According to provisional figures subject to audit, the Board of Control for Cricket in Sri Lanka (BCCSL) incurred a pre-tax loss of Rs. 48 million in the six months ended June 30 compared with a profit of almost Rs. 250 million in the first half of 2001.

Total income of the board, which released its accounts to the public for the first time last week, fell sharply to Rs. 71 million from Rs. 340 million in the same period last year.

Hemaka Amarasuriya, chairman of the interim committee of the BCCSL, told The Sunday Times Business that the board decided to release the accounts for the first time in its history for the sake of transparency. "We want to be transparent and accountable."

He said the second half 2002 accounts - which would be for calendar 2002 - would contain the audited version.

Amarasuriya said losses were incurred since there was only one home series with Bangladesh visiting last month. "Revenues are generally made from a home series," he said adding that the situation would be better next year with England, India and New Zealand touring Sri Lanka.

According to the accounts, the board had spent Rs. 415 million on the controversial Dambulla international cricket stadium in the period under review, shown as capital work-in-progress in its balance sheet. It had Rs. 206 million in fixed deposits and spent Rs. 48 million on administrative expenses in the first half of this year.

The accounts also showed that the board was able to improve its debt recovery - monies owed to the board - bringing it down to Rs. 116 million from Rs. 618 million earlier.

Amarasuriya, also chairman of the Singer group, said Sri Lanka would receive $ 6.5 million as team fees for next year's World Cup in South Africa while another $ 625,000 will come in as team fees for next month's ICC tournament in Colombo.

The BCCSL chief said the board was a non-profit organisation and ploughed back whatever it earned in revenues. Currently it is in the process of selecting a group of 60 young players across the country including Mannar and Jaffna and grooming them for the future.

"Our talent scouts have been going through selections and have come up with a squad," he said adding the first training camp for this squad would be held on August 28 at Dambulla.

The BCCSL has been mired in controversy in the past with three interim committees being appointed by the government to handle board affairs in the past three years.

Ceramic sector seeks clay deposits
Ceramics manufacturers are seeking changes in the laws governing the use of paddy lands to secure access to deposits of clay required for the long-term survival of the industry.

They want the government to suspend certain provisions in the Agrarian Development Act to strike a balance between agrarian development and industry mining, said Sunil Wijesinha, chairman of the Ceramics Industry Task Force.

"We need a comprehensive land use policy and mapping of clay deposits," he said in an interview.

"Surveys have found that some of the best kaolin deposits are under housing schemes, which means the industry cannot access them."

Under the Agrarian Development Act paddy lands are not supposed to be used for mining, not even land that is no longer viable for paddy cultivation.

Some ceramics manufacturers who had bought land for mining have found that they cannot exploit the clay deposits because of these legal restrictions which the industry now wants removed, Wijesinha said.

This was one of the recommendations of the task force made to the Ministry of Enterprise Development, Industrial Policy and Investment Promotion recently.

The ceramic industry consists of three major export-led segments - tableware, ornamentalware and ceramic tiles.

The legislative changes are required to ensure the industry has enough supplies of clay in the future.

The task force also recommended that the industry gets into the manufacture of more profitable advanced applications in the long term.

"We must look at making new products because it may not be possible for us to survive with traditional ceramic products," Wijesinha said. "Ceramics is widely used in automobile components, bio-ceramics (medical appliances inserted into the body), and components for the electronics industry.

"If we can develop the technical competence to handle advanced ceramic applications, it can be very profitable."

The industry was trying to develop links with American universities which have acquired technical skills in the ceramics field, he said.

The task force also recommended the creation of centres of "technical excellence" that would provide improved technical support services to industry.

"We should also have a system where industry can pay for university research," Wijesinha said.

As part of its strategic thrust to expand market share, the industry wants to penetrate and establish a foothold in the Indian market where changing lifestyles are likely to increase demand for high quality fashion utilities such as ceramic tableware.

It is targeting the high-end of the tableware market now catered to partly by imports.

"Our approach would be to go under our brand name to create some brand preference," Wijesinha said. "It will not be easy."

The ceramics industry also wants the government to remove the one- percent levy on imports at the port and airport on gold and platinum pigment.

These were previously exempt from duty.

"In the tableware industry the cost of gold and platinum account for the highest cost of raw material - over 50 percent," said Wijesinha. "So another one percent on that would amount to a huge cost at a time we're struggling for survival."

Tableware manufacturers export more than 80 percent of their output and are vulnerable to increases in costs and pressure from buyers to reduce prices. The depreciation of the rupee helps to offset some of these costs increases.

"Demand has come down because of the global recession while supply has gone up because China has started big manufacturing plants, creating a huge mismatch between demand and supply," said Wijesinha. "So today there's a huge surplus of tableware and we're under pressure to cut prices."

Manufacturers even find it difficult to compete in the small domestic market, which is flooded by cheap, lower quality Chinese products, and have called for anti-dumping laws.

Another "major worry" for the industry is the very high cost of energy - as high as 30-40 percent of the cost of production, said Wijesinha. The main fuel used in kilns is gas.

"All forms of energy have gone up by huge amounts over the past two years," Wijesinha said.

Manufacturers were under pressure from buyers who want lower prices because international energy costs were coming down.

The task force recommended a transparent energy pricing mechanism reflecting true world market prices.

Forecast increases in energy prices would "severely affect" the ceramics industry, Wijesinha said.

Stock prices rise on peace talks breakthrough
The stock market rose sharply last week mainly on the news about the breakthrough in the peace process and good financial results announced by some of the blue chips.

The dates being set for talks between the government and the LTTE to start in mid-September in Thailand has brought about some certainty to the peace process, brokers said.

The Colombo bourse also got a boost by the selective buying by Raj Rajaratnam, a Sri Lankan-born fund manager based in the United States, whose purchases, especially of blue chips, has generated much interest in the market.

Rajaratnam picked up a sizeable stake in the Commercial Bank on Wednesday helping to boost turnover and raise the entire market.

The All Share price index broke through the 700-point level to close at 703.5 on Friday while the Milanka index closed at 1229.1.

"The market reacted positively to the news on the peace talks," said Dushyanth Wijayasingha, head of research at Asia Capital.

Foreign buyers were enticed by the lower prices on the bourse, he said.

Corporate results that were "slightly ahead of expectations" also helped boost prices, he said.

"The trend should continue," he added. "The economy and the corporate sector are now in a recovery phase. Growth should begin to accelerate towards the latter part of the year."

Chinthaka Ranasinghe, head of research at John Keells Stock Brokers said there was more interest shown by foreign investors because of the positive feedback on the peace process.

Fears that there were problems of cohabitation between President Chandrika Kumaratunga and Prime Minister Ranil Wickremesinghe, which caused stock prices to fall the previous week, appear to have gone away, he said.

"There are signs that both parties could reach a mutual understanding," he said.

He also said it was a positive sign that expatriate Sri Lankans were coming back into the market.

Hasitha Premaratne of HNB Stock Brokers said the market should pick up again once peace talks start in Thailand next month.

"The lifting of the ban on the LTTE before the talks should also help boost the market," he added.

Trinco trade fair draws crowds
Thousands of visitors thronged the eastern city of Trincomalee on Friday amidst tight security as a five-day industrial exhibition got underway at the town's esplanade.

The exhibition, drawing some 300 local and foreign exhibitors and opened by Prime Minister Ranil Wickremesinghe, is seen as an effort by the Industries Ministry and the Board of Investment to drum up foreign investment in Trincomalee.

Sinniah Gurunathan, The Sunday Times correspondent in Trincomalee, reported that the town was gaily decorated with green and national flags, and buntings while all hotels and guesthouses were full.

"We have never had such a crowd before," he said.

The "Yuga Dekma" exhibition runs till August 20. Residents said while there was an overwhelmingly security presence because of the prime minister, ministers and other important dignitaries being in the city, there were no security barriers and people were allowed to walk freely without being questioned.

RPC, Asia Capital probe ends
The Securities and Exchange (SEC) has terminated its investigation into trading in shares of blue chip conglomerate Richard Peiris and Company and of Asia Capital.

The stock exchange watchdog last week wrote to the two companies saying that its investigations had not revealed that any parties "acting in concert" had triggered the mandatory provisions of the Takeovers and Mergers Code.

The investigation was triggered after what was seen as a hostile take-over bid of the highly diversified blue chip conglomerate Richard Pieris and Co. and Asia Capital by Dr. Sena Yaddehige.

Yaddehige is the Sri Lankan born, UK-based engineer who made waves recently by buying into the two firms. He was recently appointed as joint deputy chairman of Richard Pieris and Company.

According to the annual report of Richard Pieris and Company, dated March 31, 2002, Yaddehige is the biggest shareholder with 27.1 percent. But there was speculation in the market that his stake was actually higher than the 30 percent threshold at which take-over attempts must be announced to the market because of subsequent buying and also through his sizeable stake in Asia Capital.

Richard Pieris and Asia Capital have complicated cross-holdings in each other.

Yaddehige joined Richard Pieris and Company saying he wants to modernise and expand the company and add further value to the group's manufacturing and export activities.

The RPC group, known for its Arpico brand of rubber products, achieved a turnover, including that of its associates, of Rs. 10.2 billion, crossing the Rs. 10 billion mark for the first time this year.

Richard Pieris is also a big player in the plantations sector producing about 15 million kg of tea and 10 million kg of rubber each year.

It also has a stake in Dipped Products Ltd, the joint venture with the Hayleys conglomerate, that is among the top five industrial and household rubber glove manufacturers in the world.

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