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Jobs
galore; skills the problem Results of
a study conducted by the Sunday Times FT on the number of jobs advertised
weekly revealed that nearly 1,500 vacancies were available. This meant
that a total of nearly 6,000 jobs, including that of foreign employment,
were up for grabs in a single month, with most companies repeatedly
advertising the same vacancies week after week. An information
bulletin published by the Tertiary and Vocational Education Commission
indicates that although unemployment had declined from 12.3 percent
in 1995 to 7.6 percent in 2000, it was on the rise again, reaching
9.8 percent by end-2002. Nawaz Rajabdeen,
Vice President of the Federation of Chambers of Ceylon and Industries
in Sri Lanka, who was present at the recent meeting with the PM,
said that he had explained to the Premier that nearly 200,000 youth
annually entered the job market after their secondary school education,
with absolutely no training and therefore were completely unemployable. "There
are endless employment opportunities available, but the demand is
for skilled people to fill those vacancies." Rajabdeen said
that it was not the role of the private sector to artificially create
jobs. "We need people who are trained and who are competent." The private
sector was not prepared to suffer the same fate as government institutions,
which were ailing as a result of overstaffing by politicians in
a bid to find favour with voters, he said. He said that
the finger could not be directly pointed at the government or the
private sector, since the lethargic attitude of individuals had
also contributed to the unemployment issue. "They
too have a responsibility in selecting their future occupation,
and taking the initiative to acquire the necessary skills."
He noted that there was a huge weakness in terms of career guidance
training in the country. A leading figure
in the head hunting business said that the mismatch between job
opportunities and unemployed individuals was an age-old problem,
with successive governments failing to take note of it. He said that
vocational training institutes needed a complete overhaul, since
most of the training it provided was outdated and did not focus
on industry requirements. "We also need to create a level of
professionalism in all jobs, including the areas of farming, masonry
and carpentry." He added that
the cultural stigma attached to certain jobs, was another reason
for unemployment, with people becoming more self-conscious and judgemental. "In the
UK, the plumber would be on the same level as the accountant, but
in Sri Lanka people tend to look down upon it. I can't understand
the thinking behind this," he said. He also said
several top rung jobs required a high level of competency in English,
which had proved to be a major stumbling block for many unemployed
graduates. Minister of
Employment and Labour, Mahinda Samarasinghe said that his ministry
had urgently focused its attention on bridging the mismatch that
existed in the job market. "Through
our National Employment Policy, we have strived to increase the
employability of individuals," he said, adding that politicians
had been prohibited from granting jobs on a random basis. The minister said that a programme was underway to ascertain the demands of the job market and structure the educational and vocational curricula accordingly. "There
is a need to form a nexus with the private sector, and I have encouraged
the Chambers to meet the Vice Chancellors of Universities and heads
of vocational training centres, so that they could be a part of
restructuring courses to meet the necessary industry requirements
of the private sector." Rajabdeen said that the private sector was more than willing to help train individuals, but at a price. The government must provide the private sector with a substantial amount per individual to conduct on the job training over a two-month period, after which each individual would be provided with a certificate of employment, he said. Funds can be
obtained through the Human Resources Development Fund and the Skills
Development Fund through the ADB. "Once the individual receives
training, he can find employment anywhere, especially in the Middle
East which could bring in large sums of foreign exchange,"
he said. Seventeen Jobs
Net offices have been set up across the island by the Ceylon Chamber
of Commerce on an initiative of the Labour Ministry. So far nearly
50,000 unemployed individuals have listed in the Jobs Net database,
with a further 7,000 employers listing with the office. All 17 offices,
which are inter-linked, aim to seek a match between the two listings,
which is done automatically by its computer software. If there is
a match, then such individuals are required to go for an interview. Listings that receive no match are then advised to attend a vocational training institute to undergo training. Jobs Net also provides for job counselling, career guidance and foreign employment information. DFCC
hopes for deal with ComBank DFCC Chief
Executive Officer Nihal Fonseka said the stake remained a valuable
and strategic investment in which DFCC had always expressed its
willingness to work with more closely. He said that
the regulatory framework at present only provided for large and
small institutions to collaborate, with the law remaining undeveloped
as far as consolidation among larger players was concerned. DFCC and Commercial
Bank had approached the Central Bank two years ago in order to seek
approval for joint ownership, which was turned down due to legal
limitations. "However,
I understand that a new Banking Act has been envisaged to replace
the existing one, which may comprehensively provide for the collaboration
of larger banks in the future, which would enable us to explore
options of collaboration with Commercial Bank," Fonseka told
a news conference. However, Central
Bank officials said that the draft of the new Banking Act was still
in its initial stages, and there was considerable debate as to whether
the maximum ownership stake between 25-30 percent would be increased
further. DFCC announced
it acquired a 90 percent stake in the loss-making National Mercantile
Bank (MERC) for nearly Rs.60 million. DFCC injected Rs. 500 million
as fresh capital, in order to re-capitalise MERC and erase past
losses. MERC had reported
an accumulated loss of Rs. 468 million for the year ended December
2002, with its negative net worth estimated at Rs. 208 million.
MERC had invested heavily in an IT system at the commencement of
its operations, which resulted in the bank not being able to turn
profitable as a result of the heavy cost of financing past losses
and high overheads. However, DFCC
said it felt the bank was "ready to run", which would
cut through lead time of around 12 months, had DFCC thought of setting
up a new commercial bank. "MERC
has an extremely good IT system and the required infrastructure
to function," Fonseka said. Chairman of
the Jinasena Group and DFCC Director Nihal Jinasena has been appointed
as the Chairman of MERC, with Nihal Jayawardena appointed as the
Managing Director, and Lakshman Silva appointed as the Chief Operating
Officer for MERC. DFCC has long
felt the need to diversify its financial services to provide ventures
with working capital and trade financing in addition to ensuring
the growth of its core business of providing long term funding for
start-up projects and capacity expansion. The MERC acquisition
would enable DFCC to compete on pricing, as commercial banks have
based pricing decisions from the relationship with their customer
through long term financing which was not available to DFCC. MERC currently
has a total deposit base of Rs. 500 million and a loan portfolio
of Rs. 170 million, with a total of 1,500 savings accounts and 600
current accounts. It currently has 58 employees working in its three
branches - Colombo, Malabe and Gangodawila. DFCC initially
plans to use its branch network in the nine provinces to initially
enhance the MERC network capability. Further expansion
is to be carried out with the launch of several extension offices
planned for all cities in which DFCC operates, so that synergies
could be reaped at branch level as well as head office level. With
the acquisition of MERC, DFCC intends channelling its customer requirements
such as foreign currency loans, current account facilities and short-term
trade finance facilities, for which the demand has grown in the
last few months. (SG) Low
prices create cash flow problems for RPCs "Prices
of High Growns have been depressed since the second half April with
BOP in particular being neglected," the Tea Association of
Sri Lanka, the industry apex body said last week. "This
situation has seriously affected the cash flows of many plantation
companies. April to June are usually the high cropping months and
prices generally are low. Plantation sources, however, report that
the problem has never been as serious in the past." The association
said exporters attribute this market situation to the "unimpressive
quality" of most offerings, less buying for Russia / CIS due
to summer, absence of Iraq for teas at the bottom of the market
and the delay in the commencement of the Uva quality season. There was 6.53
million kg on offer at last week's auction of which 2.83 million
kg comprised of Low Growns. In the market for Low Growns, although there was reasonably good demand, prices were sharply lower, particularly for better teas, the TASL said. "According to unconfirmed reports, closure of borders in certain Middle Eastern destinations has resulted in Dubai and Turkey restricting their purchases. There was also less activity from Saudi, Libya, Jordan and Syria. Russian buying was fairly well maintained." East-West
third player in bunker industry
The
company last week acquired the 37,000 DWT 'Emerald Sea' from industrial
giant 'Tanker Pacific' in Singapore, at a cost of Rs. 300 million. The investment
in the ship, which is 20 years old, comes just two months after
the company had received its bunkering license from the Power and
Energy Ministry. The company also owns a smaller, 1,500 DWT ship
'Rangiri', which would be used to transport bunkers from the mothership
to incoming vessels. In an exclusive
interview with the Sunday Times FT, East-West Enterprises Limited
Chairman Nahil Wijesuriya said that the company opted to go in for
floating storage, due to the significant delay in signing the lease
agreement with the Sri Lanka Ports Authority, in which four tanks
at the Bulk Oil Installation (BOI) in the Colombo port, which was
originally built to store coconut oil, would be made available for
storing bunkering fuels based on the minimum SLPA tariff. Wijesuriya
said that the company was the first to spot the opportunity to use
the four unused tanks, each with a storage capacity of 2,500 tons,
and in May 2002 had made a request to the SLPA for the tanks to
be leased to them as a bunkering oil storage facility. However, after
East-West submitted a proposal to use the tanks, the SLPA called
for expressions of interest from other players as well. "This
meant that we were expected to compete with other players, who were
not previously aware that such tanks existed, in order to secure
the lease agreement," Wijesuriya said. Nevertheless,
the company successfully secured cabinet approval to use the tanks,
which would be now developed at the cost of East West Bunkering
Services Ltd. In order to use it for bunkering fuels, the process
would involve upgrading of tanks, laying of pipelines and installation
of pumps and safety equipment to meet with international safety
standards. Wijesuriya
said that he was disappointed at the lack of support by government
authorities in embarking on this huge project, which was an investment
that would benefit the country. He stated that even though the market
was liberalized, there was far too much of red tape, which has led
to severe procedural delays. "Such
red tape can stifle the growth of new players, when entering the
bunkering industry," he said. He believed that regulations
and other red tape should only be introduced to help curb an existing
problem, and not made in anticipation of a problem. "New ventures
must be encouraged and allowed to bloom, and not discouraged or
restricted by the prevailing bureaucracy," he said. Speaking about
the company's long term prospects, Wijesuriya said that there was
plenty of room in the market for three players, and East-West aimed
to carve a niche market in selling bunkers to ships, which did not
enter the Colombo port. "We will
anchor our ship off port limits, so that we can service bunker product
users at sea, which would also save on port charges for the ship
owners," he said. The company will also have the flexibility
to anchor the bunkering vessel off Colombo or Hambantota, depending
on which area is more lucrative. "If both areas are lucrative,
then we might see ourselves investing in another tanker very soon,"
he said. Through its
decision to liberalise the market, the government has been keen
to promote competition in the bunker industry, enabling users of
bunker products to buy cheaper bunker fuels. However, bunkering
charges in Colombo remained high, despite the competition between
Lanka Marine Services, a part of the John Keels Holdings conglomerate,
and Lanka Maritime Services owned by the Sri Lanka Shipping Company. Wijesuriya
attributes this to the effects of a monopoly situation, which existed
in the industry, in which Lanka Marine Services aimed to maximize
margins on minimum volume, resulting in the lowest possible turnover,
which didn't help the port in the long term. "Most
ship owners preferred to take on more fuel at ports such as Singapore
at the expense of carrying more cargo, as buying marine fuels (bunkers)
at Colombo has historically been more expensive," he said. "When
we come in to the market, we will undoubtedly compete on price and
the quality of our service. We expect prices to become more sensible,
and the increase in volume should compensate for the reduced profit
per tonne," he added. Wijesuriya
said that when considering the prices of fuel, one must look at
it from the ship owner's perspective. "He can buy bunkers from
Singapore or from Fujairah, but Sri Lanka is situated exactly between
them. Therefore, we need to assess how much more is the ship owner
willing to pay to buy excess fuel from Singapore rather than buy
bunkers from Colombo, and we need to bridge that gap. Ship owners
must be encouraged to carry revenue-earning cargo instead of dead
weight fuel from Singapore to Colombo, re-fuel in Colombo and proceed
to the Gulf." At present
the margins between prices in Singapore and Colombo for bunkers
is in the range of US $50-70 a tonne, which was unacceptably high.
Wijesuriya said that unless the margins were narrowed, the Sri Lankan
bunker market would only attract a captive group, that sailed the
east and west coast of India, and which did not have the opportunity
to go to either Singapore or Fujairah. Marine fuels
in Singapore are cheaper because its bunker supplies are primarily
ex-refinery, whereas in Colombo the supply is imported due to all
fuel oil produced by the state-owned Ceylon Petroleum Corp refinery
being used for thermal power generation. DPL
unit in marketing JV with Mabroc It also said
it had finalized arrangements for the acquisition of 12 acres of
land in Thailand for its first medical glove factory that is expected
to generate annual revenue of more than $ 10 million. DPL said its
plantation subsidiary KVPL would take a 40 percent stake in Mabroc
Teas, and that existing shareholders of Mabroc Teas would acquire
shares in KVPL. The two companies
in the strategic alliance are contemplating setting up several targeted
tea manufacturing and marketing projects. Mabroc Teas
has been in operation for 15 years and is among the top 20 tea exporters
from Sri Lanka. A company focused on value added and packeted teas,
Mabroc exports more than four million kilogrammes of tea to 27 countries,
generating annual sales of nearly a billion rupees. The company's
major markets are in the CIS, the Baltic States, the Middle East
and Japan where it has its own branded products, and UK, USA and
Australia. In announcements to the Colombo Stock Exchange, DPL said
it had entered into an agreement to purchase land in Hat Yai in
the rubber growing Songkhla Province of Southern Thailand for its
$ 7 million medical glove venture. This is the first overseas manufacturing
facility of the DPL Group, and it is expected to greatly add synergies
to DPL's distribution company ICO Guanti Spa of Italy, acquired
in May 2002. The sale agreement
was entered into on August 3 by N.G. Wickremeratne, DPL Managing
Director, who headed a four-member team from the company to Thailand. Securing suitable
land for glove manufacturing facilities which require large amounts
of water is a time consuming process, Wickremeratne said, disclosing
that the company had inspected more than 50 sites in the area. The Board of
Investment of Thailand has approved the purchase of the site by
Dipped Products (Thailand) Limited, the new company incorporated
to undertake the project. The company is also finalizing contracts for the construction of buildings, main dipping machinery and other equipment, and hopes to be in operation by June 2004. |
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