Good bye common cold

A joint NASA-industry team has developed a new drug that may decrease the length and severity of the flu and prevent the development of symptoms in those exposed to the virus, NASA said.

The drug is from a new class of medicines called neuraminidase inhibitors. They are designed to block an active site of an enzyme associated with the flu. Neuraminidase inhibitors may be used as treatment or prevention, and are effective against a wide variety of influenza strains. Vaccines, in contrast, must be taken before exposure and are only specific to certain strains of the virus.

NASA said an international team of crystallographers had developed a "molecular map" of the virus from space-grown protein crystals. This map was then used to design drugs to block undesirable characteristics of the virus. On Earth, protein crystals often cannot be grown as large or as well-ordered as researchers desire. In space, crystals form without interference from gravity and give a clearer picture of virus structure. This allows researchers to design another molecule to fit the structure perfectly. The flu virus infects 20 million to 40 million people in the United States alone each year. Even with vaccines, thousands are at risk of dying from complications. Similar space research has yielded new medicines that are now used to fight AIDS and high blood pressure. According to NASA, protein crystal growth experiments are conducted aboard nearly every U.S. space shuttle mission. Once the International Space Station is completed, researchers can conduct crystallisation experiments in for weeks at a time. (CNN)

Political stargazers see presidential poll

By Feizal Samath

A less-than-impressive sweep of Sri Lanka's provincial council elections by the People's Alliance and an economic downturn has put pressure on President Chandrika Kumaratunga to call early presidential polls, political analysts and economists say.

With Sri Lanka's economy sliding this year and unlikely to achieve the average five percent growth rates seen in the years before 1998, most political analysts say that it would be in President Kumaratunga's own interest to call polls ahead of schedule.

"Strike while the iron is hot ," said a political analyst, referring to the PA's flagging popularity, which was evident in last week's five provincial polls. The PA won the bulk of the seats in all the five councils but that did not reflect the narrow margins by which it secured some areas. It was only in the North Central Province that the ruling party obtained a comfortable victory.

''With such a fair showing, I believe President Kumaratunga may call an early presidential election,'' said a government economist, who wished to remain anonymous. ''She may call it as early as August this year.''

A newspaper editor noted that with the opposition UNP's performance improving over local government elections in 1997 when it was routed by the PA, the government may be prepared to gamble on early presidential and parliamentary elections.

Presidential and parliamentary polls are not due until mid- and late-2000, while the last in the series of provincial council elections - the southern region - is due in May/June and is expected to be clinched by the ruling party. Polls to the northeast council, controlled earlier by former militant Tamil groups, have been postponed over the years due to the ethnic unrest.

''It would be in the government's interest to hold early elections since in another six months to a year, the UNP can improve on Tuesday's performance. Also in a straight presidential race, President Kumaratunga is still a favourite against UNP leader Ranil Wickremesinghe,'' the newspaper editor said, noting that parliamentary polls may be tougher for the PA.

Colombo stockmarkets, generally seen as the barometer of investor confidence, showed signs of some recovery with small gains on Wednesday and an improvement on that on Thursday. Brokers said Rs. 22 mn worth of foreign inflows were recorded in the two days, showing a marked rise in foreign investment compared to the weeks before.

Some of the reasons attributed to the stockmarket gains were investor confidence over the conduct of an election with fewer incidents and the looming holiday season.

Analysts say that another vital reason why the government should favour an early poll is because of a weakening Sri Lankan economy, which is only now bearing the brunt of the financial collapse in East Asia.

A further blow has been the crash in world tea prices and there are no signs of any serious recovery at the Colombo auctions.

Prices of tea, Sri Lanka's largest export commodity, have been drastically hit by the Russian financial crisis while a general global downturn has affected the export-driven garments manufacturing sector.

Economists say that the first quarter figures of the economy are not at all encouraging.

Equally worrying to Sri Lanka is declining oil incomes in the Middle East. Remittances from Sri Lankan expatriates in the Gulf countries are an important source of foreign exchange and falling oil prices could shrink earnings.

In recent weeks however, oil prices have recovered but no one knows whether the recovery is a short or a long-term phenomenon

Oil traders predict a continued rise in prices since OPEC countries have agreed to cut output to raise market prices. Libya is also expected to come into the market after a UN oil embargo is lifted over its decision to release two Libyan suspects to an international court for the bombing of a plane, some years ago.

However, rising oil prices - which on the one hand may save the day for Sri Lankan expatriates - could create fresh financial problems for the government which has benefited by lower oil costs, though not passing that benefit to the consumer.

Political observers think that President Kumaratunga may seek some fresh battlefield victories in the war in the north and the east, where government troops are trying to contain a 17-year-long revolt by Tamil guerrillas, before deciding on early polls.

Yet it is the economy that ails Sri Lanka. Analysts believe that if the government decides to remain till the end of its term, it would resort to a populist budget this year filled with "goodies" and "handouts" for the ordinary masses in a bid to woo voters, which would put the budget deficit out of gear.

"I don't think the government would resort to a populist budget. But yet I believe its budget deficit may be way off target because it is difficult to cut spending during an election year," says economist Dr Dushni Weerakoon from private think-tank, the Institute of Policy Studies.

Dr. Weerakoon said she expected serious problems in the Sri Lankan economy in the next six to 18 months particularly due to the troubled external environment. "If the country is able to achieve four percent growth this year it would be a plus point," she said.

Economic growth is seen falling to 4.5 percent in 1998, down sharply from a six percent target set by the Central Bank earlier in 1998. The bank revised its figures several times during the year when economies around Sri Lanka started crashing. Dr Weerakoon also told The Sunday Times Business that another source of worry as far as the Middle East situation is concerned is the competitiveness of that market. Sri Lanka, along with the Philippines, appears to provide the bulk of the Gulf's labour requirements.

But with unemployment rising in Indonesia, amidst other turmoil faced in that country, the unemployed may seek overseas employment at low rates and, in such a case, the Middle East would be their best bet. "We may then have to compete with Indonesia as well for jobs there," she said.

Agalawatte opens training centre

Agalawatte Plantations Limited managed by Mackwoods Plantations (Private) Limited undertook a unique programme at its newly established Vocational Training Centre, on Clyde Estate, Tebuwana, to improve and develop the skills and knowledge of tappers on this estate and of the neighbouring estates managed by the company.

This programme is the first of its kind initiated by any plantation to upgrade the skills of the workers.

Skilled tappers to-day are becoming less available with the gradual retirement of the experienced workers. The children of workers are less inclined to undertake this work, and as a result there is a shortage of good tappers.

The intention of the company is to provide the facilities to improve and develop the skills of the present tappers who will in turn go back to their respective estates and become trainers for the younger tappers.

All participants will be issued with certificates at the end of the training course.

The Company also proposes to up-grade the tapping operations on the estates by providing the skilled tappers with uniforms and other protective clothing in the future.

The officers of the Rubber Research Institute of Sri Lanka together with the Superintendent of Clyde Estate were associated in the training programme.

The newly established Vocational Training Center on Clyde Estate will be used for the training of planting executives, estate staff and workers.

Singer Mega a new shopping experience

Singer, a household name in Sri Lanka, has now introduced a totally different concept to shopping. Singer Mega, a new concept to Sri Lanka, houses everything a home needs under one roof - and offers a totally refreshing shopping experience, packaged in a pleasant atmosphere, according to Singer sources.

"At Singer Mega the shopper is welcomed into spacious, comfortable surroundings where the family can be involved together as a unit. The mother can shop, the kids can play in an area specially designed for them and the father can either browse through cyber space or join the kids at the cafe for a snack," the spokesman added.

The first Singer Mega opened its doors in Kandy last year and the second opened in Rajagiriya.

Balendra joins Bata Board

Sri Lanka' s leading footwear manufacturer and trader, Bata Shoe Company of Ceylon Limited announced the appointment of Deshamanya Ken Balendra to it's Board of Directors as a non-executive Director.

The Bata shoe organisation, which is the world's largest manufacturer and retailer of footwear has its operations in 60 countries on virtually every continent. Bata Organisation employs more than 57,000 people around the world and operates 4,458 Company-owned stores world-wide in addition to over 100,000 independent retailers and franchisees.

Its operations span the globe with over 62 manufacturing units. Active in world-wide markets since 1894, Bata now satisfies one million customers per day.

Other Board members of Bata Sri Lanka include Deshamanya C .P. de Silva, Hemaka D .S. Amarasuriya, Alan Kelly, Rolf Senoner and Jeff Lee.

Mr. Balendra heads the John Keells Group of Companies as Chairman and CEO. In its December issue the Fortune magazine ranked the John Keells Holdings among the top ten buys in the whole of Asia and described the John Keells Group as a superbly managed conglomerate. Sri Lanka's pioneer business magazine - Lanka Monthly Digest, conferred on Mr Balendra the prestigious title of "Sri Lankan of the Year 1998".

BUSINESS BRIEFS

15% Interim dividend from UMLL

The Directors of United Motors Lanka Ltd. (UMLL) have declared an interim dividend of 15% which will be paid on 19 April. The company paid a total dividend of 35% for the financial year 1997/98.

In its quarterly financial statement to shareholders for the nine months ended Dec 31, '98, UMLL reported a consolidated net profit after tax and minority interest of Rs. 94 million, an improvement of 13.1% over the corresponding period of 1997/98.

At the recent presentation of awards for the Best Corporate Report and Accounts Competition (1999) organised by the Institute of Chartered Accountants of Sri Lanka, United Motors Lanka Ltd. was adjudged joint winner in the category of "Quoted Public Companies With Under 5 Subsidiaries." The company won the award in 1998 as well.

Open trade and fair rules - important to Sweden

On March 10, the Government submitted a report to the Swedish Riksdag describing its preparations for the new WTO negotiations.

The main purpose of the reports is to provide information and encourage a broad debate on these matters both in the Riksdag and in wider circles in society.

'The past year's conflict between the EU and the United States on the banana issue and its possible consequences for Swedish consumers and companies, has clearly shown the need for common trade rules and effective resolution of conflicts within the WTO," the Minister for Trade, Leif Pagrotsky, says.

In its reports the Government considers that a new round of negotiations in the WTO should contribute towards central goals such as:

• growth and employment,
• an ecological and socially sustainable development,
• economic development in poor countries,
• an open Europe and
• democracy and security.

NCE course for customs agents

The National Chamber of Exporters of Sri Lanka (NCE) is organising a series of educational programmes to enchance theoretical knowledge in import and export documentation, clearing and forwarding activities and also to develop professional skills of the customs house agents and wharf assisants working in export, import and shipping organisations.

The first course will be held from May 10 to 14 from 8.30 a.m. to 1.30 p.m. each day at the Sasakawa Cultural Centre, Colombo 03. Two other courses are also scheduled to be held in early June and July 1999.

Mobitel phones for FCA journalists

A joint agreement between Mobitel and the Foreign Correspondent's Association (FCA) was signed on March 24, where members will be provided the latest mobile telephones for their communication needs.

Under this tie up Mobitel has also been appointed the "Official Mobile Phone Provider" of the Foreign Correspondent's Association for a period of two years. This was disclosed at a news briefing held at Galle Face Hotel that was held to mark the handing over of the first batch of phones to members of the association.

Shipping

Owners are warned of UK tax clamp

SHIPOWNERS especially those with UK agency offices — must be sure that they comply with new Inland Revenue rules to avoid being penalised as the UK tax authorities crack down on the understatement of profits, shipping and insurance accountant Moore Stephens has warned.

The issue at stake is transfer pricing, which is the pricing between a UK company and its overseas associates.

The Inland Revenue is concerned that UK companies with overseas associates may be undercharging for services, or overcharging so that profits are understated.

According to Moore Stephens, for accounting periods ending after July 1,1999 the onus will be on UK companies to use market rates in their tax computations for any transactions involving associated overseas companies, where UK profits could be understated.

Simon Merchant, tax partner at Moore Stephens, said UK companies, where they were associated with overseas companies would have to charge a fee which was at least equal to the market rate for their services.

Or they could make a transfer pricing adjustment to reflect the arm's length value of these services in their tax computations which they submit to the Inland Revenue.

UK companies should "act now to avoid tax-related penalties which could be imposed if the Revenue considers that they have not made a reasonable attempt to comply and do not have records to show that they have done so," said Mr. Merchant.

He said shipping was particularly vulnerable to this change in UK tax legislation because many international shipping groups had agency subsidiaries in London.

Such agency companies provided a range of services to shipping management companies offshore, and as a result they charged for their services.

"There are scores and scores of companies like that, and all of these comanies will have to look at the pricing of their services to their overseas associates," Mr Merchant commented. He continued that the new tax rules had been widely drafted to include any form of provision between companies.

For shipping, this could include agency and management fees, charter fees, brokerage fees and even the terms of loans and guarantees.(Needlloyd's List)

Asian box imbalance is 'getting worse'

ASIA'S container repositioning crisis is worsening, with growing imbalances in export and import volumes looming on the horizon. Tony Gibson, general manager of P&O Nedlloyd in Singapore, said that the real challenge in managing the Asian Crisis was dealing with the increasing shortage of empty containers.

"This is actually getting worse and not better each day," he warned. Gibson conceded that, from the start of 1998, P&O Nedlloyd was forced to spend $10m each quarter on repositioning equipment to cope with the imbalance. He said the situation was likely to deteriorate further in the short-term with the empties imbalance on the Asia Pacific-Europe leg worsening by at least another six per cent in coming months.

An illustration of how bad things have become came from Neptune Orient Line's chairman Herman Hochstadt, who noted that the imbalance ratio in some key Asian markets had reached only one Asian import shipment for every four export shipment.(Fair play)

'Charity Cap' funds rise to Rs 5.5m

Business they say is all about competitive jostling, but the Sri Lankan Banking sector, in an innovative show of collective strength, has come together in a spirit of camaraderie, to float a new idea in financial Services i.e., how to collect money for a national charity.

They gave themselves five months to go after a sum of Rs. 12 milion of which Rs. 5 .5 million has already been collected. The Banks launched a "charity cap" in aid of an MRI scanner for the National Hospital's Department of Neurosurgery. The Banks involved in the charity project are: Bank of Ceylon, People's Bank, National Savings Bank, Hatton National Bank, Seylan, Sampath, CitiBank, Central Bank and NDB. This hat collection with a difference is endorsed by the Captain of the Sri Lankan Cricket Team, Arjuna Ranatunga. Several other Banks have offered their support through outright contributions.

In leading hospitals the world over, MRI scanning has become the main diagnostic tool in the investigations of spinal cord problems and tumours of the brain. In Sri Lanka, the MRI scanning facility is available only at private hospitals.

Therefore the Neurosurgery Trust, under the drive and commitment of Dr. Colvin Samarasinghe has been raising funds on regular basis for the last five years to buy an MRI scanner for the National Hospital. The Trust has collected almost Rs. 15 million made up of individual donations from over 8,500 members of the public, and the President's Fund has pledged a further Rs. 30 million towards the scanner.

The Banks are attempting to collect the remaining Rs. 12 million to buy the scanner. The cap itself is of premium quality, in blue cotton with Arjuna's signature and a Lion emblem embroidered on it. Caps are available through the Branches of the Banks at Rs. 250. Proceeds from the caps go direct towards the project, while all support provided by the sponsors is free of charge.

The project is co-ordinated through the NDB, who have set up a help line (0722 32398) to process further inquiries. The public is requested to help buying caps or through direct contribution by way of cheques in excess of Rs. 50 in favour of "NDBSL MRI SCANNER A/C ". The address is, National Development Bank, P.O BOX 1827-MRI, Colombo 2.

Browns embarks on fourth road show

The Agricultural Directorate of Brown & Co., embarked on their fourth consecutive Road Show recently.

According to Lasantha Wickr-emesooriya, Director Agricultural Directorate, the Road Show would travel the whole country, except for the North and East.

"The Float carries the entire range of products marketed by the Agricultural Directorate which includes tractors, implements, mammoties, sprayers," said Mr. Wickre-mesooriya.

The Float which will travel through farming villages across the country, will during the day time provide expertise, offer advice, tips on correct farming practices and use of equipment, while in the evenings, entertainment programmes will be provided.

According to Wic-keremesooriya, these Road Shows have always been well received by the farmers who value the service provided to them by the Company. "We will continue to provide the farmers with our services through promotions of this nature," he said.

Epson best dealer award for Keells

More than 100 dealers attended a convention, at which Debug presented awards to the Best Dealer in the Epson Dot Matrix Printer Category and the Best Dealer in the Epson Inkjet Printer Category in 1998. The awards were won by Keells Business Systems Ltd., and Syrixpro Computers respectively, on the basis of the quantity of printers sold and the total sales turnover generated.

A new category on Epson consumables will be added to the awards next year, said Managing Director Moiz Najmudeen. "We are confident that with the support of the dealer network Epson will continue to dominate the printer industry in Sri Lanka and we also have plans to work closely with the dealers to strengthen and grow the market," he added. He said Debug engineers are trained once a year by Epson and they in-turn provide training to the dealers on request. The company maintains one of the largest inventories of Epson spares in Sri Lanka.

Return to the Bussiness Contents