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Coir
producers mull joint R&D, marketing plan Another way
to moderise the industry is to develop applications where the natural
fibre has inherent technical and market advantages over its competitors,
he told the recently concluded International Coir Convention organised
by the Sri Lanka Coir Cluster. The main objective
for the next conference should be the setting up of a structural
organisation, which will act as a facilitator and motivator to the
industry, he said. "There
has to be a focused study on new product development, more value
addition and international co-operation, which could either be co-operation
between Sri Lanka and India, co-operation within the region or a
multi-country one." The two-day
convention brought together local and foreign experts from 13 countries,
including the main coir producing nations such as Indonesia, India,
Philippines, Sri Lanka and Thailand. It was sponsored
by the Common Fund for Commodities, FAO, Coconut Development Authority
and The Competitiveness Initiative of USAID. It concluded
with the formulation of an action plan for joint research and development
programmes and marketing development with a more pro-active and
market oriented focus for the survival of the coir industry. Moir said that
even though India and Sri Lanka are the major exporters of coir
fibre and products and other exporters include Asian countries such
as Thailand, China, the Philippines, Indonesia and Singapore, as
well as Mexico, Venezuela and Tanzania, the Sri Lankan coir industry
is rather backward. At present,
Sri Lanka's major input into the global coir industry is through
raw material. Hard fibres
are relatively unimportant in terms of the global value of international
trade, he said. However, they provide significant economic support
to the population in certain impoverished and least-developed areas
of a number of producing countries. An estimated
500,000 people, 80 percent of them women, are employed in the coir
industry in India, with another 40,000 families in Sri Lanka depending
on the coir industry as their main source of income. Traditionally,
coir has been processed into a range of products such as yarns for
the production of floor coverings, mats and matting, cordage and
nets, bristle fibres for brooms and brushes, and for use with domestic
mattress and upholstery industries. Global production
of coir has expanded in recent years, particularly in India but
fibre production in Sri Lanka has, at the same time, tended to decline,
Moir said. "We see
some growth in total exports in recent years led by exports of mats
and mattings from India, together with some expansion in exports
of yarn, while fibre exports, largely from Sri Lanka, have continued
to contract," he said. "Although
prices of coir and coir products have risen in nominal terms, they
have generally not kept pace with inflation," Moir said. "When
deflated by the level of general price increases, we see declines
in real prices or unit values of both fibre and products."
The IGG on
Hard Fibres has adopted a development strategy for coir that concentrates
on identifying and developing new outlets for the fibre, on improving
consumer appeal by enhancing product quality and on promoting sales
by emphasizing the environmental advantages offered by this fibre.
There has been
some development of new, non-traditional uses for coir, and some
of these applications are finding markets, Moir said. "Erosion
control mats, for example, and other geotextile applications have
found growing demand, although they still comprise only three percent
of the total volume of coir exports," he said. "While
the market for geotextiles generally is overwhelmingly dominated
by synthetics, there appears to be a niche for natural fibres, particularly
in applications where natural degradation of the mat is an advantage." Rubberised coir products used in automotives and upholstery are exported in similar volumes to geotextiles, and offer further scope for expansion, particularly in the light of their environmental advantages in the automobile industry, he added. UAL's
Udan participates in MDRT The MDRT is
the Mecca of good salesmanship and is held annually at a key western
capital to recognise and reward outstanding achievers in life insurance. It is an international
association with a global membership of about 1,900 insurance professionals
from about 450 life insurance companies from over 50 nations. UAL met the full cost of Silva's sponsorship and is the only insurer in Sri Lanka to do so. Markets
and Marketing for Entrepreneurs - III You are about
to begin your business at the small end of this spectrum. I am sure
you want to make your business survive past the fifth year. So,
it is important to understand why many businesses fail so you can
learn from their mistakes. Lack of proper
planning is one reason for the failure of small business and arises
from hasty or not well-thought-out decisions. Let us then begin
the planning process right now. Theory tells you to begin with a
business plan and then proceed to write up your marketing and financial
plans to support it. In practice, you cannot finish one part and
proceed onto the next. They are all
interrelated. If you change one aspect, all others will change too.
So, we shall explore the marketing aspects of business planning
right now. When you are more comfortable with the marketing side,
we will proceed to the other areas. Marketing is
simply finding or creating a need and fulfilling it for a selected
group of people. You create a business when people are willing to
pay you for this fulfillment. What they pay or their numbers should
be large enough for you to cover your costs and to make a profit.
I am not a
professional marketer. But, I appreciate the value of marketing
for the success of any venture. The success of everything from a
charity campaign to a self-employment project depends upon the successful
marketing of an idea. Let us talk more 'marketese' now to help you
straighten your thinking - or seeking - process. Have you heard
of the 4 P's in marketing? They refer to Product, Price, Place and
Promotion. These are some of the key aspects of your product or
service offering. Product means the goods or the service you wish
to market. It is your basic business idea. Price is price and obvious
enough, but it can make or break your business. Place refers to
the way (and where) you will make your product available to your
customers and potential customers. Promotion means
the methods you will use to let potential customers know of your
product and the ways you will use to keep reminding them of your
existence. Advertising, remember is just a tiny part of the promotions
universe. The 4 P's seem
simple enough, but is it? We will see as we take the Ps one by one
and try to understand how each will affect your business idea. Before
going forward, leave aside all your stubborn 'must have' ideas.
Once you get down to serious thinking, you will realise that you
may not be on solid ground. When so stranded, you need to be flexible.
Exploring your business idea using the 4 P's will show you your
weak points. This exploration may lead you to change your business
idea or to adapt it. Getting the
4Ps to work together is like herding cats. You'll need to get through
a lot of hissing and scratching as well as purring before you get
anywhere balancing your 4Ps. It needs patience and perseverance.
Just a bright idea will not do. Even a pile
of money can get you into deeper trouble if you do not get your
4Ps to work together for you. Welcome to the world of small business.
It is not for the faint hearted. Please send
in your questions and comments to btimes@wijeya.lk or call 074-304100. The writer is a Chartered Management Accountant by profession with a Masters in Business Administration from the University of Strathclyde in Glasgow, and managing editor of Athwela Vyaparika Sangarawa (Athwela Business Journal)
PMB adopted
a typical "Pay Through Securitisation" format in structuring
this instrument where receivables pertaining to HDFC`s zero default
mortgage loan portfolio were securitised. These notes
having a bi-annual maturity profile of upto a maximum of four years
were entirely placed with the National Savings Bank by PMB. The International
Monetary Fund (IMF) has in recent times advocated securitisation
of receivables as an independent method of mobilising funds in Sri
Lanka for government entities rather than to burden the government. HDFC General
Manager C.A. Sarathchandra said through this exercise, the HDFC
was able to raise funds at an attractive rate of interest, which
was marginally above the gilt- edged rates. He added that
the mortgage loan securitisation done for HDFC was the first of
its kind and that this would encourage other institutions to follow
suit. Managing Director/CEO, PMB, Naomal Soysa noted that the unique feature of the issue is the low level of risk borne by the ultimate investor (NSB) due to the zero default rate applicable to the mortgage loans. Enron
- case for global action on accountability standards Corporate failures
- of which the Enron debacle has been a spectacular example - do
not just manifest distortions in the market but also risk undermining
the balance between cost and benefit and the acceptable level of
risk that makes the whole market mechanism sustainable. It is therefore,
imperative that measures should be taken to re-establish the system
as a whole and, consequently, confidence in its stability. The Association
of Chartered Certified Accountants (ACCA) believes that recent structural
changes in the capital markets have outstripped the initiatives
aimed at strengthening control of their operation. As a result,
there must now be a significant acceleration in the regulation of
capital markets and their supporting mechanisms. It is clear that
new solutions must be found to global market problems. These will
have to be introduced and controlled at a national level. However,
it requires the will of investors to drive change and particularly
institutional investors to operate on a global basis. ACCA argues
that it is necessary for local solutions to be based on globally
agreed and co-ordinated bases. This will mean that national regulators
and others must rise above national concerns. Difficult as it may
be, they must be prepared to give up a measure of control over their
domestic activities in return for influence over global developments.
We believe firmly that it is necessary to focus on global rather
than local action on the corporate governance front if the Enron
experience is not to be revisited at some future moment in time. Some global
initiatives are already under way. But the resources
allocated to existing global regulation and standard setting are
a microscopic proportion of the total resources, which are available
to capital markets, and there is little doubt that the pace of change
could be accelerated significantly if more funding was made available.
There is then
the issue of who should provide that funding. Some commentators
take the view that there is an inherent conflict in regulation being
funded by those who are subject to it. Attention has even been drawn
to the fact that the IASB approached Enron (along with most other
large corporations) for funding. In ACCA's view,
this is an oversimplification. Any arrangements which enable 'he
who pays the piper' to call the tune are, of course, flawed. On
the other hand, an externally administered levy, which confers no
influence, ought to be acceptable. ACCA considers that there should
be a mechanism which requires the participants in capital markets
- both major corporations and institutional investors - to provide
the resources needed to ensure that the markets function properly. ACCA has supported
the global acceptance of international accounting and auditing standards
for some years. Indeed, its core educational programme has been
heavily influenced by them and it already provides an international
diploma on them. Implicit in its support for the principles-based
standards issued by the IASB and the International Auditing and
Assurance Standards Board (IAASB) is a rejection of the rules-based
approach, which may have been a contributory factor in the Enron
collapse. The difficulty
with legalistic, rules-based accounting (or auditing) standards
is that - by specifying precisely where the line is to be drawn
- they encourage those who wish to operate as close to the line
as possible, or even to test the limits. They encourage the exploitation
of loopholes and devalue professional judgement. This seems
to be less of an issue in principles-based systems. ACCA has a strong
preference for standards and rules based on principles rather than
prescriptive rules. And we strongly support European Union moves
to adopt International Financial Reporting and Auditing Standards
in the next few years. In our view, those standard setters and capital
markets worldwide not yet committed to international standards should
now address them urgently. This will require US markets to commit
to the adoption of international standards. Some national
regulators have announced that they are considering options, such
as placing a limit on the time for which auditors may hold appointment
or banning them from undertaking consulting work. These reactions
raise two issues. First, leaving
aside the substantive merits or otherwise of these proposals, ACCA
is concerned that such national developments will lead to a fragmentation
of rules. Instead, a global solution should be pursued. The global
adoption of the independence provisions of the IFAC Code of Ethics
will be a major milestone in promoting consistency. ACCA also believes
that the process of audit appointment should be reviewed. Although
in theory this is a matter for shareholders, in practice management
controls the appointment. It may be time to see if this can be changed.
It has been suggested that governmental bodies might fulfil the
role of appointing auditors but ACCA believes that such an approach
would not be appropriate for global capital markets. There might,
however, be merit in arrangements that permit or require companies
to hand over this task to an independent private sector body. In
any event, non-executive directors need to play a much wider role.
What is also
needed urgently is a code of corporate governance which is capable
of global acceptance. Such a code should build on initiatives, which
have occurred in several jurisdictions. Examples of such initiatives
include the OECD Principles of Corporate Governance and the World
Bank-driven Global Corporate Governance Forum. We strongly urge
the promoters of such initiatives to join forces with market regulators
- such as IOSCO - and other global organisations - such as IFAC
- to develop and promote compliance with a global governance code. At another
level, market mechanisms are also beginning to appear. We note with
approval the Company Governance Scores being developed and piloted
in various international locations (such as Hong Kong) by Standard
& Poor's. Linking good governance to capital market accessibility
will be a powerful tool in motivating companies to improve their
governance structures and their overall transparency. Likewise,
the market-based nature of this assessment tool will have an immediate
impact on poor performers. Despite all
that has been written and done in recent years, ACCA believes that
there is still considerable room for further development of corporate
governance practice and reporting. Indeed, there is a need for investor
information beyond the narrow confines of the financial statements.
ACCA champions the extension of corporate reporting to the wider
economic, social and environmental aspects of a business - investors
and other stakeholders are entitled to know how a business responds
to the wide range of risks facing it. ACCA is represented on the
first Board of the Global Reporting Initiative and has had significant
influence on the sustainability reporting guidelines of the GRI.
Now, ACCA intends to promote the philosophy of triple bottom line
reporting via a network of reporting award schemes in countries
where ACCA members are active. These include Australia, Ireland,
Malaysia, Pakistan and Singapore. This is an edited version of the full paper that the Association of Chartered Certified Accountants (ACCA) has submitted to regulators and governments. The full paper has been summarised by ACCA UK and is contributed by Ajitha Perera, Manager ACCA - Sri Lanka. The ACCA is a global professional accountancy body with nearly 300,000 members and students in 160 countries.
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