JKH group profits rise, set to reap peace dividend
John Keells Holdings has reported a remarkable performance in the first half of the 2002/03 financial year, according to interim results, and has hired a foreign consulting firm to help the group map out its future strategy.

The group's profit before tax rose 165 percent to Rs. 743 million while revenue grew 29 percent to Rs. 7.5 billion The consolidated after-tax profit was up 275 percent to Rs. 558 million.

JKH hopes the second half of the year would be better as has been the trend.
"In light of the changes that are taking place in the global economy, as well as the commencement of the recent peace process in Sri Lanka, we believe it is an appropriate time for the company to position itself to take advantage of new opportunities and improve its operating model in line with global best practice," JKH Chairman Vivendra Lintotawela told shareholders.

The group sees good potential for its business activities such as tourism, where it is considering new investments, and food and beverage with prospects of a lasting peace and an economic revival. "The various sectors of the group are well positioned to benefit from any upturn in the economy," Lintotawela said in a statement accompanying the announcement about the results.

"This has been reflected in our performance in the first half and we expect to see strong earnings growth for the rest of the year." The conglomerate has hired Boston Consulting Group to help it draw up a strategy for the future.

Lintotawela said that despite higher excise taxes, he expects the group's food and beverage sector to show "solid growth" for the rest of the year. This sector did well in the first half of the year partly owing to higher profits at Ceylon Cold Stores which enjoyed increased sales.

Sales of bunker fuel also have increased at Lanka Marine Services, the monopoly supplier of bunker fuel at Colombo port that JKH acquired recently. The peace talks are also expected to boost the tourism sector.

"With the peace process gathering momentum, we expect the improvement seen in tourist arrivals in Sri Lanka to continue into the winter season as well. In this sector, we will actively pursue new investments in the region, while consolidating our strong presence in Sri Lanka," Lintotawela said.

In plantations, Lintotawela said that while the wage hike would reduce profitability, the outlook for tea looked encouraging given the fall in crop in some major producing countries. Rubber prices, which have recovered from a prolonged slump, are expected to remain firm with the three top producer countries curtailing production.

Reverse Fair to promote outsourcing
Reverse Fair, organized by the Small and Medium Enterprise Developers (SMED) which is a project of the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) and Friedrich Naumann Stiftung (FNSt), will be held at the JAIC Hilton in Colombo on November 21 and 22.

The fair is a novel concept to promote outsourcing and supply chain management by exhibiting items that could be outsourced by large organizations and inviting suitable sub-contractors to inspect and negotiate orders, the organisers said in a statement.
It is organized for the first time in Sri Lanka, under the Industrial Sub-contracting and

Partnership Exchange (SPX) project of SMED. SPX will identify, select, upgrade and promote the manufacturing capacities and capabilities of local companies, particularly SMEs, which can act as sub-contractors, suppliers or business partners for domestic and foreign companies, buyers and main contractors, whether from the private sector (including multi-national companies) or public sector.

The overall objective of this UNIDO programme is to help local SMEs to have access to the national and global markets by promoting their industrial products and services in those markets by identifying and meeting the needs of domestic overseas partners. In addition, the programme provides links to some 60 SPXs established by UNIDO in more than 30 countries worldwide.

SPX is steered by a committee comprising the Ministry of Industries, BOI, EDB, IDB, FCCISL and other chambers and associations. Reverse Fair will exhibit sub-contracted items, spares, etc. of Loadstar (Pvt) Ltd, Regnis (Lanka) Ltd, Ceylon Government Railway, Colombo Dockyard Limited, Ashok Leyland and Agrotecnica.

IBM Sri Lanka celebrates fortieth anniversary
IBM Sri Lanka celebrates a milestone when it notches up 40 years of operations in Sri Lanka on November 20, the company said. Commencing business in 1962, the company's first customer was the Sri Lanka Insurance Corporation, then known as the Insurance Corporation of Ceylon. A branch of IBM Corporation headquartered in New York, IBM Sri Lanka said it was proud to be a part of this IT giant, which has been inventive in the perception and usage of IT around the world.

IBM said it regards itself as a responsible committed corporate citizen, contributing in many ways to the community and society it serves. The company recently donated 20 Young Explorer units under its 'KidSmart' programme.

KidSmart's goal is to enhance both numerical and verbal skills via a child-friendly Personal Computer. In a programme initiated by the Ceylon Chamber of Commerce, IBM has also offered laptop computers and training to injured soldiers to obtain their Sri Lanka Computer Driver's Licence, the IBM statement added.

NERD's dual fuel invention is more efficient
The National Engineering Research and Development (NERD) centre is planning to patent its newest invention - a dual fuel (diesel oil and biogas) generator that is more efficient in producing power and saving energy.

The invention makes diesel burn more efficiently by mixing it with biogas which creates an average saving of 85 percent of diesel oil in generating 36kWh of electricity. The electricity generated with this technique has been used for the peripheral lighting of the Kirulapone Market garbage site, which is the source from which bio gas is generated.

This project has created a useful system of removing and recycling municipal garbage for the production of bio gas for power generation and has also enabled the production of environmentally friendly bio fertiliser.

This was revealed at a seminar on "Solutions to the national problem of urban solid waste disposal", organised by the Institution of Engineers, Sri Lanka. Senior Research Engineer, Dr. Chithral Ambawatte, said that following the success of this project, cabinet approval has been granted to launch a similar project at Muthurajawela at a cost of Rs. 35 million which is nearing completion.

The bio gas and bio fertiliser production facility is expected to generate an income of Rs. 3 million a year. Among the many other possible solid waste disposal methods, the production of compost fertiliser can save the government up to $2.1 million, according to the Director of the National Fertiliser Secretariat of the Ministry of Agriculture and Livestock, D.R Wijayatilleke.

He said that 92 percent of the total chemical fertiliser requirement of the country is imported, incurring foreign exchange up to Rs. 6 billion a year. A compost blend made with Eppawela rock phosphate should be promoted among rural farmers and the current subsidy afforded to urea fertiliser suppliers must be re-directed towards this project, he said.
Engineering consultant, Nihal Cooray, said that after conducting a few case studies of solid waste incineration operations in London, he was convinced that an incineration cum electricity generation plant installed in Colombo or the suburbs could be the lasting solution to the problems regarding solid waste disposal. (SG)

SGS a key provider of certification
SGS Lanka (Pvt) Ltd, a subsidiary of Society Generale de Surveillance, Geneva which is one of the world's largest organisations in the field of inspection, testing and certification, is a key provider of organic certification services in Sri Lanka, the company said.

It said SGS certifications are recognised by import authorities in Japan, the majority of EU countries, Switzerland, India, Australia, New Zealand and the US. "Growers and shippers in the tea, spice and vegetable sectors will benefit from this certification because organically grown products fetch premium prices," it said.

SLT IPO opens on Nov. 28
The long-awaited initial public offer of Sri Lanka Telecom will open on November 28, the Colombo Stock Exchange announced. It has approved an application for listing 1,804,860,000 Ordinary Shares of SLT for a Main Board listing.

A total of 216,583,200 ordinary shares of Rs. 10 each will be offered to the public at Rs. 15 a share with the option for the government to issue a another 54,145,800 ordinary shares on the same terms and conditions in the event of an over subscription. DFCC Bank is managing the issue. The subscription list opens on November 28. The firm will issue the prospectus and share application forms on November 15.

Apollo IPO on Nov. 21
The Lanka Hospital Corporation, which runs the Apollo hospital, will make an IPO to the public of 20,554,967 ordinary shares of Rs. 10 at Rs. 15 a share. The CSE said it had approved an application for listing 156,612,518 of the ordinary shares of the firm for a Main Board listing. Hatton National Bank is managing the issue, which opens on November 21. The prospectus and share application forms was issued by the company on November 11.

Tess Agro IPO on Second Board
The CSE has approved an application for listing 9,500,000 ordinary shares of Tess Agro for a Second Board listing. A total of 2.5 million ordinary shares of Rs. 10 each will be offered to the public at Rs. 10 a share. Merchant Bank of Sri Lanka is managing the issue. The subscription list opens on November 21. The company will issue the prospectus and share application forms to the public on November 11.

SLT appoints audit committee
Sri Lanka Telecom has appointed a four-member audit committee to ensure and maintain fair and just corporate governance in the organization, the company said.
The decision was taken at a board meeting held recently chaired by SLT chairman Thilanga Sumathipala. The committee will be chaired by N. Pathmanathan - Deputy Secretary to the Treasury and comprise three other directors from the SLT board - namely Kiyoshi Maeda, Ruwan Fernando and Ajit Ekanayake.

The primary aim of the committee will be to monitor and review the scope and the effectiveness of all internal systems such as financial, operational, compliance controls and internal audits as well as management of business risks. The committee whilst maintaining an important relationship with the company's external auditors will also be the channel of communication between them and the board, the statement said.