Business
23rd September 2001
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Thousands of young executives and office workers 
linked hands together last Wednesday in various
parts of Sri Lanka, pleading for peace on the island. 
The SriLankaFirst campaign, launched by the business
community, drew the involvement of close to a 
million people. Many participants said there would 
be peace only if and when the people in Jaffna join
hands with "us as well." They urged the government
and the LTTE to get back to peace talks. Picture
by Iresha Waduge shows Ranjit Fernando, NDB CEO 
and one of the main organisers (centre) along with
others taking part in the demonstration.
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Mind your Business

Ravenous appetite
Don't crow about it. That appears to be the yardstick used by the big telecom boys amidst reports of netting the biggest monthly revenues in recent years. "Something to shout about," said excited officials. "No, no," replied others "we need to raise tariffs. That would be a problem if we are seen making huge profits."
Patriotism on hold
The recent peace campaign was a success. No doubt about it, as far as the organisers were concerned. And we are told a handsome 20 million smackers or so were spent on the advertising campaign. But where were these people when the country was burning for 18 years? No, no the business community doesn't get involved in politics, so they said. "That is not our mandate," leaders said. Well why this time then? Profits being hit by the Katunayake attacks a wake-up call perhaps, as one leader admitted? Better late than never, another leader noted. On our part we support the effort even if it gets to nowhere unless there is more positive action than just holding hands!
Treasury trembles
New brooms sweep clean they say and that is why the boys at the treasury are a worried lot these days - there's a new kid in charge with a reputation of doing things his way.

In his previous assignment he literally did a demolition job and now the story is that the lady boss herself has entrusted him with the task of reforming his new place of work. So, many changes are likely in the long established hierarchy in the near future, we hear.

Stars lose sparkle
A recently acquired city five-star is proving to be a handful for its new owners - what with the sudden decline in tourism and omnipresent power cuts.

So much so that there is every likelihood of the property changing hands once again, if the price is right, even though market conditions do not favour such a sale right now.

Already several competitors in the same industry are eyeing this prospect and the owners are hoping this rivalry will raise the sale price.

Powerful premiums
Power cuts spell doom for many businesses but there are those who can make a buck out of that too.

And at least one insurance company is contemplating introducing insurance policies against major power interruptions on a national scale the kind being experienced right now. Future power generation prospects are so bleak that this company's decision makers feel they could make a handsome profit by pricing the premium correctly.

Acidic reign 
Who said you can bring rice from the moon? Recent utterances about "solving the power crisis" have prompted old-timers to recall how a former regime promised to bring rice from the moon. Who made that promise and who made this (current) one? Your guess is as good as mine
Paper peppers electronics
Should we say hurrah? Maybe not. The power cuts have resulted in many a company temporarily stopping advertising on television and radio channels during the 4-8 hour period and increasing advertising in the newspapers. The electronic media must be certainly feeling the pinch.

Double whammy to the economy

Saudi looks elsewhere for housemaids due to uncertainties in Sri Lanka
By Feizal Samath
Saudi Arabian employment agencies have reduced recruitment levels from Sri Lanka until high insurance premiums and airfares fall while Sri Lanka's airline and employment markets are appealing to the government to provide a bailout package.

Suraj Dandeniya, president of the Association of Licensed Foreign Employment Agencies (ALFEA), said agents in Saudi, Sri Lanka's single largest employment market with between 280,000 to 320,000 Sri Lankans working there, have virtually put the Sri Lankan market on hold due to uncertainties here.

"The unfortunate thing is that this is peak period for recruitment as it precedes the Ramazan fasting season. All agents earn the best money during this period, as there is a demand for our workers, particularly housemaids. During this period 10,000 to 15,000 housemaids are sent in addition to 4,000 male workers," he said.

The country's economy, hit by a double whammy from the LTTE attacks at Katunayake in July and a fallout from the US disaster, is undergoing a topsy-turvy situation with the corporate sector saying it is difficult to plan in an uncertain environment.

Hurt by the twin crises are tourism and the travel industry, employment in the Middle East, oil prices, tea exports to the Gulf and garments exports to the US. Put together, these sectors of the economy represent the bulk of export earnings and impact on the cost of living if oil prices rise due to tensions in the Gulf, economists said.

Dandeniya said representatives of employment agencies, airlines and the travel trade met on Thursday to decide on steps to bring some stability to the shaky sectors.

The travel trade is struggling to cope with rising airfares which have made holiday and leisure travel, particularly shopping to Bangkok or Singapore, an expensive option while the Middle East employment market has contracted by nearly 50 percent in recent weeks due to fewer flights and costly airfares.

Airfares on Singapore Airlines rose by $ 140 per return ticket last week while other airlines continue to charge $80 per return ticket adding the increased insurance rates. Travel agents said the situation, like in many sectors was uncertain and could "change anytime." In some cases, the insurance hike was costing more than the actual air ticket like fares to Trivandrum in South India for instance.

Dandeniya said a six-member committee was appointed at the meeting. The committee will meet tomorrow and work out ways in which the government could ease the burden faced by various sectors connected to the airline industry.

He said the committee would be looking at whether the government through its Foreign Employment Bureau could forego payments received from foreign-bound workers and use that money to reduce the insurance component. The government would also be urged to reduce airport handling charges and other costs and pass it on to the industry.

"We are looking at ways in which the government could reduce revenues from airport-related services or forego payments collected from Middle East-bound workers," he said, adding that Saudi Air had somehow managed to maintain its old fares whereas other ME-bound airlines have all increased rates.

So far the tea markets have not been disturbed by uncertainty in the Middle East. Demand for low grown teas, mainly drunk by the Arabs, rose and fetched favourable prices last week, according to Anil Cooke, director at Asia Siyaka tea brokers. Other industry sources said it is an uncertain situation and no one could predict how this week's tea markets, for instance, would behave if the US launches air strikes in Afghanistan.

Rohan Masakorala, chairman of the Sri Lanka Shippers' Council, described the situation in the Middle East as "unknown and uncertain". "We would have to face any situation as and when it arises," he said.

R.I. Obeyesekera, chairman of the Ceylon Petroleum Corporation (CPC), said oil prices which rose slightly in the aftermath of the US crisis are now around $25-$26 per barrel. "On Friday, it came down by 50 US cents," he added.

Ashraff Omar, CEO of the Mast Lanka group, one of the country's top garment exporters, said with winter shipments to the US already gone and the garments in stores there, it is the spring shipments that exporters have to worry about. "We have been in contact with our buyers and retailers and are watching the situation. If winter sales fall, then there would be a slowdown in spring sales which start around February/March."


Power cuts, rising crime boost sales of alarm systems

By Hiran Senewiratne
The sale of industrial and domestic electronic security system (ESS) products has risen in Sri Lanka in the past three months due to power cuts and fears of increasing crime and robberies in its wake, industry officials said.

Many companies in the ESS business say sales have increased tremendously. Eshatha de Silva, senior sales manager at Ceylinco-Cisco, said due to the high demand for ESS products, sales have increased by 50 to 70 percent since July.

The demand was rising as many people anticipated possible burglaries or other crime-related events during the period of the power cuts, particularly as the number of drug addicts - seen responsible for many robberies - also showed an increase.

"There is a big demand for our ESS-related items from the domestic and industrial sector during this year," said Securo Dynamics (Pvt) Ltd marketing manager, Zarfan Carrim, noting that they are one of the pioneers in this business

He said in the last few months, sales have increased sharply by up to 70 percent in domestic security systems as people were concerned about robberies taking place during power cuts.

As security systems are generally expensive, he said the company has introduced a basic ESS product for domestic use at Rs 12,000.

Uditha Mapatuna, marketing manager at Safrex International (Pvt) Ltd, another company that sells these items, agrees that ESS products are very expensive. "A lot of people are eager to purchase their security system but many cannot afford it due to the high cost."

A spokesman at the Police Headquarters Crime Division said there has been a 10 percent rise in the crime rate in the past three months, which he attributed to the power cuts and other reasons including uncertainties in the country.


Munchee looks forward to better future with JVP

Ceylon Biscuits chairman, M.P. Wickramasingha, says his company is looking forward to a healthy relationship with the JVP union following that party's new alliance with the government.

"Since the JVP has joined the government, the unions will put the country before self, hopefully," he said. Last week Ceylon Biscuits, makers of Munchee, officially announced its factory expansion to India. The company has invested Rs. 200 million in setting up a plant and developing a distributor network.

"If the unions had continued to harass us, we would have increased our investment in India. But since normalcy has returned we changed that decision," Wickramasingha told The Sunday Times Business Desk. There was labour unrest at the Munchee factory led by the JVP union during the Sinhala and Tamil New Year period. Earlier this month, Unilever – in a similar crisis – completed a landmark collective agreement with the JVP union.


Coke prefers newspaper ads to radio and TV during blackouts

By Ashwin Hemmanthagama
Soft drinks giant Coca Cola has pulled out its heavy advertising campaigns from television and radio channels in Sri Lanka during times when the power cuts are on, officials said.

Power cuts were increased to eight hours last week from 2 1/2 hours.

"When power cuts are in force we do not advertise as a policy. If you have noticed after taking off the TV commercials we have stayed with the radio as everybody listens to the radio. Now we have pulled out from the radio as well," said Lakshman Peiris, brand manager of Coke and Lion brand drinks at Coca Cola Beverages Sri Lanka Ltd.

Peiris said they were also facing a crisis in marketing Lion brand soft drinks due to the power cuts and a shortage of empty bottles. Lion and Portello, both local brands, have seen improved sales in recent months until the present crisis emerged.

"We are putting a lot of focus on these two brands. We have signed up with athlete Susanthika Jayasinghe for a media campaign on Lion Brand. We are happy with the response shown so far with the brands for the investment that we made. We are increasing our market share month after month. The availability of our brand everywhere will help to increase the market share," he said.

The prolonged drought has been favourable to the industry in terms of increased sales of soft drinks, which is a normal phenomenon during the hot season but the power cuts has on the other hand had a negative impact on every business.

"This time the drought did not work out the way we expected. The reason is the country's situation. With the current economic recession, consumers are cutting out unnecessary spending. Soft drinks don't fit into the basket of necessities," he said.

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