News

Higher interest income boosts DFCC profits

Compared with the same period last year, net interest income showed an increase of 48 percent, a bank statement said.

But, the bank said, as anticipated at the time of its half-year result announcement, net interest income during the third quarter was lower than in the previous quarter.

The sharp reduction in market interest rates resulted in the bank having to "re-price" its loans in order to remain competitive, it said.

The bank also gave relief to borrowers on a case-by-case basis by granting concessions to tide over temporary difficulties in servicing debts.

The hotel sector, which had to face serious problems due to domestic and global factors, was one of the key beneficiaries of these measures, it said.

The gross specific provision for bad and doubtful debts was Rs. 373 million, compared with Rs. 371 million during the nine months in the previous year. The gross specific provision, however, was reduced by recoveries in respect of loans previously covered by specific provisions, DFCC Bank said.

The general provision for potential loan loss on 31 March 2001 was Rs. 49 million and covered the prawn, aqua culture and brewery sectors. Sector provisions were extended to tourist hotel and poultry farm sectors during the quarter ended 30 September 2001. During the third quarter the general provisions for prawn aqua culture and poultry farm sectors were increased.

DFCC said that the increases were considered "prudent" in the light of adverse domestic and global factors affecting these sectors.

Other income at Rs. 278 million was Rs. 13 million lower than in the comparative period. The bank benefited from dividends received on preference share investments made in the latter part of the last financial year and this increase partly offset lower net capital gains on disposal of ordinary shares from the investment securities portfolio, the statement said.

Prices rise again in Jaffna

"We do not know the reason for this condition," the chamber said in a letter to the prime minister and released to the media last week.

Delays in getting Defence Ministry clearance for goods shipped to Jaffna had an adverse impact on the cost of purchase and transport, it said.

It has suggested the government do away with the requirement to get Defence Ministry clearance to transport goods to Jaffna and cancel the 12.5 percent Goods and Services Tax on goods transported by ship which had contributed to the increased cost of goods there.

No GST is levied on goods transported by lorry in other parts of the island, the chamber has pointed out.

Rubber versus oil palm?

I am glad that the Rubber Research Institute (RRI) as a national organisation has carefully analysed all pros and cons of planting oil palm in prime rubber growing areas in the wet zone of Sri Lanka and brought this to the notice of the public to decide which crop is more suited for the country. It is clear from the evidence shown by RRI that the obvious choice for Sri Lanka is 'Hevea' rubber which is virtually a "Kapruka" without having anything to be rejected other than the leaves: whereas in the case of oil palm only edible oil is provided for cooking purposes.

The authorities who take decisions at ministerial levels should also be conscious of the interest among plantation management companies in making quick money from the estates managed by them at the expense of the environment of the country. Already they are felling valuable decades-old trees planted in estates to maximise profits. 

Some are secretly exploiting all mineral resources including gems. 

The environment and the future of the country is nothing compared to the monetary benefits that would accrue to these companies. The country must be grateful to the RRI for the effort taken to protect the environment for future generations.

Dr. H.M. Gunasekara
Colombo 10

Printers' seminar

It will by conducted by experts Bert Talents and Erwin Koerts from the Netherlands. The seminar is useful for advertising agencies, pre-press houses, designers, photographers, newspaper publishers, book publishers and printers to update their knowledge.

CCC says keep fire tariffs

In a statement referring to recent statements on the removal of fire tariffs, the CCC said:

"It is evident that from a consumer perspective, there are benefits largely, in terms of premium costs that would accrue in the wake of the dismantling of the existing Fire Tariff. However, it is our view that the removal of tariffs should be implemented gradually over a period of time, as the insurance industry in this country has not adequately developed to meet a challenge of this nature at short notice. Besides, removal of tariffs may also bring about the danger of the time tested terms and conditions of the fire policy format being varied to the detriment of the consumer."

"The IBSL (Insurance Board) should have the administrative machinery in place to ensure adherence to the tariff so that the existing situation in the market where this is observed more in the breach is eliminated. Increased co-operation between the regulatory authority and the insurance companies should be encouraged if not fostered so as to bring about more self-regulation in the industry."

"However, if it is the intention of the IBSL to remove the fire tariff in the immediate future, then concurrently there must clearly be a suitable mechanism enforced by the IBSL to ensure the long term viability of insurance companies by making certain that adequate solvency margins and technical reserves are maintained with supporting reinsurance arrangements, coupled with a sound investment policy."

Bicycle importers hit back at producers

The Bicycle Traders' Association said in a statement that their members would be able to reduce bicycle prices by Rs. 500 if the government removes the 25 percent duty on cycle imports. 

Responding to a statement last week by the Sri Lanka Bicycle Producers' Association (SLBPA), the importers said local manufacturers import millions of rupees worth of bicycle parts for assembly.

"If local manufacturers could export 80,000 cycles to the international market, facing worldwide competition on a level playing field, why do they need a 25 percent protective duty for the local market?" the Bicycle Traders' Association asked. It said it was surprised to note the claim by local manufacturers that they produce frames, forks, mudguards, chains, stays, seat stays, rims and spokes.

According to Customs statistics for 2001, the manufacturers themselves have imported the island's entire requirement of spokes. Producers import material in cut and ready to use form where minimum workmanship is required, it said.

Swadeshi wins national productivity award

The award, which represents the highest form of recognition at the national level of a company's contribution to value addition, product quality control, productivity improvement and human resources development, was the first of its kind won by Swadeshi.

Amari Wijewardene, Chairperson of Swadeshi, said a number of productivity improvement initiatives were undertaken during the last one-and-a-half years from automating production processes, augmented technology, to introducing 5S methods to improve work practices. Training the work-force received priority, which helped to change attitudes, in turn building commitment to quality and better performance, she explained in a press release.

"We have competed successfully with multinational giants for several decades to carve out significant market shares for our flagship brands like 'Khomba', 'Khomba Baby' 'Rani' sandalwood, 'Apsara', 'Perlwite' and 'Sportsman Plus', and this award will encourage us to strive for even greater heights," she said.

Standardise gas cylinders and prices

Ravi Karunanayake, Minister for Commerce and Consumer Affairs, has made efforts to ease the burdens of poor consumers but the people are watching and waiting with hope as prices are yet to come down as promised by the minister and the companies.

Ordinary consumers are laughing over LAUGFS' offers and forced to hide behind shells over Shell's offers with both companies failing to fullfil their promises. One of the main problems is that the cylinder used by the two companies is not a common type.

We appeal to the authorities to:

- Enact regulation to standardise the gas cylinders and their components.

- Fix the maximum selling price of the domestic gas cylinders and let there be only one price for any one type (domestic, commercial, industrial).

- Permit more gas companies to operate in order to remove the monopoly and provide healthy competition.

Gas is an environmentally friendly, energy saving and economical fuel and the population should be encouraged to use it.

H. D. Herman Perera
Nugegoda.