9th September 2001
Front Page
Editorial/Opinion| Plus| Sports|
Mirror Magazine
The Sunday Times on the Web


  • Business groups urge peace
  • Delmege appointed agent for Heinz 
  • Bank mergers: some lessons from London
  • Sri Lanka featured in top UK magazine
  • SMI High-Tech bought by GE
  • New Jt. MD at Car Mart
  • Director of IFPRI wins world food prize
  • Speedo swimwear to be made in Sri Lanka
  • Charge-free numbers from SLT
  • Not just a call box
  • Minor accounts for newborn babies
  • Business groups urge peace

    "Prepared to talk to LTTE if necessary" 

    A prominent section of Sri Lanka's business community last week issued a plea for peace urging people in the country to put pressure on the main political parties and Tamil rebels to get back to the negotiating table.

    "Enough is enough. This country is bleeding. We need peace," begged Ranjit Fernando, CEO of the National Development Bank (NDB) and convenor of a press conference called to announce a new peace campaign called "Sri Lanka first - it is now or never."

    He said the group of 14 business associations representing more than three million workers was even prepared to speak to Tamil rebels. "We are prepared to do whatever is necessary to put the peace talks back on track," Fernando said adding that the group launched a major media campaign from last Wednesday seeking the people's support towards peace.

    The associations - which include the cream of the country's business community, represent exporters, the tea trade, industry, garments, hotels and travel operators, airline agents, shipping agents, freight forwarders, amongst other groups.

    In recent weeks, several businessmen - individually and collectively - have formed associations urging the government and the rebels to re-start talks which were last held in 1995. A Norwegian-led effort to bring the sides together since last year has been put on the backburner as the ruling People's Alliance (PA) struggles to retain power in the face of a powerful opposition trying to oust it. Last week, the PA clinched a face saving deal with the JVP to remain in power.

    Jagath Fernando, deputy chairman of the John Keells group, Sri Lanka's biggest conglomerate which has interests in leisure and tourism, food and beverages, information technology, banking, commodities and stock broking, said the group wanted a conducive atmosphere for peace talks and hence was calling for a cessation of hostilities, providing enough food to the crisis-hit northern and eastern regions and restarting talks.

    "This country is crying for peace. Everyone needs it. We want to reach every citizen in this country so that they would put pressure on their parliamentary representatives to bring an end to this bloodshed," he said, adding that the events on July 24 was a wake-up call for the country's business community.

    On July 24, Tamil rebels launched a daring attack on the country's only international airport and neighbouring airbase, destroying more than a dozen aircraft belonging to SriLankan Airlines and the airforce. The attack reduced by half the fleet of SriLankan Airlines, considerably cutting flights and schedules. Foreign insurers also raised premiums on planes and ships calling over at Colombo, compelling the government to negotiate with companies like Lloyds and offer a million-dollar guarantee in return for bringing down the rates.

    Fernando said the business community was uniting for peace and their group was prepared to associate with anyone to end the conflict. "The cost of no peace is higher than the cost of war," he said adding that the business group was hoping to galvanise some action from the people towards their cause. He said the war had cost more than 600 billion rupees in the past 18 years since the July riots while the country was facing an acute economic crisis with the key garment exports falling sharply in the first six months of this year. The impact from the airport attacks was severe.

    "Big garments buyers are reluctant to come here and Sri Lanka is no more attractive to foreign investors. It is difficult to compete with other producing countries in the export business," he said adding that tourism has fallen sharply to 10 to 30 percent occupancy levels in hotels. Some hotels have closed while others are laying-off staff.

    The impact was greater in terms of foreign employment with Sri Lanka unlikely to reach the annual 150,000 to 200,000 jobs generated from the Middle East. Fernando said foreign employment was the biggest foreign earner to the country by way of remittances from Sri Lankan expatriates.

    "The war is the single biggest problem to the country, not the economy or the political crisis," he said.

    Ranjit Fernando said people were weary of the war and wanted the bloodshed to end. The group is urging all citizens to come out on the roads on September 19 at noon and hold hands in a symbolic gesture to support the cause for peace. "We will start small and develop campaigns along the way," he said, adding that they planned to reach out to grassroots organisations to carry their message. 

    "The campaign would continue until the two sides decide to resume peace talks," he added.

    Delmege appointed agent for Heinz 

    Delmege Distributors, one of the largest specialist distribution companies in Sri Lanka, has been appointed the authorised distributor for three major international brands of US-based multinational, H. J. Heinz Company, the company said.

    The three brands, Farley's rusks, Farlene infant cereal and Casilan are household names internationally and in Sri Lanka, and have been trusted nutritional supplements for several generations, it said.

    The former distributor of these brands is multinational Glaxo, which gave it up earlier this year after the company merged with Smithkline Beecham to form one of the world's biggest drug conglomerates. "Since Smithkline was marketing Horlicks and infant cereals similar to the Farley's range, we decided to stop distributing Farley's products. It was a business decision," a Glaxo Smithkline spokesman said.

    In fact the Farley's range was owned by Glaxo until some years back when it was sold to another international company, and along the way it was secured by the Heinz group.

    A spokesman for Delmege Distributors said the company's acknowledged pre-eminent position as a specialist distributor with no manufacturing interests of its own, its extensive reach to 20,000 retail outlets islandwide, including Jaffna - and the longstanding reputation of the Delmege Forsyth Group had been instrumental in it being chosen to market and distribute these prestigious brands.

    Of the three brands, Farley's vitamin and mineral enriched rusks are widely used by mothers in Sri Lanka as a weaning food for babies. The product, which is manufactured and packed in the UK, has a history of more than 100 years.

    Bank mergers: some lessons from London


    Recently, the Financial Service Authority (FSA), the body which replaced the Bank of England as a supervisory agency for banks in the United Kingdom, sent a strong signal to banking barons of London that it was time to put a stop to the wave of mergers that was taking place there. They did so by giving a firm "NO" to the offer made by Lloyds TSB to take over the large British building society, Abbey National. This was a setback for Lloyds TSB which had upto then continued almost unchallenged to reach the position of the biggest bank in England through a series of mergers and acquisitions, most of them hostile. Having started as the fourth largest among the big five banks in England, Lloyds went onto become the biggest by way of revenues and profits. Their biggest achievement was the merger with TSB, almost equivalent of the National Savings Bank in this country.

    When they made a bid for Abbey National, Lloyds TSB appeared to be unstoppable. Even though many financial analysts warned that the combined entity would have significant power to fix rates of current accounts and mortgage lending, Lloyds was not deterred. They made their audacious bid expecting the FSA to wave their deal through. Happily for the ordinary banking customer this did not happen.

    FSA, having considered the ill effects of the proposal, gave a firm "NO". Despite there being over 4,000 banks of all sizes in London, FSA felt that the big few banks were having the undue advantage of being able to "fix" rates almost unchallenged. This was shown by the massive profits being made by bigger banks in England, when their European counterparts were struggling to maintain a minimum level of profitability.

    FSA's decision was largely influenced by the findings of the commission appointed to look into grievances of Small and Medium Enterprises (SME's). After hearing submissions of the SME's for over one year, the commission had concluded that there was a well organised rate fixing arrangement among the major high street banks and building societies which resulted in penal rates of commission and interest being charged from the SME sector. If the FSA realised that banks in UK 'fix' rates even when there are over 4,000 banks, it is difficult to see how the Central Bank of Sri Lanka and its governor, are constantly proposing mergers between the 25 or so banks operating in Sri Lanka. Making this worse, of the 25 odd banks, almost 20 are confined to Colombo and only six - the People's Bank, Bank of Ceylon, HNB, Seylan, Commercial Bank and Sampath Bank - have a strong presence in the suburbs and the outstations. Even these six banks are not present in all outstation towns and in most places it is the usual combination of two state banks and one or two private banks, not leaving room for any reduction in the number of banks.

    This shows the huge power in the hands of these few banks to fix rates. One simply fails to see any logic behind the Central Bank's accommodative attitude towards attempts to reduce this limited presence even further. One such attempt is HNB's overtures towards Sampath, the biggest private bank and the smallest. The other is the unconventional holding company proposal between DFCC and Commercial Bank which is a thinly disguised effort at merging the leading development lender and the only fully networked bank. The adverse impact of both these will be mostly felt by the SME sector which is the main creators of wealth and providers of employment in this country.

    With the economy in a downturn, political situation uncertain, business confidence in shambles, any reduction in the number of banks will be the last thing needed by this important sector. The proposed merger between DFCC and Commercial Bank will not only impose limitations on short and medium term working capital facilities but also on long term loan facilities crucial for capital investments.

    One cannot expect the present government, beset with more fundamental problems, to appoint a commission to look into problems of SME's as done in UK. But at least the Central Bank and the Monetary Board officials who are the guardians of Sri Lankan monetary systems, should not underestimate the extent of the problems already faced by SME's and heap further burdens on the sector by controlling competition among banks.

    Godwin Fernando,
    Colombo 5.

    Sri Lanka featured in top UK magazine

    Sri Lanka has been featured prominently in the latest issue of Corporate Location magazine, which is the official magazine of UK-based Euromoney Investor PLC.

    A Board of Investment press release said that the BOI website has been ranked within the top 20 corporate investment promotion agency web sites in the world by the magazine, moving up to 20th position from 87th position.

    The BOI said the study by the magazine on the country's investment potential was done a few days before the Bandaranaike International Airport was attacked by the LTTE. The nine-page feature contains interviews with top business professionals like Tony Weerasinghe from MIT, Mahesh Amalean of MAS and Lalith de Mel of the BOI among others.

    SMI High-Tech bought by GE

    In the era of globalisation and vast technological changes SMI High-Tech has reaffirmed its dedication to offer added value to customers by going into partnership with General Engineers and Supplies Co. Ltd (GE) to strengthen its marketing and engineering capabilities.

    Company officials said SMI High-Tech Trading (SMIHT) was formed 15 years ago introducing Programmable Controllers (PLC) and Control Components into the local market. The GE Group of Companies Ltd, founded in 1977, primarily deals with electronics and has built up a highly recognised position in Sri Lanka during the past 20 years. The company has grown and diversified in the areas of radio communication, fire fighting equipment, recording systems and virtual reality systems.

    More than 100 factories are automated by SMIHT using the world-renowned brand, OMRON. "OMRON is the major manufacturer of PLCs and we are the sole agents in Sri Lanka. Automating a factory will help to reduce costs. Our main focus is to provide customer satisfaction. Among our valued customers we have AMW, Ceylon Biscuits Ltd, CTC, Kelani Tyres Ltd, Lanka Walltiles Ltd, Lanka Tiles Ltd," GE Business Development Manager, Royce Goonewardena said.

    New Jt. MD at Car Mart

    Suraj Fernando has joined the Car Mart group as its joint managing director from this month.

    Fernando was formerly managing director of Browns group where he was responsible for restructuring and reorganising the business resources of Browns, enabling the company to re-emerge as a blue chip with a new and dynamic corporate image. He will also function as jt. managing director to the entire group which includes Clarence Amerasinghe and Co , Amico Industries, Metal Packaging Ltd and Amico Exports Ltd.

    Director of IFPRI wins world food prize

    WASHINGTON - Per Pinstrup-Andersen, Director General of the International Food Policy Research Institute (IFPRI), has been named the 2001 World Food Prize Laureate, prompting congratulations from the World Bank and the Consultative Group on International Agricultural Research (CGIAR).

    The US-based World Food Prize Foundation last week selected Pinstrup-Andersen to receive the $250,000 World Food Prize for 2001, which will be presented at the Civic Centre of Greater Des Moines, Iowa, in October 2001. The prize recognises Dr. Pinstrup-Andersen's research, which has helped to modify and refocus food subsidy programmes in developing countries, thereby increasing the amount of food available to poor people.

    "This prestigious award is testimony to Per's achievement of excellence in addressing the problems of hunger and food insecurity in the world," said Ian Johnson, World Bank Vice President and Chairman of the CGIAR in a statement. "His leadership has helped shape the thinking of a new generation of food policy makers around the world and under his direction, IFPRI has become one of the world's premier food policy research organizations."

    The CGIAR, an informal association of 58 public and private members, supports a system of 16 international agricultural research centres around the world, including IFPRI, known as Future Harvest Centres. The World Bank is a founder and co-sponsor of CGIAR.

    "Per is an outstanding economist whose work has addressed one of the most compelling moral dilemmas of our time: the persistence of hunger in a world of plenty," said Francisco Reifschneider, Director of CGIAR. 

    "The award is a fitting tribute to him, and to IFPRI, for innovative contributions in addressing complex issues of food security, intellectual property rights, and subsidies."

    IFPRI's research has contributed significantly to the current revision of the World Bank's rural development strategy, particularly through their IMPACT model, a cornerstone of the 2020 Vision Initiative inaugurated by Dr. Pinstrup-Andersen that projects world food supply and demand, trade, prices, and food security to the year 2020.

    Speedo swimwear to be made in Sri Lanka

    Speedo International, the world's leading swimwear manufacturer, has launched a new joint venture with MAS Holdings Limited, the largest manufacturers of intimate apparel in the country.

    A MAS press release said Speedo will invest in Linea Aqua (Pvt) Limited, an exclusive swimwear manufacturing plant which is a BOI approved project. The project is expected to be valued at approximately USD 8.5 million.

    The entrance of Speedo signals the first joint venture, the MAS Group has entered into with a leading sportswear manufacturer. Linea Aqua (Pvt) Limited is a three-way joint venture between Speedo International, MAS Group and Brandot International based in the U.S.

    The plant, for which the foundation stone would be laid on Monday, 10 September 2001, will initially commence operations with an employee base of 500, rising up to 1000 within two years and 2000 by the year 2005, based on projected volumes of production.

    While the plant would primarily manufacture swimwear for Speedo International and Victoria's Secret, it is envisaged that several other leisure swimwear manufacturers would use this state-of-the-art facility for production as well.

    Charge-free numbers from SLT

    The concept of charge-free numbers, in many ways similar to the toll-free numbers available in developed countries, has been quietly developed by Sri Lankan Telecom (SLT) and offered to select customers.

    "We are not offering it as a public service but have offered it to two of our top customers (at their request)," a SLT official said. The two clients are DHL, the courier service firm, and Sri Lanka Insurance Corporation.

    Not just a call box

    How would you describe the game of cricket to an avid cricket fan who is frustrated that he has no way of seeing the last moments of a nail biting end to the final match between two of his favourite teams? He reaches out for his mobile phone and in no time, he is at the scene, listening to the well-known cricket voice of Tony Greig as he describes the crack of the stumps and the roar of the crowd.

    Mobitel, the leader in clarity, service and customer care, offers its customers many value-added services of which cricket updates is one of the most popular. "The reason that this service is popular is because it has a human element to it - You can listen to the updates in both English and Sinhala by well known commentators. With Mobitel you feel cricket," says a company spokesperson.

    Since its inception Mobitel has continued to provide customers with what they need from a mobile service operator such as call clarity, coverage and customer care. The value-added services offered by the company are built around this. The company offers what the local community requires and moulds its services to suit the lifestyle of its customers.

    Minor accounts for newborn babies

    Hatton National Bank launched a scheme to open 'Singithi' accounts for new born babies at Joseph Fraser Nursing Home and at Castle Street Hospital recently a press release said. 

    The scheme was introduced by HNB with the objective of encouraging parents to save for the future of their children, as well as to inculcate the savings habit among the younger generation and make them familiar with the world of Banking. 

    Under this scheme, the parents are invited to open a 'Singithi' Savings account for their baby. As our gift we will add an identical sum as that of the parent's deposit, upto a maximum of Rs. 1,000/- to double the opening balance. For example, if the parents should deposit Rs.500/-, we will add a further Rs. 500/- to make the opening balance Rs.1,000/-. Similarly, if their initial deposit is Rs.1,000/-, our addition of another Rs.1,000/- will give their baby a balance of Rs.2,000/-

    An attractively designed voucher will be gifted to the parents through the hospital authorities. The parents will then be required to hand over the coupon which is attached to the voucher.

    Index Page
    Front Page
    Mirrror Magazine

    More Business
    Return to Business Contents


    Business Archives

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