9th January 2000

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Masters DDB: "Enemies of the Ordinary"

36 years, 8 months and 13 days to the day Masters Advertising was founded by Cyril E. Masilamani, the company enters the millennium with a new identity - Masters DDB.

At a quiet ceremony attended by Mr. Greg Taucher, Managing Director, DDB Asia Masters Advertising Limited, formally signed off as an Associate Company of the DDB Worldwide Communications Group Incorporated.

DDB is the largest Advertising Agency in USA and the 3rd largest Agency worldwide. It services more than 1300 clients through 306 offices worldwide and Sri Lanka is the 97th country in which it is represented, says a news release.

Prior to this agreement, DDB has worked with Masters on their international clients for Sri Lanka such as - Compaq and McDonald's. Mike Masilamani, Managing Director said, "the challenge was to take the learnings from the international market and adapt it to our Sri Lankan clientele which is approximately 80% of our business."

Masters' current client portfolio includes Development Lotteries Board, Hemas Marketing, Elephant House Soft Drinks, Darley Butler & Co., National Savings Bank, Swadeshi Industries, Associated Electrical and Mount Lavinia Hotel. The Agency is also involved in public service campaigns such as - the Colombo Environmental Improvement Project and the campaign against the advertising and promotion of Tobacco and Alcohol in Sri Lanka.

Andrew Weeraratne, Media Manager - Planning said, the significance of the tie up was the access it gave his department to DDB's specialized media buying arm, Optimum Media.

Dhishna Bastiansz, Account Manager for Compaq, explained, the huge input DDB makes through their regional office, which acts as an extension to Masters, given the fact that the client is based out of Singapore.

Kaushik Mukherjee, Creative Director said, "I am very excited because DDB is known for their strong creative heritage." He went on to say, he took to heart DDB's theme for this year which is "Enemies of the Ordinary."

He elaborated on the theme "We believe that brilliant ideas can achieve extraordinary results. For our clients and, in turn, for ourselves. By instinct and inclination we are enemies of the ordinary. Impatient with the status quo, we are driven to avoid what is comfortable in order to find advantage in the new and unexpected. Our struggle against ordinary solutions is relentless, but never for the sake of being different. Only for the sake of finding a better way."

Greenlanka is at its peak level

Greenlanka Shipping Ltd, Agents tor Taiwanese giants the Evergreen Marine Corporation and Uniglory Marine Corporation, have handed just over 1 million teus of containers during their 10 years service in Colombo.

Greenlanka Shipping is one of the most successful Liner Shipping Agents in Sri Lanka whose innovative approach to Shipping has encouraged their Principals to make vast inroads into the Sri Lanka Shipping scenario presently with more than 36 main line vessel calls per month, which is truly on achievement for a Colombo Agent.

With the highest number of vessels calls per month, and by extension the largest caller to Sri Lanka, this Taiwanese group contributes a substantial revenue to the SLPA and have assured their unwavering faith in maintaining Colombo Port as their Indian Ocean transhipment hub, said Greenlanka Executive Director,Mr.Prashan Nanayakkara.

Presently both, Evergreen and Uniglory are on a new building spree and have launched their new vessels at regular short intervals. At the Evergreen recent launching ceremony of their new 'U' type vessels in Kobe, the group Chairman's invitation to attend the launching ceremony was accepted and attended by Managing Director Capt. Gamini Nanayakkara and Executive Director Mr. Raju Radha .

For the Uniglory launching of their newly built vessel 'Uni Perfect' which is to be held at Nagasaka shipyard on 7th January 2000, their invitation has been accepted by Group Chairperson Mrs. Norma Nanayakkara and Managing Director Capt. Gamini Nanayakkara.

In a further statement made by the Executive Director, he said that Greenlanka is at its peak achivement and will not rest on its laurel. The Company is dedicated to a continuous and relentless improvement to achieve overall benefit to the Company, and to the service provides of Evergreen and Uniglory.

The total handling of container for the year 1999 has been 180,744 Teus (346 Callers) and the cumulative total for the 10 Years ending December 1999 has been 1,002,979 Teus (2137 Vessels).

The 21st century is going to be the air cargo century

"The 18th century was the century of the ship - the clipper ship created international shipping; the 19th century was the railroad century; the 20th century was the truckers' century and the 21st century is going to be the air cargo century," according to Walter H. Johnson Jr., past president, chairman of education, and member of the executive council of TIACA - The International Air Cargo Association - which has its headquarters in Miami, Florida.

This is "because the global marketplace, which has emerged as the most powerful economic power in the world, is dependent upon the aeroplane," says Johnson. "There cannot be a global marketplace without the air cargo business." So that business is going to boom and it is going to prosper extraordinarily in the undeveloped countries of the world which don't have any surface infrastructure like roads and railroads, he suggests. They will be able to leapfrog some of the problems which some of the other countries had as they were growing.

"There will be an incremental growth in western Europe and the United States, but the big growth is going to come in Asia, Latin America and Africa, and to and from those continents," he says. One consequence of this, Johnson believes, is that "inevitably we are moving towards more pure freighters". The majority of air freight is currently carried in the bellyholds of passenger aircraft, he agrees, and "not only that, but the whole air freight business is carried in aeroplanes that were designed for passengers - the B747 is essentially a passenger aeroplane, and the only aeroplane in the world that really is designed for freight is the Antonov 124," he says. "There is a company in Georgia which is developing and has a contract for 50 aeroplanes for Federal Express," he informs. "This is going to be a five to six tonnes capacity aeroplane, with short runway capability, slow speed and it is going to be a perfect aeroplane for serving the less developed portions of all countries." (Ayres Loadmaster LM1000; ACW 25 Sept,, p6).

The aircraft is designed as a pure freighter from the wheels up, Johnson continues. "It is also a turbo-prop aeroplane but, because of the general laws and safety restrictions, it has two engines with a single propeller, capable of operating on either one of the engines. They have one flying, and I think that they are working on the certification of it now."

On the question of the growing dominance of the integrators, Johnson says: "What is happening now is that the world is changing. Panalpina is practically an integrator. They now contract whole aircraft on a five or seven days-a-week basis, and it is just exactly as though they owned them. Emery, too, has long been an integrator and a forwarder. So I think that one of the trends in the business is going to be a movement towards the consolidation of those companies into mega companies that provide the full range of services."

As to how this will leave the scheduled carriers- "I think that one of two things will happen to them. Some of the scheduled passenger carriers are now developing as much as 25 percent of their business from cargo, but when you are down in the 7 or 8 percent bracket, the passenger business wags the dog so much that it really doesn't get all the emphasis lt should.

"So, I think that the passenger carriers will be moving towards freighter aircraft and I think we will see more of that done, but I think that they will still carry cargo, because they have tremendous capacity in terms of frequency."

Cargo uplift aids Lufthansa profits

In the first nine months of this year the Lufthansa Group earned an operating profit of DM 1.03 billion (US$553.8 million), helped by cargo growth which outstripped capacity increases.

"With this performance we remain pace makers in the airline industry. The earnings result underscores Lufthansa's ambition to lead the field," said Lufthansa chairman and CEO Jurgen Weber. Following a difficult start, the course of business has improved and for the full year, the group expected an operating profit of DM 1.3 billion ($698.9 million).

Lufthansa Cargo lifted its nine-month sales figures by 6.2 per cent, outstripping the 4.5 percent rise in capacity available. The cargo load factor rose by 1.1 percentage points to 67.2 percent.

Like the rest of the airline industry, Lufthansa has been handicapped this year by the global economic situation. However, this was added to by adverse operating conditions in Europe with the overburdened air traffic control system and the situation in Kosovo.

Capacity expansion by the airline industry performing as a whole in excess of market growth had also impacted on the course of business.

"Stefan Lauer is to succeed Wilhelm Althen as chairman of Lufthansa Cargo's executive board, said a spokesman for the carrier. Lauer, currently executive vice president marketing and sales, assumed his new role from January 1. Althen will join the cargo carrier's supervisory board. Jean-Peter Jansen has been confirmed as a full participant of the three-member Lufthansa Cargo board.

ANA proud of its history and confident of its future

ANA is a family of over 15,200 employees worldwide dedicated to working together to create the ANA product. ANA supports these employees through training and education designed to foster the specialized and general management skills needed to operate an airline that is both competitive to today's levels and flexible to meet the challenges of tomorrow. The core of this process is education at every career stage from new recruits to executives.

Education needs proper infrastructure. ANA established career development facilities near both of its major employment areas, Tokyo and Osaka. To support its flight operations, ANA operates the ANA Flight Academy, complete with full flight simulators for each aircraft type it operates. Basic flight training centres in Bakersfield, California and Kumamoto, Japan facilitate in-house ab-initio pilot training. Meanwhile, the Inflight Services Training Centre and the Marketing Training Centre, both located in Tokyo, ensure the quality of ANA's product from the time of reservation to the actual flight. ANA's expertise in training has been recognized internationally and ANA offers its training services for crew and cabin attendants to other airlines.

Every ANA employee is ensured a challenging job. ANA operates a "Management-by-Objective" programme that stimulates creativity through asking every employee to identify work goals each six months. Management follows progress through regular evaluation and feedback.

The results of this investment are impressive. Absenteeism is virtually non-existent, while productivity in terms of scheduled seat kilometre per employee has increased by nearly 40% to 5.3 million available seat kilometres per employee between 1992 and 1998. Over the same time period, Iabour cost per seat kilometre has declined by 20% and overall unit costs have dropped similarly from ¥14.5 to ¥11.3.

In 1952, Nippon Helicopter and Aeroplane Co., Ltd., and Far Eastern Airlines were established in the Japanese private sector. With their founding, the first scheduled domestic flight services in Japan began. The two operated separately but with close ties until 1957, when All Nippon Airways Co., Ltd., was born through a merging of the two.

ANA grew rapidly, developing a comprehensive route network between Japan's major cities. ANA has, from the time of its founding, kept a place in its heart for the romance of flying. Reflecting this, ANA proudly displayed Leonardo da Vinci's "Flying Machine" on the tail of its original livery.

The year 1986 marked great changes for ANA. The world was opened up when the Japanese government decided to allow increased competition in the expanding Japanese market for overseas travel. In March 1986, ANA's first scheduled international flight left Narita New Tokyo International Airport for Guam. ANA aggressively expanded its international operations from Tokyo to include four continents within the first three years of starting scheduled international services. While capacity restrictions at Narita airport continue to limit ANA's growth at Tokyo, the second phase of ANA's international operations began with the opening of Kansai International Airport in Osaka in September 1994. Kansai operations now make up more than 50% of ANA's total international flight operations.

In January 1998, the Japan-US aviation talks reached an agreement and ANA gained incumbent status. With this landmark event and the opportunities it offers, ANA aims to further expand its global network.

ANA's current corporate colours reflect the changes that have taken place since its founding nearly half a century ago. ANA selected Triton Blue as its colour. Triton is the son of Poseidon with the power to bring calm to stormy waters. This is to symbolize the reliability of ANA as a carrier serving the world's major cities while making flying a pleasurable experience.

The pioneering spirit of ANA's founders is remembered by each employee who wears the ANA pin, emblazoned with ANA's original Leonardo da Vinci "Flying Machine'' livery mark. Every ANA flight is identified by the call letters NH for Nippon Helicopter and Aeroplane Co., Ltd.

ECU -LINE makes steady progress

ECU-LINE has developed quite strongly in Scandinavia over the last 2 years. It started with the opening of their own office in Gothenburg and afterwards in Oslo. Presently ECU-LINE is the second largest NVO in Sweden, with the ambition to become the market leader in the year 2000.

On January 1st, 2000 ECU-LINE has opened its own office in Denmark on ECU LINE DENMARK A./S.

Headquarters are in Copenhagen, but ECU-LINE also has own terminals in Copenhagen of course but also in Aarhus, being able to offer distribution to all interior places in Denmark, customs clearance and possibilities for trans-shipment and forwarding of goods to destinations in Scandinavia and Baltic areas.

For the exports out of Denmark, ECU-LINE DENMARK A/S is offering trucking services every Tuesday and Friday from Copenhagen/ Aahus/ Hamberg in main Antwerp and Hamburg for connection for worldwide destinations.

Beside the export services, Copenhagen will also be the "hub" for the whole of Scandinavia for all import containers ex worldwide origins.

Resellers regulated from this month

Legislation to regulate communication service resellers will come into place during the course of this month.

Telecommunication Regulatory Commission (TRC) officials told The Sunday Times Business that all communications bureaus will have to register with their respective phone companies (Sri Lanka Telecom, Suntel, Lanka Bell) to carry on business.

Prior to this, operators will be required to obtain approval from the TRC to authorise (grant certificates) to the communication bureaus. The certificates will be colour coded to represent the three telecommunication operators.

The amended TRC Act of 1996 (sector 18a) makes it an offence to resell telecommunication services without the TRC's permission. This rule applies to payphone operators as well as communication bureaus scattered islandwide.

However, the existing communication bureaus that are not registered will not be penalised, TRC officials said.

Officials added that while the legislation was complete, the rules and regulations that the communication bureaus will have to abide by, will be finalised at a meeting of the operators and the TRC this week.

In addition, TRC officials said that they were compiling a database of communication bureaus. They said that the three operators were required to submit details of communication bureaus and constantly update it (operational address, billing address, etc.). To date no official figure is available for the number of communication bureaus in operation. Officials say that with the data base random checks could be made and that operators would be peanalised if one of these bureaus violated the code of conduct set by the TRC.

Officials said that subsequently, payphone companies and Internet Service Providers would also be regulated.

Dilmah debuts here

Ceylon Tea Services Ltd., a member of the MJF Group, recently announced that it would market the company's international brand of tea in Sri Lanka.

Dilmah, a Sri Lankan product by origin started out in Australia in 1988 and in the course of the decade that followed, expanded to over 84 countries.

Dilmah rolled out a selection of its teas in a soft launch in October, offering Dilmah Tea in Keells Super outlets initially.

Early this month Dilmah extended its distribution to other A class supermarkets and hotels.

Dilmah Tea will be distributed selectively, since the product offers very high quality in premium packaging, a company release said. High quality restaurants will be amongst those that will eventually offer Dilmah's extensive foodservice product range, the release said.

At present Dilmah Tea is available in a wide assortment at the Commons and The Gallery Cafe.

The product selection at retail includes Dilmah Premium Ceylon Tea, and a selection of Gourmet Teas - English Breakfast, Earl Grey and Ceylon Supreme, the release added.

In the words of Merrill J. Fernando, Founder of Dilmah Tea, 'Dilmah is a special Tea. "We are not a mass market tea and we will never aspire to be more than a niche player".

In Australia, Dilmah Tea is the fastest growing tea brand, commanding approximately 12% market share.

In New Zealand similarly Dilmah is a category leader in growth and commands approximately 16% share.

Dilmah has performed well in Eastern Europe and the CIS countries, establishing itself as a quality brand catering to connoisseurs of fine tea, the release said. The company is looking at tapping the United States market.

By Danali Goonewardene

Third best after bomb

Market update

A bomb blast outside the Prime Minister's office and the shooting of Kumar Ponnambalam, a firebrand Tamil politician with LTTE leanings dampened sentiment in an ailing Colombo bourse. But by a quirk of fate Sri Lanka was the 3rd best performing market in Asia on the day of the blast, falling just 1.5 per cent to rank below the Taipei and Shanghai markets. Analysts were of the view the local market could not slide much further. Hong Kong fell 7.18 per cent and Singapore 5.5 per cent.

Turnover levels continued to slide and average turnover for the week was Rs 21.72. Foreign participation during the week was negligible and net foreign outflows were 23.05. The All Share Price Index dropped 2.79 per cent to close at 556.52 while the Milanka Price Index fell 2.93 per cent to register 910.

"The market is reacting in the aftermath of elections," General Manager, Forbes ABN Amro, Alistair Corera said. "Next week should reflect similar sentiment. It also takes awhile for the market to get back after the holiday season," he added.

"There could be further falls in the market due to the continued risk of terrorist strikes and uncertainty regarding general elections," Strategist, Jardine Flemming HNB Securities, Amal Sanderatne said. "Continued falls in overseas markets would also have a negative impact in Colombo," he said.

"People are uncertain of the way things are going. There could be more attacks," Director Research, C T Smith's Stock Brokers, Rajiv Casie Chitty said. "General elections are around the corner and investors are adopting a cautious

Tea Update

First sale on positive note

Shafraz Farook

The first sale for the New Year concluded last week on a very positive note. Price increases recorded for the best teas was an important and positive feature that would motivate producers to pursue a superior standard of manufacture. " We are optimistic that there would be a greater depth of demand once trading in the middle east is stepped up after Ramazan and the market should hold. In addition, officials say that the seventh phase of the Iraqi oil for food programme that is expected to kick off soon, might be instrumental in getting good prices. They said that they did not expect a repeat of the sixth phase where lower than market prices were quoted. They hope that this and the anticipated increase in seasonal demand would help boost prices.

However, officials say the next few weeks might be weaker due to the backlog of teas that is expected to flood the market and hence feel that the basic economic principals will take effect. A backlog of stocks was caused because of the presidential elections and the subsequent holiday marring two weeks of auctions. They hope it would be only a brief surplus in tea.

In addition, tea trade officials are eagerly awaiting export figures for December, as they strongly believe that it will reduce the overall gap between export earnings of 98 over 99. The deficit over 98 dropped from 16 percent in October to 14 percent in November to Rs. 46.02.

Asia Siyaka attributed the drop in tea bag exports primarily to Russia/CIS during the first half of the year and as a result buyers imported less tea to service the market. They added that pure Ceylon tea exports were well in line with the previous period.

wait and see attitude," he said.

NIPM introduces new training programmes

The National Institute of Plantation Management (NIPM) will be upgrading its existing training programmes and introducing new events in the year 2000.

"We want our plantation executives to have a proper blend of business and technical inputs," says Nimal K. Bandara, NIPM Director in a news release. Based on revised competency standards, the Institute's Prospectus for the new year provides for wide-ranging courses that will enhance the professional status within the privatised plantation companies. For successfully conducting the various programmes, NIPM will also be drawing on specialised scientists, academicians and management consultants.

In keeping with the need to impart skills down the line on estates, the revised arrangements involve strengthening the training component for operational staff and workers. The worker training programmes will henceforth cover all agricultural and manufacturing aspects. "In the emerging situation," observes Bandara, "our emphasis will be on explaining to workers the reasons behind every operation, rather than merely conveying instructions as hitherto without going into the underlying causes." He adds that smallholders in tea, rubber and coconut will also benefit considerably from the new events.

In addition to the NIPM's training complexes at Athurugiriya and Bogawantalawa, another centre is being opened at Agalawatte to cater to the increasing demand from the low-country. All the centres have modern training equipment, auditoria and library facilities. The Institute is also organised to undertake off campus programmes to suit the special needs of individual companies and estates.

Coinciding with the new millennium, the Institute is in the process of bringing out a book entitled "Plantation Management in the New Millennium" which provides a comprehensive treatment of the various disciplines involving plantation management. The 16-chapter publication will be available to the industry shortly.

Roll over smooth

The Central Bank Governor has announced that the financial system in Sri Lanka accomplished the transition to the new millennium successfully.

By 0130 hours Sri Lanka time, all banks with ATM networks had confirmed that their respective systems had rolled over successfully and were functioning normally.

The licensed commercial banks and specialised banks also reported by 12 noon on 01/01/2000 that all their critical systems are being tested and that they have not encountered any problems so far, a Bank release said.

The Central Bank too has successfully completed the testing of its critical systems including the payment systems and banking operations.

Meanwhile a Cyntec release from their event management sectors says that there have been no reports of disruptions or problems to institutions coming under mission critical sectors in Sri Lanka. This could be attributed to the responsible manner in which personnel attached to these institutions have carried out remediation work to minimise disruptions due to Y2K, the release says.

Viruses could surface from January 3, 2000 onwards, it adds. Public are advised to not to open attachments to e-mail messages from unknown parties and also when down loading from the internet, floppy diskettes should be checked for viruses. Virus protectors should be checked for expiry dates as some would have expired on 31st December, 1999, the release says.

CB warns EAP group

Edirisinghe Trust Investments Ltd., registered as a finance company under the Finance Companies Act, No. 78 of 1988, has, broadcast a radio advertisement soliciting deposits from the public stating that the money so deposited is backed solely by gold and offering 17% interest, presumably per annum.

The Central Bank of Sri Lanka has directed the Company to refrain from broadcasting this advertisement containing serious inaccuracies, which could mislead the public, a bank release said. The Company accepts gold jewellery as security for their loans. There is no evidence that they possess any other gold to back up deposits.

India Tec exhibition

An Indian delegation of over 100 companies will show off their products at The India Tec 2000 exhibition to be held at the BMICH this week. The exhibition will be the third international engineering exhibition organised by the Engineering Export Promotion Council (EEPC). Executive Director of EEPC, C.S.Shukla said that everything from nuts and bolts to commercial vehicles and other heavy machinery would be exhibited on the 11 and 12 of this month. Visitors to the exhibition will be treated to live demonstrations at the venue, he said.

In addition, Mr. Shukla said that four laboratories specialising in food, leather and agricultural technology, would be also present at the exhibition. He believes that due to the similarities of both countries, Indian technology would be very suitable for Sri Lanka. Mr. Shukla added that the exhibition also aimed to set up joint venture businesses in addition to probable sale of equipment.

Engineering goods contributed over US $ 4.2 billion to the Indian economy in 1998. Sri Lanka imported an estimated US $ 162 million worth of industrial goods from India. Imports mostly include motor vehicles and their components, Mr. Shukla said. He added that the EEPC attached great importance to the countries in the Asian region and that the exhibition was in view of strengthening ties between the countries.

Indian Electronics impact here

The India's electronics & computer software exports have enjoyed an outstanding performance during the year 1998-99 with the estimated export turnover rising to US $4,283 million destined to 120 countries as compared to US $3317 million in 1997-98. This represents an increase of 29% over the previous year i.e., 1998-99. India's electronics exports to Sri Lanka during 1998-99 amounted to US $18 million, a news release says.

Major items of electronics exports to Sri Lanka are:

Project Services, Telecom Modules, Two-In-One (Radio cum Cassette Player), Telephone Sets, Computer Software, B/W and Colour Television, Electric Sound Amplifier Set, Dish Antenna.

The computer software & services sector has registered a sectoral growth of 66% during 1998-99. The estimated exports in this sector rose to US $3.01 billion in 1998-99 as against US $1.81 billion in 1997-98. During the year, 18 new countries of software export like Malta, Zambia, Greece, Seychelles. Albania, Lebanon etc., were added. The total number of countries of exports has increased from 66 during 1997-98 to 85 during the year 1998-99 indicating a 26% growth rate in market diversification.

The total export of electronics hardware is estimated at US $596 million destined to 105 countries during 1998-99. The annual average growth during the last five years in this sector has been 5.24%.

In the electronics hardware sector the export of consumer electronics goods is estimated at Rs. 850 crore (US $205 mln) during the year 1998-99 increasing from Rs. 600 crore (US $160 mln) thereby registering a growth of 41.67% (28.01% in US $ term) over the year 1997-98.

The export of electronic components has registered a growth of 12.5% (1.66% in US $ term) during the year 1998-99. The export of electronic components has increased from Rs. 800 crore (US $217 mln) during the year 1998-99.

The telecom services and project exports registered a marginal growth of 7.69% in rupee terms during the year 1998-99 compared to last year. In value terms, the exports touched a figure of Rs. 2800 crore (US $675 mln) in the year 1998-99.

Chairman, electronic and computer software export promotion council, Vivek Singhal has said in the release that "Sri Lanka is nearby friendly market providing immense opportunity for exports of electronic items from India, and the exposition will provide a unique platform for display of India's strength in the Sri Lanka market." Mr. Singhal further stated that the live demonstration of Indian technology and machinery at the exposition would immensely help to promote business alliances and for the info Sri Lanka trade co-operation. Seven Indian companies in the area of electronics and telecommunication sector will showcase the latest of the product and technology offering from India at the exhibition to be held at the BMICH.

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