2nd August 1998
The National Development Bank (NDB) has signed an agreement with Forbes & Walker Ltd., one of Sri Lanka's leading tea brokers to disburse funds to tea producers under a new line of credit, a company release said.
Forbes & Walker Ltd., and the National Development Bank had signed the agreement on July 24, authorising the broking company to disburse the National Development Bank funds to tea factories.
A special feature of the scheme is the attractive interest rate, which is linked to the three month Treasury Bill rate, substantially reducing the cost of funds to tea producers. The loan scheme was developed by the National Development Bank following a meeting convened by the Sri Lanka Tea Board in response to representations from tea producers especially the bought leaf factories which are dependent on advances from tea brokers for their working capital.
"The National Development Bank must be given full credit for being the first lending institution to develop this special loan scheme to help the tea industry," the spokesman said.
The Ceylon Chamber of Commerce, Sri Lanka's premier business forum held its 159th annual general meeting on July 24. The chief guest of this occasion was Prof. G.L Peiris, Minister of Justice, Constitutional Affairs, Ethnic Affairs and National Integration, and Deputy Minister of Finance.
Ken Balendra was installed as the 122nd chairman of this institution, while Chandra Jayaratne (Managing Director, CTC Eagle Insurance) assumed duties as vice chairman and Thilak de Soya (Jnt. Managing Director - Associated Motorways) was appointed deputy chairman.
This year's annual general meeting focused on the theme "Creating Creative Partnerships" and highlighted key achievements of the Chamber during the last two years, emphasizing on the need for a creative partnership between the stakeholders in the economy for sustainable national economic development.
New services were also offered to the membership of the Chamber including a proposal to link the Chamber via e.MAIL to the Presidential Secretariat, key government ministries and institutions.
3M Lanka (Pvt) Ltd., a fully owned subsidiary of 3M Corporation, USA and CIC Paints (Pvt) Ltd entered into an agreement to market 3m Car Care Products in Sri Lanka.
The inclusion of 3M Car Care products to ICI's range will project them as a total solution provider from Automotive Paint to Automotive Refinish supplier, a company release says.
For nearly a century, 3M has been revolutionising the professional Automotive Refinish market from masting tape and wet sand paper in the 1920's to the state of the art refinishing systems of today, the release adds.The new line of Car Care products, includes waxes, polishes, swirl-mark removers for light and dark coloured cars, treatments, cleaners, rubbing compounds (fine, medium, heavy cut) and glazes.
Forbes Air Services, the General Sales Agent (GSA) in Sri Lanka for Emirates, has been adjudged "Best On-Line GSA" in the West Asia-Pacific Rim region for the 1997/98 financial year.
The award, which was announced by Emirates' Senior General Manager Commercial Operations (West Asia & Pacific Rim) Keith Longstaff at the airline's annual commercial conference in Bangkok recently, recognizes the growth in sales achieved by Emirates in Colombo during the year, a company release said.
Emirates Area Manager, Sri Lanka and Maldives, Tissa Bibile has said the airline's revenue out of Colombo had grown 25 percent over 1996/97, and was 30 percent above the target it had set itself.
He said Emirates had increased its passenger numbers out of Colombo by a healthy 15 percent, while improving yields by more than 8 percent in 1997/98.
Forbes Air Services was appointed Emirates GSA in April 1996. The company is a collaboration between Forbes Ceylon and the Hemas Group, and consequent to the acquisition of Forbes by Vanik Incorporation last year, is now a member of the diversified Vanik Group.
DFCC Bank has embarked on an on-going comprehensive programme to expose Advanced Level students to the more practical aspects of the business world, particularly the economy and the resultant trends in banking and its impact on the financial sector.
Chief Executive M R Prelis observes that "most often Advanced Level students in the Commerce stream do not get an opportunity to experience the realities outside their curriculum.
Classroom experience alone does not necessarily give them the required knowledge to place themselves well in the job market. They must be conversant with current global and regional trends and their impact on our country.
"They would be key players of future Sri Lanka and it is our social responsibility to provide them with the right tools."
The programme is designed to accommodate final year Commerce students from two schools every month to spend an entire day visiting the Stock Exchange, the Central Bank Clearing House and DFCC Bank Head Office.
The prime task is to make the time spent in these places interactive.
Students find the experience exhilarating. "We try to give this opportunity mostly for schools in the provinces. It is amazing to know that some of them are coming to Colombo for the first time. Most students are intelligent and talented, but the lack of opportunity is a prime hindrance," says the manager in charge of the programme.
On a quarterly basis Commerce teachers are also given an opportunity to join a similar programme. The co-ordination with schools is done through the Commerce Students Foundation.
Operating within a fast changing external environment, today's managers have to overcome complex new problems to drive their businesses forward.
Some of these challenges can be met with existing expertise and knowledge but others need new approaches.
ETV's on-air management school, Managers' Club, brings emerging managment techniques from around the world to Sri Lankan television viewers.
Managers' Club is one of the quality business programmes coming to ETV from CNBC Asia.
CNBC is a joint effort between the Dow Jones financial news group and the US network NBC. The network is distributed via satellite to the Asian continent.
Managers' Club will equip today's decision-makers with knowledge to leverage on the core competencies of their businesses. The programme is aired every Sunday at 10 p.m.
If competitors are eating into a company's market share, the programmes hosted by Prof. Peter Doyle provide its managers the tools to drive the company towards a marketing orientation.
With technology diffusion accelerating, companies can no longer hope to survive by developing new products. Products and services have to be defended with effective branding.
Managers' Club will feature the latest techniques that will enable the forward-looking executive to radically re-engineer his business to deal with change.
Radical change is a traumatic experience for the people who experience it. Managers' Club will help businesses cope with change effectively.
As Sri Lanka moves forward as a growing economy a larger portion of her labour force is moving to the services sector. Unilike the manufacturing industry which is primarily based on capital assets, service industries are built on human resources. Leaders in service industries need special skills to attract, retain and motivate the people who will take their businesses forward.
United Breweries Lanka Ltd have recently introduced two new beers to the Lankan market. Locally produced in their factory at Mawathagama, these beers are produced in joint collaboration with Mauritius Breweries Ltd, Mauritius.
The two beers launched are Kings Lager, priced at Rs.41.50 for a 625 ml bottle, with alcohol content of 4.2%. The other beer is Bison XXXtra Lager priced at Rs.50 for 625 ml bottle, with alcohol content of 7.5%. On the cards is the launch of Kings Extra Stout which is expected to be introduced in a couple of months.
According to the company's Chief Executive Officer, Mervyn Rodrigo, these beers have been brewed with the stringest of quality controls to ensure that not only a unique taste is offered to suit the local palate but also to see that a consistency is maintained in time to come.
He added that the finest imported malts and hops are used in their manufacture which differentiates Kings and Bison from other locally produced beers.
United Breweries Lanka Ltd is a joint partnership venture with MBL Offshore, Mauritius. MBL Offshore have vast years of experience in brewing beer and are currently the monopoly brewery in Mauritius. UBL has 51% stake in this Rs.150 million BOI venture with MBL Offshore holding 49%. A.P. Cassie Chitty & Co are the principal share- holders.
Mr. Rodrigo feels that these two beers have been well accepted since their launch. The company is confident that these beers will increasingly become popular amongst the Sri Lankan public, which will give a further impetus to the goverment's efforts at reducing consumption of illicit liquor.
The Factories Ordinance covers this kind of employee. The Ordinance makes provisions for the safety and welfare of workers in Factories. Hence the beneficial operation of the legislation should not be limited, as it protects life and limb:
Interpretation of the expression "Factory":
The word "factory" means any premises in which or within the close or cartilage or precincts of which persons are employed in manual labour in any process for or incidental to any of the following purposes, namely:-
(a) the making of any article or of part of any article; or
(b) the altering, repairing, ornamenting, finishing, cleaning, or washing, or the breaking up or demolition of an article; or
(c) the adapting for sale of any article being premises in which, or within the close or cartilage or precincts of which, the work is carried on by way of trade or for purposes of gain and to or over which the employer of the persons employed therein has the right of access or control;
And (whether or not they are factories by reason of the foregoing definition) the expression "factory" also includes the following premises in which persons are employed in manual labour, that is to say: -
(i) any yard or dry dock (including the precincts thereof) in which, ships or vessels are constructed, reconstructed, repaired, refitted finished or broken up;
(ii) any premises in which the business of sorting any articles is carried on as a preliminary to the work carried on in any factory or incidentally to the purposes of any factory;
(iii) any premises in which the business of washing or filling bottles or containers or packing articles is carried on incidentally to the purposes of any factory;
(iv) any premises in which the business of hooking, plaiting, lapping, making-up or packing of yarn or cloth is carried on;
(v) any laundry carried on as ancillary to another business, or incidentally to the purposes of any public institution;
With economic activity slowing significantly in 1996, loan growth fell from about 30 per cent in January 1996 to 7 per cent by the end of January. Although economic activity picked up in 1997, credit demand accelerated from 3rd quarter 1997 onwards, an ABN Amro Sri Lanka research report states.
Loans are currently growing at 13 per cent. This is expected to increase to about 15 per cent by end 1998, thanks to greater corporate demand, the ability of development bank to lend for short-term working capital requirement and sustained growth in the economy.
We believe the pick up in corporate demand is attributable to a weak capital market and lower interest rates. Deposits continue to grow at a slightly faster pace than loans, indicating there are ample funds available in the system, ABN Amro says.
The reduction of the statutory reserve requirement (SRR) from 15 -12 per cent in the early part of last year has also increased liquidity in the banking system. The reduction in the reserve requirement coupled with the repayment of government borrowings induced interest rates to fall significantly in early 1997.
The prime lending rate (PLR) fell from 19.5 per cent to 13 per cent, while the weighted yield on treasury bills decreased from 18.2 - 10 per cent. The PLR has risen by about 100 basic points over the past year and has settled at around 14.5-15 per cent.
Treasury Bill rates have been inching up this year, with the current weighted yield at 12 per cent. We believe the rise in treasury rates is attributable to a gradual rise in inflation, which reached a low 9.6 per cent end 1997.
Most banks have indicated that the treasury rates could move up another 100 basic points in 4th quarter 1998 as a result of higher government borrowings.
Although the government has kept its house in order during the past 12 months, there could be a need to borrow in 4th quarter 1998 when revenue falls relative to expenses.
In line with the rise in treasury rates, we think banks will be compelled to increase deposit rates. However, we believe that lending rates will not rise much, because competition has increased, with development banks on an equal footing with commercial banks and enough liquidity in the system.
People his best asset says Kiran
To start afresh and achieve your goals is the challenge. Kiran belongs to this rare category of business species of self made businessmen. No, his parents were never into business and that's why we call him an achiever, a go-getter. Starting life as a shipping clerk, he today heads his own ship repair company, probably the biggest in Sri Lanka.The innumerable awards and accreditions he has won during this short span, bear testimony to his business acumen. To put it simply, he has reached the TOP RUNG.
By Priyantha Gamage
Q. Mr. Atapattu what prompted you to enter the business arena?
A. What happened was from 1977 to 1984. I was working under several managers. Shipping is a 24-hour job. When a ship breaks down suddenly you get called in the nights and you start working. But the managers pick up their wives in time and go home. We had to handle the whole job.
Communicating with the owners and all the contacts were done in my name mostly. So I was handling almost the entire operation and the managers were getting the credit. So I thought that I must have my own company. And from that word 'go' I picked-up and today it's probably the best ship repair company in Sri Lanka.
Q. What was your initial capital like?
A. I started with just Rs, 10,000. That was all I had in my bank account when I left Premier Engineering.
With my first repair I made one lakh of rupees. It was a Korean ship where we had to repair the boiler. I had the technology in my mind. I did not need any equipment. And we did our first job manually.
I was disgusted. After working continuously for twenty-four hours I got about ten thousand rupees at the end of the month, but earned millions for somebody else.
The managers used to work from 9 am to 4pm. They picked up their wives and children, left in time and earned Rs. 40,000- 50,000 a month. I was frustrated.
Q : Was there any person or institution that helped you in the process?
A. In this business, nobody can influence you to get business because the ships are owned by foreigners. The people who helped me were the local shipping agents.
They knew me because I was dealing with them for many years. That knowledge helped me. I also communicated with all the ship-owners I knew and got myself registered with them. And business came.
Q. What is the size of your cadre?
A. I have around 150 persons.
Q. In which capacities do they work?
A. I have made a system where the work-force is trained in such a way that whether you are a carpenter or an electrician, when you go to a ship, you become a very good marine fitter and a welder as well.
That is the reason for the success of my company.
The entire work-force, even the ship repair director when he goes to a ship, does the work of a labourer as well.
In our company, even the Technical director will fix nuts and bolts whereas a lot of directors of other companies have a cellphone in their pocket and walk on the deck of the ship whilst the workers are working. They do not know what is happening.
We are a different type of company. That's why we are scoring.
With one call I know exactly what is taking place in the engine-room because all the directors are inside the engine room. That's why customers rely on us.
We have only one or two engineers.
We have a diving manager and a few divers. We also have technicians who are not categorised. They do every utility job.
Normally a specific person does only one job. For instance a painter won't cook but we have workmen who cook on the ship. When we board a ship we have to wait three to four days at sea. You can't take meals along with you. Neither can you take a cook on board.
So we take a mobile kitchen. The people who repair the ship also cook their own food.
Q.I gather that your company today is worth several million rupees, would you consider this as your biggest asset?
A. No the employees. We are well-organised and do not have any labour problems. The workers are very helpful. We are in this position because of our employees. They are very co-operative.
Q. So you wait for a ship to come to Colombo to start work?
A. No. Before the ship comes we are contacted by Internet or by fax and prices discussed. When the ship is on the way we are in contact with the ship through our communication set-up.
As the ship anchors, we go alongside the ship and take over the repairs immediately.
Q. How do you see the present status of your company? Are there any grievances you'd like to air?
A. At the moment you find no help for ship-repairers in Sri Lanka. All these years the bureaucracy has been helping only certain companies.
They are given land and every thing else and sometimes even monopolies.
But there are others in this field as well. Good people.
We don't need bank loans, political clout or any thing of that sort.
What we want is an atmosphere where we are allowed to do our business peacefully. The government does not appreciate the way we are boosting the economy of this country.
When a ship comes in for repairs to Colombo, the crew of the ship comes and stays in our hotels. The taxi-driver too is benefited by them.
The Batik-shop owner, the hotels, handicraft shops, public bars , groceries and everybody else will have a part of it. Even the government benefits. The Ports Authority gets revenue, the Ceylon Petroleum Corporation benefits. As the ship needs water the National Water Supply Board benefits.
They also buy food. The Gem-seller makes money. So, it's not only the ship-repairers who make money. This is a connected business.
We are into the business of ship-repairing. What we have asked from those in authority is suitable land in Galle or Colombo Port to do our business.
You simply can't take a ship for example to Rowlands at Nawinna. The ship has to be in the port. A ship has to be repaired in the harbour, and this is why we are asking for space inside the harbour.
If we can take the ship to Kandy or Nuwara-Eliya can we repair it there? These people don't understand this.
Q. You don't have land at the moment?
A. We have very limited land. Some ship-owners told me me that they will be sending all their ships and asked me to expand my services.
I can buy 2-3 acres of land from Sapugaskanda or somewhere else and put-up a workshop. But the ship can't go there. That's the problem. We can't make the decision makers understand this situation. The ship has to be repaired in the harbour.
When I asked for space to repair ships they asked me to take land in Bolgoda. I have that in writing with me. That means they want me to take the ship and go to the Bolgoda lake. That is the situation.
Q. Do you have an association of some sort for ship repairers?
A. Not for ship-repairers.
Q. Don't you want to form one, so that you could air your grievances to the authorities?
A. Who will listen to our grievances when we are not even given a hearing. We'd just go as a team, talk and at the end of the day it will be forgotten. We'd be just back to square one.
Just give us some land and we are ready to pay for it. What the authorities must understand is that when we expand we will be providing more employment opportunities.
Q. Is there anything else you want the Authorities to take note?
A. Yes, bureaucratic lethargy. We are a BOI approved company. We are entitled to import material, spare-parts and various other things on a duty-free basis .
When we make an application to import this item on duty-free basis it takes one week for them to process that document. By the time they process the documents the ship has gone to Capetown.
They don't understand that this is not a garment factory where you can wait for the raw materials to come one or two weeks later. What we need must come inmediately the next morning by courier or air- freight in most cases. Our requirements are , urgent. But here, by the time the papers are ready to be signed the ship has sailed!
And it's not only the company that loses but also the country, the government - the foreign exchange.
Each time a ship comes in for repairs the country receives $ 25,000 to $ 50,000. And we have red tape also. We don't have a free hand to work. There is so much of pressure on us.
Q. So what are your suggestions for improving your company?
A. Our company is a money-spinner. It's a goldmine.
You can charge any amount you want. There are only one or two companies doing this business. Well, there are about over 100 companies by name only.
But two companies run neck and neck and both are doing well. That's a clear indication that it's a money spinner. You can charge international rates and jobs are urgent ones. Just give us the facilities and our company will do the job.
Q. Are you happy as a businesman, Mr. Atapattu?
A. I am happy as a businessman, because I am doing well.
But the problem is if there are more facilities we can expand much more. Right now our expansion capacities are limited.
We can offer more jobs and can bring in more foreign exchange if we do expand. But our area, land is limited. We don't have the land even to park a motor-cycle as we have been confined to a small area.
Q. What's your ultimate objective in life as a businessman?
A. I have achieved my peak now and will maintain it for many years. What I want to do now is to help boost the country's economy. I have the capacity to do so. But unfortunately I don't get the support I need from the authorities.
Q. You also made the allegation that there is an alarming level of political favouritism and heavy politicisation. Could you elaborate on this, please?
A. The problem is every businessman is contributing to boost the economy. Of course they all make money. So you must understand that he needs the support of everybody.
You must not have selected businessmen. It's because you support a selected lot that you find a lot of businesses closing down. You find a lot of garment factories closing down. Of course certain businessmen are pandering to the whims and fancies of certain leaders.
Every businessman's motive is to develop his business. By developing his business he gets more business and turnover.
So, when a business is developed, there will be more employment resulting in everyone making money. So that's why you must try to help the businessmen.
They are making various allegations like 'he's bad' and cut him off.
They don't understand that when a business develops and expands, employees benefit and the whole country benefits.
So you must support businessmen. But here instead of supporting them they try to cut you off saying that you are a UNP er, or a JVP er or an LTTE er. That should not be the criterion.
We have always supported the Government in power whether it is the UNP, PA or JVP.
We'll support the democratically elected government whoever it is. Just because we do that we should not be penalised.
There are some who mislead the hierarchy saying that 'he's so and so's man. Don't give him this and that should stop.
Q. What do you think about the present economic structure of the country taken as a whole, the policies, the growth etc.?
A. Where's the growth I see in the papers, We have signed so many agreements to open new industries'. But nothing has been opened.
Instead of opening they are closing down. As for growth we must see the growth. It's not enough to see growth in the newspapers. But we must physically feed it for ourselves.
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