28th May2000

Front Page|
Editorial/Opinion| Plus| Sports|
Sports Plus| Mirror Magazine

The Sunday Times on the Web


National quality policy to be announced

The Sri Lanka Standards Institution has made a National Quality Policy statement with technical and financial assistance by the Swedish International Development Cooperation Agency (SIDA). The National Quality Policy statement was developed at a 3-day workshop held in Colombo attended by local and foreign experts in the fields of Standardization, Certification, Quality Management and Metrology activities. For the implementation of the National Quality Policy, a Quality Council represented by both Public & Private Sector Institutions will be set up together with the establishment of the National Accreditation Board, a news release says.

The necessary draft legislation for the establishment of the National Accreditation Board will be presented to Parliament shorty. The National Accreditation Board will accredit product and system certification bodies, testing and calibration laboratories, inspection and training organization in accordance with the relevant International Standards, so that the services of these organizations will be acceptable at International level.

The Policy statement refers to the commitment for Quality by the Top Management at National, Institutional and organization levels. Further, it envisages promotional activities for Quality through the National Quality Week Programmes, National Quality Awards activities and through other National awareness programmes. Educational Institutes and Mass Media Organizations are also highlighted in the action plan for promotion of the Quality Policy.

Society for management accountants

The Society of Certified Management Accountants of Sri Lanka (SCMA) will be inaugurated in June. Sri Lanka is the only founder member of the South Asian Federation of Accountants which does not have its own national management accounting body and this need will now be met, SCMA President Lakshman Watawala said.

Speaking at a media conference last week he said the association would conduct examinations and grant membership while maintaining high standards of professional conduct for its members.

The affairs of the society will be managed by a governing council of eight members. Sub committees to undertake activities of the society will also be set up. These include the Executive Committee to deal with finance and administration, Education and Training Committee, Examination Committee, Continuing Professional Development Committee and Professional Conduct and Ethics Committee.

Membership of the association will consist of Associates who had concluded their professional examinations and have three years of recognised practical experience and Fellows who have concluded examinations and have five years experience of which three years are at a senior level.

"SCMA will conduct examinations twice a year and set up facilities to provide lectures. However it will also afford existing institutions the opportunity to tutor students," he said.

These examinations would be competitively priced to enable many people to become members and fulfill the national need for professional people, Mr. Watawala said.

Government sector employees who cannot afford foreign management accounting examinations would be able to sit this exam, he said.

The Canadian International Development Agency (CIDA) provided financial assistance for this venture while technical assistance was provided by the Society of Management Accountants of Canada. This include assistance in formulating the examination syllabus and preparation of study material.

This Canadian accountancy body has also been instrumental in setting up the Institute of Management Accountants of Pakistan.

Vanik in rescue act

Vanik Incorporation which recently downsized operations by 50 percent is now trying to sell 220 perches of prime Kollupitiya land which was bought at Rs. 1.2 million a perch. Vanik has conditionally accepted an offer close to Rs. 1 million, while other offers going for Rs. 1.1 million with brokerage involved, were made, a Vanik news release said.

The announcement of sale made at an unprecedented informal shareholders meeting last week, raised questions from shareholders who said even a villager will not sell a piece of land for a lower price than he has bought it. How does a big Company agree to a lower price. CEO Justice Mr. Meegoda who presided at the meeting countered the question by asking whether there was anybody who bought land in Colombo during the last few years and was able to sell at the cost price it was bought?

He said that the Vanik subsidiaries such as Insurance Brokers, Money Brokers, LB Finance and Stock Brokers are profit making ventures and are profitable operations. The Company, he said was downsized, profit centres which were responsible for raising resources and earning the wherewhithal for their keep, were identified.

He disclosed that the Forbes building valued at Rs. 220 million was sold to Wijesuriya Holdings for debentures worth Rs. 300 million with a market value of Rs. 170 million. He said Vanik had a Rs. 1 billion leasing portfolio which was the best in the country with only one to two percent bad leases. This was a huge asset and the problem is securing additional funding so as to aggressively expand in this sector.

Vanik's shareholder Nahil Wijesuriya of the East West Group owning 12% of the Company's shares resigned from the Board recently.

He believed this was a way of getting feedback from shareholders who could contribute their ideas and recommendations as well as any criticism, the news release said.

Swedish ERP solutions provider in major deal

Intentia, one of Sweden's and the world's top ERP (enterprise resource progamme) developers and leading information technology suppliers has closed a deal for its "MOVEX' ERP solution with Trelleborg Lanka. This is a direct result of Commerce and Food Minister Kingsley Wickremaratne's recent visit to Sweden for business promotion.

This is Intentia South Asia's first major deal in Sri Lanka and also the biggest Movex deal in the South Asian region this year, a ministry relase said.

Trelleborg is a major Swedish industrial company with global interests in automotives, engineering, chemicals and the construction industry. The Company's focus is on comfort, safety and the environment. Thus, Trelleborg Lanka is one of the Group's 14 companies worldwide. The Group's 1999 turnover exceeded U.S. $. 2.6 billion.

Trelleborg Lanka is part of the Wheel Systems Division under which its industrial tyre business unit is the largest unit. This Unit develops, manufactures and markets solid tyres for trucks and other materials-handling equipment.

Established locally in 1976 by the acquisition of a local company, Trelleborg Lanka has become one of the leading players in the tyre manufacturing industry in the region. Currently, the company has 472 employees in this Unit and is composed of two plants manufacturing industrial tyres and farm/forest tyres.

It supplies Trelleborg companies in the USA, Europe and the Asia Pacific. One of its brands marketed in the USA is 'Monarch.'

During his visit, Minister Wickremaratne attended a special presentation on the 'Movex' erp solution as applied to the food industry in the area of efficient and effective food distribution. The Minister discussed with Intentia's Director of Sales & Operations, Lars Lundstrom the possibility of 'Movex' being utilised in the distribution of food and agricultral items island-wide.

A 'Movex' erp solution including information on available stocks, distribution trends, ordering procedures, demand forecasting, warehouse management can be developed, Mr. Lundstrom said.

Intentia's Regional Director for South Asia, Goran Felldin, based in Kuala Lumpur, Malaysia will be visiting Sri Lanka to hold follow-up discussions with Minister Wickremaratne on his proposal that Intentia establish a base in Sri Lanka. During this visit, Mr. Felldin will meet with interested parties from both the public and private sectors.

Shell win for "Commons"

Umesha Wickremaratne owner of "The Commons," has been named as Sri Lanka's "top young entrepreneur of 2000", at the finals of the first-ever Shell Live WIRE Young Business Start-Up Awards held recently.

Umesha's business is a successful coffee-house and gallery in Colombo. Umesha started up "The Commons" because she liked the idea of creating and owning her own business. Her advice to other young people thinking of starting their own business is to pursue their plans, but be willing to put in the time and effort into what they do.

Umesha says in the release "It's great to call the shots and make all the decisions on how your business is run." Umesha won a cash prize pf Rs. 200,000 and a trip to the United Kingdom to meet world-wide Shell Live WIRE award winners at a grand event scheduled to be held in October, 2000.

Suranga Gunaratne, owner of VictraSoft (Pvt) Ltd., an Internet Service Provider, received the second prize. Suranga and his brother, Rushan set up VictraSoft with the idea of providing Internet services at a reasonable price. He says it's fun being the boss because you get to make decisions and control the way you work.

Champa Kumari, the owner of C.H. Garments in Galle received the third prize of Rs. 35,000 and says she intends to invest this money to further her business. C.H. Garments manufactures ladies undergarments, women's and children's clothes. Champa says she is proud that her business has provided employment to four people in her area.

Seven other young business peoeple who made it to the finals of the Shell Live WIRE Young Business Start up Awards received consolation prizes.

The Young Business Start-Up Awards scheme aims to recognise the achievements of young people between the ages of 16-32, who have been in business between three months and two years. To be considered for the awards, applicants had to submit a business plan to Shell Live WIRE. These business plans had to include a summary of the business, an analysis of the market entered, details of costing and pricing, a marketing plan and a cash flow statement.

"We are extremely pleased with the response received from young people for the awards event. We had 42 entries from areas like Tangalle, Gampola, Kandy, Dambulla and Colombo. We hope that the Young Business Start up awards will be an event that will set standards among young businesses in the future", said Shell Live WIRE Project Manager, Steven Bartholomeusz.

Shell Live WIRE is a community investment initiative of Shell in Sri Lanka and aims to encourage young entrepreneurship in the island.

ITI introduces low cost farm storage system

The Post Harvest Technology Group of the Industrial Technology Institute (ITI) successor to the Ceylon Institute of Scientific and Industrial Research (CISIR) has introduced a low cost system for farm storage of horticultural produce. The ITI which functions within the purview of the Ministry of Science & Technology initiated this programme at the request of the Southern Development Authority (SDA), whereby farmers growing lime in the Moneragala and Welimada districts can store part of their crop for marketing during the off season, a media release said.

The marketing of seasonal horticultural produce continues to pose serious economic consequences to rural farmers. The glut of produce during the time of harvest and the inability to store crops for off season distribution, result in price fluctuations and heavy post harvest losses which adversely affect both the producer and the consumer.

Farmers in the Moneragala and Welimada districts have faced the problem of post harvest losses year after year. Under these circumstances they have to either sell their produce at prices below cost during the season when there is a glut of the commodity in the market or meet with heavy losses due to spoilage of crop when attempting to store their produce under the prevailing high ambient temperature and humidity conditions. The introduction of the low cost storage system by the ITI whilst ensuring a better income for the farmers will also help the consumers by preventing drastic price fluctuations.

The system is based on the evaporative cooling facility for extending storage life of perishable commodities developed by Prof. Susantha Roy and Dr. R.K. Pal of the Indian Agricultural Research Institute (IARI) in New Delhi. Dr. Shanthi Wilson, Manager of the Post Harvest Technology Group of the ITI and Dr. Malinee Abeyesekere, Senior Research Officer were able to observe and discuss the construction of this low cost facility on a recent visit by them to the IARI under the Indo-Sri Lanka Sub Commission programme on Science & Technology. The ITI officers successfully adapted and tested the system for application in Sri Lanka.

The low cost storage structure accommodates up to 500kg of limes and will cost between Rs. 1,500/- and Rs. 3,000/- depending on the capacity and dimensions of the system. Trials conducted by the ITI post harvest team indicate, that lime could be held in optimum conditions for six to eight weeks provided they are harvested at the correct stage of maturity and are in good physical condition when placed in storage. Research is currently in progress for extending this storage period further.

The ITI post harvest team that is financially supported by the Southern Development Authority for this study conducted a workshop and training programme for farmers from the Moneragala and Welimada districts on post harvest handling procedures for limes on May 26. The technology for constructing the storage structures will also be demonstrated at the two sites where two model storage systems have already been built.

The ITI Post Harvest Group is able to provide technical assistance with respect to extending and promoting the use of this low cost storage structure for other fruits and vegetables.

Poultry farmers cry foul over debts

By Feizal Samath

Debt-ridden chicken farmers in Sri Lanka are pleading for government help or face the prospects of mortgaging their properties to multinational companies (MNCs) in return for settling the loans.

"We are facing a serious crisis on the financial side," says Dr D.D. Wanasinghe, president of the All Island Poultry Association (AIPA), noting that last month alone four farms were mortgaged to an MNC, as they "just couldn't service the loans."

There are two or three multinational companies involved in Sri Lanka's poultry business.

According to figures available late last year, DFCC, which is one of the biggest lenders to the industry, had given 288.5 million in loans to poultry farmers in the past five years of which 168.5 million is outstanding.

That debt figure has risen in recent months, forcing farmers into a "sink or swim" situation.Wanasinghe told a meeting of farmers in Kuliyapitiya, on May 1 that the government should offer some relief measures otherwise small farmers - accounting for more than 75 percent of the industry - would crash or be forced to mortgage their properties to MNCs.

He said MNC's were trying to buy out farmers by offering to service their loans and then control the entire industry. "That appears to be the plan and if that happens, the entire poultry industry would be controlled by a few," he said, declining to name the firms.

Other industry officials said MNCs offered DFCC and other lenders to settle loans on behalf of defaulting farmers in return for a long-term relationship with the firms now involved in the production of chicken feed and layer birds. MNCs own some of Sri Lanka's biggest farms.

"Farmers won't be able to get out of their grip once committed," Wanasinghe warned.

The crisis for Sri Lanka's 75,000 small-time chicken farmers has gone from bad to worse in recent years. Chicken, once a delicacy for the Sri Lankan consumer, is now a must in most homes but an industry - which should be thriving - has struggled in the wake of high feed costs, small imports of eggs and chicken meat, and taxes.

Fears of hormones being pumped into chickens to fatten them have aggravated the issue.

Just as an AIPA press campaign to increase consumption of eggs and meat, focusing on its high nutritional value, was bearing fruit two months ago, the government slapped a 12.5 percent sales tax on chicken feed resulting in higher meat and egg prices.

"Farmers are fed up with the GST (goods and sales tax) and despite appeals in the past, nothing has been done to ease this burden. We are forced to either swim or sink," pleaded farmer S. Pathirana at the farmers' forum at Kuliyapitiya - the first in a series of AIPA meetings with farmers to list problems and seek relief from government authorities.

The second farmers' forum was held in Galle on May 13. At the Kuliyapitiya meeting where a host of issues were discussed, farmers urged price control in chicken feed as it was being sold at various prices in the market. They also expressed concern over reports that chickens are being pumped with hormones.

"These reports worry us as people are afraid to eat chicken," said a farmer from the north-central province, noting the issue was raised in a recent television debate on food.

Dr. L. Gunaratne, a government veterinarian present at the meeting, said there was no truth in these reports and observed that hormones were not used in the chicken business all over the world. "All chicken-related drugs and medicines imported to Sri Lanka must be approved by the authorities and we conduct regular checks, " he said.

The debt burden was the biggest problem and took up much of the meeting.

"Farmers are not earning for themselves but for the banks and are eternally in debt," said Wanasinghe. Loans to farmers range from a few thousands to 20 million rupees.

A retired private sector official, who runs a three-acre farm with 6,000 chickens outside Colombo, said she was paying 100,000 rupees a month on bank interest alone and there was "very little left at the end of the day."

"I dumped my entire savings with three friends in this business five years ago but it has been a case of losses and losses. I want to settle all loans and interest dues in the next five years and then sell the business," she said vowing however not to bow to MNCs.

"I know they are waiting on the sidelines, watching my business as well as other farms, to falter, and then come in for the kill," she added. Small farmers with less than 2,000 chickens may not be that determined as mounting debts take a toll on their incomes.

"This is a high risk business and profits margins are very small. We are at the mercy of the banks," one farmer, who declined to be named, said.

Government officials, from the Livestock Ministry, who were present promised to discuss with banks the possibilities of rescheduling interest and loan repayments.

Last year, apart from other problems, the industry was faced with over-production which saw chicken meat prices fall in August to 90 rupees from 130 rupees in earlier months.

While some farms were forced to close down due to heavy losses, thousands of kilograms of chicken meat stocks are piled up in cold rooms of big producers, lying unsold. Chicken processors were also forced to destroy chicks to cut losses. The chicks were gassed and burned at the rate of 120,000 per week at that time.

But industry officials like AIPA's Wanasinghe blamed farmers for that crisis. He said the Department of Animal Production alerted the industry in August-September of a looming over-production scenario through its news bulletins.

"No one took this warning seriously," Wanasinghe said, adding that farmers continued to produce chickens without restriction, causing a glut in the market.

Index Page
Front Page
Sports Plus
Mirrror Magazine

Return to Business Contents


Business Archives

Front Page| News/Comment| Editorial/Opinion| Plus| Business| Sports| Sports Plus| Mirror Magazine

Please send your comments and suggestions on this web site to

The Sunday Times or to Information Laboratories (Pvt.) Ltd.

Presented on the World Wide Web by Infomation Laboratories (Pvt.) Ltd.

Hosted By LAcNet