By Asgar Hussein  

The Fair Trading Commission (FTC) is expediting its investigations into abuse of monopoly positions and anti-competitive practices. It is hoped to resolve most outstanding issues before the establishment of the proposed Consumer Affairs Authority next year.

The new body - which will have wider powers and scope - will be formed by amalgamating the functions of the FTC and the Department of Internal Trade. This would follow the passage of the Consumer Affairs Authority Bill in Parliament, expected early next year.

The main function of the FTC is to control monopolies, mergers and anti-competitive practices that are likely to operate against the public interest. However, BOI firms and state enterprises, as well as the services sector, do not fall under its purview. This situation would be remedied with the establishment of the Consumer Affairs Authority which could intervene in these areas as well.

The proposed body will also enjoy wider powers with regard to price regulation, consumer dispute settlement, consumer education and assurance of quality products and services. Punishment for those found guilty of offences will also be enhanced.

The FTC is presently inquiring into seven major complaints and thirty minor complaints, said its Chairman Prof. A. D. V. de S. Indraratna.

He added that the major complaints are against Shell Gas Lanka, Ceylon Oxygen Ltd., Distilleries Company of Sri Lanka, Sri Lanka Telecom (together with Suntel and Lanka Bell), eleven insurance firms, and Unilever Ceylon. These complaints relate to abuse of dominant positions and anti-competitive practices.

A brief description of these seven cases is given below:

 A complaint by members of the public against Shell Gas, alleging frequent raising of prices thereby abusing their dominant position. The commission hopes to conclude investigations within two months.

 A complaint by Gas Auto Lanka against Shell, alleging anti-competitive practice.

 A complaint by Seico Gases and Southern Oxygen against Ceylon Oxygen Ltd., alleging anti-competitive practices which go against the public interest.

 A complaint by W.M. Mendis & Company and Randenigala Distilleries against the Distilleries Company of Sri Lanka, alleging anti-competitive practice. This case was initiated as far back as 1996, but dragged on due to changes in the government and the FTC board. Investigations have how entered the final phase, and it is hoped to conclude the case within three months.

The parties concerned will make written submissions in January, and the commission will thereafter issue an order if an anti-competitive practice is established.

 A complaint by Lanka Internet Services and Lanka Com Services against SLT, Suntel and Lanka Bell, alleging abuse of monopoly position and/or anti-competitive practice. This case revolves around a MoU entered into between the three parties which allegedly restricts the two complainants from engaging in business relating to certain telecommunication services.

In this case, the commission cannot investigate Suntel and Lanka Bell as they are BOI companies.It has informed the complainants about this position, so that they may submit a complaint only against SLT. Such problems will not arise once the proposed Consumer Affairs Authority is set up, as it will be empowered to intervene in BOI companies as well.

 A complaint by the Insurance Board of Sri Lanka against eleven insurance firms. It is alleged that they have decided to charge uniform premia and at the same time raised the premium level. This followed the deregulation of the insurance sector early this year.

 A complaint by Darley Butler and Company against Unilever Ceylon alleging misleading advertising (which is considered an anti-competitive practice). The advertisement in question claims that their zigzag toothbrush is superior to the flat-surface toothbrush. Both parties have been summoned for a preliminary inquiry, and investigations will commence shortly.

A few months ago, the FTC concluded an investigation into another case of misleading advertising. It revolved around an allegation by Swadeshi Industrial Works against Vendol Lanka Ltd., charging that the latter had engaged in misleading advertising of an ayurvedic herbal soap. The commission issued a determination prohibiting Vendol from continuing with the advertisement. This order aroused much interest in business circles, and led to a spate of complaints before the FTC, said Prof. Indraratna.

He also said they will monitor the movement of pharmaceutical prices under the deregulated regime until end April next year, before deciding whether deregulation should continue or not. At one time, the commission monitored several sectors which were price-controlled, but these were gradually liberalised. The pharmaceuticals sector was the last to be decontrolled in November this year, for a trial period of six months.

Intel introduces HT technology for new
Intel Pentium 4 processor

Intel Corporation recently introduced its innovative Hyper-Threading (HT) technology for the new Intel Pentium 4 processor at 3.06 GHz. This technology enables a new class of high-performance desktop PCs that can work quickly among several computing applications at the same time, or provide extra performance for individual software programs that are multithreaded. HT technology can boost PC performance by up to 25%.

In addition to bringing HT technology to desktop PC users, Intel reached a PC milestone in launching the Pentium 4 processor at 3.06 GHz. This is the first commercial microprocessor to operate at three billion cycles per second and is made possible by using the industry's most advanced 0.13-micron manufacturing technology. The Pentium 4 processor is the world's highest performance desktop microprocessor.

"Just as people multitask to get more done, we expect out PCs to do the same," said Technical Sales and Marketing Manager (Asia Pacific), Intel Electronics, Richard Teo. "Hyper-Threading technology is a breakthrough computing innovation that helps consumers and business people accomplish more in less time."

Ceylinco-SLT join to promote internet TV unit  

Two Sri Lankan corporate giants, Ceylinco Consolidated and Sri Lanka Telecom last week joined forces to promote the country's first ever internet television unit, thus further strengthening their commitment towards developing IT in Sri Lanka.

The new Ceylinco internet TV unit, marketed by Lanka Ecom Technologies Ltd (LET), a member of Ceylinco Consolidated, enables users to surf the internet and access e-mail through their existing TV sets, in the comfort of their homes. This tie-up is expected to enhance and develop IT knowledge among the Sri Lankan population, which at present accounts for a mere 2%.

The significant feature of this tie-up is the possibility of widespread internet accessibility by all Sri Lankans, supported by SLT's countrywide coverage, and Lanka Ecom Technologies' dedicated island-wide dealer network, which has been mobilised to promote these units around the country.

The unit itself comprises an easy-to-install set top box and a remote controlled keyboard, which converts any colour television set into an internet TV, enabling the user to browse the internet, chat online and send and receive e-mail without having to invest in a computer or an expensive internet TV.

This novel Ceylinco internet TV unit is priced at Rs. 12,999 and comes with a free internet connection, together with SLT's special internet package for a subscription of Rs. 250 per month, which includes 900 minutes free usage. It is sold with a one-year comprehensive warranty, value added features and unmatched after sales services, coupled with a dedicated call center help desk.

LET and SLT are confident of the unit's success, which enables a larger segment of the Sri Lankan population to have a hands-on experience in browsing the internet for the first time and thus take Sri Lanka's IT development to new heights.

Probe insider dealing charges
without fear or favour

The on-going inquiry into the allegations of insider dealing on the shares of Aitken Spence and Co. Ltd. has brought into sharp focus the mind-boggling conflicts of interest pervading the governance of the securities market in this country.

The manner in which the current inquiry is being conducted and its unnecessary dragging on have undoubtedly undermined the integrity and independence of the Securities and Exchange Commission (SEC) as well as investor confidence in the Colombo Stock Exchange (CSE). To compound matters, there were also reports of the SEC board allegedly halting a separate investigation of insider dealing involving the shares of the same company.

At least two of the personalities involved in these investigations are the heads of the SEC and the CSE, which underscores their public importance.

What is at issue is the independence of the Director General and his staff who have been stymied by those who have been appointed to the board of the SEC.

The eye of the storm is the unprecedented decision of the board to appoint a two-member committee to review the SEC investigation and the opinion given by the Attorney General on the alleged insider dealing by three former directors of Aitken Spence & Co. Ltd. that tantamount to an expression of no confidence in the staff of the SEC.

It also is a de facto attempt to question the authority, competence and integrity of the most senior lawyer of the government. The insidious attempt to marginalise the Attorney General and the SEC secretariat who have maintained the highest standards of professional integrity is widely perceived as a perversion of stock market regulation and natural justice.

The more cynical observers would claim that it is an attempt at wriggling out of a public investigation the outcome of which is not to one's liking through the hiring of high price legal and audit consultants who will serve the interests of their paymasters. They will probably perceive it as a 'privatisation' of a public investigation that will corrode the entire regulatory process.

Those who cannot understand or who prefer to ignore the distinction between a public listed and private company will not see the need for any transparency, accountability and disclosure in the affairs of the former category of businesses.

Those at the helm of private companies will probably only be accountable to their family members and business associates and have the right to be dismissive of meddlesome outside interests.

On the other hand, minority shareholders of some public listed companies have no doubt experienced this type of 'none of your business' attitude emanating from the head table at annual general meetings that they attend when financial statements and auditor's reports are taken up for scrutiny and discussion.

It is abundantly clear that the calibre of individuals who have been appointed as commissioners to the board of the SEC and the directors of the SEC needs to be urgently reviewed by the Minister of Finance. New criteria and strict guidelines should be issued for the appointment of the respective boards.

He should seize the initiative to clear the augean stables and make a clean break with the past. This should facilitate the expeditious handling of the investigations to their logical conclusions and allow the law (the SEC Act of 1987) to be applied in the spirit in which it was meant to be applied.

- Amrit Muttukumaru

Analog forestry a success

The concept of analog forestry is today known worldwide. In fact, if one conducts a search through the internet, many sites dedicated to this topic could be found. But what is not known is that this concept originated in Sri Lanka - to be more precise, at the Neo Synthesis Research Centre (NSRC) in Bandarawela.

This centre was also the first in the world to offer the forest garden product certification service. The venture has proved successful with increasing consumer demand for organic foods.

It all began in 1982, who NSRC initiated a series of experiments in the development of a forestry system that could answer the needs of tree production as well as biodiversity conservation. The outcome was a technology known as analog forestry. Here, tree plantations analogous to the rain forest in architectural structure and ecological function (but containing trees that yielded valuable products) were established.

This work also showed that if all crops in the new forests were grown organically, many species of animals and birds which were once confined to the rainforest could move in and establish populations in the new microhabitats.

Certification Manager of the forest garden service and founder member of NSRC, Lawrence Goldberg said "by applying the techniques of analog forestry, you are imitating the structure and functions of a natural forest." He added that the increase in indicator species indicates increasing biodiversity which in turn shows the success of the program. Indicator species include certain species of birds, insects, mammals, amphibians, butterflies and plants which enter the new microhabitats.

According to Goldberg, one of the objectives of their program is to ensure that farmers carry out their agricultural activities within their own lands instead of moving to urban areas.

He pointed out that because forest gardens grow a wide range of produce, there is less risk in case market demand falls or if disease or weather ravages some crops. "At such times, they can fall back on the other products," he added.

Forest garden products include various kinds of fruits and vegetables, cardamom, black pepper, coffee, cinnamon, cloves and the kitul palm.

These are grown exclusively as organic crops as the application of biocides and artificial fertilizers harms consumers and the environment.

Today, many local villages participate in creating analog forests. The farmers are assured of a higher price for their certified produce in both local and export markets. They are also aware of the fact that they are protecting their children and the environment from poisonous chemicals, by engaging in this activity.

Goldberg said that their certification costs Rs. 2000 per hectare annually, as well as an assessment fee of 2% of the export value and travelling costs. He stated that if a farm is to be certified, they will have to demonstrate at least three years in operation without the use of pesticides and artificial fertilisers.

He added that they have thus far issued 150 such certifications in Sri Lanka. "Ours is the only program in the world that certifies analog forests," Goldberg said.

They not only carry out annual inspections, but also conduct an audit trail which provides further evidence that the produce was grown organically, and in accordance with the standards of the certification program.

It is pertinent to mention that this certification has been accepted by the BIOFACH annual trade fair in Germany which highlights organically-grown food.

Furthermore, the German-based Federation of Organic Agricultural Movements (IFOAM) had made inquires, probably intending to incorporate some of these standards into their system.

Goldberg said, "We have the most progressive standards in the world with regard to forestry stewardship."

He noted that they have also carried out certifications in Brazil, and conducted training on the analog forestry concept in Zimbabwe, Papua New Guinea and the Philippines.

The training conducted at the NSRC in Bandarawela has led to the establishment of analog forests in several countries, including the U.S., Canada, Mexico, Equador, Costs Rica, Brazil, Philippines, Papua New Guinea, Zimbabwe and Australia.

According to Goldberg, farmers cultivating analog forests are assured of better profits. He pointed out that the global market for organic foods is estimated at around US Dollars 40 billion annually, and is increasing over time.

Locally-grown organic foods are marketable in countries such as Britain, German, France, Japan, Australia and the U.S.

Goldberg noted that consumers are becoming increasingly health-conscious - a phenomenon driven by high disease rates (including cancer). As an example, he pointed out that the widely-used herbicide, glycop- hosphate, is recognised as a cancer-causing agent. Beneficial fungi such as mychorrizae are eliminated when conventional fungicides are applied.

Some years ago, a study sponsored by the Canadian International Development Agency (CIDA) revealed that Nuwara Eliya district has the highest rate of birth defects in Sri Lanka. This could be attributed to intensive chemical spraying.

Goldberg said that when organic foods are analysed, they are shown to have a higher vitamin and mineral content than commercially-grown food. It has also been shown that spices grown in analog forests (e.g. cloves, cinnamon, black pepper, cardamom) have a higher oil content, which translates to higher prices in the export market.

The export prices of organically - grown products are 15% or more higher than those grown in conventional farms. Some products, such as organic tea, can fetch prices 300% higher.

Nawaloka Hospital opens 'artistes ward'

The Nawaloka Hospital, which has treated approximately 300,000 in-house patients since its inception in 1985, last week opened a historic 'artistes ward" at its tenth floor.

The inauguration of this ward which also drew the curtain for  with the issue of the medicard to all artistes will infuse a fresh breath of life especially  to artistes who are alone and ailing.

"We have a PRO and several consultants to look after the needs of these artistes who have done much and brought pride and joy to all Sri Lankans," said Deputy Chairman, Nawaloka Hospital, Jayantha Dharmadasa speaking at a press conference to mark the completion of 4000 cases of cardiac surgery at this hospital.

Dharmadasa also said that the hospital will every month perform cardiac surgery on a child who is on the waiting list at the government hospitals, free of charge. This gesture of goodwill will be done free of charge and children with an emergency condition will receive preference.

The Nawaloka Hospital was the first private hospital to get a MRI and CT scanner in the days gone by. Today the hospital boasts of every hi-tech medical machinery available in the developed world.

"You don't have to go overseas in search of better surgery, you can do it right here at this hospital," pointed out Prof. Lal Chandrasena. P. Withanage also participated in the discussion.

Consultant Cardiothoracic Surgeon, Dr. A.G  Jayakrishnan also explained that one need not go overseas in search of advanced medical treatment. "You can do it right here," he said. The doctor also explained that surgery is done via the Octopus process whereby surgery is performed on a beating heart. This process cuts down the risk fact or and  recovery is much faster.

He said that a normal bypass surgical procedure takes about 4 hours and open heart surgery could be done in two and a half hours.

The hospital has about 175 consultants who can be consulted  and about 10 resident consultant physicians.

'Dreams Come True Prize Draw' by CSB  

Ceylinco Savings Bank (CSB) which has completed 18 months in operation, is offering their customers Rs. 1 million in prize money through the 'Dreams Come True Prize Draw.'

General Manager/CEO, CSB, Sunimal Fernando said CSB savings account holders will be eligible for this draw. They will automatically quality with seven chances to win.

Clients who are eligible include those who are account holders in their four savings schemes - exclusive family savings, bonus savings, punchi minor savings and normal savings. Customers can increase their chances of winning by depositing an additional Rs. 10,000 in their accounts. By depositing more (in multiples of Rs. 10,000) they get further opportunities to win.

Those having the minimum balance by end November are eligible for the seven chances. By December the chances will be down to six and will decline as the months progress (i.e., five in January, four in February, three in March, two in April and one in May).

The same rules apply for punchi account holders, but the minimum deposit is reduced to Rs. 5000. By making additional deposits of Rs. 5000, these account holders can increase their chances of winning.

Fernando said the 'Dreams Come True Prize Draw' will be held on May 30, 2003, when CSB celebrates their second anniversary.

The first prize amounts to Rs. 500,000, the second to Rs. 250,000, the third to Rs. 100,000, the fourth to Rs. 75,000, the fifth to Rs. 50,000 and the sixth to Rs. 25,000.

Fernando also said they have obtained the agency for the Western Union money transfer system through Seylan Bank. He believed this will benefit their customers in and around Bambalapitiya. The CSB office is situated at 71, Galle Road, Col 4.

It was pointed out that the Western Union system operates in 190 countries.

Fernando said they presently operate only their office in Bambalapitiya, but they intend submitting an application before the Central Bank to establish at least one branch somewhere next year.

He said that CSB, which commenced operations in May last year, has built a customer base of 15,000.

He further claimed that they will be coming into operational profit by March/April 2003.

Senior Manager, Marketing, CSB, Tilak De Alwis said they follow the 'doorstep banking concept,' and have a fairly large sales force which promotes their deposit and lending products.

He noted that such visits to homes and offices makes it convenient to customers. He said this strategy has received a fairly good response rate, since people are now "fighting for time."

The bank also operates a home banking mobile service for the benefit of clients in Colombo city and the outskirts.

At present, CSB's lending activities are concentrated in housing loans and personal loans, but they will undertake leasing in a big way next year.

With regard to deposits, the bank offers interest rates 1/2 to 1% higher than that offered by commercial banks.

John Kells tops LMD 50  

The 2001/02 edition of The LMD 50, which is Sri Lanka's version of The Fortune 500 global rankings, will be released in the week ahead. Analysis of the results augur well for a bumper harvest in the next fiscal year.

LMD announced that the highly-diversified conglomerate John Keells Holdings retained its number-one slot for the fifth year in succession. The announcement is a preview of the nation's premier rankings of listed companies, comparable with the global rankings, The Fortune 500.

However, with turnover remaining virtually stagnant at 11.8 billion rupees, JKH only just held on to the mantle of being Sri Lanka's leading listed company. HNB, a bank that says it has just come out of the "most difficult year" in its 30-year-old history, is ranked a close second. Another diversified conglomerate, Hayleys, came in at number three. LMD's top five for fiscal year 2001/02 are completed by Seylan and Commercial Bank.

LMD says in its December issue, which features The LMD 50, that the litmus test for corporate Sri Lanka encompassed the fall-out from two devastating terrorist attacks. These were the 24 July attack on the country's only international airport, and what is now know as '9/11.' Further, unparalleled political turmoil sent unstable signals to the business community and investors. As LMD says, the immediately past fiscal year "isn't one that the nation's listed companies would want etched in their corporate memoirs."

The nation's leading listed companies as a whole barely kept pace with inflation. Turnover increased by a somewhat paltry 13%. LMD's LeaderBoard - its 'Roll of Corporate Honour' - fared even worse. After-tax profits of the top ten companies tumbled by almost 30%, or 1.6 billion rupees in absolute terms. Corporate balance sheets, however, were reasonably healthy. Total assets and shareholders' funds appreciated by 11% and 8% respectively.

The top four companies in The LMD 50 were forced to absorb post-tax profit shrinkages: JKH was down 41%, HNB dropped by as much as 98%, Hayleys by 23%, and Seylan Bank by 12%.

With both the political and economic landscapes showing improvement, however, there seems to be a bumper harvest ahead. There's been better news this year; so much so that the interim results released by some of the top companies are showing record profits. The mega SLT IPO of last week will also play a major role in what LMD predicts will be a 'banner year' (2002/3) for the nation's engine of growth.

Govt. should not be in business?

By Dinesh Weerakkody  

Led by the example of the developed countries the UNF administration is returning state managed enterprises to the private sector for an economic boost and to raise money to bridge the budget deficit.

Our new generation politicians whose basic need for economic miracles is no less pressing, have discovered at least in part how to hum the trick. They believe that the dullest state owned company, the heaviest loss making utility, or the least efficient public sector service could be transformed almost overnight into a viable entity and contributor to the national coffers by saying the magical word privatisation.

Generally privatisation refers to the sale of majority stake in a state owned enterprise and with it the power to manage the enterprise.

Private sector professionals who have managed state-owned enterprises say it is impossible for those who have never had to tailor their commercial instincts to suit the whims of government ministers to realise just how much it means to escape from their political masters and their supporters.

Therefore, the importance of the government carrying out an effective role as a facilitator of growth rather than the engine of growth has been recognised by a government for the first time since independence. This augurs well for the development of the private sector.

Privatisation, therefore, has become a word with a considerable cachet, one that encapsulates the advances made by state-owned industries, which have moved into the private sector.

Further the increased interest creates awareness amongst the general public with regard to the benefits of share ownership. It implies streamlined and efficient business, achieving big profits and finding better ways to compete.


However, it must not be forgotten that it is not merely the act of moving the public to the private arena, which causes these things to happen. On the contrary, it is the sustained, hard work at every level of a company, which is required to ensure that they compete effectively.

Becoming private itself is no immediate panacea for improvement. In fact, unaccompanied by anything strategic it would very well result in additional travail. Privatisation according to many bureaucrats brought a cultural revolution, bureaucratic hierarchies were broken down, recruitment and promotion policies re-written and over and above all this, managers were encouraged to manage.

Sir G. Jefferson, a former chairman of British Telecom once said, "They found that the quality of their people was as good as that of the workers in the private sector, but state ownership had never allowed them to realise their full potential."

Research suggests that public ownership generally leads to confused objectives for a business, because social and commercial objectives get intertwined to the detriment of both.

Privatisation gives management a focus, but it also intoxicates the factory floor, even in countries like Britain, where there is little record of mass participation in equity markets and where prior to the sales of stocks, share ownership was confined to only a tiny fraction of the population.

Again there is no real magic in the reasoning; it has been found that when employees see the management being given the right to manage, and seizing the opportunity, they begin to respect it and respond themselves.

A former Chairman of Canadian Airlines once said, "I am a believer in the idea that public companies are a lot freer to be innovative and entrepreneurial than government-owned companies. Since we've come up with some very innovative ideas for financing equipment. We've become a lot more customer focused. In the long run, I believe the public will be better served because of our privatisation."


Privatisation is a success story and a big business not only for governments and corporations concerned but for the investment banks, management, consultants, brokers, securities houses and law firms - indeed for all who have a part to play in keeping the financial system flexible and mobile.

Now the world map of privatisation shows that the policy is being considered in every corner of the world, including astonishingly in some communist regimes such as Cuba and Poland.

In the final analysis, some of the privatisation of our state monopolies has taken considerable time. However; the effort in some instances has been a tremendous success.

However, for us to benefit from privatisation we need to ensure that the privatisation proceeds are channeled for capital  investments, because capital investments adds to the capacity of the economy and thus promotes growth and on the other hand the government's strategy to sell minority interest in any privatisation also needs to be reconsidered.

MBSL seminar on kaizen and quality circles

Merchant Bank of Sri Lanka Limited (MBSL) has organized a seminar on 'Improving Productivity & Quality through Kaizen & Quality Circles' at the Trans Asia Hotel on December 11.

Kaizen is a Japanese technique made popular by Masaaki Imai who wrote a book titled Kaizen the secret of Japan's competitive success and followed it up with another book titled Gemba Kaizen.

Kaizen focuses on low cost improvements on a continual basis through the participation of all employees.

Kaizen is widely implemented in Japan and Singapore and is gaining popularity in Europe and the USA. This seminar will be conducted by Managing Director, MBSL, Sunil G. Wijesinha.

 Wijesinha is an expert on productivity and quality, having conducted numerous training and consultancy assignments for leading private sector companies (including multi-nationals) and also for public sector boards and corporations in Sri Lanka. Wijesinha is also Sri Lanka's only recipient of the APO National Award for Productivity.

Challenges faced by the
Sri Lankan apparel industry

Presently Sri Lanka's apparel exports are heavily concentrated in the two large global markets namely, the US and EU. This brings about a heavy dependency in terms of business risk. The industry should look at diversifying into new markets to increase export volumes while reducing its present dependence on two geographical regions.

The quota system which was in existence since 1974 will be dismantled in less than three years under WTO agreements and quota free trade will emerge from January 1, 2005. This will bring about significant and wide spread changes in the global trading system. The end of the guaranteed markets, especially for those manufacturing standard garments competing on price, will compel the industry to compete for its market share in an intensely competitive global market.

The global development of trade blocks and regional preferential trade agreements is an additional threat to the Sri Lankan apparel industry, which must be adequately addressed by effective lobbying to obtain an equal status.

Price continues to be an important factor in the global apparel industry. Sri Lanka in not as competitive as it should be due to poor labour productivity and insufficient technological advancement. Labour productivity rates in cost competitive countries are approximately 65% - 75%, which is significantly high when compared to the rates of 35% - 45% present in Sri Lanka.

Manufacturing lead times in countries geographically closer to the US and EU are approximately 30 - 60 days, whereas Sri Lankan manufacturing lead-time average at 90 days. This is due to the necessity to import raw materials for the manufacture of apparels.

The growth of the apparel industry must be propelled by strong branding efforts. Sri Lankan apparels must be consistently and aggressively branded to promote its relative strengths. It is expected that many global players will be able to deliver the basic customer expectations of price, quality and speed. Therefore, Sri Lanka must differentiate herself from the competition, through the provision of enhanced services. A total service comprises of having the raw material base, superior product development, efficient manufacturing capability, logistical efficiency and finally providing the buyer with assistance in the way of marketing, design or legal know-how. The model that is therefore envisaged for the Sri Lankan apparel industry is one of "total service."

The raw material base in Sri Lanka requires further development. The apparel industry currently imports over 40% of its raw material requirement, comprising of woven fabrics and accessories. The development of apparel zones, comprising of fabric mills, washing plants, printing and heat-sealing plants and water treatment plants will assist the apparel industry towards providing a total service to buyers.

The unfavorable development in the global markets were further reinforced by the consumers in the EU market becoming more price-conscious and therefore, importers demanding large discounts from apparel exporters of Asian countries. In the higher value added clothing segment, countries such as Malaysia, Taiwan, Korea, Hong Kong and Singapore continued to be strong competitors for South Asian countries.

The demand pattern and fashion in the apparel industry have changed significantly in recent years. The pursuit of a leisurely lifestyle has caused dramatic changes in the fashion industry shifting from structured clothing toward casual items.

With this changing environment in the global market, Sri Lanka will have to increase its market share in niche markets in Western countries and also tie up with fashion houses. It is essential to shift to high value added items and focus more on customer segmentation and modern production technology to capture demand in niche markets.

There is higher potential in the market segments of clothes for babies and children's clothes as parents and relatives often buy in a higher price range. To attract the consumers of these items, more prominence should be given to modern designs. Image building campaigns and strong lobbying would be necessary to obtain more export orders. The selection of fabrics, delivery speed and competitive prices also play a key role in attracting foreign demand.

The retailers have moved product development and buying decisions closer to customer's day of purchase, resulting in smaller order quantity and higher number of inventory turnover for the year. The vendors are under increasing pressure to supply products at short notice. The product replenishment lead times for a new product from order entry to delivery has been reduced to approximately six weeks. These new requirements are often referred to as Quick Response (QR) of Supply Chain Management (SCM).

The structural changes in the western retail markets have resulted in the buyers changing the methods and time of sourcing. "Traditional pre-season orders are being replaced by 'speed sourcing' (last minute ordering), and more replenishment of orders (within season ordering). The new methods of sourcing (speed/replenishment sourcing) currently amount to 36% of apparel product sourcing budgets and are growing rapidly. It is expected that the share for apparel will reach 52% by 2005, given the current process in implementing Supply Chain Management (SCM) enabling technologies."

These new changes in sourcing patterns will pose immense challenges to the Sri Lankan apparel industry. Reduction in traditional sourcing will decrease Sri Lanka's core competency as only a handful of apparel exporters in Sri Lanka have invested in SCM technologies. New technological advancements like Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) techniques, SCM and other business to business (B2B) software developments will have to be given due attention. The apparel industry will have to develop their speed sourcing and enhance their replenishment capabilities in order to be competitive in the global arena.

- Sri Lanka Garments Magazine

People's Bank awards
'Sisu Udana' scholarships

THE People's Bank has awarded scholarships to the students who obtained excellent results at national and district levels at the G.C.E. O/L examination held in December, 2001.

This year 42 students were selected by the bank for this scholarship programme, which is implemented annually to mark the bank's anniversary.

Under this programme the bank has provided monthly scholarships of Rs. 1250 each for 17 students who have obtained highest marks at the national level and Rs. 1000 each for 25 students who have obtained highest marks at the district level. This allowance will be paid for a period of 24 months.

These 42 children became entitled for scholarships on the basis of the certified result sheets obtained from the commissioner of examinations.

Another significant feature is that these selections were made among school candidates who appeared for the examination for the first time.

This scholarship programme launched in 1993 by the People's Bank with a view to give a fillip to higher education has been implemented uninterruptedly during the last 10 years.

This scholarship award ceremony was held at People's Bank Staff Training College auditorium at 2:00 p.m. on December 3, under the patronage of Minister of Human Resource Development Education and Cultural Affairs, Dr. Karunasena Kodituwakku and Minister of School Education, Suranimal Rajapakse on the invitation of Chairman, People's Bank, Lal Nanayakkara.

SLSI completes 37 years of service  

The Sri Lanka Standards Institution (SLSI) completed 37 years of service to the nation on December 5, thus becoming one of the oldest national standards bodies in the region. The institution provides a wide range of services to the business community and to the general public in the field of standardisation and quality assurance.

The product certification scheme operated by the institution gives a third party assurance to the consumer that the products bearing the SLS mark are safe for consumption and that they provide value for money.

The systems certification scheme operated by the SLSI  both for quality management and environmental management as per ISO 9000 and ISO 14000 series of standards provides the business community with a tool for cost reduction, quality improvement and for marketing of products both at national and international levels.

Human resource development in the field of quality management is another important activity undertaken by SLSI for providing knowledge and skills to the staff of the business community to improve the quality of products and services.

Over 2500 persons from the business sector attend the training programs conducted by the institution annually. The import inspection scheme which commenced in 1986 provides protection to the local consumer and to the local manufacturer against dumping of inferior quality goods in the Sri Lanka market by overseas manufacturers.

Laboratory testing of industrial and consumer goods, calibration of equipment and machinery, documentation and information services are some of the other services provided by the institution.

SLSI  has a well trained professional staff of over 100 scientists and engineers who provide a valuable contribution to the activities undertaken by the institution and the professional staff are being re-trained regularly to keep pace with the developments at international level.

The institution is also involved in the international standardisation activities both at operational and policy levels. SLSI was represented on the governing council of the ISO from 1999 - 2000 by its director general. The new building complex completed at a cost of Rs. 150 million will provide office space to carry out an extensive programme of standardisation activities in the next 25 - 50 years.

New spice route to Chile brings home canned fish curry from Delmege

Reputed food distribution company Delmege Distributors has opened a new spice route. Sri Lankan spices and condiments, the secret behind the fire in the island's curries, are now travelling thousands of kilometers to South America to spike a new range of table-ready canned fish curry launched in the local market by the company last month.

Mirisata Malu and Malu Masala under the Delmege label are unique additions to the growing range of canned Sri Lankan curries on supermarket shelves, in that they are canned to a "specially-developed Sri Lankan recipe" in Chile, a company spokesman said.

"These new products are a perfect complement to the popular Delmege range of jack mackerel in brine," Director, Delmege Distributors, Chula De Silva said. "This value-addition to a well established product will further enhance convenience to consumers, whose lifestyles are increasing in pace all the time."

The launch of the new products follows nearly 18 months of product development and interactive trials between the Delmege product development team, the spice supplier in Sri Lanka and San Jose Cannery in Chile, to ensure that the products satisfy the local palates, De Silva said.

Latest Westar watches launched  

Pee Bee Fashions Limited, a company that deals with the latest in a series of fast moving consumer products has introduced the latest collection of Westar watches to the market. 

Since 1992, Pee Bee Fashions has had a close relationship with Westar brand of watches that are available in 36 countries and in Sri Lanka for the past 10 years.

While most movements in Westar watches are Swiss, some watches are made using Japanese movements. Westar watches have a comprehensive collection of over 7000 models up to date.

"We wish to convey the brand image to every householder in Sri Lanka as Westar watches have shown a remarkable acceptance by the consumer as a value for money product. Our watches range from Rs. 3000 upwards, thereby giving the busy housewife, the working class, the student and the active sportsman the opportunity of purchasing a high quality watch," Managing Director, Pee Bee Fashions, Kishore Surtani said.

The profile series of Westar watches come in a range of pair watches with stainless steel, stand alone models for men with leather and metal bands. Most of these models are fitted with either a butterfly clasp or a double locking pushpin type clasp. The glass is made of sapphire and the water resistance at 3 ATM.

The ornate series for women is the latest collection featuring metal band models with intricate laced bracelets. The ladies watch also has a bracelet type concept with changeable bezel rings to suit different moods and styles of dressing.

The ornate watch can be worn as a bracelet like a piece of jewellery and at the same time, the case can be reversed to show the time. For those who prefer the leather band a barrel shaped case has been used with coloured leather bands.

The watches in the executive series focus on mass selling models with affordability being the main requirements.

According to Amurtojoy Basuray and Tariq Khalil representing Westar watches, there is a two year guarantee period on the Swiss movement and a one year guarantee on the plating on the new collection of models introduced in November and all future models.

Ceylinco Life trains managers for CIAM

28 senior managers of Ceylinco Life recently completed a managers skills seminar, one of the steps leading to the Chartered Insurance Agency Manager (CIAM) designation awarded by the Life Insurance Marketing and Research Association (LIMRA) of USA.

This is the first batch of insurance professionals in Sri Lanka to complete this training, which forms a component of the highest internationally recognised qualification for agency managers in life insurance, the company said.

The group comprised regional sales managers, business development managers and designated trainers of Ceylinco Life. The intensive five-day programme was conducted in Colombo by Alex Au, a Bangkok based certified trainer assigned by LIMRA International.

Director, Ceylinco Life, Davaan Cooray said agency management in life insurance has been identified worldwide as a specialised profession within the industry. It covers the recruitment, training, development and motivation of life insurance sales personnel and the management of large professional sales teams.



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