Features

• Making money through Internet domain names
• Marketing experts for apparel industry
• eRunway becomes Virtusa
• JICA gifts equipment to ITI
• First two years of restructuring most difficult, says Milinda Moragoda
• In brief
  

By Akhry Ameer

Imagine sitting in front of a computer all day thinking of names. Our Business Unusual candidate this week, Vincent Peeris does just that. Peeris got the idea of venturing into this business about two years ago while returning to Sri Lanka after abruptly ending his stay in the U.S. having changed plans of completing his B.Sc. in Computer Science. An article about a domain name of a website being sold for $3.3 million attracted his attention. Thus started a business in which he began using his tuition fees as capital with the approval of his father.

Soon Peeris started registering catchy domain names on the Internet that might fetch a higher price using his imagination at $70 per name. The domain names were earlier distributed free by the Internet Authority (ICANN) in the U.S. during the early stages of the Internet revolution. Thereafter registries were appointed where those wishing to acquire names can log in and search for its availability. If a name has already been acquired the user may contact the registered owner to propose a private purchase. The popularity of the name raises the bid price and in the case of Peeris it fetched him US$7,750 for the sale of eManufacture.com.

Having ventured into the trade at the early stages he considers himself lucky as today many other international companies in the U.S. and Europe have registered prospective names with the intention of attracting a higher value. Peeris who now has over 1.000 domain names, having matured in the selection of names, is close to clinching a long-term deal that could earn him $1 million over a five-year period.
A remarkable achievement for Peeris in this unique trade is that all of his transactions have been done sitting in front of his computer at his home in Kotahena. He hopes that the Internet infrastructure would improve towards broadband access so that he would be able to expand his business. Currently he is developing a website to list all the names he owns.

Marketing experts for apparel industry
The apparel industry is getting ready to face competition in the quota-free era by launching a programme to train 250 marketing experts by the time quotas are abolished in 2005.

The aim of the programme, organised by the Sri Lanka Apparel Exporters' Association (SLAEA) and the Chartered Institute of Marketing (CIM), is to give local industrialists the knowledge required to perform competitively in the international apparel retail trade.

An apparel-specific marketing programme has been designed with the help of Dr. Tony Hines, a former director of the Apparel Marketing Research Group at the London College of Fashion, the SLAEA said in a statement.

He is currently a Senior Lecturer in the Department of Retailing and Marketing at the Business School in the Manchester Metropolitan University.

This is the first time CIM UK has ventured into an apparel-specific qualification. The course is scheduled to commence in Sri Lanka in June and will have a similar structure to the present CIM marketing course, with the emphasis on apparel marketing, the statement said.

When the quota system, known as the Multi-Fibre Agreement, is abolished, garment factories will need to go beyond their current manufacturing expertise and know-how and develop marketing skills to market their product directly to the customer, it said.

"Once the quota system is abolished, it is estimated that approximately 60 percent of the country's existing factories may shut down," the statement said.

"Surviving in the new trading environment beyond 2005 will depend entirely on how well the industry markets its manufacturing capabilities and product quality to the international market," it said.

The association organised a seminar on 'Apparel Marketing and You' conducted by Dr. Tony Hines recently. It was to educate and inform the apparel industry on ways of improving their sales and marketing strategies in order to succeed in a highly competitive and challenging market environment after the present quota system is abolished in 2005.

The end of textile quotas, while seen as a threat, could also be an opportunity for the industry which, with effective marketing and by building strong and direct relationships with buyers, has the potential to grow, it said.

eRunway becomes Virtusa
By Akhry Ameer
eRunway, the software development company that started its operation as Technology Providers in Sri Lanka, went through its second name change last week to be known as Virtusa Corporation.

The name change was partly due to the negative outlook by organisations in the US on e-based companies and also to instill its strength and stability as a company that strives for engineering excellence, said Kris Canekeratne, Chairman and CEO of Virtusa Corp.

Hariharan Murthy, who joined the company recently from Indian software giant Infosys as Executive Vice President to head worldwide sales and marketing said, "It is not just a name change, but a public acknowledgment of what the company stands for. We felt that eRunway does not truly reflect the company".

According to Canekeratne, Virtusa's value proposition of excellence in people, process and engineering over the last four years has helped the company realise a compound annual growth rate of 75 percent and a sequential quarter to quarter growth of 26 percent. This trend was maintained even during the times of economic slowdown in the US, he added.

However, as on previous occasions the chairman declined to give actual figures of performance but said that they were making profits.

Virtusa employs Java and Microsoft technologies to deliver solutions to its customers in certain financial segments and in the areas of electronic bills and Customer Relationship Marketing. The company with a staff of around 500 has an employee retention record of 93 percent driven by an employee ownership culture and selection of the high performing candidates. To battle the effects of September 11 last year, Virtusa took a company wide pay cut instead of retrenching staff which had been largely welcomed within the company. The name Virtusa, had been proposed by a member of staff from its development centre in Hyderabad, India, among many other names that the staff came up with.

Virtusa has no immediate plans for a public listing as it has sufficient capital adequacy.

The company raised $35.5 million in two rounds of funding from US-based venture capitalists, Sigma Partners, Charles Rvier Ventures and JAFCO Ventures. Its total worth is believed to be over $100 million.

JICA gifts equipment to ITI
The Food Product Development Group of the Agro and Food Technology Division of the Industrial Technology Institute (ITI) has received equipment worth Rs. 4 million for accelerated shelf life determination of food products under the Technical Cooperation programme of the Japanese International Cooperation Agency (JICA).
The equipment includes heated incubators, a pH meter, a water activity meter and a bio-safety cabinet.

"By acquiring this new equipment, the ITI continues to support industry by undertaking testing, investigations and research, for improving product quality, technical processes and methods used in industry," an ITI statement said.
Production of food of acceptable quality and safety with shelf lives adequate for their intended use is of immense importance to both the retailer and the consumer.

It is therefore vital that food must reach the consumer in good condition and retain its quality for the period intended. If the shelf life of a food product is determined using normal conditions, the product has to be stored at the appropriate temperature and evaluated after varying periods of time.

A more rapid alternative technique is the accelerated method of shelf life determination where the storage temperature is elevated so as to accelerate the ageing processes.

Thus raising the storage temperatures to between 30-55°C brings about rapid changes in flavour, oil-water separations, breakdown of fats, tin dissolution in unlacquered cans as well as destabilisation of pickles and sauces, the statement added.

With the equipment that the ITI has now acquired through the JICA project, the institute is now in a position to determine the shelf life of most food products to be stored at ambient temperature in a relatively short period of time.
Another area of accelerated shelf life determination that the Food Product Development Group of the ITI intends to get involved in the future is that of frozen food products. Storage defects in frozen products can be accelerated by storage at higher temperatures of 10 to 15C.
This method will also enable the rapid shelf life determination of frozen foods in a relatively short time. Food industrialists are now welcome to make use of this new facility at the ITI.

First two years of restructuring most difficult, says Milinda Moragoda
The first two years of economic restructuring is the most difficult and most painful and in this context there is a need to explain to the people why this is being done and the ultimate benefits, says Economic Reforms Minister, Milinda Moragoda.
"When there is a high fiscal deficit, the normal sequence is to enter into a stabilisation process. This means a sharp cut in real incomes because there is too much demand and too little supply. There is often opposition to this," he said in a recent interview.

"But after the fiscal deficit is brought under control, there should be growth."
Here are excerpts of the interview:

On economic reforms:
Stabilisation has many phases like temporary unemployment due to the restructuring of the economy. In economies that theoretically are efficient like the US, you see sharp adjustments immediately. When there is too much demand, they adjust quickly without delay. In a developing country like ours following a standard stabilisation programme has its risks. We have to be aware of the social dimension. We can't look at it in a one dimensional way.

The difficulty is to balance the two. My own thinking is that we have to focus more on reforms than what I call "playing the numbers game". The social and political realities of the country mean we can't achieve this.

To make this work and project growth, we need to reform. This would mean deregulation so that the private sector can invest and grow. The most difficult would be labour reforms.

On public sector downsizing:
We need to change the mindset among young rural people that the public sector is the best employer. It is a challenge to the private sector too. The private sector must be able to present itself as an alternative to the public sector. There is a need to trim the public service.

Education reforms:
The government has to address the education sector seriously. In our manifesto we talk of a voucher system so that a student can go to any school making it competitive. The emphasis should shift from the government providing education to one of providing the opportunity for education, via the voucher system. These are long-term measures.

The problem of the unemployed and the not employable is a volcano waiting to explode. If, as a society, we are going to be complacent, there would be a third explosion. If we achieve economic growth in the short term, it might not benefit this spectrum in society. If it only goes to the Colombo schools, the elite schools, we have a problem.

Brainstorm on education reforms:
The prime minister as minister of policy development and I as deputy minister have created a policy development committee which is a private-public combination with some academic input. Under this there are several committees.

However, I always feel that we have a lot of concepts but implementation is weak. Sometimes it is better to do three things right and two things wrong than to spend too much time (on too many things). As the prime minister says, let us have a hands-on approach and proceed even if we make mistakes.

On privatization:
Every survey that has been done in Sri Lanka shows that people are suspicious of privatization. There is a need to explain the system and take people into one's confidence. I am not saying privatization or free enterprise is the best system in the world but this seems to be the best system that is working at the moment.

We need this purely to finance the budget deficit with Rs. 21 billion being targeted from privatization. Last year too the same amount was targeted but it was not successful under the previous government. It is a huge challenge.

The Insurance Corporation would be one of the flagship privatisations with 10 percent going to the employees. As far as Sri Lanka Telecom is concerned there are two ways of looking at it - get maximum value out of the sale or look at it from the customers' point of view. In our view, the second is the best option. We need to increase the number of telephones and offer the best service at the lowest possible price. Through competition we are expecting better quality, better service. In the rail transport sector too we are looking at public-private partnerships.

Foreign investor concerns:
I agree there is a confidence issue when we investigate previous privatization deals. It has to be done in a way that global business confidence is maintained. But equally it is being said that if there have knowingly been corrupt practices then those must be exposed. This should not be a witch-hunt or be seen as one.

On welfare:
A new welfare law has been announced in the budget. This is essentially to give the criteria by law for receipts and includes penalties for violation. Today political party affiliations become the criteria, not need. That's how half our population has ended up getting welfare benefits.

In brief

Banking for Jaffna students
The Institute of Bankers of Sri Lanka (IBSL) is trying to encourage students in the north and east to take to banking by setting up accredited tuition providers in those areas.

A team from the IBSL visited Jaffna last week with the aim of starting banking examinations in Jaffna, the IBSL said in a statement.

Jaffna College in Vaddukodai, has been made an accredited tuition provider of IBSL and it hopes to start lectures for the Certificate in Banking and Finance and other qualifications shortly.

The IBSL also arranged visits to Trincomalee to create awareness of banking education and banking examinations which are jointly conducted by IBSL and the Chartered Institute of Bankers, London.

Celltel launches 'stock tracker' facility
A sophisticated mobile phone based information cum tracking facility for stocks on the Colombo Stock Exchange (CSE) has been launched by Celltel Lanka Ltd, Sri Lanka's pioneer cellular operator.

The "Celltel Stock Tracker" enables any Celltel GSM subscriber to be kept informed automatically of stock price movements on the basis of parameters set by the individual, making it the most powerful and effective stockmarket information service in the local cellular industry, the company said.

The new facility which is powered by Celltel's exciting Short Messaging Services (CellSMS) technology and the latest Internet software makes it possible for a subscriber to order a watch on selected stocks and receive a message when they reach a stipulated price threshold.

"This is a resourceful tool for the busy investor," Celltel's Commercial Director Aniljit Singh said. "With Celltel Stock Tracker, a subscriber can actually configure an individual portfolio on Celltel's Stock Tracker website (www.stock.celltelnet.lk or via www.celltel.lk) and be kept informed of the value of his or her portfolio real time, throughout the day."

Rediffussion-DY&R buys Advantage SL
The advertising agency, Advantage Sri Lanka, recently announced a joint venture with Rediffusion - Dentsu, Young and Rubicam.

Dentsu of Japan and Young Rubicam, along with Rediffussion - DY&R (RDY&R), India's fifth largest advertising agency, have acquired controlling stakes in Advantage Sri Lanka. The new entity will operate as Advantage - DY&R Brand Communications.

Rediffussion- DY&R's roster of clients include international brands such as AT&T, Canon, Citibank, Colgate - Palmolive, Daikin, Ericsson, ING Insurance, Nike, Phillip Morris, Thomson, UIP and Victor Chandler to name a few. Some of the domestic brands that the agency handles are AirTel, Eveready, Maruti- Suzuki, Taj Hotels, Telco and Zee Telefilms.

Locally, Advantage Lanka, which started operations in 1994, has provided communication solutions for many a blue chip firm, including Singer, People's Bank, Maharajah Group, Maliban, Hayleys, Directories Lanka, Mobitel, and DFCC Bank.

Lanka Walltiles workshop
Lanka Walltiles recently organised a full-day workshop for tilers at the Sampath Hotel, Kadawatha, aimed at educating the trade on the handling, laying and the usage of tiles.

Gasper Gunathilaka, the company's marketing manager, described the firm's commitment towards raising the standards of the tiling industry as fulfilling a social requirement that went beyond any corporate agenda. He said workshops like this aimed at equipping tilers with the latest technological know-how would be held across the country.

NIIT, NYSC computer programme
NIIT, the global leader in IT Education and Training joined hands with the National Youth Services Council to conduct a computer literacy programme in Moneragala. This two-day training programme called SWIFT Praveshi was conducted at the NYSC Computer Training Centre in Moneragala in late March.

SWIFT Praveshi is a training programme designed by NIIT to transform people from "No Computers" to "Know Computers", a NIIT statement said.

Sunimal Weerasooriya, Managing Director of MMBL CyberSkills (Pvt) Ltd, licensee of NIIT in Sri Lanka said, "When NIIT launched the Sri Lanka Computer Literacy campaign in February 2002, the National Youth Services Council also embarked on a computer literacy campaign to educate the youth on computers through their centres throughout the island. Since both organisations had similar objectives, it was decided to pool resources and conduct joint IT training programmes in rural locations where NYSC has centres."

He further said the programme conducted in Moneragala was the first such programme and it was a big success where "we were able to train 60 students of various backgrounds and age groups".

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