Sri Lanka Newspapers - 15/01/2012

A- and P2 ratings for Janashakthi

Janashakthi Insurance PLC continues to drive forward with consistent growth as revealed by RAM Ratings Lanka.

The Company rated Janashakthi's long - and short-term claims-paying-ability ratings at A- and P2 respectively, a testament to Janashakthi's consistent service delivery and tenacity within the competitive market.

Janashakthi has the highest paid-up capital among quoted insurance companies and has shown high profitability and growth amidst tough market conditions. "We seek to continuously improve our performance and consistently deliver on our ethos of building consumer trust" said Janashakthi Managing Director, Prakash Schaffter.

"The ratings by RAM is a reflection of our performance and strength and an endorsement of all the hard work we put into reach where we are today in this highly competitive industry which has recently seen the entry of many new players".

http://www.sundayobserver.lk/2012/01/15/fin06.asp

Digital movie camera to revolutionise film industry
by Jayampathy JAYASINGHE

Digital technology will revolutionise the local film industry in the near future. Mrs Sumithra Peries, director of the new film titled Vaishnavee said that she and her husband Lester James Peris had the idea of producing Vaishnavee for quite some time.

She said "being in the film industry for some time my husband and I are venturing out with the new technology."

Vaisnawee the new film based on folklore will be shot with the latest digital camera called the Red Epic, she said.

Chairman, Mano Nanayakkara of Asia Digital Entertainment Company said he agreed to produce Vaishnavee with Dr. Lester James Peries using digital technology.

http://www.sundayobserver.lk/2012/01/15/fin07.asp

Range Rover sponsors top authors for GLF
Contemporary British motoring élan is to be showcased in Galle later this month at the Galle Literary Festival (GLF).

Two British writers will be among the eminent authors participating in the 2012 edition of the festival courtesy Range Rover, a first-time Gold sponsor of this annual event.

Novelist Joanna Trollope OBE and playwright Tom Stoppard are sponsored by Frontier Automotive (Pvt) Ltd, sole agent in Sri Lanka for Land Rover and Range Rover, in celebration of the arrival in the country of the Range Rover Evoque, Land Rover's SUV.

http://www.sundayobserver.lk/2012/01/15/fin08.asp

ERI gets Diamond Eye Award

Chairman ERI – Lalith Heengama receives the award from President OMAC – France, Charbel S. Tabet. Director ERI, Gamini Sarath Munasinghe and OMAC officials are also present.

Environmental Resources Investment PLC, Sri Lanka was presented with the prestigious international Diamond Eye Award for Quality and Excellence by Otherways Management Association Club-France OMAC at an awards ceremony held in Geneva, Switzerland recently.

ERI is the first Sri Lankan business entity to be presented with the Diamond Eye award and was also awarded the certificate for T.Q.M. (Total Quality Management) at the ceremony. This international award for quality and excellence was initiated in Europe to recognise and reward companies from all parts of the world which have proved themselves in the field of quality and excellence.

http://www.sundayobserver.lk/2012/01/15/fin09.asp

ICTA plays major role in Visa Online System
The ICT Agency of Sri Lanka (ICTA) played a major role in 'Visa Online' by linking the Lanka Gate Internet Payment Gateway (IPG) for making online payments. Also known as Electronic Travel Authorisation (ETA), Visa Online introduced in its trial version on October 1 , 2011 became a regular procedure with the dawn of the New Year.

The Immigration and Emigration Department had introduced the trial version of the Electronic Travel Authorisation (ETA) facility. The ETA facility became fully operational from January1 2012.

According to the Immigration and Emigration Department, foreign nationals, who intend to visit Sri Lanka for a short stay up to six months, must obtain ETA, prior to their arrival from January1 2012. The ETA is issued through the on-line system. No passport copies, documents or photographs are required.

There is no requirement to endorse the ETA in the passport. Nationals of the Maldives and Singapore who visit Sri Lanka for short visits up to 30 days are exempted from ETA as reciprocities.

Foreign nationals who intend to visit Sri Lanka for official or diplomatic purposes should forward their applications to the Immigration and Emigration Department through relevant Sri Lanka Government Ministries and Agencies or Sri Lanka Overseas Missions. Gratis (Free of Charge) basis is applicable only for diplomatic and official passport holders.

The Gratis ETA is granted for normal passport holders, if arrangements have been made between the Government of Sri Lanka and the respective countries.

For personal visits, Diplomatic and Official passport holders should follow the normal ETA application procedure, Immigration and Emigration Department sources said.

The online visa system for tourists arriving into the country was introduced instead of the hitherto implemented on arrival visa. Accordingly, all visitors to Sri Lanka including transit passengers will have to apply for travel authorisation online prior to their visit to the country.

This new system has replaced the previously implemented 'on arrival visa' at the ports of entry while a fee of $ 10 and 20 would be levied from travellers from SAARC countries and other passport holders.

The Electronic Travel Authorisation has been introduced to grant prior approval for visa online for foreign nationals from 78 countries.

Controller of Immigration and Emigration W.A.C. Perera said foreign nationals visiting the country for tourism, medical treatments, sports, cultural shows, business conferences and discussions, training programs and seminars can apply for the Electronic Travel Authorization via www.eta.gov.lk.

The ICT Agency of Sri Lanka CEO Reshan Devapura said the newly introduced Online Visa System was a major breakthrough ICTA had made in 2009 by introducing the eRevenue Licence Project to the Lanka Gate IPG:" the precursor for ETA 2012 is said to be a breakthrough ICTA had made in 2009.

http://www.sundayobserver.lk/2012/01/15/fin10.asp

China's export growth slows, sluggish demand from Europe
Growth in China's exports slowed in December because of sluggish demand from the US and Europe. Exports rose by 13.4 percent from a year earlier, the customs agency said, down from 13.8 percent in November.

Import growth also slowed, rising 11.8 percent compared with the previous year, much lower than the 22.1 percent growth in November.

The latest figures could fuel worries that the world's second largest economy is losing steam.

China's Vice Commerce Minister Zhong Shan said that the country's foreign trade environment could be bleak in 2012, as demand declines.

Analysts echoed that sentiment, adding that the figures could cast a shadow on the economy.

"Our forecast for gross domestic product is already the lowest in the market.

This trade data basically confirms our view that the first quarter is going to be very tough," said Zhang Zhiwei, chief China economist at Nomura in Hong Kong.

China's rapid economic expansion slowed to an annualised 9.1 percent in the three months to the end of September.

That is down from 9.6 percent in the previous three months and slower than the double-digit expansion of 2010.

China's trade surplus widened to $16.5b (£10.7b) in December compared with the $14.5b in the previous month.

However, the trade surplus for 2011 as a whole narrowed to $155.1b, compared with $183b in 2010, said customs officials.

This means the trade surplus, which is politically sensitive and has caused tension between China and the US, shrank for the third straight year. The US, and China's other trade partners, have complained that Beijing has restricted access to its markets at a time when countries are trying to revive growth and create jobs. BBC

http://www.sundayobserver.lk/2012/01/15/fin11.asp

DFCC Vardhana Bank promotes financial inclusion
Looking back at 2011, DFCC Vardhana Bank (DVB), the everyday banking unit of DFCC Bank had a productive year in terms of profitability, asset growth, with a number of milestones being achieved, awards won and expansion in the bank's products and services.

The entirety of the bank's activities focused on one goal: financial inclusion, which is evident from the wide reach of its branch network, the add-on products and services as well as CSR activities. 2011 saw DVB go into a Rs.1 b subordinated debenture which was rated at 'A+(lka)' by Fitch Ratings.

The rating agency also simultaneously affirmed DVB's National Long-term rating at 'AA-(lka)' with a "Stable Outlook".

The five-year debt issue will have both fixed and floating coupon rates and the Capital will be re-paid on maturity.

The bank will utilise the debenture to finance the loan growth and also help to strengthen the bank's tier 2 capital.

In May 2011, DFCC Bank upped its stake in DVB to 99.07 percent from the previous level of 95.6 percent after receiving the green light from the Central Bank to fully acquire the unlisted subsidiary.

Subsequently, the Bank became a Public Limited Company (PLC) from November 28 2011, with the Listing of its Debentures on the Colombo Stock Exchange.

http://www.sundayobserver.lk/2012/01/15/fin12.asp

SLT Broadband enhances WWW with faster speed
Enhancing internet usage across the country whilst expanding Sri Lanka's broadband capacity, SLT Broadband will speed internet speeds up to four times the speed taking speeds up to as much as 16 Mbps.

SLT Broadband has simultaneously launched four new high-speed broadband value packages and has enhanced the speeds and volumes of existing packages and improve Internet experience for SLT Broadband customers.

This has given customers a better selection of broadband packages for them to choose the ideal package that suit their specific need and budget.

As the national telecommunications service provider, SLT can boost the country's potential by enhancing the Internet speeds up to four times and launching four new broadband packages.

SLT has a close relationship with customers and sensitivity to the broadband needs and have inspired them to enhance the broadband capacity significantly, thereby providing unmatched high speeds.

http://www.sundayobserver.lk/2012/01/15/fin13.asp

Mercantile Investments wins gold for 12th consecutive year
Mercantile Investments PLC won the gold award in the "Finance Companies Sector" for the 12th consecutive year at the Annual report award ceremony held in December 2011, organised by the Institute of Chartered Accountants of Sri Lanka.

Mercantile Investments PLC secured first place competing with a number of other finance companies in the sector, a spokesman for the company said.

http://www.sundayobserver.lk/2012/01/15/fin14.asp

Seylan Bank 'airdrop' and door-to-door promo
Seylan Bank recently redefined the concept of savings, in an initiative hitherto not seen in Sri Lanka's banking and financial services industry, by literally 'dropping' Rs. 1 m from the skies supported by a door-to-door campaign.

On October 22 helicopters hovered over different parts of Sri Lanka and dropped thousands of coupons with special serial numbers and individualised barcodes to an eager public. On the same day, over 3,000 staffers from Seylan Bank's 131 branches all over Sri Lanka embarked on a door-to-door campaign distributing similar coupons

http://www.sundayobserver.lk/2012/01/15/fin15.asp

Hameedia looks to 2012 with zeal
After successfully completing an event-filled 2011, Sri Lanka's leading mens' wear specialist, Hameedia has embarked on a journey to further strengthen its position as The total fashion solutions provider for all Sri Lankan males and significantly expand its reach across the country and region with an unparalleled product offering.

Led by the Deputy Managing Director, Hussain Sadique and the top management, Hameedia staff started work for the New Year following tradition with multi-religious observances at the head office at Borupana, Ratmalana.

Taking a bottom-up approach the management has revised the Company's 'Vision and Mission', and established its corporate values. These were unveiled on the first day of work.

http://www.sundayobserver.lk/2012/01/15/fin16.asp

Two shops selling pirated Atlas Books sealed
Pettah police raided, two wholesale shops selling Atlas pirated books, abusing the Atlas trademark and brand name, the leading stationery manufacturer said. The shops were sealed after a warrant was issued by the Colombo Magistrates Court.

Atlas, recently obtained the exclusive licence to publish images of several popular children's cartoon characters and super heroes on its range of stationery products including images of Marvel Superheroes, Wolverine, Thor, Iron Man the First Avenger and Spiderman. The company also obtained rights for the Ben 10 range of images, including Ben 10, Ben 10 Alien Force and Ben 10 Ultimate, as well as children's cartoon, The Power puff Girls.

http://www.sundayobserver.lk/2012/01/15/fin17.asp

Munchee wins global brand leadership award
Munchee has set a new industry standard by winning top global honours at the World Brand Congress held in Mumbai, India. It is a reward for brands forecast on innovation uncompromising quality and understanding of consumers.

This is the eighteenth award that Munchee received in 2011.

Munchee has a market share of 60 percent and its continuous thrust for introducing innovative products has contributed towards this achievement.

Munchee has been exporting to over 45 countries and is in the process of opening a dedicated manufacturing facility at the Seethawaka Industrial Processing Zone to cater to its ever increasing demand in the export market.

http://www.sundayobserver.lk/2012/01/15/fin18.asp

CIMA Board inducted
CIMA (The Chartered Institute of Management Accountants) Sri Lanka Division inducted its Board for 2012 at the Cinnamon Grand recently. Chief Executive Officer of Union Assurance PLC [UA] Dirk Pereira was elected Chairman while Partner - Head of Advisory Services of KPMG Ford Rhodes Thornton and Co Reyaz Mihular and Managing Director/CEO, Hatton National Bank PLC

Rajendra Theagarajah were appointed as Deputy and Vice Chairman. Over 300 CIMA members attended the event.

CIMA appointed its local governance board in 2010 to provide strategic oversight on the delivery of CIMA's corporate strategy to grow and service students and members in Sri Lanka.

Dirk Pereira is a fellow member of the Chartered Institute of Management Accountants UK. He has over 15 years experience in the profession and is a member of the Institute of Chartered Accountants of Sri Lanka and holds an MBA from the University of Sri Jayewardenepura.

http://www.sundayobserver.lk/2012/01/15/fin19.asp

Cargills - over 150 years in business and still going strong
by Lalin FERNANDOPULLE

Cargills is one of the few corporates that has stood the test of time, enjoying success over a century of operation, Cargills (Ceylon) PLC Deputy Chairman, Ranjit Page told the Sunday Observer, which has commenced publishing articles on century- old companies in Sri Lanka .


Ranjit Page

He said, "Our founders were entrepreneurs who believed in the enormous potential in Sri Lanka. Today the enterprise they launched has taken a new direction and would continue to expand and diversify the business. Their philosophy of creating value for Sri Lanka remains our legacy handed down the generation of leadership as the true benchmark of business success."

"That has been the success of Cargills, our ability to change and innovate with time and consumer needs yet hold on to our values of transparency, accountability and good governance", Page said.

History
In 1844, William Miller and David Sime Cargill commenced a general warehouse, import and wholesale business in Colombo, Fort. The establishment was named the 'House of Cargills'. A successful bid by Sir Chittampalam A. Gardiner saw the House of Cargills being incorporated as a Public Limited Liability Company on March 1,1946.

In 1981 Ceylon Theatres acquired the controlling interest of the company and Albert A. Page was appointed Managing Director. Page went on to become the Chairman of Cargills on November 26 1982. Under the new management, Cargills explored the potential of innovating its trading legacy. As a result, in 1983 Cargills established the first supermarket chain in Sri Lanka with the opening of its first outlet at Staple Street.

Cargills ventured into the production of processed meats in 1993 when the company invested in its first manufacturing facility the Cargills Quality Foods in Mattakkuliya.

In 1996, Cargills acquired the franchise license of KFC and innovated on its secret recipe to deliver products that suited the local palate.


Cargills building in Fort

Cargills began sourcing fruits and vegetables directly from farmers in 1999 when it established its first collection centre in Hanguranketha.

In 2002 it invested on a dairy processing plant and whereby expanded its outgrower network to include dairy farmers.

Cargills Magic ice cream was the outcome of this endeavour.

In the same year Cargills diversified into agri-processing with Cargills, Kist which created further market opportunities for farmers.

In 2008 Cargills acquired Millers Limited, consolidating its marketing and distribution operation.

Expansion
In 2010 Cargills expanded its interest in the dairy sector with the acquisition of Kotmale Holdings PLC and immediately after, bought the abandoned biscuits manufacturing plant owned by Diana Manufactures (Pvt) Ltd. In 2011 Cargills, through the subsidiary Millers Brewery Limited acquired the famous McCallum Brewery renowned for 'Three Coins' beer.

According to the book 'Real Ceylon' by C. Brooke Elliot, when Fredrick North, the first Governor of Ceylon from 1798-1805, first arrived in Ceylon he had resided at a building in a block of old Dutch building within Colombo Fort.

The building occupied by the Governor was at the corner of the block which later became the Cargills Building in 1844. The curious old statue of 'Goddess Minerva' the Goddess of War which stood on the gable of the old Governor's' house still stands in top condition on the ground floor of the Cargills building in Fort.

The original Dutch building occupied by Governor North which stood at the location where the Cargills Fort property still stands today.

http://www.sundayobserver.lk/2012/01/15/fin20.asp

What should be the next move in rubber plantations?
Continued from last week
by Dr. Lakshman RODRIGO

Reduction in overall bark consumption is the second advantage providing several benefits. Obviously, this could be a practical solution to higher rate of bark consumption that prevails in most of plantations due to unskilled harvesters. The productive period of rubber fields could be extended keeping the rubber tree for long. In a particular estate, this increases the proportion of mature extent providing more revenue.


Dr. Lakshman Rodrigo

Also, the application of LIH on virgin bark allows more time for bark regeneration resulting in higher yields in renewed bark harvesting. The delay in replanting brings numerous environmental benefits such as reduced soil erosion, more organic matter to soil with continuous leaf fall and additional CO2 sequestered combating the greenhouse effect.

Another benefit of LIH is the improved wages for harvesters. With the use of yield stimulants, latex yield per harvest increases in low frequency harvesting resulting in enhanced daily intake per harvester. Even in the reduction of tapping cut length, higher intake per harvester can be obtained with the increase in the tapping block/task size.

In RPCs, latex harvesters are paid an incentive for additional latex harvested above the norm. Therefore with increased daily intake in LIH, there will be a substantial increase in the income of latex harvesters. Whilst minimising the usage of unskilled latex harvesters, such improved wage structure will undoubtedly help to retain good harvesters in this profession or motivate unskilled workers to become skilled. In the rubber industry, this is another serious issue that can be addressed by LIH.

Monetory value
Monetory value of any incentive paid to the worker is always less than the value of additional latex brought in and of course, less than the proportional payment to latex under the norm. Obviously, there is a cost for the stimulants and its application. All such added costs are less than the value of labour saving in LIH. Therefore, there is always a reduction in COP hence greater profit margin could be experienced from the application of LIH.

After intensive research, the Rubber Research Institute of Sri Lanka (RRISL) has recommended two LIH systems for base panel tapping. These systems are suitable for any clone recommended to tap with the traditional S/2 d2 system and also for any stage of harvesting. With no reduction in tapping cut length, harvesting systems having two tapping frequencies are recommended, i.e. either tapping once in three (S/2 d/3) or four (S/2 d/4) days on the base panels.

In the S/2 d/3, 2.5 percent of ethephon is applied 4-5 times per year whilst 3.3 percent ethephon is to be applied monthly in the S/2 d/4 tapping. Commercial scale trials show that overall yields given by these systems [in terms of average yield produced within a year by a tree (YPT) or on hectare basis (YPH)] are comparable to that given by the traditional S/2 d2 system. Increased profitability, reduction in COP, increased earning of latex harvesters (up to about 20% in each case) and reduced bark usage (up to about 45 percent) are also evident.

This article serves only as an eye-opener to the LIH systems and anyone interested, could obtain the full application protocols from RRISL.

The above recommended systems, there is a potential to tap the base panels of the rubber trees with a quarter spiral cut once in three days (S/4 d3). Ethephon has to be applied twice a month with 2.5 percent concentration. While assuring the requisite yield level, this system too provides all other benefits of LIH.

In particular, bark usage is reduced by about 60 percent. Since commercial scale trials are in progress with this system, innovative estate managers are also invited to participate in it. RRISL is prepared to provide the technical knowhow and guidance for monitoring.

RRISL is working towards weekly harvesting systems which allow rubber smallholders with off-farm involvements to tap their rubber fields during the weekends.

Results are promising but still premature for large scale commercial applications. In addition to the application of LIH on base panels, such systems could be used for effective utilisation of high panels. Being with the virgin bark, high panels can provide substantial yield for a longer duration; however in most instances, its potential is not really explored by the old tradition of slaughter/intensified tapping.

Therefore, after completion of base panel harvesting for about 18 years, instead of intensified tapping, RRISL has recommended Control Upward Tapping (CUT) with a shorter cut and reduced frequency (i.e. once in three days) for efficient utilisation of high virgin panels. In CUT, two options are available - to wit- stimulation with either ethephon (CUT-ET) or ethylene gas (CUT-EG). As mentioned before, the former is quite easy and not costly.

With monthly application of 5 percent ethephon, quarter spiral cut is made on high panels in CUT-ET (S/4 d3). Special jackets are to be fixed on the bark in the CUT-EG for periodical injection of ethylene gas.

This requires only 1/8 of the circumference of the tree for tapping once in three days (S/8 d3) and hence the CUT-EG leads further saving of the bark. Also, yield response to stimulation is quite fast. Despite these advantages, field application of the CUT-EG demands high level of attention particularly for the repairs of leaking jackets and calibration of the gas cylinder. There are few commercially available CUT-EG systems in the country (e.g. RRIMFLOW, G-Flex).

Those systems are rather expensive; however at the present price of latex, it is still appears to be cost effective.

Gassing frequency
Despite the different manufacturers' recommendations developed for other countries, the gassing frequency of 30 days was found to be suitable for Sri Lankan clones. Anyhow, a gassing frequency of 15 days could be applied during the last two years in tapping (i.e. two years before uprooting). In general, yields given by LIH systems are slightly less in drier regions probably due to the limitation in soil moisture. Rubber latex comprises about 50-70 percent water. On each tapping day, a greater volume of latex is to be extracted in LIH and plants may have some difficulty to cope up with this in drier areas.

In wet regions, application of rainguards is very useful to make LIH successful.

When compared with the traditional harvesting systems, any loss of tapping days in above mentioned LIH systems has a greater impact on the overall yield. Other basic recommendations in latex harvesting such as panel marking for proper control in bark consumption and tapping angle and correct placement of tapping utensils, are essential for the effective use of LIH. More importantly, only the correct dose of stimulants must be used with the relevant harvesting system.

Way forward
Only a few companies were able to enjoy the benefits of LIH. Since there is a threat on overuse of stimulants at field level, some companies are reluctant to move towards low intensity systems.

Also, it appears that some do not have enough confidence to undertake the adoption of new technologies. All above reflect the need of publicity programs and also field level workshops on LIH. Any additional cost for such programs is affordable at this stage with the current price for rubber latex.

Therefore, this is the correct time to move in such a direction. To begin with, LIH could be adopted only in a division of the estate as a pilot project. Else, RPCs can set up trials on LIH by selecting few innovative estate managers. Other rubber growing countries such as India and Malaysia have made a move. Of course, what is required is endurance to meet the challenge.

However, we cannot be crazy with stimulants. RRISL is always prepared to provide for those in need.

The writer is the Head of the Department of Biochemistry and Physiology, Rubber Research Institute of Sri Lanka.

http://www.sundayobserver.lk/2012/01/15/fin25.asp

EDEX Expo - single largest platform for educational opportunities
by P. Krishnaswamy

The EDEX Expo 2012 opens from January 20-22 at the BMICH and on January 27-28 at the Kandy City Centre.

This is the largest education and career exhibition being held in Sri Lanka more than 250 educational institutions from 20 countries will participate, offering higher education to aspiring students in many disciplines.

It is being held for the 9th successive year with the endorsement of the Presidential Secretariat, the Ministries of Education, Higher Education Youth Affairs and Labour and has benefited thousands of students and job seekers in previous years.

Envisioned to "Empower Sri Lanka youth to be globally competitive", EDEX was launched in 2004 by the Royal College Union to offer best choices, options and opportunities in careers to youth of Sri Lanka on a single platform, guiding them towards gainful employment.

Participants at the exhibition represent reputed universities from USA, UK, Russia, the Middle East, Far East, South Asia, Australia and New Zealand that are ranked high by many global standards. A large number of international and local professional institutes of the highest calibre are participating in the exhibition. There will also be many local vocational and technical training institutes from both government and private sectors, offering many options to gain advanced knowledge and enhanced skills, it was stated at the press briefing.

EDEX is the single largest platform that offers many choices, options and opportunities for aspiring youth from many social strata, irrespective of their level of education.

It is visited by senior students, eager parents, school leavers, unemployed, underemployed and those seeking higher educational, technical or vocational training opportunities or professional qualifications, it was stated.

Services of many career guidance counsellors will also be available at both Colombo and Kandy events to assist and guide deserving youth and caring parents in the selection of most fulfilling and well rewarding career paths.

There will also be many informative career guidance seminars that will be conducted parallely with free onsite psychometric testing service on offer.

EDEX in Colombo and Kandy offer opportunities for spot admissions at substantially reduced rates to various academic, vocational, technical and professional courses and post graduate and MBA programs offered by local and foreign institutions, with additional opportunities for deserving students to win full/partial scholarships.

Additionally, there will also be ancillary service such as Banks providing loans, concessionary courier services, substantially discounted air tickets offered exclusively by our national carrier SriLanka Airlines.

Kamal Abeysinghe, Chairman, EDEX 2012 spoke at the press briefing and video presentations of promotional trailers and TV Commercials were displayed. Marketing Director, Singer Sri Lanka PLC Nasser Majeed, MD/CEO, ESOFT Computer Studies (Pvt) Ltd.Dr.Dayan Rajapaksa, CEO/Executive Director, ANC Education Dr.Punarjeeva Karunanayake and Chief Operating Officer, Western College for Management & Technology Chintaka Wijayaratne who are platinum sponsors of the event also spoke.

President of the Institute of Chartered Accountants of Sri Lanka, Sujeeva Rajapaksa, Senior GM, Corporate Planning & Marketing, Mobitel (Pvt) Ltd. Janaka Jayalath and Internal Auditor, CINEC Capt.G.J. Amarasooriya who are the Gold Sponsors also spoke.
http://www.sundayobserver.lk/2012/01/15/fin26.asp

Dialog Axiata and HelpAge Sri Lanka use Star Points to help elderly
Star points, Sri Lanka's largest loyalty rewards network has linked with HelpAge Sri Lanka a charity dedicated to the elderly enabling more than seven million Dialog customers to donate their star points earned as loyalty rewards for the well-being of the senior citizens of the country.

Dialog Axiata and HelpAge Sri Lanka announced the partnership at a press conference with the participation of Dialog Axiata Chief Executive Officer, Dr. Hans Wijesuriya and HelpAge Sri Lanka and HelpAge International Chairman, Tilal de Zoysa and other officials.

The launch of the partnership enables Dialog customers to donate Star Points towards providing medical and eye care facilities for needy segments of Sri Lanka's elderly population.

Dr. Hans Wijesuriya said that Dialog customers can donate the desired number of star points for HelpAge by dialing #141#.

"There was an unprecedented response from customers in the first three days as Rs. 1 million was collected from star points donated to HelpAge", Dr. Wijesuriya said.

Dialog Axiata's Star Points is a fully mobile enabled rewards network which enables Dialog's 7 million customers to earn and spend Star Points with over 400 partner merchants and 20,000 outlets islandwide.

All funds collected from the Dialog Star Points promotion will be channelled through the HelpAge Mobile Medical Unit.

According to HelpAge Sri Lanka, each mobile medical clinic cost approximately Rs.70,000 per day and has the capacity to screen 150 elders free of charge.

Its services includes medical screening and eye screening services, which also facilitate to detect elders who are suffering from cataract.

RW
http://www.sundayobserver.lk/2012/01/15/fin27.asp

Richard Pieris forays into insurance sector
by Rohana JAYALAL

Richard Pieris and Company PLC added another product to Sri Lanka's insurance market under the brand name 'Arpico'. with an investment of Rs. 700 million.


Group Chairman, Dr. Sena Yaddehige (second from left), Group Director Operations Ravi Liyanage and other officials at the media briefing. Pic: Chinthaka Kumarasingha

'Insurance for the living' the new venture is part of the Group's diversification plan will extend financial services offered by the group from the current stock broking and financial asset management.

The service portfolio is made up of an education plan, hospitalisation plan, income replacement plan, retirement plan, health plan, group assessment plan, critical illness plan, investment plan, loan protection plan and lifetime surgery plan.

Group Chairman, Dr. Sena Yaddehige said, "Even though we developed and controlled another insurance company for eight years, we wanted to venture into the insurance industry under our own name, our brand and logo.

It is in many ways a fresh start, we want to create a new market space and the insurance company will offer benefits which the customers can enjoy while living while continuing to provide for those who live.

The general perception is that there should be a death to reap the benefit of life insurance.

Here we create a new space for insurance for life. Group Director Operations Ravi Liyanage said, "Don't postpone life and here we present a chance to do just that. There has been a 30 percent premium growth in local life insurance. It is believed that less than 11 percent of the population is insured and only 27 percent of the workforce is insured. The scope for life insurance in the country is great. This venture would enable us to maximise shareholder value while contributing to the growth of the country.

http://www.sundayobserver.lk/2012/01/15/fin30.asp

Eurocenter DDC is now 99X Technology
99X Technology is a company specialising in delivering high quality, high-end Software Product Engineering services to Independent Software Vendors (ISVs) in the global market place.

With offices in Colombo and Oslo, the company has a track record, of more than 10 years, in building and delivering over 100 Software Products worldwide.

With a strong focus on the art and science of software product engineering, 99X Technology caters to establish as well as startup ISVs.

The rebranding will in itself present 99X Technology as a 'Technology Company' focusing on Software Product Engineering.

The company conducted several internal and external promotions and teaser campaigns to coincide with the name change.

An online gaming challenge themed the '99 Challenge' was successfully carried out with nearly 50,000 gaming sessions being held to date.

The website www.99XTechnology.com was also launched at the official kick-off.

http://www.sundayobserver.lk/2012/01/15/fin31.asp

IKA Culinary Olympics in Germany
by Mohammed NAALIR

The 23rd IKA Culinary Olympics organised by the German Chefs' Association will be held in Germany in October this year.

The aim of the competition is to uplift culinary standards in Sri Lanka and improve the culinary standards of young and upcoming chefs, Team Manager of Culinary Olympics Gerard Mendis said. It is a costly event. Over Rs. 18 million is required to take part in the competition.

Addressing the media at Waters Edge, he said that a large number of world renowned chefs will take part in the event.

The CGL represents all chefs in the island and is looking at various fund-raising events and support from the industry.

Gerard said that the team was confident of winning this competition. We have enough experience in competing with world giants in the culinary industry.

The individual hotels will also have the opportunity of nominating chefs to be a part of the Sri Lankan delegation at their own expense.

The Sri Lanka national culinary team is led by team manager Chef Gerard Mendis, team leader Dimuthu Kumarasinghe from Heritance Ahungalla. Chef Ushantha Kulatunga from Jet Wing Light House, Chef Manjula Wickrama from Cinnamon Grand, Chef Chamika Perera from Hilton Colombo, Chef Kasun Premachandra from Heritance Ahungalla and Chef Sanjeewa Niroshan from Grand Hotel Nuwara-Eliya will take part in the exhibition.

http://www.sundayobserver.lk/2012/01/15/fin32.asp

Mannar Divineguma to revive regional industries
Over 8000 visitors are due to attend the Divineguma exhibition to be held in Mannar.

The show will focus on reviving industries in the region.

Industry and Commerce Ministry sources said that the exhibition would help families in the area to be self-sufficient and supply farm and livestock produce at micro level.

The exhibition will be held in Mannar from January 21-22. Officials, department heads and statutory institutional heads from the Ministry of Industry and Commerce, Youth Affairs Ministry, Ministry of Traditional Industries and Small Enterprises (with IDB), Ministry of Economic Development and Science and Technology Ministry participated in a preliminary discussion.

Ministry sources said that over 8,000 visitors from the area, including students are expected to view the exhibition.

Secretary, Ministry of Traditional Industries and Small Enterprises V. Sivagnanasothy said: "We expect to create an awareness among village level families in the area on running cottage industries and facilities which we offer for micro and medium scale cottage entrepreneurs.

The exhibition will showcase machinery and equipment and we will also highlight spot in the production process where the machinery comes into manufacturing."

The initial one million home gardens, livestock, poultry, fisheries and one million domestic economic units targeted under this program as proposed by the 2011 budget proposals, has now been increased to 2.5 million in the budget proposals 2012.

http://www.sundayobserver.lk/2012/01/15/fin35.asp

Chevron Lubricants Lanka- a decade in SL
Chevron Lubricants Lanka PLC, the pre-eminent marketeer of Caltex branded lubricants Havoline, Delo and Lanka, reached a decade in operations in Sri Lanka, which is a significant milestone for the Company.

"No employee or contractor of the company has stayed away from work due to a workplace injury during these 10 years.

For a petroleum-based manufacturing organisation, this is a significant milestone and is a reflection of the determination and commitment of our employees, and the world-class safety systems and processes in place to help employees achieve safety results. We are also setting a new performance standard for other companies operating in Sri Lanka", said Managing Director/CEO of Chevron Lubricants Lanka PLC, Kishu Gomes.

At Chevron, Operational Excellence (OE) is a critical driver for business success and is one of the key focus areas of the company's enterprise execution strategy.

Chevron defines OE as 'the systematic management of process safety, personal safety and health, environment, reliability and efficiency to achieve world-class performance.'

"It is the 'zero incidents' achievable mindset that helps us achieve standards in safety and operational excellence.

After all, the ultimate success of improved safety performance depends significantly on the preventive principles inculcated in the minds of every employee", he said.

http://www.sundayobserver.lk/2012/01/15/fin36.asp

Union Bank opens headoffice

Central Bank Governor Ajith Nivard Cabraal makes the first
transaction. Pic: Kavindra Perera

Union Bank opened its new state-of-the-art head office recently. Ajith Nivard Cabraal, Governor of the Central Bank opened the new premises in Colombo 3. The new head office combines of state-of-the-art technology, competitive financial solutions and superior service delivery under one roof.

As the preferred Bank for the Small and Medium Enterprises, Union Bank continues to add value in strengthening the sector. The new head office will also house the Bank's subsidiary companies including National Asset Management Limited, offering customers easy access to a wider portfolio of value added products and ser vices.

http://www.sundayobserver.lk/2012/01/15/fin37.asp

thanks paper boys, keep it up

Moving Towards Liquidity Crunch

Wednesday’s Treasury (T) Bill auction which initially had only Rs. 2,000 million worth of maturing T Bills of 91 day tenure available for reissue, however saw Central Bank of Sri Lanka (CBSL) allowing the market to oversubscribe to almost four times that amount, a sum of Rs. 7,879 million, at that auction.
But the danger in CBSL allowing the market to subscribe to such a large volume of such a short tenure is that its maturity coincides with the Avurudhu period, a period in which liquidity demand from the market is virtually at its peak.
And when such a large amount of maturing T Bills are up for re-issue during that peak season, it causes a liquidity crunch, tending for rates to rise. CBSL of course can reinject liquidity to the market by procuring T Bills and releasing rupee liquidity in lieu, thereby dampening pressure for a rate rise, but such an action may lead to inflationary pressure on the economy, a situation which may be brought under control by jacking up rates to attract excess liquidity away from the market, leading to a situation where one is back to square one.
A higher interest rate regime deters investments as it makes borrowings more expensive, thereby negating an avenue for job creation.
As it’s, the net value of CBSL’s T Bill holdings as at Tuesday had increased to Rs. 166,392.278 million compared to a figure of a mere Rs. 1,048 million a year ago.
Meanwhile weighted average yields (WAYs) of 91, 182 and 364 day maturities at last week’s T Bill primary auction remained unchanged for the second week running, which caught the market by surprise, as, it was only the previous day that the market saw rupee premiums in US dollar ($) forward bookings rising.
“If you look at the fundamentals there is something wrong,” a market source told this newspaper.

http://www.thesundayleader.lk/2012/01/15/moving-towards-liquidity-crunch/

Breaks Norm

Central Bank of Sri Lanka (CBSL) at Wednesday’s Treasury (T) Bill auction offered Rs. 12,000 million worth of maturing T bills to the market for reissue, over and above the usual Rs. 10,000 million weekly quantum.
This was due to a surplus of maturing Treasuries entering the market (for re-issue) last week.
The split too was peculiar, with the amount of three months (91 day) Treasuries offered being Rs. 2,000 million and six months (182 day) and one year (364 day), Rs. 5,000 million each respectively.
The reason why, relatively speaking a lesser amount of three months Treasuries were offered to the market being that its maturity coincides with Avurudhu, a season where there is liquidity demand by the market. So the lesser maturities (in value terms) up for reissue during that period, the less pressure it causes on liquidity also during that period, thereby making it easier for CBSL to police rates.
Usually, when a parcel of Rs. 10,000 million worth of maturing T Bills is offered to the market, the splits are generally:-91 and 182 days (Rs. 3,000 million each) and 364 days (Rs. 4,000 million).

http://www.thesundayleader.lk/2012/01/15/breaks-norm/

F&W Optimistic About Tea
■Ignores Iran Crisis

Average tea auction prices last month declined by Rs. 34.12 year on year (YoY) to Rs. 354.63 a kilo, Forbes and Walker (F&W) in a report said.
It attributed this to the political unrest in the Middle East (ME), Sri Lanka’s single biggest tea importer regionwise.
The decline would have had been sharper if not for the November 3% rupee devaluation, F&W said. However listing a host of other positives for the New Year for tea, the report seemingly overlooked an apparent negative, the possibility of escalating tensions in the ME on account of Iran’s nuclear programme, a country which the report said is Sri Lanka’s second biggest tea importer and its impact on this produce (see elsewhere on this article).
Howbeit, among the positives listed for tea for the new year by F&W in this report were: Generally low production in the first quarter of the year which would drive up prices, greater interest by some of Sri Lanka’s key export destinations showing some element of political stability following last year’s political unrest which disrupted the smooth flow of tea, the growth in tea consumption in India and China as a combination of its increasing population and rising per capita income levels which would result in exports declining from those countries due to internal consumption increasing, increase in popularity of black tea in China particularly among the younger age groups, improved market activity from most importing countries which is likely to emerge as the current price levels are significantly lower than the corresponding levels in 2010 and 2011 and another plus being that inventory levels in most importing countries being unlikely to be higher than the corresponding level of the previous year, particularly the tea importing nations from the ME regions.
“The above factors would enable to project a cautiously optimistic market scenario this year with the expectation that the Colombo Auction averages should move up from the low levels to which it declined to during the last quarter (Q) of last year, whilst it may be over-optimistic to predict the dizzy heights that we reached during the first Q of last year at this point of time,” F&W further said.
It also said that the year’s first sale which concluded last week which had 7.2 million kilos on offer met with “good general demand.”
Ex-Estate offerings totalled 1.1 million kg. “There was good demand and prices in most instances were firm to dearer,” F&W said. The encouraging feature was the strong demand for BOPs which appreciated between Rs. 20-30 a kg., and “more select best invoices,” it said. Consequently the price parity between the BOP/BOPFs have narrowed considerably and in the case of the better Westerns, the BOPs are now selling substantially above the BOPFs, the report said. Nuwara Eliya BOPs gained sharply whilst the BOPFs lost out on value. The overall price structure for Uva/Udapusellawas showed no significant change except for the poorer invoices which were difficult to sell. CTC teas appreciated by Rs. 15-20 a kg., while the liquoring leafy teas “were irregular following quality.”
Shippers to the CIS participated on a wide cross section of the teas. There was fair demand from Japan and the Continent as well, while some selective buying was also evident possibly on account of Pakistan, F&W said.
Off Grades and Dust too were dearer by Rs. 5-10 in most instances.
Low Growns comprised 3.5 million kg. in the leafy/tippy catalogues. In the tippy catalogue, a range of better FBOP/FF1s sold at fully firm to “irregularly” dearer rates. Others were lower, particularly following quality. Well made tippy invoices too were irregularly dearer, others were generally easier. In the leafy catalogue, better OP/OPAs declined. Teas at the bottom end however met with better demand and were fully firm to dearer. PEKs were easier. BOP1s were fully firm to dearer whilst OPIs were easier. There was fair demand from CIS, Dubai, Saudi Arabia, Turkey, Iraq and Kuwait.

Exports
Total tea export revenue in the first 11 months of last year increased by Rs. 8.5 billion to Rs. 149.5 billion YoY.
In the review period export volumes too increased, by 6.6 million kg. to 292.4 million kg. CIS continues to be the largest importer of Sri Lankan tea followed by Iran and Syria. Although UAE is placed 4th, total imports showed a significant decrease YoY. Other noteworthy importers are Iraq, Turkey and Japan.
Meanwhile tea exports in November of 26.9 million kg. showed a marginal 0.5 million kg. YoY gain. Total revenue of Rs. 13.9 billion during that month showed a Rs. 0.5 billion YoY gain. Tea in bags have shown a YoY growth whilst tea in bulk and tea in packets have shown a decline.

http://www.thesundayleader.lk/2012/01/15/fw-optimistic-about-tea/

Another “Singapore”?

Last week’s business pages of this publication carried “gloom and doom” quotations from two businessmen.
One was from Richard Jansz a rubber broker and the other from well known businessman Ajita de Zoysa. Both of their negative outlooks coincidentally revolved round the Euro Zone debt crisis and rising tensions in the Middle East (ME) brought about by Iran’s nuclear programme with possible military action by the West and Israel to stifle the same and the seeming impact of such on oil prices.
Euro debt crisis is bad for Sri Lanka’s exports (incidentally EU is Sri Lanka’s second biggest export market) while an attack on Iran will make oil prices go sky high, widening Sri Lanka’s trade deficit even further, which last year is estimated to have had touched a near US$ ($) 10 billion figure, with oil being responsible for half of that amount and causing a serious balance of payments crisis in the economy.
As it’s, even without a conflagration in the ME because of Iran, Sri Lanka’s oil bill in the first 10 months of last year grew by 48.5% year on year (YoY) to $ 3.68 billion. According to Central Bank of Sri Lanka (CBSL), oil prices on Wednesday were hovering around US$ ($) 113 a barrel, up by nearly $ one in a mere two days.
The Iranians threaten that if the West/Israel resorts to military action against them, oil prices will go up to $ 200. Oil last hit dizzy heights nearly three years ago, at the height of the commodity boom, when it almost touched $ 150 a barrel. That caused grave problems to the economy, with oil prices at the pump shooting up, commodity prices increasing, coupled with inflationary pressure on the economy, pressure on the exchange rate and electricity costs, which is mainly fuelled by expensive diesel, also increasing, That was also the time the terrorist war was in full swing, which was another blow to the economy. Thankfully, now that war is a thing of the past and Sri Lanka doesn’t have to worry about that evil. But despite the war end, the island has not lessened pressure on military spend, part of that problem being the costs that have to be incurred in maintaining a large defence and police force, not forgetting the Civil Defence Force, even in peacetime! But why aren’t’ they being demobilized? Can a poor country such as Sri Lanka afford to apportion its largest chunk of budgetary expenditure during peacetime to defence year in year out as has been the case even after the war has been won, for three years since, ie in 2010, 2011 and 2012? Are there not other more pressing commitments? Isn’t there something wrong somewhere?
It may be moot, at this juncture, to recapitulate excerpts of the business editorial published on these pages in The Sunday Leader issue of 31.5.09., 13 days after the terrorist war was over under the heading “Demobilisation.”
It said, “Whilst, no doubt, a large number of troops will be needed to man newly established or re-established camps in the North and East to ensure that there is no repeat of terrorism from those areas, there may still remain a surplus of soldiers who are no longer needed by the army, now that the 26 year long war with the L.T.T.E. is over.
What then is the Government going to do with those excess numbers of military personnel who have been trained to handle weapons, who have been trained to kill, but whose services are no longer required now that the war is over is the million dollar question.
Therefore the onus before the Government is to find alternative avenues of employment to those demobilized troops.
For this to happen, they may need to be trained in various vocational skills in order to be made employable elsewhere, similar to what the Government is doing to those captured or surrendered terrorist cadres who are now in the process of being rehabilitated, before being released to society.
Of course the excess number of troops are not terrorists, that is the subtle difference. But the sheer numbers involved in the case of demobilized troops may be phenomenal, possibly numbering in the thousands, if not in the tens of thousands, gigantic, when compared with the head counts of those Tigers who are being rehabilitated, and whose numbers may add up to only a few hundred, if not a couple of thousands at the most.
The Government may also be hard pressed to find the necessary resources to train them in various vocations so that they would be equipped with the necessary skills to make them suitable for employment in non military jobs.
A man who has been trained to kill, if not gainfully employed in other trades in the event of being demobilized, may be a threat to society itself, this is the reality.
One way that the Government may make these demobilized troops useful is to employ them in construction and reconstruction works, a very real requirement for a country whose assets have been destroyed and development and progress stultified as a result of the 26 year old conflict.
However, a cash strapped Government with little resources will be hard pressed to do this alone. It will need to muster the support of the donor community and N.G.O.s to see this through.
These are one of several issues which the Government faces in peacetime, for which international goodwill and international support are essential for lasting peace and sustainable development of this island nation…”
The phrase, “international goodwill and international support” prescribed in the last para of that editorial perhaps sums it all as a possible solution to this vexing question which drains out valuable resources for the upkeep of such a large force now seemingly redundant with the war end 2½ years ago.
“International goodwill and international support” revolve round not only around India, China, Iran and Myanmar, the canvas is broader than that and needs no elaboration.
Reverting to terrorism, leave aside the fear, the killings and the destruction caused by it, it also bled the economy white, but now that is all history, and as a result a plus point from a socio-economic perspective for the country, which Sri Lanka should take advantage of.
There are those who said that if not for the July 1983 disturbances that led to Sri Lanka’s 26 year old destructive protracted terrorist war, Sri Lanka would have had been another Singapore by now. Now that war has been over more than 2½ years ago, can we still say that we are on the path of being another Singapore from a development perspective? Blame it on the economic crisis in the EU region and in USA (the island’s second biggest export market) as well, but why not for a start turn the searchlight inwards and see whether Sri Lanka and its leaders too share part of the blame for the economic morass currently besetting the country and not necessarily only to external issues, as some of the articles published on these pages in this publication point out?
Now that the war is over, it may be good for President Mahinda Rajapaksa and his Government to go back to the drawing boards and examine the success of the economic policies adopted in 1977 (which progress was however interrupted by the 1983 riots and terrorism that sprang thereafter, possibly due to certain political, both internal and external (India) ramifications and not necessarily due to economic policies) and try to learn lessons from the same, so that the country could go forward to the next level of development. Space doesn’t permit further elaboration.

http://www.thesundayleader.lk/2012/01/15/another-singapore/

Bye To FDI

It’s foreign direct investments (FDI) and not investments in Government securities that the country wants, a market source told this reporter.
FDI, among other things is free money, free foreign exchange, he said. Whereas subscription in Government securities (Treasury Bills and Treasury Bonds) is an expense as there is an interest component added to them, which the Government has to pay such investors along with the capital at maturity, he said.
FDI not only ease pressure on the rupee, it also strengthens the country’s balance of payments position, so critical as the island is believed to have had run a trade deficit of US$ ($) eight billion last year. FDI also boosts its foreign exchange reserves.
FDI are also needed to create employment opportunities in the island where the ranks of the educated unemployed has swelled to 20% (see also the business editorial of this newspaper’s 1.1.12 issue), though unemployment on an overall basis has declined to under 5%.
Youth unemployment may have had been the primary cause of three insurgencies the country has faced thus far, ie two in the south-in 1971 (of which in particular unemployed graduates and undergraduates played no smaller role) and 1987 and the other in the northeast in 1983.
“And the recently passed Expropriations Act which targeted a foreign hotel brand such as Hilton (see also last week’s business editorial of this newspaper’s) has had a negative impact on FDI,” the source said. Foreigners are talking about it and they have taken it as a negative message, he said.
“Laws are needed to protect FDI,..we are sitting on top of a volcano,” the source further said.
Meanwhile Government/Central Bank of Sri Lanka (CBSL) in a seemingly desperate move to attract more foreign exchange ($s) to the market, last month deepened the permissible investments of foreigners in government securities from 10% to 12.5% of such outstanding amounts. However this move has thus far not achieved the desired results, where the T bond market in fact having had witnessed a foreign outflow of Rs. 672 million (US$ 5.9 million*) in the week ended January 4 on a week on week basis and the T Bill market a foreign inflow of a mere Rs. 343 million ($ 3 million*) witnessing only a mere $ 2.9 million in net foreign inflows in the review period, of foreign investments in the Government securities market.
A source commenting on then Deputy CBSL Governor K.G.D.D. Dheerasinghe’s statement that there is demand for government securities like hot cakes in the international market (see this publication’s issue of 11.12.11.), said that one may be able to fool the electorate, but not financial markets (see also the business pages of this edition’s last week’s issue).
*1$=Rs. 113.90

http://www.thesundayleader.lk/2012/01/15/bye-to-fdi/