10th December 2000
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  • SLIM ties up with four A's
  • Tea update
  • Fuji gets a double exposure
  • FCB does mind being 18 years in service
  • Swiss in the air
  • Thai, Lankan governments recognise business council
  • "Lodge" refurbished
  • Emerald, now under its own label in Britain
  • LPG monopoly off
  • ComNet in Piliyandala
  • For a few shoppers more
  • SLIM ties up with four A's

    The Sri Lanka Institute of Marketing will hold the 12th SLIM Ad Awards on February 24. SLIM is now collaborating with the newly formed Accredited Advertising Agencies Association (Four A's) in the planning and implementation of the project, a SLIM release said. 

    A joint blueprint committee of the two organizations has reviewed and improved various aspects of the awards programme. One area that has received attention is entry categories - with a view to ensuring more homogenous categories, better category definitions and greater congruence with how the categories are growing. 

    The number of categories has been increased with food, beverages, automotive, entertainment and leisure, banking and financial services, investment, insurance and real estate now established as separate categories, whereas they previously existed in combination. Another is the judging process - with a view to ensuring greater fairness and consensus in the selections. The pricing for participation has also been adjusted downwards to encourage more agencies and smaller agencies in particular to participate. And to top it all, SLIM has increased the number of awards to over 120 this year. 

    The joining of hands between SLIM and Four A's mirrored in the theme for the 2001 awards which is all about "client-agency partnership". Not only will the ad campaign for the awards and the event itself carry this theme, two new innovative awards have been introduced for marketers, to reflect the role they play as clients in creating great advertising. These awards, for "The Agency Motivator of the Year" will recognize a client person who has worked successfully with an agency to achieve excellent results, and another for "Breakthrough Brand of the Year" will allow marketers and their agencies to jointly present a marketing communications case where new ground has been broken in the marketing of a brand. 

    SLIM has retained the familiar "Bell" trophy given the equity built around this over the years, though it created a special "millennium design" for the awards held this year. 

    "Coordinating an event such as this requires substantial funding and commitment from sponsors" said Ravi Bamunusinghe, Chairman of the Awards programme, "CIC Paints (Pvt) Ltd., has come in as a Main Partner for the fifth year while Coca-Cola Beverages Sri Lanka Ltd., is with us for a third year and Ericsson Telecommunications Lanka (Pvt) Ltd., is a main partner for the second time." Other support has been received from Daily Mirror, MTV/Yes FM, Business Today, Sri Lanka Exhibition and Convention Centre, Ceylon Intercontinental Colombo, SriLankan Airlines, Graphitec and Swedish Trading Audiovisual, who are all co-partners. 

    Tea update

    Prices were relatively stable in the first sale of December, but the question is, will it be that way throughout this holiday season? Historically, as the sale comes to a close before Christmas, buyers wind down during their buying and prepare for the holiday. This year, analysts expect a similar situation, but added that prices would continue to be higher than in December 1999. They said that as prices have been relatively higher than in 1999, they expected the year to close the same way. 

    However, a holiday in the plantation means a backlog of teas subsequently. This would mean a drop in prices in the first few sales of 2001. But, as the auction quantities return to normal, prices to will pick up. 

    Meanwhile, the weekly and the monthly auction averages continue to maintain a healthy lead over 1999. In the third sale in November, the weekly average was Rs. 13.2 higher than the Rs. 133.82 recorded in 1999. The monthly average was Rs. 20 higher than 1999s Rs. 114.15. However, brokers say that with the devaluation of the rupee during the year, this increase comes down by dwindling proportions. 

    Last week's auction too maintained the year's increased price trend. 

    Fuji gets a double exposure

    Fujifilm's bid for market leadership in Sri Lanka took a giant step forward last week, when the brand's local agent Hayleys Photoprint launched a new distribution system that will ensure quicker delivery of products to the market and double the size of its retailer network within two years.

    The company, which previously reached consumers direct via 4800 dealers, (wholesalers, retailers and sub distributors) has appointed nine regional distributors who will be responsible for servicing extensive retail networks in their respective regions. A newly recruited and trained sales team will support these nine distributors, the company said.

    "We have moved, virtually overnight, to selling to nine instead of 4800," Hayleys Photoprint's Director/General Manager Ashan Abeyesundere explained. This will result in a quantum leap in supply chain efficiency and give us tremendous new reach.''

    With the new distribution system in place Hayleys Photoprint plans to expand Fujifilm's retail network to 7000 within a year, and to 10,000 by 2002, Mr. Abeyesundere said. The company has also set up a unit to develop new channels of distribution in a major initiative to make Fujifilm the most visible film brand in Sri Lanka, he said.

    Hayleys Photoprint took over as the sole agent for Fujifilm in 1996, when the brand had a market share of four per cent in Sri Lanka, and had secured a 32 per cent share of the market by the latter half of this year. "The new distribution system will give us the impetus to make Fujifilm the Number One brand for film and photographic products in Sri Lanka," Mr. Abeyesundere added.


    Money market First Capital 

    Renewed interest 

    The inter-bank call money market and the overnight repo market

    With the beginning of the seasonal drawings from the banking sector, the liquidity shortfall increased to a new climax, and was in the range of Rs. 24~25Bn. The inter-bank money market continued to feel the impact of the enhancing liquidity shortfall and the interest rates kept under immense pressure. On the week ending Thursday, the call money reached high as 30%. The weekly call money average surged further to close at 22.21%, which was approximately 27 basis points higher than the previous week. Given the remaining bond program of the month and the seasonal drawings, we expect the liquidity shortfall to expand further. Therefore, the pressure on the money market rates are likely to prevail, until a clear direction of easing the liquidity shortfall. In addition, a possible revision of Central Bank open market operations rate would guide the call money rates to a new level. As the players who wanted by pass the seasonally affected month of December has been covered, a slight revision was witnessed in the term money rates and one month money was at quoted at 24%~27%. 

    As the Central Bank maintained its reverse repo rate at 20%, the overnight market repo rate was persisted same at 19.8%~20%. 

    CB's open operations

    During the week the Central Bank open market operations, repo and reverse repo rates remained unchanged at 17% and 20% respectively. The liquidity shortfall in the market was mostly funded by the Central Bank's reverse repo window and during week the reverse repo window released Rs. 118.2Bn, averaging Rs. 23.64Bn a day. We are of the opinion that the reverse repo window will remain as the main lender in the market and to set the direction for market repo rate and the call money rate. 

    Treasury bill auction

    During the week Rs. 3310Mn worth treasury bills matured and the full amount was offered to the market. The investor expectations and the sentiments were renewed on the back of the revision in bond yields in the previous week. Therefore, most of the investors who were on a wait and see approach, rushed to invest in the government securities, where the yields are at the highest in the recent history. In this week's auction a remarkable improvement was witnessed in the subscription level. 

    Though the rates improved across board, the rise was marginal when compared with the previous week. However, still the gap between the 364-day yield and the 2-year bond yield remains high.

    Treasury bond auction

    In the bond auction held during the week, the government of Sri Lanka offered Rs. 3000Mn worth of 2-year bonds and 1000Mn worth of 2-year callable bonds. For the first time in Sri Lanka, the Central Bank introduced call options for treasury bonds. (The issuer of the security reserves the right to terminate the contract by buying it back before its tenure). 

    The call option will be exercised at the weighted average yield of the particular auction, after one year. However, nothing was accepted from the callable bonds. Though the fundamentals remaining unchanged, the renewed investor interest persisted for 2-year bonds. 

    For the second consecutive occasion, the auction was heavily oversubscribed, resulting a further decline in the weighted average. The investors were keen to get in to bonds at the current yields. 

    Foreign exchange

    During the week the Central Bank reduced the middle rate by 2 cents and on the week ending Thursday, the Central Bank buying and selling range closed at Rs.78.83 and Rs. 81.37 respectively. As the dealers refrained from trading above the Central Bank selling rate, the market was one sided during most parts of the week. 

    Nevertheless, with the call money rate rising high as 30%, some selling of dollars was witnessed in the market. On the week ending Thursday, the spot tumbled to 81.12~81.18 levels. The market volumes were thin, averaging 4~5Mn US dollars, inclusive of purchases from the Central Bank. The depth in the forward market was lessened. 
    Treasury Bill Auction

    Period 91 days 182 days 364 days 
    Last Week 17.65 17.74 19.37
    This Week 18.04 18.25 19.75

    Treasury Bond Auction

    Maturity 08-Dec-02 28-Nov-02 
    Coupon 10.75% 10.75% 
    Amount offered Rs.Mn 3000 1000 
    Amount Accepted Rs.Mn 3000 nil 
    Weighted Average 21.30% nil 
    Change 0.83% nil 

    FCB does mind being 18 years in service

    Minds FCB, the local partners of FCB Worldwide completed its 18th year in the Advertising Industry, a company release said. 

    Commencing its foray into the advertising world in 1982 with just one international client, Minds FCB has expanded into one of the largest players in the local advertising industry, the release said. 

    The Agency still handles many of its long-standing clients like Ajinomoto, Singapore Airlines, Toyota and Lanka Walltiles and has added a few big time jewels to its crown - Lakspray, Dialog GSM, Sri Lanka Telecom, Toyota, Ericsson, Clipsal Lanka, Triumph International, Citibank and Samsung being a few of them, the release said. 

    "Minds has always outpaced the advertising industry in terms of growth. Winning awards at SLIM, Ola and Sumathi right from the inception. Minds has grown from a rupees 20 investment to rupees 200 million plus company," the release added. 

    Minds FCB is the local office of FCB Worldwide, which was founded in 1873. FCB Worldwide is the sixth largest advertising agency globally and the largest in the United States of America the release said.

    Swiss in the air

    SriLankan Airlines and Swissair have commenced a codeshare service between Colombo and Zurich from last week.

    SriLankan Airlines will be the operating carrier and will deploy its new Airbus A330 on this route in a two class configuration. Flights will operate every Friday and Sunday from Colombo as well as from Zurich, a news release said.

    "We are delighted to offer a joint service with a major carrier like Swissair," says SriLankan Airlines' Chief Executive Officer Peter Hill. "Our aim is to expand our route network with direct and codeshare service and so make Colombo an attractive hub in South Asia. We are sure this codeshare with Swissair will serve to strengthen our Colombo/Zurich route and we hope Swissair's presence will serve to encourage other carriers to also operate to Colombo". 

    "Swissair also entered into another condeshare service between Colombo and Zurich with its subsidiary Balair which is the operating carrier flying new Boeing B767 on this route in a two class configuration leaving Zurich on Mondays and Colombo on Tuesdays," says Swissair's General Manager for India, Sri Lanka and the Maldives Hans-Peter Doser. "These days of operation are complementary to the days operated by the Swissair/Sri Lankan codeshare, thus bringing the number of Swissair codeshare operations to three per week between Sri Lanka and Switzerland."

    Thai, Lankan governments recognise business council

    The governments of Thailand and Sri Lanka have recognized the special status conferred on the Sri Lanka-Thailand Business Council by ensuring that its co-patrons are the Royal Thai Ambassador in Sri Lanka M. R. Sukhumbhand Paribatra and the Minister of Internal and International Commerce of Sri Lanka. In addition, the senior managers of the two national airlines are ex-officio members of the Executive Committee of Council, a news release says.

    The president of the Business Council, K.C. Nadarajah said that the role of the Council is to enable the private sector to realize the potential that exists in both imports and exports. Trade between Sri Lanka and Thailand amounts to about US$ 200 million. In 1999, Sri Lanka's share of that was US$ 56 million in exports. "That's roughly what a big country like Pakistan exports to Thailand. Incidentally, this accounts only for officially recorded trade. It does not account for individuals travelling and bringing in goods like auto spare parts," he said.

    In pointing out the goodwill that exists for Sri Lanka in Thailand, Mr. Nadarajah said that Sri Lanka's exports rose by 43% in 1999, and 29% in 1998. That he said can be partly explained by the devaluation of the Thai Baht, but it cannot account for the fact that Thai business continued to trade with Sri Lanka despite the devaluation when many were arguing that the rupee was overvalued. He pointed out that given this apparent willingness to trade, there has to be scope for growth.

    He said that information about opportunities in Sri Lanka and Thailand seems not to have been properly disseminated in either country. "For example, Sri Lankans seem to be only marginally more aware of the price advantage of importing from Thailand than the Thai business community is about the impact of SAFTA on exporting into India from Sri Lanka. We are to serve both importers and exporters who join us."
    Office bearers

    Sri Lanka-Thailand Business Council

    The following were appointed as office-bearers for the year 2000/2001.

    Patrons: Minister of Trade and Commerce,

    The Ambassador of Thailand to Sri Lanka.

    President: K. C. Nadarajah

    Vice Presidents: Azmeer Shums, Anura Fernando

    Secretary: Rizan Nazeer

    Treasurer: Lionel Fernando

    Ex-officio: Chandana De Silva. Bundit Saralamba, Chaturont Chaiyakam

    "Lodge" refurbished

    By Sanath Weerasuriya
    Habarana Lodge, one of the popular Keells Managed hotels, has opened its doors to local and foreign guests after a Rs. 26.8 million restructuring programme.

    Under the 1999/2000 restructuring project, Keells Management Services Limited has utilised these funds for plant, machinery, equipment, furniture and fillings and also have spent an additional Rs. 5.4 million, for the construction of 'purpose-built Herbal Centre, which is very popular among local and also overseas visitors'.

    With the 'Lodge" as a hub, there are 150 air conditioned chalets spread out over the 27 acre ornamental garden, each raised on a podium as in the Ritigala Meditation Pavilion - even the beds in the twin rooms are on similarly raised platforms.

    'Habarana Lodge' was designed by architects Pheroze Choksy and Ismeth Raheem in 1980, inspired by the aura of the nearby 2nd century BC forest hermitage of Ritigala.

    Lodge is the first resort hotel in Sri Lanka to win ISO 9002 and currently is vying for ISO - 1400 certification as an eco-friendly venture.

    (See story in the TV Times)

    Emerald, now under its own label in Britain

    Sri Lanka's very own Emerald shirt has achieved the unique distinction of becoming the first Sri Lankan shirt to be sold in the International market under the local brand. Emerald is now sold under its own label in prestigious showrooms in the United Kingdom, a company release says.

    Emerald International (Pvt) Ltd commenced operations in the 1950s. The initial business concentrated on marketing Japanese made shirts.

    In the 1960s, seeing an opportunity for Sri Lankan made menswear, Emerald diversified into manufacturing. But put up shutters clouded by dark economic times. Emerald re-emerged in 1977, with the second generation of Emerald family. By 1984 Emerald International soared to new heights.

    In July 1983 following the bleak part in Sri Lankan history Emerald saw a void in the local market. Cheap imitation brands that were entering the market were being rejected by the consumer. 

    Their new production plant commenced work in 1985 and Emerald went on to record a high rate of growth, the release adds.

    The export market opened its doors in 1988/1989 - what initially started as a subcontract operation that made use of machine idle time during the off-season soon became a priority area. Buyers noticed the quality and style Emerald produced and encouraged the company to commence export.

    Mansak Pants Collection was launched in 1989 to complement the Emerald shirts under the Emerald label. And, today's well known shirt brands such as Class one X klusiv, 1st Choice and Focuss come to the domestic market only from the House of Emerald.

    The unit feeding the domestic market at Maharagama and the company's export factory in Panadura completed in 1995, employ a highly skilled workforce of over 550 employees.

    As export soared, the company invested in new machinery for fusing, pressing and collar moulding. The state-of-the-art machinery meant enhanced quality, vital for export.

    Today Emerald exports apparel to U.K., U.S.A., Germany and Europe.

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