24th December 2000
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  • CIC Seeds to introduce rice huller to farmers
  • Money market First Capital Ltd.
  • Tea Update
  • LB Home maker with Singer
  • Production planning system for the garment industry 
  • Exploring 3G evolution in Sri Lanka
  • FCB Regional Creative director pays visit 
  • Stronger for much longer
  • Portsmouth launches Computer Honours degree in Sri Lanka
  • Eagle now a LOMA member
  • Sri Lankan economic growth rests on cultural factors
  • Confederation of Indian Industry to set up office in Colombo
  • Greater co-operation for entrepreneurial culture
  • Abdul Rahims goes online
  • Icon of French style and technology launched in Sri Lanka
  • Double Gold for Silicone Coatings the house of NIPPOLAC
  • Touchwood Mahogany launch : a great success
  • Metropolitan upgrades telephone system for Asiri
  • Hotshot in a hot spot
  • Keells Hotels launch Asia's largest website
  • ZILLlONe launches latest version of ACCPAC for Windows 
  • HSBC rewards Royal College
  • CIC Seeds to introduce rice huller to farmers

    By Chanakya Dissanayake
    CIC Seeds (pvt) Ltd is urging the Development Finance Institutes to join their drive to equip farmers with rice hullers. This would enable farmers to bypass the middlemen and sell rice directly to the end consumer, creating a higher value for their produce. Initially CIC Seeds will be introducing the rice huller to its large outgrower base in Hanguranketha. Currently it is using the outgroweres to cultivate Seed Paddy under a comprehensive buy back agreement which includes technical assistance. CIC Seeds entered the Rice market to utilise the paddy which is not upto the standard of Seed paddy, but suitable for consumption.

    The rice huller currently being promoted is jointly designed by the CIC and its Korean manufacture. The main feature is its small size amounting to only 5 cubic Mt. This would enable a capital unintensive operation sans large buildings and would suit the small scale agri- entrepreneur. " This is a giant step toward empowering the rice farmer. If the project becomes successful, the rice farmer could mill the paddy into rice and sell directly to the consumer, earning a substantial return", said Vasantha Gomez, Executive Director CIC Seeds.

    CIC Seeds started marketing the rice exclusively to the upmarket hotels and restaurants few seasons back as an experiment. " We being a private agri entrepreneur are able to market purified rice at the same price as the government, at a profit. We consider this a substantial achievement since our production costs are higher due to the usage of balanced plant nutrients", Gomez further added.

    Government privatised a part of the seed paddy manufacturing in Sri Lanka in 1998 as a measure to improve the private sectors participation in the agri sector. However it still actively controls more than 60% of the seed paddy market. Government has being selling seed paddy at the same price since 1995. The private investors allege that this is creating a unfair competition and creating a market imperfection in the seed paddy market. " If you consider the inflation and other production costs, it is obvious that cost has risen. But the government is selling at the same price. It is evident that they are subsidising the seed paddy. This is a market intervention which will dampen the good effects of the privatisation", claimed an investor.

    Agri Entrepreneurs are also urging the government to allow introduction of Hybrid rice varieties to Sri Lanka. The Department of Agriculture has set a time frame of 10 years for the introduction of Hybrid rice varieties. " If we want to improve rice productivity, Hybrid is the ultimate step. If the whole world is using Hybrid rice varieties, what is holding Sri Lanka back?", asked Gomez.

    Money market First Capital Ltd.

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

    During the week ended 21st December, the liquidity shortfall in the inter-bank money market remained in the range of to Rs. 27Bn-29Bn. However, the pressure on the inter-bank money market was eased to a certain extent and the call money rate was pushed down. 

    During the week, the call money rate moved in between the much extended boundaries of 21% and 28%. 

    The weekly call money average took a beating over the previous week to close at 25.02%, which was a decline of approximately 380 basis points, similarly, the term money rates too witnessed a decline and the one month term money was quoted at 20%~23%. 

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

    Central Bank open market operations
    Yet for another week, the Central Bank open market operations, repo and reverse repo rates remained unchanged at 17% and 20% respectively. 

    The Central Bank's reverse repo window persisted to be the largest lender in the market and during week the reverse repo window released Rs. 141Bn, averaging Rs. 28.3Bn 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 the government of Sri Lanka renewed Rs. 2141Mn worth of treasury bills. Given the prevailing renewed investor interest for treasury bills, once again the auction was oversubscribed almost by two times. 

    However, as the market expects the rates to drop further, most of the investors bided for the 364 days category. 

    The bids for other categories did not witness any significant improvement. For the second consecutive week, the treasury bill yields for all categories took a dip. 

    The 364 days yield recorded the highest fall, while other categories tumbled marginally. We expect the investors to portray a similar interest for treasury bills in next week's auction too..

    Treasury bond auction
    In the bond auction held during the week, the government of Sri Lanka offered Rs. 2750Mn worth of 2-year bonds. The investor interest for treasury bonds prevailed very high. 

    Hence, the yields plummeted by approximately 112 basis points to 18.97%. Though some buying interest was witnessed in the secondary market, the selling depth was narrow. 

    Therefore, the 2 year bonds were traded at 18%-18.5%, soon after the auction. The prevailing buying momentum is likely to remain in the very near future.

    Foreign exchange - dollar movement
    On the week ending Thursday, the Central Bank buying and selling range closed at Rs.76.93 and Rs. 83.08 respectively. The change in the middle rate during the week was very modest. The spot found ranged bound in the region of Rs. 82.70~82.80, and the week closed at Rs. 82.74~82.80. Easing of term money rates saw a drop in the forward premiums accordingly Three months forward was quoted at Rs. 85.55 to Rs. 85.80 and the six months forward was quoted at Rs. 88.25 to Rs 88.75..

    Days 91 82 364 

    Last Week 17.97 18.13 19.43

    This Week 17.91 17.93 19.01

    Change (0.06) (0.2) (0.42)

    Maturity 22-Dec-02

    Coupon 10.75%

    Amount offered Rs.Mn 2750

    Amount Accepted Rs.Mn 2750

    Weighted Average 18.97%

    Change (1.12%)

    Tea Update

    Planters Association - progress and problems 
    The Planters Association of Ceylon is set to launch a website as a prime source of information on the plantations. Chairman of the PA, M.J.C. Amarasuriya said that and had been successfully registered and that they would be activated early next year. The two websites would contain detailed information about the two sectors. Information relating to new methods and techniques used in harvesting, planting and processing would also be available. They also hope to include news developments in the estates on a regular basis. 

    Mr. Amarasuriya who was addressing the PA AGM last week said that the PA web site would complement the online tea auction system also soon to be launched. 

    At the AGM Mr. Amarasuriya also mentioned that the plantation sector was no longer eligible to concessionary ADB loans for land development. He said that ABD had made a decision to only give grants for human resource development. Mr. Amarasuriya said this was a tough blow for the plantations, because now they had to borrow from the open market paying high interest rates. 

    He said that investment in land development was essential to increase productivity of the crop. 

    Auctions and expectations for 2001
    Meanwhile, the last auction for the year held last week closed on a very positive note. Most varieties met with fairly good demand and as a result received attractive prices.

    In their interim review, Asia Siyaka Commodity Brokers said that Demand for Russia/CIS would be the platform from which the market for most teas would be launched next year. "We cannot expect unseasonal rains, which played a major part in the record production achieved, to be taken for granted. We could expect therefore, a drop in production during this period. Low Growns will continue their price trend subject to seasonal changes. Even at current Rupee rates Colombo's prices are still attractive to the Middle East market. Consumers in Russia/CIS should continue to demand superior tasting Ceylon Teas. In Russia, Indian teas are due to be subject to the same taxes as those from other origins from January 2001."

    They feel that this could cause the greater price conscious segment to look for better value Ceylonese. "The market for Low Growns should therefore at least hold at this year's levels," Asia Siyaka said. 

    In their interim tea review Asia Siyaka said that Kenyan prices had been higher than most auction centres. "But there has been a shift of some demand from this market to other centres. A good example is the increased shipments to Egypt in spite of the considerable duty advantage enjoyed by Kenya," the report said. 

    They feel that the continual production problems in Kenya, which caused a drop in quality and a crop shortfall in 2000, could benefit Sri Lankan high grown small leaf teas. "Last year the country's 1Q production was significantly higher than 1999. In Kenya if the year 2000-production trend continues the world price situation could change."

    LB Home maker with Singer

    LB finance has launched "LB Home maker with Singer" to provide all customers of LB finance to purchase any brand of product from Singer ( Sri Lanka) Limited on an installment basis.

    The highlight of "LB Home maker with Singer" is the, very attractive rates of interest and the period of repayment which cannot e matched, a company release said.

    Coupled with Singers quality guarantee and after sales service LB finance launched this innovative product to match the growing demand and request from customers, the release said.

    Production planning system for the garment industry 

    "FAST REACT the Production Planning System for the Garment Industry, has a proven track record to help companies to improve their perfomance and profits. This is a rapid decision making tool for use by the management of Garment Industry companies. It helps these companies react quickly to changes in customer demands and difficulties in production whilst maintaining maximum use of company resources," says Andrew Brown, Director, FAST REACT - UK, during his recent visit to Sri Lanka.

    Continues Andrew Brown, "This industry specific planning tool can also take account of Start Up delays, Build up losses and can cope with Different Efficiencies for the same product being made on different production lines. Re-planning is simple".

    FAST REACT, a UK based software comany recently appointed The Golden Key Company Limited as their partner for Fast React, a production Planning System for the garment and apparel industry.

    Exploring 3G evolution in Sri Lanka

    Ericsson Sri Lanka and MOBITEL, recently announced an agreement between the two companies to evaluate the migration to 3G (third generation) wireless technologies. The collaboration encompasses early studies of end-user behaviour and usage, new business logic as well as technical requirements, a company release said.

    "Both companies are committed to exploring marketing and technological innovation in the Sri Lankan wireless telecommunications market. The focus of the agreement is in understanding local consumer needs and customising technology so that it is readily accessible and easy to use. This includes wireless Internet enablers such as WAP and then moving to 3G", the release said.

    "As the world leader in provision of wireless infrastructure and development of techologies for the next generation of mobile telephony, Ericsson is well positioned to work with MOBITEL in choosing the best migration evolution path to 3G", says Johan Adler, Managing Director of Ericsson Sri Lanka.

    Ericsson further strengthened its position as a leader in 3G systems when it recently signed 17 out of a total of 22 contracts with leading operators in the World for an end-to-end commerical 3G system, based on W-CDMA technology.

    Ericsson is offering customers 3G systems based on EDGE, WCDMA and cdma 2000 being the only supplier with a complete portfolio for second and third generation systems.

    Mobitel, CEO, Cathy Aston stated that "Our joint development of technology and marketing solutions will give us a deeper understanding of the practical 3G market challenges as they apply to Sri Lanka and the ability to customise our services to meet local consumer needs".

    FCB Regional Creative director pays visit 

    Chris Kyme, FCB's Regional Creative Director and Bhaskar Rao, FCB Singapore's Chief Executive Director visited their Sri Lanka counterpart Minds FCB to brief them on the recently acquired worldwide business of Compaq Corporation.

    Compaq, which is among FCB's 3 top accounts worldwide, is expected to become the industry's leader in the Asia Pacific region, the company release said. Chris Kyme and Basker Rao welcome the challenge that has been set to FCB to provide a consistent image across the world while taking the local market into account where local relevence, flexibility and local ideas will be considered when launching the campaign in this region.

    While in Colombo, Mr. Kyme also conducted a Workshop for the Creative staff of Minds FCB. This included workshops with the Creative Writers and Art Directors of the company.

    Meanwhile, Mr. Bhaskar Rao, CEO of FCB Singapore held sessions with the Client Service personnel of Minds FCB. Mr. Rao explained in detail FCB's influence on advertising and communication trends in the Asia Pacific region. He dwelt in length on the role undertaken to develop e-business in the region through FCB.

    Stronger for much longer

    Energizer Lanka Ltd. last week launched Energizer e2, a new category of batteries for the millennium. 

    An advanced titanium technology and a new cell construction housed within the new Energizer e2 provides power and dependability to the consumer a company release said. 

    The new line features a bold new look with vibrant colours and innovative packaging. 

    The Energizer e2 batteries are an addition to the Energizer line already available in Sri Lanka and will be sold at an introductory retail price of Rs. 55.00, the release said. 

    With a rising population of teenagers and young adults needing longer lasting batteries, Energizer e2 is the perfect solution for all their battery-operated devices, the release said. 

    Industry officials said that Energizer batteries had good demand due to its long life and that consumers did not mind paying a premium. 

    They said that Energizer batteries were mostly popular with camera users and the ex-pat community. They believe conumes would like the new and improved Energizer e2

    Portsmouth launches Computer Honours degree in Sri Lanka

    Singapore Informatics Computer Institute recently launched the UOP Hons degree in computing with the visit of Dr. Jonathan Britt the Head of the School in Computing and Mathematics to Sri Lanka. Dr. Britt stated that the University of Portsmouth was the first UK University to offer a degree on the cyber campus via the Internet and this degree was launched by Informatics Holdings Ltd., of Singapore through its Internet Virtual University in May 1999. This will enable foreign students to take the degree from their home country with the same quality using UOP lecturers and obtain the same degree qualification awarded in the UK at 1/4th the cost. The degree programme is offered through Informatics Holdings Ltd. Singapore network of over 275 centres in 27 countries.

    Students qualifying from Sri Lanka will receive the same certificate from the University of Portsmouth which is recognized internationally and they could also attend the University Convocation.

    The University of Portsmouth will also shortly launch the MSc in Computing through the Cyber Campus, which will enable the IT graduates to further enhance their qualifications.

    Eagle now a LOMA member

    Eagle Insurance recently became the first Insurance Company in Sri Lanka to be accepted to the membership of the Life Office Management Association - USA (LOMA), a company release said. 

    LOM is an international association of insurance and financial services companies that has more than 1000 member compaines in 60- plus countries. LOMA is committed to a business parnership with its members world wide, in the insurance and financial services sector, to improve their management and operations through qality employee development, research, information sharing and related products and services, the release added. 

    This membership is in addition to Eagle's membership in LIMRA (Life Insurance Market Research Association) which provides fountain of insight into understanding customers and evolving solutions to meet ever changing needs, the release said. Membership of these associations alone is a symbol of ethical conduct and in addition Eagle will thus benefit from these affiliations though knowledge and best practice transfer, enabling the Company to provide total customer care, the release said.

    Sri Lankan economic growth rests on cultural factors

    By Akhry Ameer
    "Sri Lanka's economic growth is now resting on non-economic factors" said Dr. Nimal Sanderatne, one of the themes developed in his book Economic Growth and Social Transformations - Five Lectures on Sri Lanka. 

    Dr. Sanderatne was addressing a gathering at the launch of his book organized by the Sri Lanka Economists Association (SLEA). 

    Speaking on this theme he observed that even if the war was ends other factors such as discipline, law and order, administration, etc. needs to be refined for the economy to improve. 

    He further said that the future of the economy would be to capitalize on international trade with a careful look at internal factors while highlighting some of the other themes in his book. The book is a collection of lectures made by Dr. Sanderatne from 1998 to '99, two of which were made in commemoration of Sri Lanka's Golden Jubilee of regaining independence.

    Former Secretary General, UNCTAD and founder president of the SLEA Dr. Gamani Corea in his address agreed with Dr. Sanderatne's views in the book that the country hasn't been successful in integrating the social and economic growth. 

    He explained this further by citing the new sectors of agriculture and farming that have developed and the future of the current sources of income from the garment industry and foreign unskilled labour.

    Dr. Saman Kelegama, Executive Director of the Institute of Policy Studies and joint president of the SLEA reviewed the book and reiterated Dr. Sanderatne's projection of the population stabilizing at 23 million by 2023 and the need to utilize the savings in improving the quality of education and health rather than cut down the expenditure. 

    He also stressed the importance of non-economic factors in relation to economic figures. Both speakers commended the author's lucid simple language style of presentation of the 135 page book.

    Dr. Nimal Sanderatne is a former Director of Economic Research and Statistics of the Central Bank and former Chairman of the Bank of Ceylon and the National Development Bank. Currently he is a Visiting Fellow at the Post Graduate Institute of Agriculture, University of Peradeniya.

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