Compaq hurries services with DHL

Compaq Computers Asia recently signed an agreement with DHL Worldwide Express to provide logistics services to Compaq's authorised service providers in Sri Lanka. The service involves customs clearance, storage and issuing of spare parts to the authorised service providers on request. Compaq will also use the services of DHL to dispatch defective parts to their service facility in Singapore, a news release said.

Before this operation, Compaq directly imported each spare part from Singapore and dispatched from its Singapore warehouse to its Authorized Service Providers on request. With this new arrangement, Compaq is well positioned to respond to customer calls and fix product failures within hours.

According to Chandana Perera, General Manager - DHL Sri Lanka, DHL Worldwide Express is committed to provide cost effective and innovative service solutions to their customers.

DHL Worldwide Express has also launched a new product aimed at small and medium sized electronics and technology based industries in Asia. "Direct Distribution" will enable manufacturers to enhance their distribution systems by delivering finished products directly from Singapore and other Asian countries to the ultimate customers.

Compaq's Regional Services Manager, Woo Khiang Tan was in Colombo to start the logistics operation and also to introduce this new service to the local service providers. According to Mr.Tan, the partnerhip is another step for Compaq in reducing turn-around time leading to better customer satisfaction.

PIM patron felicitated

The PIM Alumni Association held a felicitation dinner at the Grand Oriental Hotel for their patron and the Director of PIM, Professor Gunapala Nanayakkara. Professor Nanayakkara is expected to be away for a few years on sabbatical leave.

President of PIMAA, Gerry Suraweera welcoming Prof Nanayakkara said that he had rendered invaluable service to management education in Sri Lanka for over 25 years.

It is due to the Professor's untiring efforts that PIM has been recognised as the 'Nation's School of Business', on par with any Business School in the region. Prof Nanayakkara then said he had only done his duty towards Management Education in Sri Lanka. It is the objective of PIM to educate and develop managers of today to become committed and persevering to achieve their objectives,he added.

Rhino Roofing to start depot in Kurunegala

Rhino Roofing, suppliers of roofing products in Sri Lanka will shortly open its first depot in Kurunegala, announced Company Chairman A.Y.S. Gnanam, according to a news release.

Addressing dealers in Kurunegala, Mr. Gnanam said that it was the Company's intention to better facilitate both their customers and dealers, which was the reason that led to their opening of this depot.

The dealers who were from in and around the area, the North Western, North Central, Central and Eastern Provinces, were enthusiastic in their response as this move would make the product more accessible, while delivery time would also be shortened.

The soon -to -be- commissioned Rhino roofing, depot is the first of its kind in Sri Lanka. Mr. Gnanam requested the dealers for their inputs and suggestions with regard to the running and smooth operation of the depot as the number one priority was customer convenience. Mr. Gnanam also said that in the event the dealers expressed their satisfaction with the depot's operation, the Company would seriously consider opening other Depots in strategic locations in the country,

Rhino roofing manufactures the big six corrugated fibre cement sheets for roofing as well as flat asbestos sheets for ceilings with the products having already earned the SLS mark for quality, while the ISO certification for the Company's quality system is to be awarded shortly.

The Company now enjoys a 45% market share in Asbestos roofing sheet sales in Sri Lanka producing 3.5 metre, 2.5 metre and 1.75 metre roofing sheets which are regular sizes, claims the company.

Seminar on E-Commerce

The IT Centre of CIMA Sri Lanka Division will hold a seminar on "E-Commerce The Hype and the Reality of Doing Business in Cyberspace" from 2.30p.m to 6pm. on June 2, at the Colombo Hilton. The seminar is sponsored by E-Trade (Pvt) Ltd.

ISO National Conference

The Sri Lanka Standards Institution (SLSI) will organise a national conference on ISO 9000 Standards to mark the issue of 50 ISO 9000 certificates to the business sector by the Institution.

The conference is scheduled to be held in the last week of June. It is estimated that the total number of ISO 9000 certificates issued in the country to be around 90, thus SLSI presently has the largest market share for certification to ISO 9000 standards in Sri Lanka.

The main objective of this conference is to share the experiences gained by the certified companies during the past two to three years in the operation of the certification programme.

Several speakers from the business sector will address the conference on the benefits and problems faced by them during the implementation of ISO 9000 standards. The keynote address will be delivered by T S Subramaniam, who has wide experience as a lead assessor for certification of a large number of industries in India. Mr. Subramaniam was responsible for guiding SLSI staff in the assessment of quality systems during the early stages of implementation of this scheme. Another important feature of this conference will be to highlight the main changes envisaged in the revised ISO 9000 standards which would be published in the year 2000.

Gulf Air, first again

Gulf Air is set to take delivery of its first Airbus A330-200 aircraft in June. The airline has placed firm orders for six A330-200 aircraft with options for six more aircraft. Delivery of the first four is expected this year, with the other two joining the fleet by Year 2000, says a press release.

Dr Shaikh Ahmed bin Saif Al Nehyan, President and Chief Executive of the airline described the arrival of the first Airbus A330-200 as an important event for the company. "While Gulf Air was among the first air carriers in the Middle East to operate Airbus aircraft, A330-200 represents the most efficient in its class.

"Apart from several modifications, a number of new facilities have been added to enhance comfort and convenience. The aircraft will improve Gulf Air's operational efficiency while our passengers will discover a new experience in flying," he said in a statement.

The new aircraft has undergone substantial changes from the standard facilities. Although capable of accommodating up to 381 seats, Gulf Air's A330-200 aircraft will have a total of only 243 seats, in a three-class configuration (12 First Class, 24 Business Class and 207 Economy Class seats) affording additional space and greater comfort for passengers, he said.

Best homes as in UK in Col. 7

Chairman of Lincoln Property Holdings, R. Ayaru responsible for funding "The Cinnamon Garden Residencies" project was confident of its success he said at the foundation laying ceremony of Cinnamon Garden Residencies held recently,according to a company release.

Lincoln Property Holdings is a British owned B.O.I, company deriving its name from the property known as Lincoln House, owned by the family for over 75 years.

The parent company, Lanka Enterprises, has invested largely in the United Kindom and Central Africa and has built up vast experience and expertise in constructing and letting, up-market housing in these two countries.

Cinnamon Garden Residencies, 82 luxury condominium apartments situated in an idylic location in Colombo 7, is the newest project undertaken by Lincoln Property Developers and is funded with 100% foreign investment.

Chairman, Ayaru, a chartered engineer, claims that a large sum of foreign currency has been brought into Sri Lanka compared to what would have been invested in property and world financial markets, due to the strong faith and confidence that foreign investors like himself have in this country and its government.

As a leader in property development and having a reputation for constructing landmark structures, the company pledges that the complex is to be built to high standards in par with such condominiums in the United Kingdom.

Harischandra reflects character and culture of the south

By Feizal Samath

Lokugamage Albert sips tea quietly in a corner in the soap section of this giant complex while other workers are busy filling boxes with soap or stamping the company name on the finished product.

Albert at 74 years is one of the oldest hands at Harischandra Mills in Matara but does not work as hard as the others. Age is catching up and he is not as agile as before. Senior managers treat him with kindness, well aware of his contribution to the dynamic growth of the company in the past fifty years.

"He grew up with the company and has been one of our most valuable employees," says Dayapala Munasinghe, Product Development Manager at the factory, sprawled across five acres, a few Kilometres from Matara town.

To many residents in this coastal town on the tip of Sri Lanka's southern region, Harischandra - now a household name in the country for food products - reflects the hopes and aspirations of the south.

Residents are proud of their culture and traditions. Matara is the home of low-country dancing and is synonymous with trade, fishing, the Devinuwara Temple and Dondra lighthouse.

Harischandra made its entry in 1943 - when its founder C.A. Harischandra launched the company on 20 perches of land, with an initial capital of Rs.25,000 rupees - and has firmly established itself as one of the premier establishments in this region, growing with the people here.

Development has been slow and unemployment high in the south, particularly Matara, just like its northernmost counterpart, Jaffna. That could be the reason for both regions spawning insurgencies by troubled youth - the Janatha Vimukthi Peramuna (JVP) in the south and the Liberation Tigers of Tamil Eelam (LTTE) in the north.

The two regions share many commonalities. Their people are quiet but fiercely loyal. They have knowledge, skills and expertise. They work hard and rarely grumble if given a decent wage.

Harischandra in many ways reflects the character of the people of the south. Its employees are quietly efficient and loyal like Albert, have fascinating beliefs and come from interesting backgrounds. There is the shy Nilantha, whose father, now dead, was a famous exponent of low country dancing; the quiet chief accountant who quit a job in a plush office in modern Colombo and opted for a rural setting, a slower and less glitzy life than the capital; and the elderly national-clad Mr. Peiris whose profound knowledge of and belief in vegetarianism has had an impact on other employees in making them aware about the sad plight of animals, slaughtered for mankind.

In the modern world of business, machines and gadgetry are slowly replacing men and workers. The truism of employees being the life and blood of a company is slowing fading, as company executives throw up their hands in despair - not when workers are absent but when computers go down or are shut off in the world of unseen viruses.

Walk into the Harischandra complex at Matara and senior managers will tell you about the history and tradition of the town, its people, its culture and many other facets of life, as I pleasantly discovered.

They have the time and the space to talk, unlike the busy Colombo executive, who worries about money, growing debts, how to get home fast after work through the city's traffic snarls or how to get his child into the best school.

The Matara worker may be less paid than his Colombo counterpart but seems to benefit from a less harried work culture, sans the make-believe lifestyles that push the capital's workforce to live beyond their means.

There appears to be a quiet kind of professionalism that pervades the Harischandra complex. Little wonder then that the company has been able to withstand the rigours of the free market, which killed many local industries in the post-1977 era, challenge the impact of globalisation and stamp its class as Sri Lanka's premier food company with a product range of 34 items that few others can match.

The formative years of Harischandra Mills were spent in the milling of rice, kurakkan and other grains. By 1952, the business had expanded into various fields including the milling of oil.

"I started work as a mechanic at this factory when it opened in 1943," says Albert, recalling the days he worked at the home of founder Harischandra.

"I worked in the Mahattaya's bungalow and he had a lot of confidence in me. He used to give me the keys of the Broadway Theatre and ask me to open it in the morning, when he was manager of that cinema." Albert's two sons work at Harischandra's, while another son and a daughter are in the police force.

The company is a market leader in the coffee and noodles trade and in its wide range of flours - rice, ulundu and kurakkan. Its edible oils and instant foods have become an instant success. The company also maintains a significant presence in the laundry and toilet soap markets.

It has an up-to-date laboratory and research centre in the factory, often used by undergraduates to advance their knowledge. The centre is in the process of testing herbal teas, flavoured noodles and low-calorie stringhoppers, pittu and rotti for diabetics.

The idea to launch a range of low-calorie foods came from a consumer, who suggested three years ago that the company provide food suitable for diabetic patients like him.

"We are extremely conscious of consumer needs and take special care about the quality of our products," says S.B. Navaratne, the Quality Assurance Manager. His team also gets help from the Medical Research Institute and the Ceylon Institute of Scientific and Industrial Research, which recently underwent a name-change. The company does not use chemicals in its food products. It is particularly strict on the expiry dates which range from three months to one year. On rows of shelves in the research laboratory lie the range of Harischandra products where constant checks are carried out on expiry dates and shelf-life. The expiry date on the label is often two or three months before the shelf-life of the product runs out. This is a safety precaution by the company to ensure quality.

The quality unit has stringent checks on incoming products.

Raw materials are thoroughly screened for moisture content and impurities. Even after that tests are done on the production line and goods are cleared for sale only after a final inspection.

Navaratne says coffee is the most difficult product in terms of quality control and care. "If it gets a bit over-roasted then we have a problem," he said.

However, two years ago Harischandra's invested in an automatic coffee roaster from Italy to maintain the required temperatures. Its coffee enjoys a market share of 60 percent-plus in Sri Lanka, while noodles have 80 percent or more, company officials say.

With growing demand always outstripping production, officials say the company plans to invest in more machinery and equipment. The noodles' section works on a 24-hour shift while the coffee and soap units work on a minimum 15/16- hour shift.

Harischandra's has brought in a consultant to help it achieve the ISO 9002 standards especially for its range of soaps.

Taking me through the various production units in the factory, Product Development Manager Munasinghe says that the oil section has little work these days due to a shortage of copra which doesn't seem to end. Plans are afoot to extend the noodles' unit into the adjoining oil milling section and raise capacity. About 450,000 packets of noodles are produced a month, compared to 200,000 packets a month, a few years ago.

Senaka Samarasinghe, a Colombo-based director of Harischandra Mills Ltd said the company was planning to invest in new technology in noodles and other production lines after its improvement in coffee technology saw production and profitability rise in the 1997/1998 financial year.

The company, listed at the Colombo Stock Exchange, reported a 16 percent rise in turnover to 405 million rupees and a rise in after-tax profits of 19.2 million for the year ending March 31, 1998. Profits, yet unaudited, for the 1998/99 year are also seen as favourable. Samarasinghe said the company was planning to enhance its production lines and range of instant foods in the next few years while consolidating its position as market leaders in noodles, coffee and other items.

Harischandra started a bakery, about 20 years ago, to churn out bread, rolls and other pastries mainly for residents in Matara. Its cattle farm at Tudawe, a few Kilometres from the factory, makes curd for local residents, reflecting its constant desire to serve a community that helped the company grow from its roots.

It's cold brew for tea small -timers

Most days, Seelawathi Liyanage and her middle-aged husband sit outside their kitchen with other neighbours and discuss the hard times ahead rather than tend to their small tea plot in Sri Lanka's southern region."Tea prices are down and times are hard for us," she says, breaking off a discussion with others on politics and the future of tea smallholders or owners of small tea lands.

Globalization - the international buzzword - is hurting smallholders who account for the bulk of Sri Lanka's thriving tea industry. They are facing an uncertain future due to falling tea prices in international markets in the past few months, in addition to a global crisis.

Sri Lanka is the world's biggest tea exporter and annually produces over 250 million kgs. Prices have been knocked down by a financial crisis in Russia, one of Colombo's main buyers, since late 1998 with the situation being exacerbated by a global economic downturn and lower demand from Gulf states.Small growers like Liyanage, from the village of Ihala Malidu, about 40 km from Galle, have been worst affected than the giant plantation companies.

To add to their miseries, they are being fleeced by middlemen traders. Small growers now get about 14 or 15 rupees per kg of leaf compared to rates ranging from 22 to 27 rupees per kg at the same time in the middle of last year. Rising fertilizer costs and an increasing wage bill have added to the headaches."Even if prices fall, we have to pay the same wages to workers or even more and apply high-cost fertilizer," said H. D. Francis, another small grower from Ihala Malidu. He said many growers were cutting costs by using less fertilizer and trying to pluck the tea leaf themselves. Plucking of the tea-leaf is a specialised job and growers normally hire women from the village who are experts in this field.

In Colombo, government officials involved in the tea industry say that prices have been improving this month since February and March when they were down. "Low grown tea at last week's auction fetched an average of 129 rupees per kg compared to 100 rupees in February and March. So things are improving," asserts Rohana Illangaratne, chairman of the state-owned Tea Small Holdings Development Authority (TSHDA).Under a government-arranged formula, 4.5 kgs of tea leaves is equivalent to one kg of processed tea which is sold at the auction.

TSHDA is responsible for the development of thousands of smallgrowers who own around half an acre of land on average. Low grown teas, grown by smallholders mostly in southern Sri Lanka, account for 62 percent of national production and 74 percent of the country's annual tea income.

Teas are also grown in high and mid-country zones, mainly by plantation companies owned by large Colombo firms, some with foreign collaboration, which have sufficient financial resources unlike their southern compatriots to weather declining market trends.

Low grown teas are a favorite of consumers, particularly in Gulf countries, and fetch high prices.A tussle between the TSHDA and owners of private factories, which grinds the leaf into various super grades of made tea, over financial help to tide over mounting losses has complicated matters for small growers.

Private factories have appealed to the government to release cheaper funds to them to offset the losses but though the government promised to release about 700 million rupees to this sector, the monies are yet to be disbursed."I would have lost at least three million rupees in the past two or three months," grumbles Herman Gunaratne, owner of the 100-acre Hadunagoda estate and tea factory, which lies about 20 km from Galle.

Gunaratne, also spokesman for the Private Tea Factory Owners Association, said he could not understand why the government was delaying in releasing the funds to factories. "This is a crisis for the entire industry. I have stopped purchasing leaf from smallgrowers and I am only processing leaf from my own plantations because I can't afford to pay the growers," he said. The minimum price scheme by which small growers are paid is a complicated one, though it has been in existence for about 40 years. Growers are entitled to 68 percent of the price per kg obtained at the Colombo auction while the factory gets the balance 32 percent.

Factory owners say this is complicated since it takes anything between six to eight weeks - from the day it is plucked off the fields - before the tea is sold at the auction. According to the formula, growers are entitled to the auction price that prevailed at the time they supplied the leaf to the factory, not when the teas are sold at the auction some weeks later. All teas are sold at the Colombo auction, the biggest trading center in the world.

"In a rising market we don't lose. But in a declining market, we lose a lot. For example, if today's average price is say 100 rupees per kg and last month's average was 120 rupees, we have to pay the grower at the rate of last month's average," said Gunaratne, whose association has appealed to authorities to scrap the formula system and resort to free market practices.

TSHDA's Ilangaratne rejects these arguments saying that the factories made massive profits in the past in a rising market but were now not prepared to take a few losses. "When prices were high they benefited and did not complain," he said, adding that the state was unlikely to resort to the free market as smallgrowers would then be at the mercy of the factories. "We need to build their bargaining skills and provide the structures for them to be able to trade and get reasonable prices before freeing the market," he said. Tea prices have seen a phenomenal rise since the 1980s. Last year's low -grown tea prices fetched over 140 rupees per kg compared to 62 rupees per kg in 1994. Government officials concede however that tea input costs, like fertilizer and wages, have also gone up.

While the battle goes on between the government and the factories and the tea crisis worsens as far as the smallgrower is concerned, the middlemen benefit. Growers sell their tea to middlemen, or collectors, who in turn supply the factories.

Industry officials say that often these collectors quote a lower factory price to their village clients but sell it at a higher rate to factories. "Growers are generally ignorant or are not aware of price trends and depend on these collectors to provide them information," one official said. Even if they are aware, growers are reluctant to confront collectors who run the small grocery stores in the village and offer goods on credit to growers in return for their tea.

"We are often indebted to the local collector because all our food items and inputs for tea are purchased from him," said Liyanage, who said their debt to the collector was mounting. She said their problems have been aggravated in recent times after factories became more selective about the quality of the leaf they bought, throwing away a lot of leaf which was normally purchased earlier.

Seelawathi's husband, Somadasa Vithanage points to a nearby hill and says that the owner had uprooted rubber trees and planted tea as rubber prices had fallen drastically about 10 years ago. "Many of us did the same. So where do we go from here if prices fall further? Do we plant some other crop?" he asked, seated on a rickety old chair. His humble home with sparse furniture, like many other small growers, does not reflect the wealth reaped by Sri Lanka's tea industry in recent years.

Several kilometres away, politicians from the ruling People's Alliance (PA) and the main opposition United National Party (UNP) - in small rallies and pocket meetings - swap promises of a better life for tea growers. With the southern provincial council elections just a few weeks away, local issues like the tea crisis appear to be taking pride of life apart from the usual and boring criticism of opposing candidates and their parties.

The PA promises new tea factories and better prices for growers. The UNP blames the government for the plight of the industry and says it would do better under a provincial administration. Residents are not impressed at all. "These fellows they come, promise and go away, never to be sighted again," said an old man, standing outside his withered half-an-acre of tea land in a Galle village.

- FS -

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