Tea markets buoyant in first quarter 2001
The tea market is expected to remain buoyant during the first quarter of
next year with quality improving and demand staying strong, Forbes and
Walker Tea Brokers said.
"Taking into consideration that quality would reflect an improvement
starting with January sales, combined with the current indications of demand,
producers could expect remunerative prices during the first quarter of
2002," they said in an annual review. Healthy prices were maintained towards
the end of the year with the strong marketing conditions experienced during
the months of November and December, they said.
The final auction for the year ended on a "reasonably high note" last
week, they said.
Most overseas buyers appeared to be quite active despite the holiday
period and overall demand was better than anticipated, the brokers said.
The absence of a sale this week would also have contributed to more buying
pressure, they said.
Low growns, which make up more than half the crop, met with better demand
and most varieties appreciated in value. Last week's auction averages are
expected to improve from the previous week's sale because of improved demand
from most markets and the depreciation of the rupee. The US dollar, which
was trading at Rs. 83.35 during the first sale of the year, had gained
by 11.7 percent to Rs. 93.14 by the sale of December 12, the broking firm
The sale average of Rs. 153.67 at the first sale of the year had fallen
by 2.4 percent by the sale of December 12 when an average of Rs. 149.93
was recorded. In dollar terms the decline was a significant 12.5 percent.
"In an industry that is 18 - 20 percent dependent on imported raw material
inputs, the effects may be dramatic," the firm said.
Volume Based Charging for Mobile Internet
By Akhry Ameer
Sri Lankans who were apprehensive of Internet usage due to high costs will
now be able to try out what is being touted as a cheaper approach, that
is if they have the right mobile technology in their hands. MTN Networks
(Pvt) Ltd. on Tuesday unveiled, GPRS (General Packet Radio Service) their
latest innovation to the Sri Lankan mobile telecommunications market.
With the introduction of GPRS, Dialog GSM joins the ranks of developed
markets such as Europe and South East Asia and is one of 40 countries to
adopt this stepping-stone move towards third generation (3G) mobile technology.
To the end-user it means high-speed mobile Internet access and data communication.
The technology also stimulates a shift in pricing from time-based charging
to volume-based charging. Through GPRS, users will be always connected
to the Internet. However, the users will only be charged for "downloads"
rather than the duration they have been connected. This sounds to be a
better method, as the charge will be more attractive overcoming problems
such as slower links and heavy traffic. According to Dr. Hans Wijesuriya,
CEO of MTN Networks the charge will be in the region of cents per kilobyte.
The actual tariff is expected to be announced towards the end of the one-month
free pre-commercial trial period.
Though all of Dialog GSM network base stations have been upgraded to
provide GPRS services throughout its total coverage area, customers need
to be in possession of one of many specified GPRS enabled devices to make
use of these services. The most basic GPRS enabled device (hand phones)
are now available in the market from Rs. 30,000 upwards, the prices of
which should come down during the forthcoming year, according Dr. Wijesuriya.
He added that the introduction is part of his organisation's policy to
present the latest technology to its customer and is confident that the
investment will realise its true potential in time to come.
ADB aid for SMIs in Sri Lanka
MANILA – The small and medium scale enterprise (SME) sector in Sri Lanka
will be boosted by an assistance package approved last week by the Asian
Development Bank (ADB).
The package consists of loans totaling US$86 million and a partial credit
guarantee to support commercial cofinancing of up to US$90 million.
The Small and Medium Enterprise Sector Development Program will enhance
the business environment, strengthen business capabilities, and improve
access to finance.
It will also use information technology to improve access to markets
and technology, and to enable banks to reduce lending costs.
Afghanistan – a long way towards rebuilding
Rebuild Afghanistan? Build is more like it, say US newspapers. In one of
the most ambitious exercises of its kind, the U.S. and its allies are about
to get busy trying to make something out of the country the World Bank
calls "the poorest, most miserable state in the world." They start with
a blank canvas. Afghanistan has no education system, rail network or commercial
air service. It lacks national mail delivery and a power grid. It has no
Internet service provider, no media and no functioning banks.
This won't be the first time the international community has tried to
help. More than three-dozen foreign aid groups have spent two decades on
the ground in Afghanistan. They've built roads, bridges, homes, clinics,
schools and mosques. They've laid out irrigation canals, dug wells, started
bakeries and handed out food. They have taught job skills to war orphans
and fitted land mine victims with artificial limbs. Their work kept the
country from sliding further toward the Stone Age, but many of the gains
it produced were obliterated by fighting, Taliban repression and an absence
of rain. Will it be any different this time?
"I have a sense of a great national U-turn at the grass-roots level,
of ordinary Afghans rejecting the cycle of war and decline," says Mark
Malloch Brown, head of the United Nations Development Program (UNDP). "Afghans
want to seize the moment."
Malloch Brown puts the price tag for Afghan reconstruction at US$ 6.5
billion over the first five years. World Bank President James Wolfensohn
says it could cost $10 billion to $20 billion over a decade. At $20 billion,
the bill would approach $1,000 for everyone in Afghanistan, making it one
of history's costliest attempts at nation building.
Few states have failed as spectacularly as Afghanistan. Three out of
four Afghans lack access to safe water; nine out of 10 have no toilets
or other sanitation facilities; four out of five can't read; nearly one
in 20 is disabled by land mines. One-fifth of Afghan children die before
age 5. A third of the survivors are orphans; half are malnourished. The
Afghan economy "is in a state of collapse," the World Bank says. The challenges
in engineering a recovery are immense.
The major development agencies involved in the funding effort would
be Brown's own agency, a host of other UN bodies, the World Bank, the International
Monetary Fund (IMF), and the Asian Development Bank. The Islamic Development
Bank also will likely help. So will dozens of non-governmental agencies,
many for years working quietly in both pre-Taliban and Taliban Afghanistan.
The development challenge is huge. Even before the conflict period, Afghanistan
was "bouncing around the bottom" when nations were ranked according to
the UNDP's human development index, notes Brown.
Meanwhile Afghanistan's Finance Minister, Hedayat Amin-Arsala, visited
the World Bank on December 14 to discuss his country's reconstruction with
the Bank's president, James Wolfensohn.
The two agreed on the importance of a strong government budget that
would help coordinate distribution of foreign aid, which is expected to
amount to tens of billions of dollars. "They agreed that a significant
challenge for the interim authority would be the coordination of donor
assistance in such a way that commitments and expenditures were aligned
to Afghanistan's needs and its own vision for its future," the Bank said
in a statement.
FAO study on Sri Lankan tea taste, appearance
Sri Lanka has undertaken a project in association with the Food and Agriculture
Association [FAO] to study how different climatic regions affect the taste
and appearance of tea.
Such a study could benefit India, where tea is grown in a much larger
geographical area spread from Darjeeling in the east to Nilgiris in the
"A study is being undertaken in league with the FAO's inter-governmental
group on tea, on how climate affects the chemical properties in the beverage
and its positive effects," Sri Lanka Tea Board chairman C.S. Ratwatte told
the Press Trust of India (PTI).
The study would help growers know exactly what these differences are
and its positive impact on human health and consumer preference, Ratwatte
Tea grown in Sri Lanka falls broadly into 6 climatic areas, and each
has its own unique characteristics.
While the difference in taste and appearance from various areas was
known, what was not "widely" known was that these variations were the result
of different chemicals in 'made tea'.
These chemicals have been produced due to a combination of the climatic
zone, the planting material and the method of manufacture.
An example was the tea produced in the Nuwara Eliya climatic zone, which
has chemical properties more akin to green tea than the standard characteristics
of black tea.
The study was deemed necessary because inadequate research had been
carried out so far on the subject.
Better Maldivian public services via IT
MANILA – People living on the scattered atolls of the Maldives will be
better able to access public services through the Internet under the Information
Technology Development Project, for which the Asian Development Bank (ADB)
on December 17 approved a US$9.5 million loan.
The project to link government agencies and provide information and
services electronically to the public will improve the efficiency, transparency,
and accountability of public sector management. The project will also establish
the National Computer Center to coordinate ICT policies, standards, and
practices for government work, and to build Internet kiosks in remote atolls.
It will bring in sector reforms to bring down the costs of telecommunication
access and services, which are relatively high.
A quarter of Maldives' 280,000 population is on the island capital of
Male, and the rest are spread among 200 islands. "Most people on the atolls
would be hugely empowered if they could access public services through
the Internet at the same affordable prices as on Male," says ADB senior
financial analyst Dong-Soo Pyo.
The project will link government ministries and related organizations
in Male as well as on 20 outer atolls. The networks will be extended to
other islands in a phased manner in future.
South Asian insurance regulators meet
The South Asian Insurance Regulators Forum was recently inaugurated in
Colombo. The forum was organised by the Insurance Board of Sri Lanka (IBSL)
with insurance regulators from SAARC countries taking part.
"The primary objective of this forum is to promote co-operation among
South Asian insurance regulators to facilitate regulatory activities; the
sharing of information and exp-eriences; the training of regulatory staff
and the harmonisation of legislative approaches," said Dayanath Jayasuriya,
Director General of IBSL. Nadeem Ul Haq, the IMF Representative in Sri
Lanka, making the keynote address said there was a need to build good regulations
with incentives. Country representatives also made separate presentations
on the current status of the insurance industry and regulation in their
Container truck firms face difficulties
The Association of Container Transporters (ACT) says it is has been facing
a crisis in the past years and is hopeful the new ministers handling finance
would be able to solve their problems.
ACT, while welcoming the new deputy finance minister Bandula Gunawardene,
also in charge of rural economy, said the container industry suffered its
worst period in the past two years
It said mostly small scale entrepreneurs were involved in the industry
owning a few vehicles with finance from lending institutions. "They have
mortgaged their properties to obtain loans to purchase commercial equipment.
Most of these loans or leases are in arrears and some vehicles and properties
are being seized due to nonpayment of loans/leases," the statement said.
While agreeing that the situation cannot be changed overnight, the association
said it was necessary to provide some assistance to the industry particularly
The World Bank has approved a US$22.56 million credit to Nepal to help
finance the Telecommunication Sector Reform Project. The project supports
the implementation of the government's sector reform agenda. "The government
recognises the importance of telecommunications to be a key factor for
the economic development, social inclusion, and enhancement of the welfare
of the population," says Kenichi Ohashi, World Bank Country Director for
SINWA retains MTI for strategic planning
Sinwa Holdings Pvt. Ltd has retained MTI, the International Marketing Solutions
Company, to carry out a comprehensive strategic marketing planning exercise
using MTI's proprietary 8S model.
With its 51-year history Sinwa is one of Sri Lanka's leaders in bonding
solutions, rubber products and fashion footwear representing brands such
as Multibond adhesives and Sinwa shoes.
Commenting on this strategic decision, Sinwa's Managing Director Mr.
Mohideen Cader said, "In times as competitive as these it is of paramount
importance that we ensure rational, strategic thinking to provide the base
of our activities. I am confident that MTI can provide the framework in
which to do this."
The 8S model is a research based strategic marketing planning model.
It approaches all aspects of the marketing function in a strategic and
It involves a strategic audit of the existing business and culminates
with the formulation of a practical and action-oriented marketing plan
The model is delivered using MTI's innovative ConsulTraining approach
using a series of highly interactive workshops.
PMB concludes first real estate project in the south
The People's Merchant Bank (PMB) concluded its first real estate project
in the country's southern region late last month.
The project was managed by the Bank's Real Estate Division, which was
set up earlier this year. The bank has already purchased another block
of land, which is now being developed with marketing of the land due to
start next month, a PMB press release said.
The next stage of the Real Estate Division's business plan is to venture
into low cost housing since several investors have approached the bank
to form joint ventures to engage in low cost housing projects, it said.
Celltel X'mas Dreams ring out loud at Majestic City
Majestic City has been transformed into a fun filled extravaganza by Celltel
GSM this Christmas.
Thousand of prizes ranging from T-shirts, caps and bandanas to free
facilities from Celltel, discounts of up to 50 percent on new handsets
or accessories, sensational red-uctions at participating shops, and grand
prizes of two air tickets to the Maldives and two phones with connection
are on offer at this promotion "Celltel X'mas Dreams." "Synchronized by
a central Celltel booth in the main lobby of the mall, 'X'mas dreams' is
turned into an electrifying experience through 25 participating shops and
live DJ music and entertainment in association with Sun FM. All purchases
at these shops entitle participants to discounts on Celltel services,"
a Celltel press release said.
Usually late but now punctual!
SriLankan Airlines has achieved consistently high punctuality levels for
timely flight departures around its network for over a year, the airline
said in a statement.
Between October 2000 and October 2001, 85 per cent of all flights departed
within 15 minutes of scheduled departure time and 76 per cent of all flights
took off within three minutes of scheduled departure time.
SriLankan flies to 27 cities in 20 countries and currently has 154 flight
departures a week around its network.
A new fleet of A330s and a concerted effort by the airline's Punctuality
Improvement Committee (PIC) in Colombo has achieved sound results. The
Punctuality Improvement Committee comprises all operational departments
involved in flight departures such as Flight Operations, Engineering and
Maintenance, Cargo, Airport Service, Inflight Service, Catering, Schedules
Planning and Security.
"We recently introduced a superior product by way of the Airbus A330
and A340 and the inflight features they offer," says SriLankan's Chief
Technical Officer Richard Hutton. "What is also vitally important to ensure
an overall quality product is on-time departure.
We thus placed priority on punctuality and are glad to have seen sustained
results over a period of time."
Citi National raises Rs 2.2 bln in funds
The Citi National Investment Bank has raised funds in excess of Rs 2.2
billion over the last two months since October through debt instruments
such as promissory notes, debentures and securitisations.
A bank statement said that through these instruments Citi National has
tapped the market of investable funds of tenors of 6 months to 7 years.
Investors have included pension funds, unit trusts, insurance funds, banks
and semi gove-rnmental organisations as well as individual investors.
"A noteworthy feature of such fund raising is that these specially designed
instruments catered to investors with varying risk baring capacities, from
bank guaranteed to asset backed products," the statement said adding that
instruments also had tenors to suit varying investment horizons whilst
allowing the corporate issuers to match their cash flows.
Out of the funds raised approximately Rs. 1.6 billion was through the
issuance of promissory notes.
Citi National also structured and placed listed debentures issues with
tenors ranging between 2 and 7 years.
"The issuance of long term instruments with tenors of more than 5 years
is important to the development of the capital market as there are no government
bonds of similar maturities. Long term guaranteed debentures can establish
a market driven yield curve for low risk debt instruments.
This is an essential prerequisite for pricing of future issues and for
the valuation of companies, " it said.
Securtisations carried out by Citi National has enabled companies to
diversify their funding sources and access lower cost funds. Also importantly,
companies have gained access to longer-term funds which match their cash
inflows from assets.
The main concentration of issuers for securitisation so far has been
in the leasing industry however Citi National recently ventured into securitisation
of hire purchase receivables.
The structured financing team at Citi National is presently working
on a number of issues to further diversify the product range.
Citi National Investment Bank is the investment banking arm of Citibank
NA in Sri Lanka, and of the National Development Bank (NDB).
Emirates unveils opportunities to Colombo travel
Travel agents in Colombo have been urged to grasp the opportunities presented
by long-term growth plans announced recently by Emirates and Dubai, the
airline's home base.
In a presentation to about 50 travel professionals last week, Emirates
Sales Manager Colombo, Devika Ellepola, said the airline's plans to increase
its fleet to 100 aircraft by 2010, coupled with breath-taking development
plans for Dubai will provide a much needed stimulus to the local travel
"In every crisis, we see an opportunity," Ms Ellepola said. "The commitment
of US $ 15 billion for 58 new aircraft is a forceful vote of confidence
in the future of Emirates and Dubai. Use this to your advantage to sell
more travel out of Colombo."
She said Dubai is also emerging as a major international convention
venue, and is constructing a 9000-capacity complex for the 2003 conference
of the International Monetary Fund (IMF) and the World Bank, an airline
Combank shareholders relieved
It is extremely gratifying to learn that the directors of the Commercial
Bank have decided against proposals to absorb the bank into a holding company.
Along with many others, I took up this issue through the newspapers
raising my concerns. As a layman it was initially difficult for me to understand
the real impact of the proposal. But after obtaining the necessary information
from my brokers and monetary authorities, I was shocked that a proposal
of this nature had even been made because there was a real risk of the
blue chip Commercial Bank share becoming a valueless piece of paper after
being sucked into a holding company.
The issue has now ended and shareholders of the bank must be thankful
to the Central Bank and the bank's board of directors for having clearly
identified the dangers of the proposal and refusing to permit the formation
of the holding company.
BA withdraws fuel surcharge
British Airways (BA) says it is withdrawing the fuel surcharge worldwide
effective from December 23.
"The withdrawal of the fuel surcharge is in direct response to customer
demand and the recent fall in fuel prices," a BA statement said.