Sri Lanka ideal to test new products - HSBC
By John Breusch
By shifting from Bangladesh to head HSBC's Sri Lankan operation, Mark Humble has entered a market that the world's second largest bank likes to use as a testing ground.

Take Internet banking. Leaving aside the major countries in the region - Hong Kong, Singapore, Malaysia, India - Humble said Sri Lanka was the first among "what we call the smaller countries" to launch online banking.

The service, launched late last year, now has 1,000 customers and has just embarked on a marketing drive. Sri Lanka is "often used as a testing ground for new products and systems in the group," Humble said.

"All of our IT is done in-house out of Hong Kong and Sri Lanka has been the first to launch many of our new products and systems, for a couple of reasons. It's a nice-sized market, and also you have very professional and qualified staff on the IT side and on the banking side."

In fact Humble, who this month took over as HSBC's chief executive officer in Sri Lanka, is the only permanent expatriate among the bank's 750 or so staff in this country.

HSBC is a massive company, operating in 78 countries. In the banking world, only US-based giant Citicorp is bigger. Humble's previous posting was in Bangladesh, where HSBC has had a presence for just six years compared to almost 110 years here. As a result, he is joining a far bigger, and more established, operation. "So the business is more complex here [than in Bangladesh]," he said.

HSBC Sri Lanka, for example, is a leader in the local credit card market.
"We've got 100,000 cards. It's quite competitive because a lot of the local banks have issued cards as well - Commercial Bank, Sampath, Hatton National [HNB]- they're all in the credit card business. So our feeling is that although our numbers are increasing the market is pretty saturated.

We've increased market share but clearly the market is growing as well, although not as quickly as many people would like. Maybe the market here for credit cards is about 250,000, depending on how you set your criteria."

Although an end to the war in the north and east would help the economic development of the whole country, Humble said the peace process is not a cause for any radical rethink of HSBC's strategy.

"We've always had a watching brief on other areas of the country. Clearly we always keep our eyes and ears open, not just now but at any time, in terms of expanding the branch network. The places we might look at in the future would be Galle, Trincomalee and Jaffna. But it's too early to have any firm plans for moving up to the north and the east, although we keep an eye on what's going on."

As for its existing business in the south, Humble points out that HSBC has been growing despite the effects of war on the economy. "So in the last three years we've probably doubled in size," he said.

"We've introduced credit cards, personal Internet banking, we've started our off-site ATM network. So the message is HSBC has always been there, we will continue to be there. We will continue to invest in the tough times and clearly if the good times come we will look at doing other things, [such as] maybe expanding the branch network. We'll also get more business coming in through foreign direct investment."
In the meantime, he insisted HSBC "does not have a shopping list" in terms of either branch expansion or acquisitions.

HSBC has 10 branches in Sri Lanka and recently opened a branch in the Maldives, which is managed from Colombo. "Expanding the branch network is not something that is under active consideration," he said.

But that does not mean the bank is not keen to grow. It would like to be able to offer its customers insurance products - "a core interest for the bank in other parts of the world," said Humble.

But its aspirations here are frustrated by restrictions which prevent banks owning insurance companies. While local banks like HNB have been able to overcome the restriction by establishing insurers as subsidiaries, the task is not so easy for foreign banks.

It is an area that Humble hopes the government might address as it introduces a raft of reforms aimed at freeing up the financial sector. "We would very much like to be able to offer a wider range of investment and insurance products to our customers and we're actively looking at ways of doing that," he said.

Tips to triumph in trade
Do you have what it takes to succeed in business?
By Nilooka Dissanayake
Starting a business of your own is like setting out on a long unending journey. So, it goes without saying that you need to be prepared for it. Before finding a business idea to suit you, let us find out if you are suited for business. This may seem like a strange idea. But it is not so. I do not believe entrepreneurs are born. True, it takes some special attributes to succeed in business, but I believe these can be cultivated. The attributes and thinking patterns that make a winner in the world of business are within reach of any one who is reasonably intelligent and is ready to work for it.

Many a theses have been written on attributes of entrepreneurs. Let them be. All you, my dear reader, is interested in is finding if you have what it takes to succeed in business. Let us do just that.

Athwela Business Journal, the Sinhala business magazine has developed a questionnaire to help you determine where you stand in this respect. It has 64 questions divided into eight sections. You have to answer "yes" or "no" to each question. They deal with your attitudes, knowledge and skills as well as your stamina and your family's aspirations.

For example, there are questions on your health and ability to withstand stress. Other questions ask how positive minded and confident you are. How good are you at getting on with people? How dedicated and committed are you? What experience, knowledge or contacts have you in the world of business? Are you financially stable? Do you and your family understand that until the business starts making profits you may have to restrict your lifestyle? Do you have funds to survive if the business makes losses? How creative are you in facing and solving problems? And so on.

Once you complete the questionnaire, you will know where you stand. More importantly, you will understand your own strengths and weaknesses. It will show where you need to improve and work at building new skills or competencies. For example, when I went through it, I could say yes to 63 out of the 64 questions. The one which I said "No" to was asking whether I am money minded. I am not. Never will be, but, that does not stop me from being in business! Most people, on a general rule will score nowhere near 64. That does not matter if you are ready to take on your dream. If you believe you can, you can.

There are others who confirm my belief. Sometime back, I interviewed Vijith Kannangara, a medical doctor who gave up medicine to build Q&E Advertising, the largest independent advertising agency in Sri Lanka. Giving advice to those thinking of starting a business, Vijith says that if you are thinking of changing track or starting a new business, you should think twice; Are you doing it just for money? In his opinion, although money is important and you need money to start a business, it is more important to have a dream you want to realise. He feels that when you set out to be an entrepreneur, you need to want something more than just make money; that is, you need some sort of a higher purpose.

I fully agree. Perhaps that is what my one "No" answer amounts to. I get a lot more out of business than money. And it is not the money which keeps me going at difficult times or gives me inspiration; It is the million other things; the satisfaction, the sense of achievement, the recognition and the social responsibility to mention just a few. These things matter more to me than money. So, as you venture out to seek if you are suited to be in business, consider what other things than money you need to be happy.

Unfortunately we cannot reproduce the complete questionnaire in this column. If you wish to get one (it's free), please call on 074-304100 or email your contact details to btimes@wijeya.lk and we will send it to you.
I am glad that many of you took up the invitation to help make this column interactive. We received advice, comments and requests for help from Sri Lankans Commercialising industrial R & D
How to obtain services
All requests for ITI services should be made on a company/client letterhead and addressed to the Director, ITI. When a company/client letterhead is not available a Service Request Form can be obtained from the Corporate Services Division-Technical Services Branch located at the ITI main lobby.

commercialising industrial R & D
By Naomi Gunasekara
The Industrial Technology Institute (ITI), at 363, Baudhhaloka Mawatha, the premier multi-disciplinary scientific research and service organisation in the country, has a vision to be the model institution for industrial research and a pioneer in self-financing research and development (R&D) to elevate the level of technology in Sri Lanka.

However, achieving this vision has become a somewhat difficult task for the institute. It faces many problems in obtaining sufficient investments for R&D to meet the future needs of the industrial sector and in scaling up laboratory-developed processes for sustainable marketing of the institute's research work.

The ITI carries out its R&D work and industrial services in its 7,000-square metre compound through six divisions: Agro and Food Technology, Chemical and Environmental Technology, Materials Technology, Process and Plant Engineering, Metrology and Instrumentation and Corporate Services.

Multi-faceted
Being a multi-faceted institution, ITI does not confine its services to the government sector and provides a number of services to industries. It extends its services to the scientific and commercial sectors, small, medium and large industries, non-governmental organisations and national and international funding agencies by conducting research to accelerate industrial technology development. In addition, it collects and disseminates useful technology (shelf technology in particular), trains people in areas related to technology, monitors environmental pollution and recommends remedial measures to mitigate pollution and co-operates with government departments, institutions, technical colleges, universities and other bodies to promote industrial research and development.

Upgrading quality
Since its establishment, ITI has provided about 5,000 services each year for upgrading the quality of industrial products and processes, and provided more than 2,000 services each year for calibration and repair of equipment and industrial measurements. It also has introduced technologies for food products such as canned and bottled coconut milk, mushroom pickles, baby foods, and instant mixes for traditional foods such as string hoppers, hoppers, pittu and chapathi. It also provides assistance to build wastewater recycling and treatment plants, and designed and fabricated plant and machinery for industry.

Mission
With a mission to promote technological and industrial growth through demand-driven research and development and internationally competitive technical services leading Sri Lanka to Newly Industrialised Country status, ITI conducts its R&D work in well-equipped physical, chemical and micro biological laboratories. It has a pilot plant and engineering workshop, a technical library with reference and lending facilities and an in-house computer facility.

Sunday Times Business Desk met Dr. Nirmala M. Pieris, who heads ITI's Corporate Services Division to find out how ITI markets its research and the problems encountered by the institute in endeavouring to commercialise successful R&D work. She said that R&D licensing is not a one-time transaction but a long-term process.

Operating through a financial grant made available annually by the government and the income generated through its services and research projects, the institute focuses on market-driven research, says Dr. Pieris. "We are commercially oriented and market-driven at the moment," she said, pointing out that the ITI has been transformed from an academic research institute to a more commercially oriented institute over the 30 years she has served at ITI.

"In a dynamic environment with technological advances occurring at an accelerating rate, the ability of an industrial firm to survive depends to a great extent on its capability to anticipate new user needs," she said. ITI decided to provide demand-driven scientific industrial R&D and internationally competitive technical services to promote rapid industrialisation.

Expertise
ITI's expertise lies in a number of areas - post-harvest management of fruits, vegetables, grains and cereals, food science and technology, food and agro product analysis, essential oils and spices, plant tissue culture, industrial microbiology, chromatographic and spectrometric techniques, wet chemical analysis, pollution monitoring and control among others.

According to Dr. Pieris, ITI is not a research institution per se but is also an industry services institution which provides services to industry. These include Standard Services (where the institute carries out tests in keeping with standard specifications and methods), Customised Services (where services are rendered on requests made by specific clients who require repair and maintenance services, supply of products for market trials and supply of information) and Consulting Services.

Training programmes
The institute undertakes training of personnel in areas related to the experience of its staff. Training comprises programmes that are tailor-made to suit specific client requirements. From time to time, it does group training of personnel through workshops and seminars. It also conducts training programmes for students in universities and professional organisations in order to meet with course requirements.

All research done by ITI is funded by local and foreign funding organisations through submission of project reports. "In the early 1990s CISIR reformulated its R&D policies and strategies to suit new demands from the industry and other economic sectors arising out of the new industrial policy of the country. The new policy underlined the need for the CISIR to be market-oriented and demand-driven with respect to its R&D and service functions with a view to being self-financing," said Dr. Pieris.

Technology transfers
Technologies that are developed by the institute through R&D and foreign funded projects are transferred to both existing industries and potential entrepreneurs.
ITI's clients comprise individuals and public and private sector organisations. "The number of clients in 2001 was over 1,500 of which 90 percent came from the private sector. We also provide services to other international, regional and national organisations and academic bodies, ministerial committees, technical committees and professional associations by serving on special committees."

Commercialising research
Despite its determination to become a market-driven research organisation, ITI encounters several problems in endeavouring to transfer results of successful R&D work into commercial practices. "One of the biggest problems in commercialising R&D work is when the work is not market-driven. The research done by an institute must have a demand, if not it becomes difficult for the result to be pushed into the market. We do a lot of work for industries when the requests come from them because that way you have an assurance that the research will not stagnate."
According to Dr. Pieris, the problems related to commercialising research include:

* The ambiguous, undefined character or policy structure of R&D institutions.

* The tendency of research personnel to regard industrial research as uninteresting or not worthy of understanding.

* Lack of promotional activities of R&D institutions.

* The incapability of R&D management staff to direct research activities. (They usually face inadequately prepared proposals and contracts, poor budgeting and planning, lack of adequate liaison with industrial clients, insufficient project control and inability to develop the interdisciplinary team approach).

* Lack of industrial experience. (This leads to an unrealistic assessment of problems, finding unduly complex solutions to problems and an uneconomic approach).

* Inadequate financing. (Due to financial constraints faced by R&D institutions, they often initiate their operations in an unrealistic manner whenever funding is available).

* Failure to recognise the importance of technical information services, economic research, quality control and trouble-shooting.

* Failure to take follow-up action and ensure that the results, findings or recommendations are implemented to the fullest degree.
It is not only research organisations that are guilty of not having enough commercial orientation. The industrial sector too contributes to the problem.

* They do not know how to formulate questions and pinpoint existing problems.

* They lack regard for local research services.

* Industrial managers regard research as unnecessary and expensive.

* Preference to use R&D results from multi-national partners.

* Industry's apprehension that confidential information will be leaked to a competitor when outside services are used.

Because of these problems, many technologies developed by R&D organisations have been aborted or shelved and have thus failed to reach the market place.
She said R&D organisations must consider alliances with potential users of R&D results such as industry associations and relevant groups with the aim of dividing costs between ITI and its clients. They need also consider affiliate programmes in which the focus of R&D is on specific projects that will help the companies which will pay an annual fee that entitles them to R&D experts and access to special events like workshops and demonstrations. They must encourage scientists to form their own companies or joint ventures, engaging in sponsored/contract research, staff exchanges, establishing technology development corporations and venture capital firms in order to successfully commercialise research. In spite of problems related to commercialising R&D work, universities and research institutes spend billions on research that may result in breakthroughs that eventually benefit ordinary people.

Significant technical achievements
* Dehydration of whole lime - The whole lime is dehydrated while retaining its flavour. The final product is a black, dry lime. It has very good market potential in Middle Eastern countries as the whole black lime is used for cooking rice according to Arabian recipes. About 15 kilos of dried lime can be obtained from 100 kilos of fresh lime. The technology has been scaled up to pilot plant level and is available for commercial exploitation. In the meantime, the technology has been transferred to two foreign entrepreneurs in India and Kuwait.

* Conversion of natural rubber latex into rubber compound - ITI has developed a process for the conversion of natural rubber latex into rubber compound for the manufacture of moulded products. The process has taken into account the drawbacks of the conventional conversion process such as high cost, heavy power consumption and environmental hazards. It provides the methodology to carry out compounding of rubber in the wet state itself followed by the coagulation and drying of the product.

* Production of vinegar from waste coconut water - the institute has designed a stainless steel vinegar generator to produce vinegar from waste coconut water on a commercial scale and transferred the technology to an entrepreneur who now holds over 10 percent of the market share.

* Thin film solar cell devices - A collaborative project of the University of South Florida and the ITI, the project aims at identifying and refining thin film solar cell processing techniques that are applicable to developing countries.

* Value-added products from betel - Value-added products like betel toothpaste, mouthwash, shampoo, face cream and instant betel quid and betel pellets have been formulated by ITI recognising the anti-bacterial, anti-fungal and high anti-oxidant properties of local betel.

* Low cost farm storage system for horticultural produce - A low cost system for storage of horticultural produce whereby farmers growing lime in the Moneragala and Welimada areas were able to store part of their crop for marketing during the off season. The system is based on the evaporative cooling facility for extending storage life of perishable commodities. Lime stored under this system can be held in optimum condition for six to eight weeks provided they are harvested at the correct stage of maturity. The storage structure can be built to accommodate 500 kilos of lime and the price of the facility ranges between Rs. 1,500 - Rs. 3,000 depending on its storage capacity.
*Know-how for mushroom products - Development of the know-how for the manufacture of three types of mushroom pickles. The pickles made under this project are available in supermarkets.

* Technologies for food products like bottled coconut milk, instant string hopper, hopper, thosai, pittu, roti and chapathi mixes. With regard to coconut milk, ITI has developed and transferred the know-how for several product formulations with different compositions to suit various overseas markets.
* Assistance for mosquito eradication - ITI has constructed two battery powered Back Pack Aspirators similar to imported aspirators at the request of the Medical Research Institute to collect adult 'Aedes aegypt' mosquitoes, who are the principal vectors of Dengue and Dengue Haemorrhagic fever. The aspirator facilitates the indoor collection of this vector species for obtaining useful information on the biology and behaviour of the mosquitoes.

* Wastewater recycling plants - ITI has developed a pilot model for treating wastewater of one of the largest sewing thread industries in the country that was in the process of expanding their production. As the quality of the thread water has satisfied the required water quality parameters for dying, the company is now in the process of setting up a commercial unit for recycling based on the ITI design.

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