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25th April 1999

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CEAT makes Kelani fit for United States roads

Associated CEAT, the Sri Lanka-India joint venture tyre manufacturer, has announced that the company has provided its strategic partner Kelani Tyres Ltd., with its compounding technology as the first step of a major technology transfer project. The initiative, which is intended to bring Kelani's manufacturing processes on par with those of CEAT, includes transfer of technology and expertise in the areas of process control, utilities, tyre design and construction, a news release from CEAT said.

The company's Managing Director Abhik Mitra said the end result of this transfer of technology would be that tyres manufactured by Kelani would be in a position to compete globally with well known brands, enhancing their potential for export.

The transfer of CEATs compounding technology alone, would guarantee a 30 per cent improvement in the performance of Kelani tyres by mid April this year, he said.

The management of CEAT - Kelani is confident that the technology transfer would enable the joint venture to obtain Department of Transportation Registration in the USA, which is a prerequisite to exporting to that country. CEAT, which exports regularly to the USA, already has this registration.

"Delta" wins Airline Of The Year award

Delta Air Lines recently won the prestigious "Airline of the Year" award nominated by the magazine Air Transport World (ATW) in its 25th anniversary awards issue.

In selecting Delta Air Lines as Airline of the Year, ATW records that it is "recognizing a company that in a sense is completing a long and painful journey of discovery from which it has emerged stronger and wiser," says a news release.

Delta's record earnings of US$1 billion for its fiscal year ended June 30, 1998 and its record US$327 million profit in the first quarter of the current financial year, testify to the ultimate success of that journey, just as its rapidly improving service product demonstrates a commitment to restoring a name long synonymous with excellence in that regard. George Stuarts is the General Sales Agent.

Code share service from Cathay Pacific and Japan Airlines

Cathay Pacific Airways and Japan Airlines introduced new codeshare services between Hong Kong and Osaka and Hong Kong and Nagoya, effective March 28 and April 1 respectively. The codeshare services on both routes provide one non-stop daily flights operated by Cathay Pacific.

In addition to the new codeshare agreement, the two airlines will participate in each other's Frequent Flyer Programmes. "Asia Miles" members have already been able to earn and redeem Asia Miles on Japan Airlines and Japan Asia Airways flights since 1st February while JAL Mileage Bank members began earning and redeeming JAL mileage Bank miles on Cathay Pacific from 1st April this year.

Tea stocks lost in floods: buyers affected as a result

Colombo's tea markets last week saw some improvement in the prices for low grown teas but off the auction centre, there were worries that torrential rains in the city which flooded many stores and warehouses may have washed away some tea stocks, brokers said.

Ravi Kumararatne, President of brokers Asia Siyaka said the stores of some buyers had been affected by flooding and stocks may have been lost. "I don't know how bad the situation is but we hear some stores have been affected."

Maxwell Fernando, consultant at broker Somerville, said some of their tea chests had been affected by the flooding but there was no crisis in the industry.

Analysts say that even if stocks have perished the impact would be minimal since the next couple of auctions would see enormous quantities of six million kgs and over at each sale.

"These are large quantities that would be on offer," Fernando said, adding that Sri Lanka was heading for another record year of over 300 million kg in production.

Colombo's tea prices have slumped in recent months, hit largely by last year's Russian financial crisis. The Russians, key buyers at the Colombo auction, have resumed purchases since the problems eased but are buying at the lower and cheaper end of the market.

Chrisantha Perera, chairman of broker Forbes and Walker Ltd, said that tea prices have fallen to below cost of production levels.

Last week's auction averages were not immediately available but the average in the auction the week before, was Rs. 98.37 per kg.

The average cost of production for manufacturers varies from Rs. 80 to 120 per kg with higher costs generally affecting small producers.

Perera said tea prices in other centres were much better than in Colombo, probably because Sri Lanka's exposure to Russian markets was much greater than other tea producers.

PMB debentures snapped up

People's Merchant Bank Limited's Rs 150 million debenture issue was oversubscribed on the opening day. People's Merchant Bank has received applications for 1,756,150 debentures of Rs 100 each to the value of Rs 175,615,000 as at 22 nd April 1999 by 2 pm. The issue on offer was 1,500,000 debentures totalling Rs 150,000,000.

The bank closed the issue on April 23, 1999 at 4.30 pm owing to the over subscription. The basis of allottment will be decided by the directors of the company in consultation and agreement with the Colombo Stock Exchange before expiry of seven market days from closure of the issue.

The debentures were guaranteed jointly by the principal shareholders of the bank People's Bank, Hatton National Bank Ltd, and DFCC Bank. The main objective of the issue was to raise long term funds for expanding the bank's fund based activities such as leasing, discounting of trade bills and investment portfolio.

World Bank to guarantee private loans

The World Bank yesterday announced a new scheme to help developing countries raise money on private capital markets, provided they follow Bank economic reform prescriptions, reports Agence France-Presse. The Bank is offering to guarantee a part of loans raised by such countries on the private capital markets, and the guarantees "are expected to play a catalytic role in helping World Bank borrowers with strong economic and social programs improve their access to private foreign financing," a Bank statement aid.

The Bank already provides guarantees for money borrowed by governments for projects linked to structural and social reform, but the new facility would partially guarantee funds raised on the private capital market, such as bond issues. But such guarantees would only be available to governments carrying out World Bank-approved "structural, institutional, and social policies and reforms."

The Bank said it would be starting a pilot program with $2 billion available in credit guarantees, but for the moment no particular countries were requesting such assistance.

The $2 billion would be spread over several projects in coming months, adds Dow Jones, with the overall program to be reviewed at a later date before a more permanent mechanism is proposed within the bank.

The guarantees could form part of a wider loan program from the World Bank or its subsidiaries or might be included in loan programs put together by other lenders, according to Wednesday's statement.

ADB forecasts for developing Asian Country's

Asian Development Bank forecasts for gross domestic product and consumer prices, from the bank's annual Asian Development outlook (percentage change on previous full year):

GDP Consumer prices
1998 1999 2000 1998 1999 2000
China 7.8 7.0 6.5 -0.8 2.0 3.0
Hong Kong -5.1 -0.5 2.0 2.8 -1.5 1.0
Singapore 1.5 1.0 4.0 -1.5 0.5 2.0
Taiwan 4.8 4.9 6.3 1.7 1.9 2.6
South Korea -5.5 2.0 4.0 7.5 2.0 3.0
Indonesia -13.7 0.0 2.0 58.2 17.0 9.5
Malaysia -6.2 0.7 2.7 5.2 4.2 3.8
Philippines -0.5 2.4 4.0 9.7 8.5 7.0
Thailand -8.0 0.0 2.5 8.1 3.0 5.0
India 5.8 5.9 6.0 14.4 7.5 7.0
Pakistan 5.4 3.4 4.6 7.8 8.0 9.0
Sri Lanka 5.3 5.0 6.2 9.4 9.0 8.0
Asia* 2.6 4.4 5.1 6.5 3.7 4.1
*Excluding Japan.

IMF bows to pressure for debt relief

The IMF yesterday bowed to mounting global pressure for more generous debt relief for the world's poorest countries when Managing Director Michel Camdessus admitted it was time to beef up official efforts, the Guardian (p.11) reports.

Speaking ahead of the World Bank/IMF spring meetings, Camdessus admitted that the Heavily Indebted Poor Countries (HIPC) initiative, promoted by the Bank and the Fund as the solution to Third World debt, was in need of root and branch reform.

"The time has come for further steps," Camdessus said, noting that a "proliferation of initiatives" would be discussed by finance ministers at next week's meetings.

Today, UK International Development Secretary Clare Short will become the latest G7 politician to criticize the official debt relief efforts as inadequate, the story says.

In a carefully timed attack on the eve of the spring meetings, Short will say that the HIPC initiative has failed to help reduce poverty in the developing world.

"Relief under HIPC has been too slow and it has failed to secure that 'exit' from unsustainable debt that was promised," Short will tell Commonwealth leaders today. "Above all-and my biggest concern-HIPC has failed to free up resources for spending on anti-poverty programs." The FT (p.7) also reports.

Meanwhile, French Finance Minister Dominique Strauss-Kahn in Dakar today and tomorrow will defend his debt relief proposals at a franc-zone finance ministers meeting, Les Echos (p.7) reports, and the Daily Yomiuri (p.16) and the Japan Times (p.1) also report on Japan's debt relief proposals.

World 1998 export growth slumps amid Asia's economic crisis: WTO

The growth in world exports plummetted three-fold to 3.5 percent in 1998 due mainly to the economic crisis in Asia, the World Trade Organization said.

The WTO warned that for export volume growth this year to match even that lower level, trade would have to pick up in the remaining months ahead.

A quicker-than-expected slowing of US or Western European economic growth, or a weaker recovery in Asia "would clearly imply growth below 3.5 percent in 1999," said a WTO report on trade developments.

Nevertheless, the report noted that the worst appears to be over for the five Asian economies Thailand, South Korea, Indonesia, Malaysia and the Philippines - most brutally hit by the financial squeeze that broke in 1997.

"A moderate recovery (in Asia) is the most likely scenario for 1999," the WTO said.

On the negative side, economic difficulties in Brazil and Russia could cast a shadow on their neighbours with whom they have extensive trade ties, the report noted.

Also the impact of steep oil and commodity price falls last year on commodity exporting countries would become fully apparent only in 1999.

Rising oil prices, following recent OPEC pledges to limit supply, could help cushion some of the pain if the increases prove durable, the report said.

Last year's performance looks sickly beside the 10.5 percent growth of global exports in 1997 and an average growth of six percent between 1990 to 1995.

Trade expansion still beat world gross domestic product (GDP) growth of two percent last year but by a much smaller margin than in previous years, the authors said.

The trade picture was gloomy in value terms also, as exports last year of 6.5 trillion dollars were two percent lower than the figure the previous year.

Exports of services, at 1.3 trillion dollars, posted their first annual decline since statistics were first compiled in the mid 1980s, the report said.

While all major regions suffered a marked slowdown in trade growth, the biggest paralysis in import terms was in Asia.

Japan's serious downturn helped to hammer Asian imports which fell 8.5 percent in total although the rates in East Asia ranged from a 34 percent drop in South Korea to a 26 percent decline in Malaysia.

Only South Asian countries such as India and Sri Lanka saw imports rise.

Trade did pick up in most Asian countries in the last quarter of 1998, partly due to the strengthening of the yen and other Asian currencies against the dollar, the WTO noted.

The United States remains the world's biggest trader, absorbing around 15 percent of imports and one-eighth of exports.

The booming US economy sucked in 10.5 percent more in imports in 1998 than the previous year, leading to a 253 billion dollar trade deficit.

The report highlights the large commodity price drops last year.

This pushed the share of primary products in world exports below 20 percent in current price terms for the first time since World War II.

The price falls were particularly harmful for Middle Eastern countries and poor African nations, many of whom depend on agricultural exports for a large share of their export earnings.

Prices of manufactured exports and services also fell last year, but by less than those of commodities.

INRO starts two-day meeting with an uncertain future

The International Natural Rubber Organisation (INRO) began a meeting of its policy-making council on Thursday which officials said could determine the fate of the world's last commodity pact with economic clout.

The council was expected to decide on a proposal to adjust INRO's intervention price range at the two-day meeting in the Malaysian capital, officials said.

A press communique would be issued at the end of the meeting on Friday, INRO said in a statement. Industry officials said INRO's governing council was likely to approve a proposal to raise the group's reference price in a last-ditch attempt to persuade Thailand and Malaysia to reconsider their decision to leave the organisation.

But a Thail deputy minister said on Thursday it would not review its withdrawal decision even if reference prices changed.

Under the proposal, INRO's reference price would be raised by six percent to 227.85 Malaysian/Singapore cents per kg, and intervention levels would be adjusted upwards accordingly.

The new "may-buy" level would be 194 cents and "must-buy" 182 cents. The "may-sell" level would be 262 cents and "must-sell" 273 cents.

The reference price is currently 214.95 cents, while the "may-buy" level is 183 cents, the "must-buy" 172, the "may-sell" 247 and the "must-sell" 258.

Thailand and Malaysia have complained that the intervention level is too low and should be raised.

Several attempts have been made by INRO's governing council to adjust the price range to reflect Asia's economic conditions, but no consensus has been reached yet.

Barring any second thoughts, Malaysia will leave INRO on October 15 after a year's notice while Thailand has said it would also quit. Both countries said INRO failed to shore up rubber prices, now at long-term lows.

Thailand said on Thursday it may resume local rubber market intervention to boost prices.

Industry officials said INRO was doomed to collapse with the withdrawal of Thailand and Malaysia, which together account for more than 50 percent of the world's production.

Officials said the council would also decide on a proposal to replace the daily market indicator price for INRO's price range, currently a hybrid of the Malaysian ringgit and the Singapore dollar, by a single currency, perhaps the Singapore dollar.

"This could result in a larger increase in the reference price than what the producers had asked for," an official said.

Some delegates said council members might not be able to decide on INRO's fate this week and put off a decision until July.

INRO, set up in 1980 to stabilise world rubber prices under the U.N. Conference on Trade and Development (UNCTAD), groups six rubber producing and 16 consuming countries.

The producers are Thailand, Indonesia, Malaysia, Ivory Coast, Nigeria and Sri Lanka.

Consuming members are the United States, Japan, China, Germany, France, Austria, Belgium, Luxembourg, Denmark, Finland, Greece, Ireland, Italy, the Netherlands, Spain, Sweden and Britain. Belgium and Luxembourg are considered as one member.-(Reuters)

Plantation course to upgrade executives

National Institute of Plantation Management Institute (NIPM) has introduced a Higher National Diploma Course in Plantation Management with a view to enhance professional status of practising plantation executives, says a news release.

Its duration is 12 months. The course is based on lecture- discussions - presentations and assignments covering 300 hours.

A compulsory assigned dissertation thesis has to be submitted to the examination panel within a period of 6 months. Each modular examination will be in the form of written examination followed by a viva/oral tests.

The faculty will comprise very senior members of university staff, and professionals in various disciplines. Management resource personnel from post graduate institutes, and crop research centres will also assist the institute in the course.

This is the only kind of such courses held at the present time and it is believed that such qualifications would entitle the successful candidates for selection for post graduate studies in plantations/plantations management, and other related subject areas.

The course is expected to begin on May 15.

CATs help keep Colombo clean

United Tractor & Equipment Ltd (UTE) Special Projects Department supplied five more CAT 910F wheel loaders and two CAT D5M dozers with special attachments for solid waste disposal applications to the Western Provincial Council for the Solid Waste Management Project of the Colombo Metropolitan Area.

The OECF funded project is aimed at improving the environment and sanitation in Dehiwela, Moratuwa, Kolonnawa, Sri Jaye-wardenepura Kotte and Maharagama Municipal areas, says a company release.

These new CAT machines will make it possible to improve the present solid waste collection ratio from 39% to 80% and to minimize the environmental impact on surrounding areas of existing disposal sites.

The project will also provide other infrastructure facilities for an efficient and effective collection and transport system of solid waste in line with the Colombo Environmental Improvement Project (CEIP) which is constructing a large scale sanitary landfill site at Hanwella to serve the Colombo metropolitan area.

Junior Chamber creates history this year

Junior Chamber Sri Lanka (Jaycees) created history this year with the signing of a Memorandum of Understanding with the Federation of Chambers of Commerce and Industry of Sri Lanka says a chamber release.

This was signed during the visit of the Junior Chamber International Vice President assigned to Sri Lanka, JCI Senator Louise Jones. Present at this occasion was the Minister of Trade, Kingsley T Wickremaratne.

Junior Chamber Sri Lanka has taken the initiative this year to work closely with the FCCISL in keeping with the objectives of the current JCI World President Yong Suk Choi.

This agreement will help strengthen cooperation between the two parties while establishing mutual contacts at both local and national levels. The agreement highlights areas such as meetings, training for members as well as for public and private sectors, exchange of business and trade information and joint projects, adds the release.

Junior Chamber Sri Lanka is moving towards becoming a business oriented entity in order to meet the challenges and needs of today's society. Its goal is to establish more partnerships with businesses and chambers of commerce. Junior Chamber International too was successful in signing an MOU with the International Chamber of Commerce (ICC).

SLRC reports Rs. 100.8 mn. profits

The Rupavahini Corporation, according to the final accounts approved by the Board of Directors for the year ended December 31, 1998 has made a total income from all its operations amounting to Rs. 669.7m as against the budgeted target of Rs. 634.5m, an increase by Rs. 35.2m, says a news release.

The operational profit recorded for the year 1998 was Rs. 100.8m as against the budgeted target of Rs. 84.5m.

The income from investment being Rs. 41.7m as against the target of Rs. 40m the over-all profit before tax amounted to Rs. 140.8m as against the target of Rs. 122.5m.

However, it has been observed that in 1998 the rate of increase in income was relatively lower than the rate of increase in expenditure reflecting 13.4% and 16% respectively.

This is mainly attributable to the implementing of the second phase of the salary revision which came into effect on January 1, 1998.

The replacement of assets has also resulted in a higher depreciation.

The expenditure incurred in relation to the telecast of Discovery Programmes has been well counter balanced by restricting the procurement of foreign programme material.


ABB switches

ABB spent over 100 years paying attention to the smallest detail to offer the Classiq range of designer switches, dimmers and sockets, to suit every possible location.

ABB's trendy design meets the demands of every individual taste in the interior decoration from "exclusive" to "rustic" and from functional and businesslike to contemporary and casual.

The tear drop shape curved rocker ensure comfortable operation. The Classiq switch is designed with the safety of the user as a top priority.

ABB Installation Material (East Asia) Pte. Ltd., Singapore and their local partners Samuel Sons Co. Ltd., and SMS Private Ltd., will be convening a seminar to launch these products on April 28 at JIAC Hilton

Creativity techniques

Institute of Personal Management will conduct a one-day programme titled 'Creativity Techniques for Human Resource Professionals from 9 a.m. to 4.30 p.m. on May 13, 1999 at the Sri Lanka Foundation Institute, Colombo 7.

This programme has been initiated by the Institute under the Professional Development Project 1999/2000, and has been targeted at practising professionals in the field of management, training and development of human resources.

AirLanka's seventh flight to London from May 1

On May 1, AirLanka begins daily services to London Heathrow with the introduction of its seventh weekly frequency which is another milestone in the growth of its operations, says a news release.

Air Lanka currently flies six times each to London Heathrow, offering a flight every day of the week except Friday. The seventh weekly flight will operate on Friday beginning May 7, which means that AirLanka will begin to offer a daily service from May 1.

London Heathrow is one of the most sought after destinations in the world and the commencement of daily flights to prime destinations moves Air Lanka's product into the ranks of those offered by major international airlines.

London Heathrow is one of AirLanka's busiest destinations and the airline flies thousands of passengers between Colombo and London each year. Air Lanka offers its Colombo/ London passengers convenient connections to six other destinations in the UK on British Midland. Air Lanka also offers passengers travelling from Colombo convenient connections from London Heathrow to other destinations in continental Europe as well as to North America. Further AirLanka's passengers to London have the facility of travelling onward to Paris or Brussels by rail on the high speed channel tunnel operator, eurostar.

Since London Heathrow is itself a popular hub airport in Europe and Colombo offers easy connections to other points in the Indian sub continent, daily flights between London and Colombo will serve to develop Colombo as a hub between east and west and the northern and southern hemispheres, an integral element of Air Lanka's current business plan.

Most Colombo London flights are scheduled for the morning hours arriving in London in the morning or afternoon on the same days, with the exception of the Wednesday flight which offers an alternate afternoon departure, arriving in London in the evening on that day.

Air Lanka flies to four other cities in Europe Paris, Frankfurt, Zurich , and Rome-and will launch a new European destination-Stockholm - in the coming winter.

'Harvest' serves the consumer

Burns Philp Lanka has added to their "Harvest" range of products "Harvest" Coconut Vinegar and "Harvest" Soya Sauce recently.

Burns Philp Lanka is a member of the multinational Burns Philp Group Australia.

"Harvest" has introduced soyameat, vinegar, soya sauce, noodles, jams and table sauces. It also markets "Olina" brand of cooking oils.

Burns supplies the bakery sector "Mauripan" yeast, "Simas", "Marina", Gold Coin" and "Amanda" brands of margarines and fats for bread, cakes.

Face lift for Cotta Children's Park

The reconstruction of Cotta Children's Park was recently completed under the sponsorship of Ceylinco Securities & Financial Services Ltd., and Asian Finance Ltd. These two companies are part of the conglomerate of the Ceylinco Consolidated.

The task of completing this project was handed over to Deshamanya Lalith Kotelawala by the Mayor of Colombo, Deshabandu Karu Jayasuriya. At the inauguration ceremony three trees were planted to commemorate the occasion by Deputy Mayor Omar Kameel, Deshamanya Lalith Kotelawala and Madam Kotelawala, says a press release.

The opening address was made by the Chairman, Ceylinco Consolidated who along with Madam Kotelawala later on distributed gifts to 45 children from a nearby Childrens Home. The children were also treated to refreshments and a magic show.

A presentation of the project was made by Mrs. Malini Aluwihare and the Vote of Thanks was given by Mr. Bandula Ranaweera, Deputy Chairman, Ceylinco Securities & Financial Services Ltd. Special tributes were paid to Deshamanya Lalith Kotelawala for his generosity in sponsoring this project and to Mr. Bandula Ranaweera for his tireless efforts in handling same.

A restaurant run by Sponge Pastry Shop will be available for those patronising the park. A children's play area has also been provided by Seylan Bank - Tikiri Account.

Cotta Children's Park is a well-known land mark on the Sri Jayawardenepura driveway. Much of the labour for this project was employed from those living in the surrounding areas. The sponsoring companies have called this project their "Commitment to the Community", adds the release.

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