US security could raise export costs

Tighter security measures on shipments to the United States from here and Colombo Port's efforts to join the US Container Security Initiative (CSI) could raise costs for shippers but failure to comply might hurt exports, shipping industry officials said.

The Sri Lanka Ports Authority is seeking to join the CSI, which places US Customs agents at foreign ports to screen US-bound containers to prevent terrorist attacks.

The US move to screen cargo more thoroughly and require shippers to provide cargo manifest information 24 hours in advance comes in the wake of heightened security concerns following the terrorist attacks of September 11, 2001.

US Customs has said it would strictly enforce its 24-hour rule for advance manifest information when a grace period for compliance expires on February 1.

SLPA chairman Parakrama Dissanayake said it would advantageous for Sri Lanka to join the CSI as American importers would prefer to import from countries which screen cargo more carefully or from transhipment ports that have the capability.

The SLPA plans to acquire two mobile X-ray scanners to screen containers. They would be able to scan 30 boxes an hour.

"If goods are not scanned exporters could be at a disadvantage vis a vis countries with whom they compete which do scan their cargo," Dissanayake said.

The SLPA had also adapted its procedures to comply with the 24-hour cargo manifest rule without disrupting current practices, he added.

Singapore and Malaysia, with whose ports Colombo competes, have already joined the CSI.

The Sri Lanka Shippers' Council said it fully supports the new security initiatives.

"This would in fact discipline shippers to have the cargo ready on time," said Ravi Ratnapala, the council chairman. "There have been many instances in the past where shippers wait for the last moment to have the cargo ready and load, thus creating all sorts of inconveniences to the port and shipping lines."

Ratnapala said exporters to the US would find it to their advantage to find the security initiative in place in Colombo.

"The last thing we would want is to have our cargo transhipped at a port where the CSI is in place due to our reluctance to join the programme thus increasing our lead times to the US."

Port officials said the SLPA would either buy the X-ray scanners or get a third party to procure them and provide the screening service for which they would charge. The machines would cost $5-10 million.

The SLPA has begun talks on the possibility of recovering the costs from shippers, which could be around $10 per box, officials said.

However, Ratnapala said the full cost should not be passed on to the shippers as there are other parties who are stakeholders who would benefit from such screening, such as the Sri Lanka Customs and the defence authorities.

"Their work load would reduce and it would also assist Customs authorities to detect any sort of smuggling," he said. "Therefore part of the cost should be borne by the government. If there's an improvement in the speed in which containers are cleared at the port gates by having an X-ray scanner this would benefit shippers and importers.

"I personally believe shippers and importers would not object to paying a reasonable sum," he added. "However, operationally I have certain doubts about how effective and efficient an X-ray scanner would be. What matters is the speed at which a container is screened."

US embassy spokesman Bruce A. Lohof said that if Colombo Port joins in the initiative, "it would be taking another step toward the competitive edge. Scanning containers in Colombo, before they leave for the US, would make it that much easier for Sri Lanka to export to the States."

Dissanayake said all export cargoes to the US will need a 48-hour cut off time.

US Customs Commissioner Robert C Bonner has warned that Customs would strictly enforce its 24-hour rule for advance manifest information when a grace period for compliance expires on February 1.

"This is an issue of national security," Bonner said. On February 2, "we will indicate to carriers our intent to deny permits to unload, and we will expect the co-operation of carriers to deny loading at the foreign port to those who do not comply with the rule.

"We have provided sufficient time for the change of business practices

needed to comply with the 24-hour rule," Bonner said. "Data that is incomplete or late will not be tolerated from carriers or shippers."

Migrant Chinese businessmen - a dying breed?

By Rajika Chelvaratnam
Sri Lanka saw the arrival of Chinese immigrants during 1928 to 1950. These immigrants set up businesses in the island, acclimatised themselves to the country's culture, learnt to speak the language as well as the natives and put down very strong roots. Their main areas of business range from dentistry, textiles and restaurants. Unfortunately these old and established groups of Chinese are now fast becoming a dying breed of businessmen in the country.

Yu Chang of YCC Exporters Ltd who is an exporter of baby care products called Doctor Baby, comes from the generation of these original immigrants from a province called Hupeh.

He says that his father was one of the first to arrive in Sri Lanka as far back as 1928. Compared to India the influx of Chinese into Sri Lanka during the corresponding period was low. The arrival was due to a migratory trend during the period affecting quite a few of the Chinese in the mainland and the thrill of going abroad and making money. "The world was open for all these technicians," said Yu Chang

He said that there are two separate and identifiable groups of Chinese; one would be from the village called Hupeh, while the people dealing in textiles are from the village of Shantung. Some of the families were the Wei family, the Yee family, the Ching family and the Chang family. These families are well established and very 'Ceylonised', said Chang.

The Chinese who set up businesses as dental technicians called themselves that because though they were not professionally qualified in the field as they came from a village that practiced generations of orthodontic work similar to the traditional Ayurvedic medicine in Sri Lanka. The Chinese immigrants from the village of Shantung came in around 1942 to 1950 and established 'original' Chinese restaurants down Chatham Street like 'Parkview' and 'Lotus'. However, most of the old Chinese restaurants which were set up by the old generation have been closed down now as the younger generation have moved out to other countries.

In addition to these Chinese moving out of the country seeking greener pastures, some of the subsequent generations have also diversified into various other businesses. For instance, in addition to Yu Chang's own business, which is quite different from the traditional profession of dentistry, his brother has diversified into the field of importing dental products.

Some others have set up prawn farms or have become turf accountants.

This is mainly because most of them prefer to be professionally qualified or enter more lucrative areas of business rather than carry on the traditional businesses.

According to Chang only some of the Chinese who have intermarried are staying on in Sri Lanka. Some of the main reasons for the old businesses closing down and the younger generation of Chinese leaving the country have been the severe political instability and the lack of citizenship in Sri Lanka. Some of the immigrants, unless they have married Sri Lankans, are stateless. Another difficulty is that the professionally qualified Chinese finds that the old business is unsuited to his qualification.

"In recent times, with the immigration regulations being eased, you get quite a few of the vagrant Chinese coming in, who have nothing to do with the old established Chinese."These Chinese get into more controversial areas of moneymaking, like brothels under the guise of massage parlours, or Chinese medicine shops and even restaurants.

"That is a new trend," said Chang, "the original people from these provinces are genuine, legal people who have settled down here."

This new breed of Chinese "come under the guise of the BOI" in order to make "big money and are involved in a more profitable trade."

L.T. Hang of 'Chinese Lucky Stores', which sells textiles, said that when they first came to Sri Lanka they sold textiles by cycling from place to place, selling their products.

His father was originally from the village of Shantung though Hung himself had been born here.

They had mainly migrated to Sri Lanka due to the war in order to avoid conscription.
He too was of the view that the younger generation of Chinese prefer to migrate or diversify into various other businesses rather than continue traditional ones.

S.W. Chang who is also from the village of Shantung and is the owner of "The One Price Shop', dealing in textiles said, "We were born here and we have got adapted to the Sri Lankan system and we are quite happy here."

However, he did not feel that the generation after him would carry on the business. "I think in time to come education is going to be more important than doing business," he said.

Due to changes in modern lifestyles he feels that there were fewer chances of sole businesses surviving, as now things have been made more convenient due to supermarkets and malls.

"We're down to about ten or eleven of the original families who came down. In time to come they will all be gone," he added.

JK Office Automation marks 10 years of

John Keells Office Automation (JKOA) recently celebrated 10 years of strength and excellence in the Sri Lankan market.

The company, established on January 14, 1993 with a share capital of Rs. 5 million, has grown in both scale and scope from 23 members to over 200 employees today. JKOA is one of the largest office automation suppliers with an annual turnover of half a billion rupees and has become the leader in providing the most renowned and effective after-sales service in the industry. It is the exclusive distributor for global power brand Toshiba, and its product portfolio includes digital copier solutions, copiers, facsimiles, notebook computers and business telephone systems, supported by state-of-the-art workshop facilities.

During its impressive 10-year growth trajectory, it has won over 12 Quality Service awards from its principals, Toshiba Corporation. Many of the awards also cover good management and outstanding performance.

Equally impressive is JKOA's client base - 13,000 customers - and over 18,000 units sold to-date, supported through an extensive network of agents islandwide in 12 key towns and cities. JKOA is also the exclusive agent for Toshiba in the Maldive Island, a company statement said.

Mobitel expands to Jaffna

Mobitel, one of the pioneers in the mobile phones operations in Sri Lanka has now extended its coverage to Jaffna, a company statement said.

A group of Mobitel staff members visited Jaffna recently to promote the network and its services. "Among other improvements for 2003, there is also a primary focus on expanding Mobitel's existing coverage to new regions. Madulsima, Moneragala and Trincomalee are only a few of the places that we have already covered," said Nalin Perera, General Manager-Marketing, Mobitel.

"The capital investment envisaged for expansion will ensure coverage extending to all major cities and towns including the northern and eastern regions and all major highways and their connecting roads. Mobitel is keeping to its promise of offering its customers the best in coverage, clarity and customer care," he said.

In the midst of Mobitel's fast expanding coverage, the company is preparing to bring about a new GSM network. Mobitel is in the process of finalising its plans for a GSM rollout. All mobile users in Sri Lanka would experience the paradigm change in the service, quality and value. A fully functional state-of-the-art GSM network is expected to be in place within the year, the statement said.

Mobitel also donated a substantial quantity of books, as well as Rs. 125,000 to the Jaffna library to mark the launch of the service in the province.

Caltex Lubricants gets major Asian award

Caltex Lubricants Lanka Limited (CLLL) has received the Silver Award for outstanding performance among the ChevronTexaco Global Lubricants companies in the Asia Pacific Region.

Managing Director, CLLL, Kishu Gomes received this award at the recently held regional conference in Sydney, Australia, where Caltex, Sri Lanka, competed with 17 other ChevronTexaco Lubricant companies in the region, including New Zealand, Australia, Japan, China, Philippines, Singapore, Thailand, India and Vietnam. It received the Silver Award for the company's outstanding performance for the year-end 2002.

There has been a laid down criteria covering all aspects of the business in evaluating outstanding performers in ChevronTexaco, Asia Pacific Global Lubricants, which includes corporate compliance, social and environmental responsibilities, financial performance and equity market performance, local market achievements which includes maintenance of market share while defending pricing and margin structures, merger integrations and human resource development and management. CLLL has performed exceptionally well in all the above aspects, to come second only to China Lubricants operation, which has shown a significant turnaround in the Asia Pacific Region.

Speaking on this achievement, Gomes said that "the award is a culmination of team effort with the right focus and strategic direction towards achieving the company vision of becoming the pre-eminent marketer of lubricants and being the most admired customer facing solutions provider."

Apart from this award, CLLL has had a solid run in 2002, continuing to consolidate its position as a leading blue chip in Sri Lanka and also to further strengthen its place as the most successful privatized enterprise in the country.

CLLL in its third quarter results for shareholders says that purchasing synergies achieved through the Chevron Texaco Merger has contributed over Rs. 100 million in rebates on core raw material purchases through a Global Supplier Agreement and various other rebates.

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