he said.
The air cargo industry had almost totally recovered from the impact of the terrorist attacks using jetliners in the United States last year, he said.

Hallock earlier told the 29th Executive Council Meeting of the Federation of Asia Pacific Air Cargo Associations held last week that the industry needs more smaller Sri Lanka-based freighter carriers serving regional routes.

"Permission for an alternative cargo ground handling agent to operate at the Katunayake International Airport should be given soon," he said. "Such permission should be expressly on the basis of abilities to demonstrate cargo control backed with a minimum investment of not less that Rs. 50 million," he said. A separate apron area dedicated entirely for freighter aircraft, which is in close proximity to the air cargo agents' terminal, was also required, he said.

JKH seeks to expand overseas
John Keells Holdings is looking to diversify further to reduce its reliance on the local economy and on cyclical businesses such as plantations and tourism.

The company reported group net profits plunged by 30 percent to Rs. 543 million in the year ended March 31, 2002 because of its core business being affected by what chairman Vivendra Lintotawela called "testing conditions".

The downturn would have been worse if not for a strong recovery in the last quarter of the financial year, he said in the annual report to shareholders. "The past year's results clearly highlight the over-reliance of our company on the fortunes of the Sri Lanka economy, and in particular, on the more economically sensitive or cyclical industries such as plantations and tourism," he said. "While we have already taken measures during the last two years to address these issues, we will be prioritising the need to enhance our overseas exposure and pursue new, less cyclical businesses locally," he added.

JKH is evaluating potential hotel investments in Goa, India while its flagship soft drink, Elephant Ginger Beer, continued to sell well in Australia, India and Thailand, he said.

During the next year, the firm will be looking to further expand its food and beverage businesses in India, particularly in processed meat products and carbonated soft drinks. The planned launch of branded value added teas is another major initiative aimed at increasing revenue from overseas, Lintotawela said.

Trade chamber sets up policy support unit
The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) with the help of the US-based Centre for International Private Enterprise (CIPE) has set up a Policy Support Unit (PSU) to address private sector-related issues.

"The PSU would be a dedicated and exclusive unit to facilitate private sector policy advocacy," said Macky Hashim, FCCISL president. He made these observations when an agreement between FCCISL and the CIPE was signed for this purpose. Hashim and John Callebaut, senior programme officer, CIPE, signed the MoU.
The Sri Lankan private sector is currently facing a number of challenges, apart from the effects of global competition, like internal challenges due to the political and economic environment prevailing in the country.

Hashim said the impact of policy related issues could be implemented through a process of policy dialogue. It is important to create an environment where the private sector could get involved in a long term policy dialogue with the government in order to boost private sector-led economic growth in the industry, he added.

The FCCISL plays a major role in articulating the macro policies necessary for overall private sector development, FCCISL General Secretary Samantha Abeywickrama said.

The PSU is expected to strengthen the economic research and lobbying capacities, he said. Its main objectives are to identify issues constraining the development of the private sector and prepare memoranda for representation to the government and multilateral aid agencies.

The FCCISL will also be monitoring and analysing current economic development in the country and abroad to provide private sector corporates with information required for their business planning, he said.


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