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29th November 1998

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Fresh dressing for textile industry

The first instalment of Rs. 195 mn to the Textile Debt Recovery Fund (TDRF) was paid by the Treasury last month, a top Treasury official said.

The government last year, abolished the duty on textiles to enable the apparel industry to have quicker lead times and stem the smuggling activities that were taking place.

The move brought an outcry from the weavers, who were struggling for survival before the duty was abolished. The industry had accumulated a total debt of Rs. 3 bn, which the manufacturers were unable to repay.

The government then created the TDRF where total debt burden was transferred to the Fund, and the government will pay the interest on the loan for 3 years. These measures were introduced to relieve the manufacturers from interest burden and cash flow problems for the next three years, enabling the bank to re-inject needed capital for modernisation.

However, the weavers are unable to secure funds for modernisation as the banks are reluctant to lend to the industry.

"We understand the banks' and the manufacturers dilemma," the official said. The Treasury is drawing up a course of action to convince the local lending institutions to support the manufacturers who have the capacity to expand into a viable institution to meet the challenges of the future, the official added.

Local textile manufacturers claimed last week that their industry is knocking on death's door, with around 30,000 employees being redundant following the government's abolition of duty on imported textiles.

The weavers claim that the duty free import of fabrics has affected local production and accused apparel exporters of misguiding the government.

"The apparel exporters have gained nothing by the removal of duty on imported materials," an angry manufacturer said.

"The garment lobby has totally misled this government and 30,000 people have been thrown onto the streets, Deputy Chairman Ceylon Textile Manufacturers Association, Dan Mukunthan said.

"The very people who promoted this are themselves in big trouble today," he said.


Private operators unhappy

The three telephone operators said they were "disappointed" with the new interconnection agreement unveiled by the government telecommunication watchdog, Telecommunication Regulatory Commission (TRC).

The two private operators (Suntel and Lanka Bell) said that they might have to pay more to Sri Lanka Telecom (SLT) under the new agreement, which becomes effective this week.

"We are disappointed. But we will have to live with this for the next three years," Suntel Managing Director Jan Campbell said.

The dominant carrier SLT said the new interconnection agreement favours the two wireless operators.

The Telecommunication Regulatory Commission (TRC) unveiled a new interconnection agreement last week that would replace the controversial sender-keeps-all system and lead to revenue sharing among the operators.

The new ruling was made in a bid to end a revenue row among the three fixed access telephone operators, which have substantial foreign investment.

Under the agreement, which will be effective for three years, for the first time, the operators will have to share revenue from both incoming and outgoing international calls, TRC Director General Prof. Rohan Samarajiva said.

However, both Suntel and Lanka Bell argue that earlier they had no way of monitoring the number of calls coming into their network from overseas and therefore, were unable to figure out if they would actually benefit from the new system.

Revenue sharing on the lucrative international calls will take effect from December 1. Revenue sharing on local calls can come into effect only after the three operators, establish common telephone directory services. A date has yet to be fixed for revenue sharing on local calls to become effective.

A senior SLT official said they will not be able to benefit from the revenue sharing until a directory is in place. "We all know how long it will take to have a directory printed so we are not going to benefit from the revenue sharing proposal."

SLT is unhappy about the decision to share their lucrative revenue on international calls with the two WLL operators.

SLT had earlier accused the two operators of undercutting them and threatened legal action against them for allegedly resorting to unethical practices to take away its market share.

The Sri Lankan telecommunication industry is expected to grow by 15 to 20 per cent next year, industry analysts said.

Sri Lanka Telecom is 35 per cent owned and managed by Japan's NTT, while Suntel is owned by Telia telecommunications of Sweden and Lanka Bell has a major investment from Transasia Telecom of Singapore.


Bank of Nova Scotia to open in March

By Shafraz Farook

The Bank of Nova Scotia will commence business with a USD 10 million capital and a reserve USD 2 million in March next year.

Mr. David Tait, who will head the local operation told the Sunday Times Business that Sri Lanka was the next step to their exposure in the Asian region.

The bank initially will commence operations with private banking and trade financing.

The 350,000 or more expatriates living in Canada will find transactions cheaper and faster, forming the base for the banks commercial operations here, he said.

Branches in Galle or Kandy or another branch in Colombo will be opened in the future, Tait said.

The Bank of Nova Scotia operates in 52 countries worldwide, including Asian countries like India, Bangladesh, Hong Kong, Singapore and Malaysia.

The bank will adopt a rather cautious approach at first and only accept deposits. Lending will come later, Tait said.

Banks' traditional role is Changing and are becoming centres for iinformation. Customers use banks not only to deposit and borrow but also to pay their consumer bills and access other information, he said.

Tait will be the only expatriate employee while about 15 local bankers will be hired and sent to their Indian branch for training. The bank's Indian branch has been in operation for over 20 years.


ICA to judge best annual reports

The Institute of Chartered Accountants is once again organising the Annual Competition to select the Best Annual Reports published in the country. In its endeavour to promote excellence in Accounting and Annual Financial Reporting in the country, the Institute has, this year, expanded the categories.

The Technical Committee has already commenced the preliminary evaluations of the reports and the Institute hopes to organise the Awards Ceremony by mid-March 1999. Applications will be received by the Secretariat till 5th December 1998, a news release said.


LB Finance ventures into new fields of business

LB Finance Limited with 27 years of operations as a Finance Company commenced pawn broking recently. The first pawning centre of the Company was opened by the Company's Chairman, Des-hamanya Dr. W. M. Tilakaratna at No. 520, Maradana Road, Colombo 10 on November 9. The Company has plans to open similar pawning centres in Kandy and other suburban areas in the near future. The pawn broking activities of L B Finance Limited will be carried out by an experienced staff headed by a former banker M A. G. Abey-ratna, whose experience dates back to the time institutions commenced pawn broking. With his experience in this field, Mr. Abeyratna is of the opinion that L B Finance would be very successful in this new venture due to the confidence the public has in the Company. The low interest rates charged and the flexible redemption options offered to customers supported by an outstanding customer service will enable the company to successfully compete in the market.


Business briefs

NDB in Kandy

The National Development Bank has opened its ninth branch in Kandy.

The Kandy branch will offer medium to long term finance, including finance for SMI, provide project loans, working capital, leasing and services such as opening of letters of credit, for business enterprises, and also operate a special scheme known as the Perennial Crop Development Project (PCDP) implemented by the Central Bank.

New sales centre for Ceylinco Life

Ceylinco Insurance Company's Life Division recently opened a new sales centre in Colombo to accommodate the company's rapidly expanding business.

Situated at No 60, Park Street, the new sales centre will house the company's sales force from the Ceylinco Life Centre in Kollupitiya, leaving most of the administration duties to be carried out from the Life Centre. The sales centre is designed to accommodate a workforce of 200 and includes a fully equipped training room for the sales staff, library and conference room facilities.

Commerical Bank in Seeduwa

The Commerical Bank of Ceylon recently opened its 59th branch in Seeduwa, linking this busy town to its ComNet network.

The new branch is connected to 58 other branches of the Bank making it part of the largest computer-linked banking network in Sri Lanka. The Seeduwa branch also offers 24 hour banking facilities through the CAT Automated Teller Machine and ComTel Telephone Banking, a bank release said.

Browns to sell Olympus

Brown & Co. Ltd., have obtained the distributorship for Olympus cameras, the world renowned market leader.

Browns MD, Suraj Fernando stated that their decision to enter the camera market was influenced by the need to have a complement of duty free merchandise at the two company outlets. "We felt that the Sharp range of Consumer Electronics and Domestic appliances needed to be complemented with a range of home appliances, personal care products, cameras, wrist watches and pens," he said. Mr. Fernando also said that very soon Browns hoped to announce the distributorship for a leading brand of pens and writing instruments as well.

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