Sri Lanka Newspapers 02/02/2012

Bourse slides

Selling pressure drive down the Colombo Stock Exchange on Wednesday for the second consecutive day after failing to sustain a brief rally that was witnessed during the day, brokers said.

The All Share Price Index fell 0.20 percent, down 11.59 points to 5,682.33 while the Milanka Price Index of more liquid stocks fell 0.33 percent to 4,909.46, shedding 16.45 points on Wednesday.

Turnover amounted to Rs. 1.34 billion on a little more than 48.7 million shares changing hands during the day. Sixty seven (67) counters closed in positive territory against 114 counters that closed in the red.

Year-to-date, the world’s second worst performing stock exchange fell 6.45 percent.

There was however positive foreign interest with purchases amounting to Rs. 292.94 million against an outflow of Rs. 73.27 million.

"The market gave up intra-days gains to end on a negative note with activity driven by retail speculative buying centred on ACME along with large trades on JKH and CTC, accounting for approximately 50 percent of the day’s turnover," John Keells Stockbrokers said.

ACME closed 12.79 percent higher at Rs. 33.50 with 12,2 million shares changing hands during the day. JKH closed at Rs. 170, up 0.41 percent.

Warrants of Environment Resources Investments (GREG.2) was the biggest loser, closing 50 percent lower at Rs. 5.50 followed by its GREG.W6 warrants which fell 13.9 percent to close at Rs. 9.90.
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Citizens Development Business Finance PLC (CDB) recorded an after-tax profit of Rs. 398 million for the nine months period ended December 31, 2011, up 28 percent from a year earlier, the company announced.

"The third quarter profit reflects a decline of 25% compared to the corresponding previous quarter. This was mainly due to other incomes recording a mark to market value adjustment of Rs.114.97 million in the corresponding previous quarter as against the current quarter recording a negative figure of Rs. 15.7 million," the finance company said.

"However, the core business profit for the third quarter has recorded a growth of 80 percent. On the same basis, after- tax-profit for the 09 months from the core business reflects a growth of 98 percent. The top-line grew by 36 percent during the 09 months period surpassing the Rs. 2 billion mark. Net interest income grew by 52 percent to Rs. 886 million. These strong bottom-line results have been made possible by a steady growth of 45 percent to Rs.14.8 billion in the balance sheet from the last audited balance sheet date of March 31,2011," it said.

Balance sheet growth has been fuelled by a loan book growth of 52 percent, a deposit portfolio growth of 40% percent and a debt funding growth of 41 percent. Capital funds have surpassed the Rs. 2 billion mark, substantially strengthening CDB’s balance sheet and the capital adequacy ratios in Tier 1 and Tier 2 at 16.45 percent and 16.68 percent respectively.

Continued improvement in the quality of the loan portfolio has resulted in recording a gross non-performing loans ratio (NPL) of 2.15 percent and a net NPL of 0.47 percent being among the best in the industry, the company said.

CDB’s net asset value per ordinary share stood at Rs. 39.68 and earnings per share for the nine months ending December 31, 2011 amounted to Rs.8.62.

CDB is in the process of further expanding its 34 online connected multi-layered distribution network across rural and urban sectors and commenced savings account operations in December 2011 under its new core bank solution powered by Polaris and MillenniumIT (MIT). The new core bank solution is expected to go fully live in the first quarter of FY2012/13. CDB also intends to commence an Islamic Finance window under the brand name of "CDB Meezan" within the current quarter.

CDB’s corporate credit rating was recently upgraded to BBB/P2 by RAM Ratings.
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By Mario Andree

More than two and half years have passed since the 30 year bloody conflict ended opening doors to the North and East to both local and foreign tourists who are now visiting these areas in large numbers.

With more than 4,300 tourist arrivals recorded at the Bandaranaike International Airport per day, the country last year saw more than 855,000 leisure travellers arrive, surpassing the government’s target of 750,000 for the year.

With top industrialists and officials quoting the unfortunate incident which occurred recently as a direct pathway to heaven they have created their own slogan, "Come to paradise to go to Heaven."

The Sri Lanka Tourism Development Authority hopes that this year would be more successful and the country would be able to draw more than one million tourists in to the country despite several unfortunate events reported in the latter part of last year.

With only 22,000 rooms available in both the formal and informal sectors while facilitating the local tourists who are enjoying their weekends in the sunny resorts or the wild life parks in the country, the government is keen on developing several tourism zones focusing on the beautiful beaches around the country.

The plan includes developing more than 35,000 rooms with all amenities with the involvement of the local investors to reap the benefits from tourism.

Passekudah

With the war which crippled the country’s economy coming to an end, the Sri Lanka Tourism Development Authority (SLTDA) has identified Passekudah as a tourism destination with plenty of potential as it is already renowned for its calm and sandy beaches.

The government leased properties to 14 hotel developers both local and international and only one has so far completed the project and commenced operations.

Deputy Economic Development Minister Lakshman Yapa Abeywardena, during a recent visit to the area observed that another two hotel projects would be completed by end February and March.

The hoteliers are developing up market resorts with rooms priced at Rs. 35,000 to Rs. 40,000 per night.

The minister with hotel developers and relevant authorities discussed various issues which delayed the development projects and he warned that the leased land would be taken back by the government if the developers failed to complete the projects by December this year.

He also advised the relevant authorities to support the hotel developers to complete their projects and requested the SLTDA to obtain a separate electricity connection to provide power to projects since there were frequesnt power failures.

The Valachchenei Paper Mill which was the original power supplier selected by the SLTDA had failed to settle a sum of Rs. 120 million to the Ceylon Electricity Board despite the SLTDA making a Rs 16 million advance payment to the company to provide uninterrupted power supply and water to the zone, while the military is constructing the access roads and other facilities.

Vakarai Development

With 900 rooms expected in Passekudha, the government has also identified Vakerei as a potential tourism zone with 73.6 acres earmarked for tourism development. These lands are vested under the District Secretariat. According to Sri Lanka Tourism , these properties could be utilised to build 600 additional rooms.

The acquisition process has already begun and the SLTDA hopes it could call for bids by end next month and the projects could be completed by mid 2014 to minimise capacity constraints.

With land prices in Kuchchuveli soaring as high as Rs. 20 million per acre, the government expects lands in Vakarai to be leased at Rs. 15 million per acre. The tourists who had already visited the areas were confident that the product once completed would have a high demand.

Arugambay…

This well known surfing destination attracts a large number of tourists, but with fewer facilities available for tourists. There are several informal sector resorts and hotels in the area where prices vary depending on the season.

The area is full of tourists from mid April to end October with weather conditions and the sea levels at their best, providing an ideal opportunity for surfers and visitors to enjoy the very best of what Arugambay has to offer.

Ranked among the top ten for its unique wave pattern which starts from the sea and ends in the sea, unlike most beaches, it provides safety to surfer and a number of international tournaments are held here by the the global surfing circuit.

The Deputy Minister identified the zone as a location which could attract and minimise the congestion in the southern parts of the country and said that the necessary facilities would be developed and promised the support of the government to the hotel developers .

The SLTDA has plans to capitalise on the popularity of the famous beach and attract developers for 700 new rooms and add to the capacity of 850 rooms at present and develop it to be a hotspot in the region. The government last year received proposals to develop two star class hotels in the region with a combine room capacity of 135.

Fisheries sector …

Both Arugambay and Passekudha are famous for the fishing industry and tensions are simmering between the fishing community and the hotel developers in the area.

Fishermen in Passekudah expressed disappoinment that some developers were openly campaigning to have the fishing communities removed from the area. When The Island Financial Review asked them how tourism was supporting their livelihoods, they said that both Sri Lanka Tourism and the hoteliers have forced them to move away from their original locations.

They said that President Mahinda Rajapaksa had not ordered such relocations in his vision for the future, and were visibly shaken with anger when they said that the SLTDA and hoteliers were trying to force them out.

However, Sri Lanka Tourism said that there was no such request it was a rumour spread in the neighborhood.

However, following a meeting, the minister had with the hotel developers in Arugamabay,they have urged the minister to evict the fishermen from the location claiming that they were disturbing the tourism industry and the natural beauty.

The minister refused to accept the developers’ request and told that tourism was a people’s industry and everyone should reap the benefit of it from top to bottom. He said that the fishermen were an asset and it too could be marketed as a tourist attraction aimed at increasing the flow of tourists to Arugambay. He requested the hotel developers to work hand in hand with the government and the fishermen.

Divinaguma, Samurdhi and Tourism…

The demand for local fish and vegetables have increased in the tourism zones.

Two and a half years after the end of the conflict and resettlement of people almost being completed, the government recently introduced the Samurdhi programme to the North and the East, with the intention of providing a better livelihoods to the people of the two regions. Last year the government launched its livelihood development programme ‘Divinaguma’ in the region.

Both these programmes indirectly contribute to the tourism industry since the hotels purchase their daily requirements from farmers and fisherman in the area. The farmers and fisherman told The Island Financial Review that they were pleased that they were getting a fair return for their products.

The minister said that the programme had encouraged the residents in the area to cultivate their lands and Samurdhi would strengthen it further.

Employment…

Upcoming hotels are bound to provide a large number of employment opportunities for the youth in the area.

Currently, the hotel developers are facing difficulties to find sufficient skilled labour for construction of hotels and are dependent on those from other areas.

Training programmes for hotel staff in the region are being conducted to fulfill the demand as hotels would commence operations soon. The existing staff are pleased with their salaries.

Some carpenters who had been brought down from elsewhere told The Island Financial Review that the salaries were good and accommodation and food was also provided to them and it was of good quality and their salaries ranged from Rs. 1000 to Rs. 1800 per day.

Drugs and Plugs…

Some hoteliers highlighted that drugs and prostitution were major issues in Arugambay and it hurts the industry at times and the religious and cultural sensitivities of its people.

Some of the night clubs and restaurants in the area promote prostitution and sell drugs to tourists to increase profits while abusing the tourists via other means, they said.

The hoteliers requested that the government should look in to the issue and provide solutions to develop tourism in the are.

Illegal Construction…

Following the Tsunami in 2004, the government had ordered that all constructions should be more than 100 metres from the shoreline, but this is rarely implemented.

Since Passekudha is a new beach which has been exploited after 30 years, it is being developed according to the new legislations which stipulates a minimum distance of 50 meters from the shoreline.

However, plenty of illegal constructions are visible in Arugambay with huts only 10 meters or less from the shoreline; the minister emphasizing the risk to the industry and the visitors ordered those to be demolished, despite heavy lobbying from industrialists and small boutique owners.

Open public area…

With major hotels and resorts being developed to cater and attract high spending local tourists and foreign leisure travellers, the government also has plans for the middle level domestic traveller who visits some of these beaches.

The government spent Rs. 275 million last year to develop a public area and would contribute Rs. 375 million to complete the project in Passekudha. After completion it would have all the facilities required by the ordinary traveller to enjoy a memorable weekend.

A similar project has been approved for Arugamabay and the government is now looking for a suitable land in the area. Officials pointed out that there was a government owned land which was occupied by fishermen. The minister requested half an acre to be left for the fishermen and use the other section be used for development.

The country hopes to attract more than 2.5 million tourists by 2015 and has been able to surpass yearly targets for the last two years. Many development programmes are underway, however a cloud hangs over some of these projects will they be completed?

After President Rajapaksa highlighted that the tourism was a people’s industry and the benefits should reach the bottom of the pyramid, the SLTDA drafted a 5 year strategic plan last year on the path tourism would take.

However the locals and industrialists The Island Financial Review spoke to had many questions on how these values would be protected while the country promoted tourism as well.

Three international magazines, including a newspaper had ranked Sri Lanka among the top destinations to travel after the successful end of the bloody 30 year conflict.
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People storm bank in Mannar!
*1,600 accounts opened on RDB branch’s fist day in small rural economy
January 31, 2012, 9:00 pm


The Regional Development Bank opened its doors to the people of Mannar on Monday only to experience something they never dreamed of which most banks who have a run on their deposits do; people stormed the bank, but only to open accounts with the SME lender.

Sources told The Island Financial Review that nearly 1,600 new accounts had been opened by the branch on its first day in Mannar.

The Regional Development Bank (RDB) with a 3.5 million customer base has the country’s third largest network of branches. The Mannar branch was its 254th.

"I request the RDB to begin improving the fisheries and agro sectors of the region as soon as possible so that the livelihoods of the people will improve," Chief Guest at the branch opening Minister of Industry and Commerce Rishad Bathiudeen had asked of the bank’s top officials.

"Eager crowds of new clients in Mannar who appeared starved for development banking needs, immediately entered the RDB premises and was seen competing with each other at the counter to open their initial accounts with cash deposits ready in hand," the ministry said in a statement.

Speaking earlier in Colombo, R Siriwardhane, GM/CEO of RDB said: "The objective of RDB’s entry to Mannar is to uplift the rural economy, providing more opportunities for people to earn additional income through development banking".

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Exchange rate issue:

An open letter to the CB Governor and Minister of Finance
Do you sincerely believe that you can continue to maintain the situation without dragging Sri Lanka into a serious crisis?
January 31, 2012, 9:20 pm


In recent months we, the ordinary people of Sri Lanka, have witnessed a number of speeches, press interviews and analytical articles debating the issues such as foreign reserves, exchange policy, IMF facilities and foreign borrowings. Among the participants in these debates are the Governor of the Central Bank Ajith Nivard Cabraal, deleted Economic Spokesman Dr. Harsha De Silva, Minister of Economic Development Basil Rajapaksa and the Secretary to the Treasury Dr. P. B. Jayasundera. A leading economic think-tank the Pathfinder Foundation has already published several Economic Alerts analyzing the pros and cons of these issues and providing guidelines for government policy makers.

The Governor of the Central Bank, however, has repeatedly emphasized that he will be able to attract or borrow foreign currency to replenish the foreign reserves being spent currently to defend US Dollar/ Rupee parity at the current level. In his recently declared "Road Map: Monetary and Financial Sector Policies for 2012 and beyond", the Governor has indicated that he will implement a programme to harness (borrow) foreign exchange during the coming months. As such, an international money market related effort to raise foreign exchange reserves will take at least six months. In addition, it may prove difficult to mobilize the necessary financing at a time of uncertainty in the world economy which has resulted in increased risk aversion amongst potential investors/lenders.

However, it has been reported that during the month of January 2012’ alone the Central Bank has spent over $650 million to defend the Rupee. At the current level of spending, the Central Bank would require almost $4 billion until it is able to raise additional funding. Dear Governor, do you sincerely believe that you can continue to maintain the situation without dragging Sri Lanka, its people and the political leadership to a serious crisis situation. I pray for your success.

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Sancharaka Udawa 2012’ attracts 5000 prospective buyers

Increasing demand pushes the organizers to look for bigger venue
January 31, 2012, 9:06 pm

By Harischandra Gunaratna

The "Sancharaka Udawa", Sri Lanka’s only Meet Mart for the Small and Medium Enterprises in Tourism organised for the second successive year by the Sri Lanka Association of Inbound Tour Operators (SLITO) yesterday at the Ceylon Continental, Colombo was well patronised and by afternoon around 2000 visitors had reached the venue and number soared to 5,000 towards evening. There were around 180 stalls of exhibitors whose products ranged from boutique hotels to small guest houses, home stays,restaurants and package tours both outbound and domestic to excursions to wild life parks, water sports, whale watching,. camping, adventure and nature tourism to wellness and many others, all under one roof. It served as a one stop shop for many in the trade as well as prospective buyers.

President of SLAITO, Nilmin Nanayakkara said judging by this years performance, SLITO was confident that demand for space next year would be much more and the organisers decided to shift the venue to a more spacious BMICH.

Chandra Wickramasinghe, Immediate Past President, SLITO said that the event is gathering momentum and the overwhelming response from the trade and support and encouragement received from the authorities was enormous.

"The number of exhibitors, their enthusiasm and the flow of visitors signified that the tourism industry in the country has reached great heights and the need to organise such "Meet Mart" s to help the small and medium enterprises and to empower them to meet the ever increasing demand," the SLITO Past President said.

Among the exhibitors Taj Group of Hotels was an exception as they were the only City Hotel to make their presence at the event.

Ravindni Walisinghe, Public Relations Manager of the five star Taj Samudra Hotel said that "The objective of our presence here was to make the public aware of what the Taj Group Hotels were doing and it is an excellent opportunity to have one- to- one meetings and communicate with prospective visitors.

"It is not only an ideal platform for the small and medium enterprises to meet the others, but also an excellent platform for the domestic traveler to whom all the information that he or she wants for the next tour could be obtained under one roof, thus saving his time and energy in having to visit travel agents in different places," said Bandula De Silva, Director Operations, Travelon Ltd.

Pubudu Dissanayake and Karen N.R. Whyte, Managing Director and Director Operations of Brook Boutique Hotel in Alipalama, Melsiripura said that their property being a new venture and just about one year in operation, has found a place to meet the travel agents to whom they didn’t have easy access since some travel agents were not very active, but they were important and here they met them.

"It’s a great opportunity to display our products,"Karen said.

Sugath Marasinghe, General Manager of the Flag and Whistle Restaurant was of the opinion that "Awareness is the key" and members of the Association of Small and Medium Enterprises in Tourism and others in the industry whether they were big or small had been given a golden opportunity and SLITOs effort should be commended.

A cross section of the visitors, "The Island Financial Review" interviewed praised the efforts made by the organizers. Among them were many prospective clients who said that the event helped them enhance their knowledge of what was on offer to keen travelers be it a package tour to an exotic destination outside Sri Lanka or a domestic tour to one of the many places with scenic beauty on the verdant hills or the sandy beaches.

There were also students of many disciplines who were looking for places to holiday according to their purse, and it was a welcome sign.

Pics: Bandula De Silva, Director, Travelon Ltd, speaks to a prospective buyer about his next outbound package tour.Saved under travel- 01

2) Sudath Marasinghe, General Manager, Flag and Whistle talks to an interested visitor Saved under flag.

3) A visitor (left) in a pensive mood seemingly unable to decide on the packages on offer while another phones to tell the others about the products that are on offer. Saved

Pics by Harischandra Gunaratna

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Ceylon Tea on route taken by successful apparels
January 31, 2012, 12:00 pm


Ceylon Tea can be viewed as emulating the success route of the 3.8 billion dollar Apparel Industry of Sri Lanka and the results would be seen in years to come, even though the two industries work on a totally different business dynamic environment, said Rohantha Athukorala addressing the 20th Global Session of the FAO Inter Government Group on Tea hosted by the Sri Lanka Tea Board.

Athukorala, who was the 8th Chairman of the Sri Lanka Export Development Board and the pivotal policy making body The National Council For Economic Development (NCED) under the Presidential Secretariat, looked back at the apparel industry that began operations in the early 80’s.

At the time, apparel industrialists were referred to as mere ‘contract manufacturers ‘and some even used to refer to them industry s tailors. After some strategic thinking by the industry, it gave leadership to the world by making Sri Lanka the fashion apparel of the world for Ethically manufactured clothing.
"This has given teeth t o the industry in competing with price savvy merchandise coming in from Cambodia, China and Bangladesh and the apparel industry must be complimented," said Athukorala.

Today this industry is targeting 5 billion dollars plus in export revenue by making Sri Lanka an Apparel Hub in Asia for R&D, technology sharing for fast fashion which is a case study to the world," opinioned the Guest Speaker, who heads National Portfolio Development for Sri Lanka & Maldives of the United Nations Office For Project Services(UNOPS).

Then focusing on Ceylon Tea he showed how the Tea Industry of Sri Lanka, with strong leadership was slowly but surely taking the same route with Sri Lanka being the 1st ozone friendly certified Tea producing nation of the world.

Athukorala then tracked back and showed to the eminent gathering how Ceylon Tea had carved out its current strong position globally with some key strategic moves in the last thirty years even, with all the challenges that a commodity can be up against.

Starting from the times that the Plantation industry was nationalized in the 1970’s when it came under government control, it went on in the 1980’s to make a bold decision to make the Colombo auction control the Global demand chain by breaking away from the great London auction system which has held ground for many years. "The Colombo auction commands the highest values for tea globally, a testament to the fact that this decision was correct," Athukorala said.

Thereafter in the 1990’s the supply chain was privatized to management company’s which gave the opportunity for new thinking to be introduced to the industry with strong R&D power and capital infusion that resulted in Sri Lanka demonstrating the best performing country globally for value addition at a commanding 43%

"Today, we see that Ceylon Tea has taken the high ground with some focused decisions on conforming to global standards on MRL levels and has gone further by developing a new standard for Tea that has resulted in Ceylon Tea being the 1st certified ozone friendly tea globally that no other tea producer has received which the industry must be complimented for," said Athukorala.

Given that tea was classified globally as a food/beverage, the ozone friendly proposition makes Ceylon Tea a cut above the rest, even though there are many challenges for the local Industry with catapulting cost of production (COP) that needs to be managed. "Hence we see the similarity between the Apparel and Tea Industry even though the industry dynamics are totally different." he said.

Sri Lanka needs to give leadership to supply chain sustainability, given that the wage increase between the time period of 1991-2011 is a staggering 986%, said Athukorala. Sri Lanka’s daily wage rate is 137% of the average auction price in the last year whilst the other producing nations like India is at 93% and Kenya at a healthy 79%.

"What the country requires now is strengthen the demand chain by launching the Ceylon Tea campaign under the Ethically manufactured proposition, whilst the ozone friendly badge supporting this claim will give teeth to the campaign," said Athukorala. "Which once again makes Sri Lanka giving leadership to the world on the Ethically manufactured route just like the Apparel industry of Sri Lanka voiced Athukorala."

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Foreign buying momentum fades
*Indices down, turnover low
January 31, 2012, 12:00 pm

Fading foreign buying momentum, some modest profit taking and settling of month-end accounts pushed down the Colombo bourse to a losing mode with both indices down and turnover below Rs. 1 billion, brokers said.

Both JKH and Commercial Bank saw their prices edging down.

Business was lackluster on a turnover of Rs. 0.84 billion, down from the previous day’s Rs. 1.4 bn., with the All Share Price Index down 61.64 points (1.07%) and the Milanka losing 50.30 points (1.01%) with 144 losers strongly outpacing 62 gainers.

``The foreign buying momentum seemed to have reduced,’’ a broker said. ``It’s hard to attribute the fall to profit taking because there wasn’t all that much profit to take. Being the last day of the month, there could have been some selling to square accounts.’’

There was little activity from morning with Acme being the highest turnover generator with retailers active in the stock with nearly six million shares traded between Rs. 27.10 and Rs. 30.10 closing Rs. 3.30 up at Rs. 30 generating the day’s top turnover of Rs. 170.4 million.

JKH followed, closing 70 cents down at Rs. 169 with nearly 0.3 million shares traded between Rs. 168 and Rs. 172 contributing Rs. 45.6 million to business volumes.

ERI lost 90 cents to close at Rs. 29 on 1.4 million shares done between Rs. 28.90 and Rs. 30.40 generating a turnover of Rs. 41.1 million while Swarnamahal Financial Services gained Rs. 5.50 to close at Rs. 133 on 0.3 million shares done between Rs. 126.10 and Rs. 134 contributing a turnover of Rs. 39.6 million.

Colombo Land was down 90 cents to Rs. 48 one nearly 0.7 million shares done between Rs. 47.20 and Rs. 49 while REgnis gained Rs. 11.10 to close at Rs. 330 on 90,200 shares traded between Rs. 320 and Rs. 348.90.

Among stock that showed both volume and price gains were CT Land, HNB (non-voting), Parquet and Cold stores. Commercial Bank lost 70 cents to close at Rs. 105 on 0.2 million shares while Asia Asset Finance was 10 cents down to close at Rs. 6.60 on nearly 1.6 million shares.

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Inflation slows to 25-month low
January 31, 2012, 12:00 pm

The rate at which general price levels increase slowed down to a 25 month low in January 2012, the Department of Census and Statistics said yesterday (Jan. 31).

Inflation, as measured by the country’s official inflation index (the Colombo Consumers’ Price Index) CCPI), slowed to 3.8 percent in January 2012 from 4.9 percent in December 2011.

"The rate of inflation as measured by the CCPI on a year-on-year basis decreased to 3.8 percent in January 2012 from 4.9 percent in December 2011. This is the lowest inflation rate recorded after twenty-five months from December 2009. As against the higher base prevalence in January 2011, the year-on-year inflation in January 2012 shows a significant decrease," the government statistics office said."The highest contribution to the overall increase in prices came from non-food commodities which increased by 4 percent in January 2012. The combined effects of both domestically produced and imported food commodities contributed to the increase in the food sub Index.

"Among the food commodities, rice, wheat flour and vegetables, which have significant weights in the CCPI basket, recorded price increases on a year to year basis. Under the non-food category, the prices of Kerosene Oil, Petrol, Diesel and Gas rose by 39 percent, 19 percent, 15 percent and 28 percent respectively," the department said.

Price levels have increased by 0.3 percent from December 2011 to end January 2012.

However, the food category recorded a decline of 0.12 percent or Rs. 51.01 on better supply of most food items on the CCPI basket with prices increasing for fish and sea food, pepper powder, eggs, chicken and coconut.

Clothing and footwear, housing, water, electricity, gas and other fuels, furnishing, household equipment and routine household maintenance, health, transport, recreation, culture and education. Communication costs remained unchanged.

Meanwhile, the annual average rate of inflation continued to slowdown further since peaking at 7.2 percent in September 2011, reaching 6.5 percent in January 2012, the statistics office showed.

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Planters’ Association of Ceylon welcomes govt. decision to lift ban on RPC timber harvesting
January 31, 2012, 6:45 pm


The Planters Association (PA) of Ceylon says the government’s decision last week to lift the prohibition on Regional Plantation Companies [RPCs] from harvesting timber, from forestry cultivations, will ease pressure on fuel costs and RPCs finances.

"The government has decided to lift its previous restrictions on timber harvesting. RPCs can now harvest timber / fuelwood from their commercial forestry cultivations. We wish to express our appreciation of this decision to the government, and particularly to the Minister of Plantation Industries, the Mahinda Samarasinghe, for his personal intervention on behalf of the plantation industry. We are confident this decision by the government will benefit not only the estate sector but the country as a whole," said the Chairman of the PA, Lalith Obeyesekere.

The PA says the latest decision to allow timber/ fuel wood harvesting of RPC forestry cultivations, will provide RPCs with a cost effective alternative to imported fuels. Tea factories can now use fuel wood for their driers instead of more expensive imported petroleum products. The use of fuel wood is expected to reduce both RPC operating costs and also the country’s oil import bill, at a time when oil prices are rising. Timber harvesting will also provide RPCs with an alternate source of income. This is seen as particularly important as many RPCs are facing financial difficulties due to volatile tea prices and increasing production costs. RPCs supply of timber to the market, says the PA also may contribute towards reducing illegal logging in the country.

The PA says RPC Forestry programmes are environmentally friendly and are in accordance with the Forestry Management Plans approved by the Conservator of Forests and the Ministry of Plantation Industries. Prior to harvesting of fuelwood and timber, the areas are inspected and approved by a team of officials of the Forest Department, Central Environmental Authority, Ministry of Plantation Industries and the Divisional Secretariat, thus ensuring the necessary checks and balances are adhered to, and is in no way a threat to the environment.

The RPCs have been commercially cultivating trees such as eucalyptus (gum), in the up country and other varieties of timber, in the low country. The RPCs say the estate sector has been involved in forestry management for fuel wood and timber, since the 1970s and have, in the past, been supplying timber to national agencies like the Ceylon Electricity Board for electricity posts and the Railway Department for sleepers. Timber from RPC lands was also marketed to the State Timber Corporation for purposes such as building construction and furniture manufacture.

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Small holder sector produces 76 % to enhance prestige of Ceylon Tea
January 31, 2012, 6:47 pm


By Steve A. Morrell

About 400,000 small holders spread throughout the hill country hinterland are responsible for some 76% Tea production in this country, said Minister of Plantation Industries Mahinda Samarasinghe, addressing the FAO/IGG sessions in Colombo last Monday. Regional Plantation Companies, managing Plantations in the Central Hills produce 24% of the crop; 21 such companies manage these plantations.

He said production had to be increased to resuscitate the sector and the Tea Research Institute had been accordingly advised to improve planting stock to ensure the formal plantation sector would have the acquired support to increase production.

Chairperson Tea Board Ms. Janaki Kuruppu said the tea industry supported the livelihood of approximately two Million people both in and out side the estate sector. Advances in their living standards could not be glossed over and the holistic concept was that they contributed in tangible terms to the economy of the country with the small holder sector handling a major share of its development.

She also said the industry grew 8.3% over the past few years.

Development of the Tea industry in Sri Lanka continued to take center stage and its contribution to the economy was substantial.

FAO Country Representative, FAO Office Colombo, Peter Evans inaugurating the sessions handed over Chairmanship of the FAO/IGG on Tea for the next two years to Chairperson Tea Board, Ms. Kuruppu.

Minister Samarasinghe said although the country faced many challenges it was now geared to move forward.

He also said Ceylon Tea was dependent on volatility and turmoil in other countries, which could affect the industry here. This conference was a good forum to coordinate future action to circumvent such influences, because quite like Sri Lanka other countries too could be victims of similar circumstances. He said he would not name these origins, but stressed the need for concerted action.

At the press conference after the inaugural sessions, Director Tea research Institute, (TRI) Dr. Jerry Jayawardena, said the TRI had already implemented researching cultivars that would not only improve crop, but resist disease common in Tea. He said the 40 series cultivars were already in use on plantations, and trials were being conducted on new planting material currently in the 50 series.

Director Tea Board Hasitha de Alwis, said marketing of Ceylon Tea would take on a new dimension to extend our product to The US, and Chinese markets.

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