BUSINESS

Fertiliser importers face major crisis

By Marianne David

The private sector fertiliser importers are facing a crisis, which could blow up into one of national proportions, as a result of the government delaying subsidy payments of over Rs. 1.2 billion it owes the industry.

At a press conference, which included all the private sector importers of fertiliser, the officials discussed problems faced by the industry as a result of accumulated debt and the possibility of a national crisis in the event of not stocking up in time for the Yala season.

The delayed payment of subsidies could result in the restriction of future imports, a crisis that would affect not just the farmers, but also the entire country, officials said.

"The government owes Rs. 1.2 billion to us on account of subsidy payments applicable for Urea fertiliser imports. Consequently, the private sector finds it difficult to pay bank interest. Bank interest has reached a staggering high and is becoming unbearable. We appeal to the government to interfere and resolve the problems faced by the private sector fertiliser importers," Director, Baurs, Lakshman Niyangoda said.

"Our companies are paying interest to the banks because the government is not paying us on time. 15-18% interest is being paid. We have to pay interest for Rs. 1.2 billion. The government has not paid us for the last eight months," Joint Managing Director, McLarens International, Sarath Silva said.

If the situation continues for much longer the companies may not be able to survive said Niyangoda. The total interest to date payable by all four companies is over Rs. 200 million.

It was stated that this is not in keeping with the government's policy of promoting the private sector of the country, which they have repeatedly referred to as the engine of growth.

70% of the required fertiliser in the country is imported by the private sector. Only Urea imports are subsidised and the private sector imports 70% of the required Urea fertiliser. Almost 50% of the imported Urea goes to the paddy farmers, the balance being used by the tea, rubber, and coconut cultivators.

Urea amounts to approximately 350,000 tons of the fertilsier imported. The fertiliser subsidy scheme was re-introduced in October 1994 for the four main fertiliser ingredients, namely Urea, Muriate of Potash (MOP), Triple Super Phosphate (TSP) and Sulphate of Ammonia (SA).

In 1997 the scheme was revised and only Urea fertiliser qualified for subsidy payments, while the other three were excluded.

Under this scheme, the maximum selling price of Urea decided by the government was Rs. 7000 per metric ton. It was changed again on October 10, 2002, with the subsidy applicable for Urea fixed at Rs. 6000 per metric ton, regardless of the price of Urea in the international market.

"In the world market today farmers have to pay Rs. 1000 per bag of fertiliser," said CEO, ETA Lanka, A.M. Ismail.

Managing Director, McLarens International, Rohan De Silva said that over the last few years, despite the financial constraints faced by them due to the non-receipt of timely subsidy payments, they have continued to supply the agriculture sector with their requirements without creating shortages.

"It is only fair that the government responds to our appeals," he said.

"Urea is a commodity that fluctuates in price. Now fertiliser is $ 200. The prices go up very high sometimes like right now. If the government had paid us on time we could have stocked up when the prices were lower," said Silva.

The private sector importers of fertiliser have payments owing to them since June last year. The agreement between the government and the private sector importers was that payments had to be made three weeks from the date of receipt of the claim. According to the importers this has not been the case since 2002.

"In effect, we the private sector importers of fertiliser have been advancing monies to the government through the commercial banking system to ensure that the farming sector is not deprived of their fertiliser requirements. These losses on account of bank interest are currently being borne by the importers in the hope that some relief will be granted by the government, however our appeals have fallen on deaf ears," said Ismail.

Due to the non-receipt of the subsidy payments, the companies are facing serious liquidity problems and the continuity of their business is at stake said the officials. Most of the importers have had to face severe restrictions being imposed on them by the banks.

Despite numerous discussions and communications with the Agriculture Ministry, Finance Ministry, Treasury and the National Fertiliser Secretariat since July last year, the fertiliser importers say there has been no effort made by the government to ensure timely subsidy payments.

"In fact the delays to date have increased from the agreed period of three weeks to 30 weeks," said Ismail. "We will be finding it difficult to place fresh orders henceforth as we will be unable to finance them."

In this event, importers will be unable to procure their normal requirements to cater for the forthcoming Yala season which commences in April/May and a serious fertiliser shortage would therefore be the outcome, leading to a crisis on a national scale unless immediate payments are made, said Niyangoda.

"We might have a shortage of Urea fertiliser, 80-90% of which is brought from the Middle East countries. If there is a war on top of this problem, we will have even more problems. We have to avert a national crisis."

"When we pressurise them, they pay us a little bit but it is inadequate. It has come to a point where we can't tolerate it anymore. This has been happening for a few years now. The government has not agreed to pay the interest either. Two years ago we spoke to the secretary of the Treasury and we were told that the interest would be given but we have received nothing so far."

"We have sent several letters to the Treasury, Agriculture Ministry and Finance Ministry but still there are no results. We had a discussion with Treasury officials a few months ago and they paid a small amount. We sent a letter about two weeks ago to the Treasury outlining our problems but there was no proper response," said Silva.

"Rs. 1.2 billion is owed to us. If those funds are not made available, how can we procure fertiliser?" queried Senior General Manager, ETA Lanka, M.H.M. Razik.

The importers claim that all their appeals have fallen on deaf ears. "We appeal to the government even at this late stage to address the situation and avert a national crisis," they said.

The Treasury, Agriculture Ministry and Finance Ministry are responsible for this situation, they charged. 

Amounts owing to date

CIC   -      Rs. 511 million

Baurs -      Rs. 220 million

McLarens      -      Rs. 154 million

ETA Lanka      -      Rs. 264 million

Project MoUs to the value of Rs. 4 billion signed at opening of NWPEC

3,000 job opportunities were created at the opening of the North Western Province Economic Commission (NWPEC) when 30 MoUs were signed to the value of Rs. 4 billion. The highest amount - Rs. 1.53 billion - was assigned for oxidising and magnet manufacture.

The other deals amounting to over Rs. 100 million were for an infrastructure development project, a small hydro project, an eco tourism project, a shoe board and cardboard manufacture project, an ornamental fish and foliage project and a coconut by-product manufacturing project. MoUs for a tourist hotel project, adventure park project, mini power generation project and a low cost housing project for migrant workers were also signed.

Chairman, Ceylinco Group, Lalith Kotelawala has allocated Rs. 15 million from his personal funds to reconstruct 20 tanks in the area while Seylan Bank has allocated Rs. 15 million to provide loans for business entrepreneurs in the area. This is the first time in Sri Lanka that MoUs were signed within one hour creating over 3,000 job opportunities.

Need for government-business collaboration

By Dinesh Weerakkody

A leading Malaysian industrialist once told me that people say Singapore is a great place to do business and is located in the center of the region, but to him Sri Lanka is equally central and is an even more attractive place to invest in.

However, he said that the problem here, unlike in Singapore, is that the social and economic system is so politicised that businessmen have to go behind politicians to get their work done. So he suggests the government should give greater opportunity for the chambers to nominate private sector representatives into parliament and government ministries.

He also emphasised that the country's political and economic stability, IT infrastructure, operating costs and language proficiency needs to be similar to Singapore or Malaysia for Sri Lanka to become a great place to do business. And for that to happen the government should be privatised and the bureaucracy should help the politicians to establish legal and regulatory structures that are generally hospitable to private investment. We know there is such a thing as economic privatisation. However, does it entail such a thing as political privatisation?

The first term is common enough. It refers primarily to the sale of state owned undertakings to the public but, more broadly, to the state reducing its role in the economic life of the nation.  But does a contracting economic role for the state make political liberalisation inevitable?

Freer economy

It is true that demands for political change can be made even in the absence of major reconfiguration of economic forces in society. The situation in Myanmar was a case in point.

However, what is of more interest is the question whether the global trend towards a freer economy and society is bound to be accompanied by a movement towards liberal politics based on maximum freedom for the individual and minimum rights for the state.

The question was dramatised, of course, in China in 1989. The Tiananmen incident expressed the cumulative effect of changes in the Chinese society when a liberal and economic regime began replacing a command administrative and closed economy.

The process created a class of people whose access to education, jobs and goods in the new economic system, whose values and self perception are those one would normally associate with the middle class

Chinese political analysts at that time openly blamed the disturbance on a handful of agitators acting under the influence of harmful Western values and ideals but also, more generally on the emergence of an assertive middle class. The Tiananmen activists were thus one of the main beneficiaries of reformist China, who were turned into rebels by a simple logic; the desire for political power that generally accompanies growth in economic power.  Hence their demand for political change.

Sri Lanka

Perhaps this may be a reason why in Sri Lanka also top businessman are calling for privatisation of politics. The failure of the Chinese reforms corroborates such an assessment.

In spite of a brutal crackdown that sent shock waves through Chinese society and the rest of the world, the urban intelligentsia could not enthuse the two main segments of the population, farmers and workers. Their lack of response to the students' fate doomed the movement.

Interestingly, China's political experience with economic modernisation in 1989 was exceptional because the country was making a transition from communism to capitalism, but it is nevertheless of interest to third world states which are liberalising their economies.

Will they too, be faced with an unstoppable demand for political liberalisation? Experience, in societies such as Taiwan and South Korea, suggests that this is inevitable. Such countries do seem to be united in the way their political status quo is being questioned by a class, that ironically is largely a creation of economic development underwritten by political authoritarianism.

This would seem to bear out the argument that the economic context within which political system develops is critical in deciding their form and direction. This is not the simple determinism Marxists are fond of - there is a complex tension between the two spheres.

Privatisation

But the tension takes the form of interaction, too, and an important expression of that interaction today is the way privatisation in economies tends to spill over into politics.  Of course, the spill over is not the same everywhere. The extent to which political demands are made, and are met, differs widely from society and is influenced by local factors.

In a country like Singapore, two points stand out. The first is that the government has intervened decisively in the economy over the years and continues to have considerable powers in the management of the economy.

However, the emphasis on efficiency and results has prevented the state's economic institutions from degenerating into the bastions of bureaucratic privilege which are common in many third world countries.

In those places, the public sector has become a vested interest both for the government, which sees it as a support base, and for workers, who use its protection to make increasing and unreasonable demands on the state.

It is obvious that by reducing the role of the public sector, the influence of the government and bureaucrats are affected. In fact the intention of Max Weber, the architect of modern bureaucracy, was to bring logic, rationality and efficiency to large government organisations. Instead we have inefficiency, lethargy and delays. Therefore, it is about time the rules of Max Weber were re-written.

Corporatisation

In Singapore, by contrast the experiences of corporatisation for example should make the political privatisation exercise less politically arduous, like in Sri Lanka where the privatisation programme in the late 1990s marred the benefits envisaged in the programme.

The political system in Singapore has been marked by the coexistence of real political rights for citizens with authoritarian 'reserve' powers for the state, but the latter has never been anything like those seen in military ruled societies.

Thus, while critics may discuss what kind of democracy Singapore should be, there is no doubt that it is a democracy. Whatever political changes are demanded the economy will have to be fashioned within those broad parameters. This may be the case in Sri Lanka too.

In an age of dramatic change, the prognosis for Singapore therefore appears to be good. The middle class is likely to be far less subversive of the status quo than elsewhere because it already has so great a stake in it.

On the question of what political change should take place in Sri Lanka to accommodate industrialist in our policy making bodies remains debatable, considering the contribution made so far by the private sector in economic and social development.

However, the administration and the bureaucracy and their approach towards serving the private sector needs to be overhauled, since the private sector is considered the engine of economic growth, and therefore it means a bigger role for the private sector in economic policy making.

Like in Singapore, we too need deliberation councils to encourage government-business collaboration and this will help to eliminate lobbying, where rules are murky and groups seek secret advantage over one another.

Fisk to establish CIM as the world's leading marketing body

Chartered Institute of Marketing (UK) recently announced the appointment of a new CEO. Peter Fisk will be the new incumbent in the role of chief executive and his immediate task will be to establish the CIM as the world's leading professional body of marketing.

Fisk, 35, is a strategic marketer and joins from PA Consulting Group, the international management and technology consulting firm, where he has been responsible for defining and implementing high performance marketing working with clients such as American Express, BT and Microsoft. He started his career in marketing strategy and brand development with British Airways.

"My work with clients has convinced me that marketing is undervalued in virtually every company," explains Fisk. He points to research of 6000 companies by PA which shows that marketing typically creates three times more value than anything else, yet marketers are typically not in the driving seat. "Marketers need to be more strategic, more innovative and more commercial in order to demonstrate and deliver their true worth."

"I want to significantly improve the reputation of marketing within business, and the capability and confidence of marketers to unlock its real value. Marketers should be the driving force of strategy and change in organisations; relentlessly searching for differentiation and improved business results."

"They should be out looking for the best sources of future profits, unlocking emergent technologies in innovative ways, and responding to the ever-changing needs of customers. This is how they will command a much stronger voice in the boardroom. The CIM should become the first place every marketer turns to for leadership and support. It should help create great marketers, and help them to deliver great marketing."

The appointment builds on the new strategic vision set out by the CIM to become the leading body of marketing globally , and the governance changes in order to make that possible. The new CEO's challenge will be to shape the new strategic plan, then work with the CIM team and the marketing world to implement it successfully.

Ceylinco Life sends delegation to APLIC

A delegation of 26 top sales officers from Ceylinco Life represented the company at the seventh Asia Pacific Life Insurance Congress (APLIC) in Singapore recently.

The delegates from Ceylinco Life were selected on the basis of their sales performance and achievement of targets in 2002. The majority of them were sales consultants and sales executives and the delegation comprised representatives from many parts of the island, the company said.

"APLIC is possibly the biggest life insurance congress in the world to date, and enabling our top sales achievers to participate and advance their careers while also motivating them to strive for even better performance in the future," Director, Ceylinco Life, Thushara Ranasinghe said.

The delegation from Ceylinco Life was the largest among Sri Lankan insurance companies represented at the APLIC this year.

The APLIC is held once in two years. The last APLIC held in Thailand was attended by six representatives of Ceylinco Life. "Providing our sales team and managers with opportunities for training and exposure overseas is an important strategy in their continuous development and the advancement of professionalism in this sector," Ranasinghe said.

These international forums will help them to acquire knowledge through international experts, he added.

Macksons sets up overseas colour banks

Sri Lanka's largest exporter of paints to achieve distinction, Macksons Paint Industries, manufacturers of Multilac Paints, recently set up its first overseas colour banks in China's Shanghi province, and in the Maldive Islands.

Managing Director, Macksons Paint Industries (Pvt) Ltd., M. Mizver said that having exported paints to China for the past three years, and to Male for the past two years, he saw the need for such a facility in these favourable and growing markets.

Macksons Paint Industries further consolidates its market leadership in the export of paints by being the first Sri Lankan paint manufacturer to offer colour tinting systems to overseas markets. This concept, the Coloris France Colour Bank, is in keeping with global trends and offers the most advanced solutions to consumers.

"The hidden harmony of stimulating 10,000 shades to match even the most remote colour comes from the unbeatable world of Coloris France tinting system. Macksons Paint Industries has teamed up with Coloris GCE of France to present this newest global colour concept which uses three different base paints for pastel, medium and deep shades, with a combination of 16 colorants to produce over 10,000 colours."

Mizver said that Macksons Paint Industries has already set up 15 colour banks in Sri Lanka. Plans are underway to set up more such colour bank networks internationally, while further expanding the local market as well during the course of this year. The next colour bank is scheduled to be opened in India shortly.

NSB gets a SL AAA rating

The National Savings Bank (NSB) has been assigned a SL AAA (triple A) rating by Fitch Ratings Lanka. NSB is the very first Sri Lankan bank to be awarded this prestigious rating.

SL AAA rating offers highest safety for timely payment of interest and principal. It is the highest rating assigned in the Sri Lanka national rating scale. The deposits of NSB enjoy an explicit government guarantee through the NSB Act.

Credit ratings assist the public to find out the default risk of their fixed income investments. The government in the 2003 budget announced that credit rating and publication of such rating will be made mandatory for all deposit taking institutions and all debt issues over Rs. 100 million.

The government is hopeful that credit ratings would not only instil a greater degree of market discipline on financial institutions but also help bring down the lending rates in general through disintermediation.

In Sri Lanka, credit ratings are carried out by Fitch Ratings Lanka, established in 1999 as a joint venture between Fitch Ratings Inc., Central Bank of Sri Lanka, Employees' Provident Fund and several leading banks and insurance companies. Fitch Ratings Inc., is a global leader in rating financial institutions and rates over 2,300 international banks and insurance companies, 1,000 corporates, and 70 sovereign nations.

A credit rating is a carefully formed independent assessment of the ability to service the promised interest and principal obligations on a timely basis by an institution or debt issue. Credit ratings are not guarantees against loss. They are opinions about relative measures of default risk.

Fitch Ratings Lanka has already assigned entity ratings to: Citibank Sri Lanka Branch (SL AAA), Commercial Bank of Ceylon (SL AA+), John Keells Holdings (SL AA+), Hayleys (SL AA+), DFCC Bank (SL AA), Bank of Ceylon (SL AA-), Hatton National Bank (SL A), Senkadagala Finance Company (SL BBB), and debt issue ratings to: Sri Lanka Telecom Debentures (SL AA+), Aitken Spence Debentures (SL AA) and Singer (Sri Lanka) Debentures (SL A).

Credit ratings to several other institutions are being assigned. Detailed credit analysis reports of all rated institutions or debt issues can be obtained free of charge.

ETF Board goes hi-tech

The Employees' Trust Fund Board (ETF) signed a contract with Golden Key Software Solutions Ltd., in March to supply a software package addressing all their financial requirements.

The PC-based ACCPAC international software would mean faster and more accurate information at their fingertips, as the need for faster and more complex information becomes a requirement for the ETF Board. A Memorandum of Understanding was signed between both parties. A unique feature of this agreement would provide a continuous, efficient and reliable service to their clients with the assurance of unparalleled technical assistance from Golden Key.

The widely used ACCPAC software will provide the system manager platform ensuring stability and security for the solution. The cash book from PereSOFT software systems, an arm of ACCPAC International, will compliment the general ledger from ACCPAC.

Director/General Manager, Golden Key Software Solutions Ltd., Chintaka Pathirana explained the special emphasis on user-friendly software that was both effective and efficient saying, "ACCPAC software was selected as the application software for the ETF Board due to its cost-effective reliability, backed by the skilled technical division of Golden Key to run it."

Chairman, ETF Board, Dinesh Weerakkody said, "We currently run a manually operated system. This has resulted in time and accuracy cost for us. We look for a solution that will both answer all our requirements and will be easy to implement, ensuring that our staff and customers will benefit from the change."

TRC to introduce 10 digit numbering plan

By Risidra Mendis

The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has taken steps to introduce the 10 digit numbering plan that seeks to create a level playing field for all fixed line and mobile operators.

This operation to be introduced in June 2003 is expected to create healthy competition and will also provide for a vast number resource base to meet the future demand of their subscribers.

Commenting on their plan to take Sri Lanka forward to be in line with international telecommunication procedures and methods, Director General, TRCSL, Themiya Hurulle said the new number plan will consist of a standard three digit area code plus a seven digit subscriber number for fixed lines and a three digit operator code plus a seven digit subscriber number for mobile lines.

However, an important feature would be that all fixed lines (wireless and wire lines) would have a geographic identity determined by the area code. According to Hurulle, the present numbering plan developed more than 30 years ago when there were around 100,000 telephone lines in use has now outlived its life.

Sri Lanka presently has 1.8 million telephone lines in use while the demands for new lines is on the increase. The new plan therefore seeks to achieve the standardisation of the length of all subscriber numbers of fixed telephones to seven digit numbers irrespective of the operator being SLT, Suntel or Lanka Bell in every secondary centre area.

The new number plan will also enable the introduction of emerging services such as free phone services, and the provision for standardised short codes for all operators.

"By this plan each fixed operator will have virtually one million numbers in each of the 29 secondary centre areas, while the mobile operators will have 10 million numbers for each of the incumbents countrywide," Hurulle said.

He said that the two digit area codes of Colombo, Kandy and Galle where the subscriber rate is the highest will change from 01 to 011, 08 to 081 and 09 to 091 respectively.

All six digit SLT numbers in Colombo and Kandy will change to seven digits by the addition of two in front of them. For example, in Colombo 234567 will change to 2234567 while the national number will be 011 2234567.

All five digit SLT numbers will change to seven digits by the addition of 2X. For example Gampaha 23456 will change to 2X 23456 and the National number 033 2X 23456. According to Hurulle the digit X will be notified by SLT well in advance.

Suntel numbers will for example change from 074 123456 to 4123456 with the National number 011 4123456. for Lanka Bell numbers the change will be from 075 123456 to 5123456 and the national number 011 5123456.

In the case of mobile services the codes will remain the same. However, one more digit will be added to make it a seven digit number. The change in code for Sri Lankan Airlines from 073 to 01973 will also take place.

According to Hurulle, emergency services can be reached by dialling uniform codes such as 111 irrespective of the operator.

However, operator dependent codes to access services such as billing, complaints and faults will consist of four digits. "Details of the short codes to be introduced will be published in due course."

In order to implement these changes smoothly and with the least possible inconvenience to the user, the implementation will be undertaken in stages with the entire project to be completed by the end 2003, he said.

MCSL records net profit of Rs. 33.6 mn

With an increased deposit base of Rs. 1.5 billion, Merchant Credit of Sri Lanka Ltd. (MCSL), the fourth largest finance company in the country, has recorded a net profit of Rs. 33.6 million for the financial year ending December 31, 2002.

The company earned a total income of Rs. 343 million in 2002 as against Rs. 252 million for the year 2001.

According to Managing Director/CEO, MCSL, Shirley Perera, MCSL's business target is Rs. 600 million for leasing as it is the bank's main activity. The bank plans to lend more to corporate clients at lower rates by using the bank's low cost excess funds.

MCSL has ventured in to real estate and the bank is currently involved in a large real estate venture at Kerawalapitiya, Wattala. For the first time in the history of real estate businesses in Sri Lanka, all the blocks were reserved on the same day. Named Radiant Park, the company has invested more than Rs. 40 million on this project. Development work of the project at Wattala, which is on a total land area of nine acres, was completed in a few months.

The blocks were reserved by 114 buyers from the Pettah business community. They have paid 25% of the value up-front and the rest of the amount will be paid in instalments over a period of five years on easy payment terms. Perera asserts that the bank has plans to construct houses on these blocks for an attractive package in collaboration with reputed house building companies. This will be a new line of business for MCSL.

MCSL first ventured in to the real estate market two years ago. Perera observed that the bank is very selective in choosing other businesses as the bank's main operations involve leasing. Real estate is yet another side-line business. Apart from the ongoing projects, the MCSL has undertaken four to five new projects.

The service based personal customer service provided by the bank has increased the customer's confidence in the bank, while the bank's involvement with the Bank of Ceylon and the Merchant Bank of Sri Lanka could be considered as yet another plus factor. According to Perera, the young team of marketing officers who go to the customer's house to provide a personalised service has also contributed to the bank's success.

After Perera took over in 1998 as MD/CEO, MCSL's deposits which were less than Rs. 350 million soared high and is presently at its Rs. 1.5 billion mark. Perera's business acumen was rewarded twice when he won the Entrepreneur of the Year award. The Federation of Chambers of Commerce and Industry in Sri Lanka (FCCISL) awarded Perera with merit certificates for 2001 and 2002.

Incorporated on November 30, 1983, MCSL commenced business under the new Management in September 1992. Bank of Ceylon and the Merchant Bank of Sri Lanka own the company. MCSL has three branches in Kandy, Kurunegala and Horana.

The board of directors of MCSL are Sunil G. Wijesinha (Chairman), Shirley Perera (MD/CEO), Nihal Abeysekara, S. N. P. Palihena, Thilak Ranasinghe and W. A. Nalini.

Record wins by Minds FCB

An unprecedented three gold awards in three successive years for the same client was achieved by Minds FCB for Triumph at the SLIM advertising awards this year.

Minds FCB collected seven awards this year, two golds, three silvers and two bronzes. Long standing clients ICL Marketing and Clipsal joined Minds FCB in their triumphs while work of recently acquired international businesses such as Samsung and New Zealand Milk were also award winners.

Minds FCB has an important array of clients on their portfolio; Dialog GSM, New Zealand Milk, Standard Chartered bank, Singapore Airlines, Clipsal, Gordon Frazer, Ceylinco Life Insurance, Triumph International, CavinKare, Samsung and Ajinomoto being some of them.

Commenting on the impressive achievements of Minds FCB at the awards ceremony, Managing Director Ryan Jayatunga said, "I am delighted that in this, the 21st year of our operations, the work that we are doing in Colombo for FCB's global clients like New Zealand Milk and Samsung are also receiving recognition and reward."

"Over the years we have built our business almost entirely on the strength of our local operation. Minds FCB won awards for our clients such as Sri Lanka Telecom, Lanka Walltiles, Clipsal, Triumph, Browns, ICL Marketing, Dialog GSM and Toyota."

"This year is another leap in the same direction we have always headed in since we started. Thank you clients, thank you team Minds FCB. It is a real joy to be working together, and even better when our peers think the work that we do is worthy of awards."

Minds FCB is the local office of Foote, Cone & Belding, which is the world's third oldest advertising agency. Today, FCB is a powerful world-wide agency network with 2001 billings of $7.9 billion and over 190 offices servicing clients in 104 countries.

Hedge fund - a new concept in investment, fund management and risk management

The modern world is exploring various ways and means of fund management to protect and guarantee commercial investments so as to minimise the risks that the associated with such investments, to provide liquidity to the markets, and at the same time obtain a fair and reasonable return on the investments.

One such innovation is an investment vehicle described as a 'hedge fund.' This concept has fast become an industry of its own and has got a lot bigger in Europe in recent years. The rapid nature of trading activity - trading more actively than other market participants at the same time concentrating on certain parts of the market, particularly the most volatile sectors, have made hedge funds punch above their weight in the financial/commercial markets.

What is this hedge fund? There are a multitude of definitions, all pointing out to the same thing: but using different approaches and different terminology.

A hedge fund is a term commonly used to describe any fund that isn't a conventional investment fund - that is, any fund using a strategy or set of strategies other than investing long in bonds, equities (mutual funds), and money markets (money market funds).

A hedge fund is a fund that can take both long and short positions, use arbitrage (we will explain this term down the line), buy and sell undervalued securities, trade options or bonds, and invest in almost any opportunity in any market where it foresees impressive gains at reduced risk.

Hedge fund strategies are wide and varied - many hedge against downturns in the markets - especially important today with volatility and anticipation of corrections in overheated stock markets. The primary aim of most hedge funds is to reduce volatility and risk while attempting to preserve capital and deliver positive returns under all market conditions.

You will wonder what this term 'arbitrage' means - in short, it simply means:

Risk free betting!

This is a technique whereby exactly offsetting positions are taken in a market simultaneously but at different prices.

The difference in price represents an immediate risk-free profit that is independent of the subsequent movement in price of the instruments traded. This technique has long been used in financial markets, which can be difficult for nonprofessionals to access. In other words: Arbitrage is the profit from investing tax-exempt debt financing proceeds in higher yielding taxable securities.

'Arbitrage' - include fixed income arbitrage, mortgage backed securities, capital structure arbitrage, closed-end fund arbitrage, convertible bonds arbitrage funds, market-neutral arbitrage funds and merger arbitrage - arbitrage opportunities - that occur after a merger or acquisition offer is announced. Each category having its own underlying definitions.

Merger arbitrage, also referred to as risk arbitrage, is a relatively new hedging strategy. Sometimes categorised as one of the market-neutral hedging strategies that have emerged in recent years, merger arbitrage, though little correlated to the market, is not truly market neutral, as we've seen that market downturns can sometimes disrupt the outcome of agreed deals.

Sometime last year when technology stocks took a beating, some financiers and business men used this system of 'hedging' to cover the downside, and minimise the risk - in the interest of steady, consistent returns. It's a strategy that more and more fund managers are taking - and more of their clients demanding - to cushion the fund against a precipitous fall - as stock markets reach valuations that are described as 'overheated.'

However, strangely enough, Ironically, most mutual funds, the darlings of the investment world, cannot take short positions or use put options. "Hedge" funds, on the other hand, can do this and more, with the flexibility not only to be defensive but to be responsive and opportunistic in its investments.

Hedge funds, unlike most conventional funds, are not limited to a single asset class such as stocks. Within the hedge fund universe there are a wide variety of funds with a wide range of strategies and styles. Some may invest in asset classes such as currencies or distressed securities and in one or more regions throughout the globe.

Some utilise return-enhancing tools such as leverage, derivatives, arbitrage, and highly concentrated positions that are generally beyond the reach of mutual funds, which largely are subject to regulations and disclosure requirements around the world.

If the readers are able to gather something of this professional jargon, their next question will be, we have some inkling of what a hedge fund is, what arbitrage is, tell us how can one invest in a hedge fund?

What we can say is that in international commercial transactions, unless an individual has a great deal of money to invest and an understanding of the risks associated with the different hedge fund strategies, the best approach is to either use a consultant or invest in a fund of funds (The explanation comes at the end of the article as to what a 'fund of funds' is).

A funds of funds spreads its portfolio among a diversified mix of hedge funds, blending different strategies and asset classes which can provide a more stable long-term investment return than that of the individual hedge funds.

This approach is especially useful given the broad range of hedge fund strategies and styles that can confound the lay person. Although hedge funds got their name in the early 1960s with managers who both bought stocks and sold them short, today the term refers essentially to any fund using alternative investment styles, some of which may not even hedge risk.

It is important to understand the differences between the various hedge fund strategies because all hedge funds are not the same - it is also important to understand such terms as investment returns, volatility, and risk as these are ingrained in investments and vary largely among the different hedge fund strategies.

Some strategies which are not correlated to equity markets are able to deliver consistent returns with extremely low risk of loss, while others may be as or more volatile than mutual funds. A successful fund of funds recognises these differences and blends various strategies and asset classes together to create more stable long-term investment returns than any of the individual funds.

According to experts there are approximately 14 distinct investment strategies used by hedge funds, each offering different degrees of risk and return. The primary aim of most hedge funds is to reduce volatility and risk while attempting to preserve capital and deliver positive returns under all market conditions.

A macro hedge fund, for example, invests in stock and bond markets and other investment opportunities, such as currencies, in hopes of profiting on significant shifts specifically as global interest rates and countries' economic policies.

It follows therefore that a macro hedge fund is more volatile but potentially faster growing than a distressed securities hedge fund that buys the equity or debt of companies about to enter or exit financial distress.

An equity hedge fund may be global or country specific, hedging against downturns in equity markets by shorting overvalued stocks or stock indexes. A relative value hedge fund takes advantage of price or spread inefficiencies.

It is imperative that the players in this profession should conclude that knowing and understanding the characteristics of the many different hedge fund strategies is essential to capitalising on their variety of investment opportunities.

I am sure that if these strategies have been adopted by that financial institution, the subject of many controversies, articles and letters and lamentations of investors, and which is still in the brink of a liquidation abyss, it may have been saved from bankruptcy.

Here are some text-book guidelines expounding the key characteristics of hedge funds and hedging strategies

a.    Hedge funds utilise a variety of financial instruments to reduce risk, enhance returns and minimise the correlation with equity and bond markets. Many hedge funds are flexible in their investment options (can use short selling, leverage, derivatives such as puts, calls, options, futures, etc.)

b.    Hedge funds vary enormously in terms of investment returns, volatility and risk. Many, but not all, hedge fund strategies tend to hedge against downturns in the markets being traded.

c.    Many hedge funds have the ability to deliver non-market correlated returns.

d.    Many hedge funds have as an objective consistency of returns and capital preservation rather than magnitude of returns.

e.    Most hedge funds are managed by experienced investment professionals who are generally disciplined and diligent.

f.      Pension funds, endowments, insurance companies, private banks and high net worth individuals and families invest in hedge funds to minimise overall portfolio volatility and enhance returns.

g.    Most hedge fund managers are highly specialised and trade only within their area of expertise and competitive advantage.

Hedge funds benefit by heavily weighting hedge fund managers' remuneration towards performance incentives, thus attracting the best brains in the investment business. In addition, hedge fund managers usually have their own money invested in their fund. If they have not - then make them.

A wide range of hedging strategies are available to hedge funds. For example:

      Selling short - selling shares without owning them, hoping to buy them back at a future date at a lower price in the expectation that their price will drop.

     Using arbitrage - seeking to exploit pricing inefficiencies between related securities - for example, can be long convertible bonds and short the underlying issuers equity.

      Trading options or derivatives - contracts whose values are based on the performance of any underlying financial asset, index or other investment.

      Investing in anticipation of a specific event - merger transaction, hostile takeover, spin-off, exiting of bankruptcy proceedings, etc.

      Investing in deeply discounted securities - of companies about to enter or exit financial distress or bankruptcy, often below liquidation value.

     Many of the strategies used by hedge funds benefit from being non-correlated to the direction of equity markets.

Let us now see what are the benefits that could be derived in hedge fund investments. The experts in this field of fund management, risk management and investment enumerate the following benefits:

1.    Many hedge fund strategies have the ability to generate positive returns in both rising and falling equity and bond markets.

2.      Inclusion of hedge funds in a balanced portfolio reduces overall portfolio risk and volatility and increases returns.

3.    Huge variety of hedge fund investment styles - many uncorrelated with each other - provides investors with a wide choice of hedge fund strategies to meet their investment objectives.

4.    They also say that academic research proves hedge funds have higher returns and lower overall risk than traditional investment funds.

5.    Hedge funds provide an ideal long-term investment solution, eliminating the need to correctly time entry and exit from markets.

6.    Adding hedge funds to an investment portfolio provides diversification not otherwise available in traditional investing.

Then comes the query, can 'hedge funds' hedge against risks?

Some funds that are called hedge funds don't actually hedge against risk. Because the term is applied to a wide range of alternative funds, it also encompasses funds that may use high-risk strategies without hedging against risk of loss.

For example, a global macro strategy may speculate on changes in countries' economic policies that impact interest rates, which impact all financial instruments, while using lots of leverage. The returns can be high, but so can the losses, as the leveraged directional investments (which are not hedged) tend to make the largest impact on performance.

Most hedge funds, however, do seek to hedge against risk in one way or another, making consistency and stability of return their key priority, rather than magnitude. Event driven strategies, for example, such as investing in distressed or special situations reduce risk by being uncorrelated to the markets.

They may buy interest - paying bonds or trade claims of companies undergoing reorganisation, bankruptcy, or some other corporate restructuring - counting on events specific to a company, rather than more radom macro trends, to affect their investment. Thus, they are generally able to deliver consistent returns with lower risk of loss.

Long/short equity funds, while dependent on the direction of markets, hedge out some of this market risk through short positions that provide profits in a market downturn to offset losses made by the long positions. Market neutral equity funds which invest equally in long and short equity portfolios generally in the same sectors of the market, are not correlated to market movements.

A true hedge fund then is an investment vehicle whose key priority is to minimise investment risk in an attempt to deliver profits under all circumstances.

Hence in order to institute the proper implementation, certain alternate strategies have to come into play. Among these alternative strategies are:

i.      Hedging by selling short - selling shares without owning them, hoping to buy them back at a future date at a lower price in the expectation that their price will drop.

ii.   Using arbitrage - seeking to exploit pricing inefficiencies between related securities.

iii.      Trading options or derivatives - contracts whose values are based on the performance of any underlying financial asset, index or other investment.

iv.   Using leverage - borrowing to try to enhance returns.

v.      Investing in out-of-favor or unrecognised undervalued securities (debt or equity).

vi.      Attempting to take advantage of the spread between the current market price and the ultimate purchase price in event driven situations such as mergers of hostile takeovers.

It is also advantageous to know the distinction between a hedge fund and a mutual fund. The principle differences being:

1.    Mutual funds are measured on relative performance - that is, their performance is compared to a relevant index or to other mutual funds in their sector; hedge funds are expected to deliver absolute returns - they attempt to make profits under all circumstances, even when the relative indices are down.

2.    Mutual funds are highly regulated, restricting the use of short selling and derivatives. These regulations serve as handcuffs, making it more difficult to outperform the market or to protect the assets of the fund in a downturn. Hedge funds, on the other hand, are unregulated and therefore unrestricted - they allow for short selling and other strategies designed to accelerate performance or reduce volatility.

      However, an informal restriction is generally imposed on all hedge fund managers by professional investors who understand the different strategies and typically invest in a particular fund because of the manager's expertise in a particular investment strategy.

      These investors require and expect the hedge fund to stay within its area of specialisation and competence. Hence, one of the defining characteristics of hedged funds is that they tend to be specialised, operating within a given niche, specialty or industry that requires a particular expertise.

3.    Mutual funds generally remunerate management based on a percent of assets under management.

      Hedge funds always remunerate managers with performance-related incentive fees as well as a fixed fee. Investing for absolute returns is more demanding than simply seeking relative returns and requires greater skill, knowledge, and talent. Not surprisingly, the incentive-based performance fees tend to attract the most talented investment managers to the hedge fund industry.

4.    Mutual funds are not able to effectively protect portfolios against declining markets other than by going into cash or by shorting a limited amount of stock index futures.

      Hedge funds, on the other hand, are often able to protect against declining markets by utilising various hedging strategies. The strategies used, of course, vary tremendously depending on the investment style and type of hedge fund. But as a result of these hedging strategies, certain types of hedge funds are able to generate positive returns even in decling markets.

5.    The future performance of mutual funds is dependent on the direction of the equity markets. It can be compared to putting a cork on the surface of the ocean - the cock will go up and down with the waves.

      The future performance of many hedge fund strategies tends to be highly predictable and not dependent on the direction of the equity markets. I can be compared to a submarine travelling in an almost straight line below the surface, not impacted by the effect of the waves.

And here we return to the concept of fund of funds. Investment and fund management analysts say that a 'fund of funds' is a fund that mixes and matches the most successful hedge funds and other pooled investment vehicles, spreading investments among many different funds or investment vehicles. As we've noted, hedge fund  strategies are complex and varied in their ranges of risk/return.

Even within a particular style, no two managers are likely to be exactly the same. Each will apply different amounts of hedging or insurance to his/her portfolio and will employ different amounts of leverage. A fund of funds simplifies the process of choosing hedge funds, blending together funds to meet a range of investor risk/return objectives while generally spreading out the risks among a variety of funds. This blending of different strategies and asset classes aims to deliver a more consistent return (than any of the individual funds).

Among the advantages:

       Returns, risk and volatility can be somewhat controlled by the mix of underlying funds.

       Capital preservation is generally an important consideration.

       Volatility depends on the mix and ratio of strategies employed.

Experts such as Dion Friedland say that creating a fund of funds can be likened to baking a cake. Working from the same ingredients such as flour, butter, sugar, yeast, eggs, etc., a baker is capable of producing different cakes. For example:

     A sponge cake may have more eggs.

     A fruit cake will include chopped fruit and nuts.

     A chocolate cake includes chocolate but the basic ingredients are still the butter, flour, eggs, etc.

So it is with a fund of funds. Understanding the characteristics and risk profiles of the different hedge fund strategies allows the fund of funds manager to blend funds together that often are able to produce fairly predictable returns.

I am of the opinion that this is a concept worth looking at in the Sri Lankan scenario. Shall wind up with the famous words of Friedland:

"In the animal kingdom, few creatures are as terrifying - and as awe-inspiring- as the grizzly bear. Mammoth and quick, keen and powerful, these carnivores take no prisoners - not even human ones - when feeling threatened or hungry. They are sudden and aggressive; they go for the kill; they want it all, not content with only a mere morsel of their prey."

"In the hedge-fund kingdom, global  macro funds can be compared to grizzlies. Aiming to profit from changes in global economies, and using leverage and derivatives to accentuate the impact of marker moves, such funds are not for the faint of heart. They can be enormously profitable, but are volatile, not terribly predictable, and can also produce occasional sudden falls."

- M.Z.M. Nazim
Director/General Manager
Volanka Insurance
Services Pvt. Ltd.

zMessenger to revolutionise marketing via SMS and MMS

The first and only SMS based company specialising in SMS marketing services in Sri Lanka, zMessenger Private Limited is set to revolutionise advertising in Sri Lanka with a vision of redefining and expanding the way a mobile phone/device is used in day-to-day life.

If you're a person who's always on the run or the kind of person who hungers for information and interaction, then zMessenger is the ideal intelligent companion.

With zMessenger, mobile users will have the latest information including shopping, entertainment, sporting, job opportunities, news and political fields and much more at their finger tips.

Using technology such as SMS, MMS, etc., zMessenger gives subscribers information that is accurate, informative and timely. zMessenger specialises in campaign development, broadcast delivery and subscriber acquisition encompassing wireless technologies.

zMessenger services are built, managed and delivered through a combination of marketing expertise and technology leadership and uses software that is locally developed by the company.

While mobile marketing and customer service is poised to fundamentally change the way companies interact with their customers, zMessenger is dedicated to ensure this is done on a permission-based and spam-free basis.

"We have a unique business model. Through the SMS based marketing channel, people can advertise, do promotions or even conduct wireless marketing research like opinion polls. Our business model is unique because we get the subscriber's consent first and there is no spamming," said Head (Marketing), zMessenger Private Limited, Jayomi Lokuliyana.

Even the message content and number of messages per day is decided according to age and position, said Lokuliyana.

The messages are also classified into different categories according to the time of the day. For example, the SMS sent in the morning will be morale boosters, news and such, and those sent in the night related to happenings and events.

Members can join zMessenger via digital (SMS, email, web, automated voice response) or traditional (print, call-centre, mail-in) response channels and is absolutely free. Members can unsubscribe anytime simply by sending an SMS.

zMessenger has also devised a business model that will allow them to pay subscribers (zMembers) Rs. 1.00 (1 zPoint) for every two messages they receive.

Once a member collects 300 zPoints , they are given two options: to get a voucher for Rs. 300 from any preferred outlet or to transfer the money to the HOPE Cancer Project. The company also hopes to tie up with other charities in the future.

"We have also introduced a point scheme where if a person introduces another subscriber through them, they get another five points," said Lokuliyana.

Even when conducting research, if the subscriber participates, he or she will receive a minimum of five points as well. In addition, the customer is not charged for taking part in opinion polls since zMessenger provides a toll free number.

Research shows that 'permission based' wireless (SMS, MMS, etc.) advertising is 50% more successful at building brand awareness than TV and 130% more successful than radio. In Sri Lanka there are over 650,000 mobile phone users amongst which nearly 40%-60% are active SMS (short message service) users, a figure that is bound to grow in the coming years.

"The response has been quite amazing. There are about 400,000 SMS users in Sri Lanka and we want to reach about 100,000 in one year's time. We have a fully-fledged system to conduct opinion polls and customer satisfaction surveys. We hope that like in the Philippines and the UK, SMS will be used for political campaigns in Sri Lanka in the near future too," said CEO, zMessenger Private Limited, Janaka Rupasinghe.

The zMessenger subscriber base ensures that subscribers are sent the most relevant message. "We have a highly profiled database so companies can target their markets and send the message to the people they want - a highly focussed communication medium. We can conduct time-based promotions and it's an interactive medium. If a company wants to conduct an opinion poll, they can get instant feedback," said Lokuliyana.

Companies are charged on a per SMS basis that depends on the size of the target audience.

zMessenger acquires its subscriber using an effective marketing campaign by offering various incentive schemes and mobile related services.

The company's subscriber base is further strengthened by the services offered through the website www.zmessenger.lk.

zMessenger is a member of the Mobile Marketing Association (MMA) and takes the issue of privacy very seriously. The company abides by the MMA and the Direct Marketing Association (DMA) codes of practice for mobile marketing.

zMessenger has built up a number of key strategic partnerships with respected marketing, telecommunications and technology companies. Founded in 2003, zMessenger is backed by Consumer Reach, a company specialising in wireless marketing research.

Advantages of SMS marketing

     Highly targeted

     Very personal

     Time sensitive

     High potency to instigate action

     High speed of delivery (within seconds)

     Has the viral effect (can be forwarded to friends and family)

     Can have up to 160 characters

      Messages can include a unique tracking code

      Messages can include phone number for call back

      Ability to track the delivery of the SMS to the mobile users

SLIC retains leadership position

By Shezna Shums

Despite stiff competition in the insurance industry, the Sri Lanka Insurance Corporation Ltd (SLIC) has managed to retain its leadership in the year 2002 having reported a gross premium income of Rs. 7.9 billion on both life and non life business against Rs. 6.5 billion in year 2001.

According to Chairman, SLIC, Chrisantha Perera these figures are well above the gross written premium achieved by the challengers. The growth in the premium income is approximately 21.5% over the previous year. SLIC is also known to have achieved a premium income of approximately Rs. 5.1 billion on non life, recording a growth of 27.5% over the previous year. However, though all other classes have recorded a higher income during the year, the general accident portfolio recorded Rs. 1629 million be an increase of 46.7% over 2001.

According to Perera, despite the unfavourable terms offered by re-insurers after the incidents at Katunayake and the USA in 2001, SLIC has continued its policy of re-insuring high risks together with reputed overseas re-insurers. As a result the major portion of the higher income had to be ceded abroad. This resulted in a total outflow of Rs. 2038 million compared to Rs. 1290 million in 2001.

The draft annual accounts revealed that SLIC had completed yet another strong financial year thereby recording a net profit of Rs. 1.1 billion. Before making a provision of income tax amounting to Rs. 350 billion. The total underwriting profits on all classes for business was Rs. 99.6 million.

According to Perera, considering the challenges faced by the industry globally as well as locally, this achievement is significant. Gross premium underwritten under life business recorded a growth of 10.4% over the previous year.

Due to the underwritten surplus and investment income during the year, the life fund increased by 17.6% to Rs. 19209 million at the end of the year. The prudent policy followed by SLIC in managing the investments of the life fund enabled them to earn an income of Rs. 2898 million against Rs. 2517 million in 2001.

The growth amounting to 15.1% is a remarkable achievement especially since the market rates of interest continued to fall throughout the year thereby recording a single digit at the end of the year. According to Perera, SLIC is confident that they maintain the record of highest bonuses in 2002 as well. "An endeavour is made to improve on previous bonuses of up to Rs. 150 per Rs. 1000 sum assured and paid in 2001," he said.

The bonuses declared by SLIC to its life policy holders have far exceeded the rates declared by their competitors. The value of total investments including fixed assets of SLIC in the market exceeded Rs. 31 billion, which is unmatchable even if the total investments of all the other insurers in the country were put together.

SLIC conducts its business from their head office in Colombo and 76 branch offices scattered throughout the island. With a branch in the Maldives, the cessation of hostilities and commencement of the peace process, the total death claims paid during the year have declined to Rs. 160.9 million from Rs. 188.4 million in 2001. Branches in the north and east have also shown a substantial progress in business activities.

Omicron test set equipment
launched in SL

The launch of Omicron test set equipment in Sri Lanka took place on March 14, at the Trans Asia Hotel.

Omicron Electronics is an international company providing innovative solutions for primary and secondary testing for electrical utilities, power equipment manufacturers and large industrial users.

Combining innovation and leading edge technology, Omicron has become a world leader within this niche market. With sales in more than 100 countries, offices in Europe, North America and Asia, and a world-wide network of distributors and representatives, Omicron has established itself as a supplier of the highest quality.

The automated testing and documentation capabilities of Omicron testing solutions provide important benefits in light of changing market conditions, which have resulted in restructured organisations required to "do more with less."

Omicron's products offer a testing concept which provides solutions to the challenges created by competitive trends in the marketplace. This integration of lightweight and reliable hardware with flexible and user-friendly software is referred to as the Omicron test universe.

For secondary systems, the CMC test set and the test universe software offer completely automated testing, result gathering and assessment for all types of power system protection and metering.  To provide even greater levels of automation, the test base system provides a link from the relay setting sheet through the complete testing procedure to the archiving and analysis of results tailored specifically to an individual system.

For primary testing, the range includes the unique CPC which combines many of the functions required for substation testing, including current and voltage injection and resistance measurement, into a single compact unit. The integral computer allows automated testing and result recording to greatly accelerate the testing process. Service in the are of consulting, commissioning, relay testing and training make Omicron's product range complete.

Specialisation in power system testing along with visionary leadership allows Omicron to continue with innovative developments for its testing solutions to meet the customer needs of the 21st century.

In Sri Lanka, Omicron test equipment in supported by the technical team of Bela International (Private) Limited, exclusive partners of Omicron. The engineers of Bela International (Private) Limited, have been extensively trained by Omicron on its product range.

Ceylon Electricity Board, Cruickshanks Ceylon (Private) Limited, Lanka Transformers Limited and world wide customers such as Siemens, ABB, Vatech, Alstom etc., use Omicron test equipment in Sri Lanka for primary and secondary testing.

Exterior Interiors sets up subsidiary
in Sri Lanka

Exterior Interiors Pvt Ltd. (Ex-In), India's leading speciality design organisation, which provides solutions in training and consulting in architectural interior design, recently set up its fourth overseas subsidiary in Sri Lanka, as a BOI company.

The launch event which took place at the Taj Samudra in Colombo, was subsequent to the Joint Business Council meeting in Sri Lanka organised by FICCI and FCCISL (Sri Lanka) on regional cooperation under the umbrella of SAARC Chamber of Commerce.

Ex-In's international subsidiary corporations, Dhaka in Bangladesh, Kathmandu in Nepal and San Diego in California have been subsequently added to the Exterior Interiors family.

Ex-In has a student base of 1500 annually from over 4,600 applicants.  This is the largest student base in interior design in the world in any single institution.

The comprehensive programme comprises detailed training of skills in levels pertaining to all aspects of interior design including on-the-job exposure and an exhaustive six-month computer aided design programme with CAD 2000.

The programme is one of the most economical in technical education in the world, with placement guaranteed in large organisations, advertising agencies, hotels, building promoters, architects and interior designer offices.

A graduate student in any subject after completing this course successfully, and, on specific recommendation of the course director, is accepted on direct admission and with campus transfers to a Master's Degree in Interior Design in leading US universities, such as Drexel University in Philadelphia and Pratt Institute in New York. Campus placement is also assured.

Students are also being given campus transfers up to three years in B. Arch degree courses in the USA's Woodbury University, Los Angeles, San Diego Campus, Tulane University, New Orleans and New School of Architecture, San Diego without undergoing any tests. In deserving cases, financial assistance is also being provided.  It is said that no other institution in India, Nepal, Bangladesh and Sri Lanka has such widespread links.

Ex-In is the largest networking architecture, interior design, mechanical engineering and plumbing, V-Sat, heating, air conditioning and ventilation control consultants in India today, with 14 offices in India and abroad, and, with a large corporate and public sector client base.

Among Ex-In's clients are Reuters India Ltd., Sony India, Hindustan Copper, Indian Oil Corporation Ltd., India Today, Telco, ITC, Brooke Bond Lipton Ltd., KLM, Bata India Ltd., Hindustan Petroleum Corporation, Duncan Gleneagles Hospital Ltd., Unit Trust of India, Corporation Bank, Allahabad Bank, Bank of Baroda, Federal Bank and UTI Bank.

Ex-In is a member of the Indian Institute Designers, International Federation of Interior Designers, Asia Pacific Space Designer Association, Interior Design Educators' Council, USA, FICCI and India-ASEAN Sri Lanka Chamber of Commerce and Industries.

One of the largest employers of their students, this international consultancy organisation is the brainchild of Managing Director, Ex-In and Programme Director, Ex-In Diploma Programme in Interior Design in India, Nepal, Bangladesh and Sri Lanka, Ashish Mitra.

Following the Sri Lanka launch, Ex-In will set up subsidiaries in Tanzania and Dubai. Plans are also underway to commence operations in all other SAARC countries by 2005 with training and consultancy offered from Ex-In's own offices.

Singer donates Rs. 2.2 million
for housing construction

Singer Sri Lanka donated Rs. 2.2 million towards constructing 22 houses in the districts of Anuradhapura and Nuwara Eliya under the 10,000 houses programme coming under the Housing and Plantation Infrastructure Ministry and Housing Development Ministry.

The project encompasses 22 families selected from the poorest of the poor, those unable to meet even the basic loan requirements. The two cluster housing schemes will be called 'Singer Shakthi Gama.'

Singer's involvement in the project revolves on the strong social responsibility culture that permeates the entire company, having been a silent sponsor and provider to the less fortunate of the land for many decades.

"Singer is a company that has always been in the forefront of cricket and entertainment but very few know of our work behind the scenes with the community." With shelter being a priority need for mankind, we realised that this housing programme would be the ideal way for us to contribute towards the betterment of society," said Chairman, Singer Sri Lanka, Hemaka Amarasuriya on handing over the cheque to Minister of Housing Development, P. Harrison at a ceremony at Sethsiripaya.

"We chose the number 22 because we have 22 sales territories in Sri Lanka and even though the ministry's housing project is aimed at capacity building through self development, there are some families that are unable to meet even the smallest of loans, finding it difficult to maintain their daily existence. It is these families that we will assist."

He also mentioned that it has been a policy of the company to request each branch to undertake a social project within their community, an initiative that ensures Singer's commitment to society and the nation.

Housing Development Minister, P. Harrison on accepting the cheque praised Singer for setting an example for other private sector and multinational organisations in Sri Lanka.

"Singer is the first such company to help in this national project and I do hope others will follow suit," he said. "Housing and shelter is a huge national problem and cannot be solved by the state alone. It is also a problem that will never end. As the population increases, so will the need for shelter. We need the help of the private sector to combat this problem and I do hope this will pave the way for other companies to come forward to assist in this national need."

Ceylinco Group to develop theme park

Ceylinco Theme Parks (Pvt) Ltd (CTPL) was incorporated recently, specifically to develop an amusement park which will be located on 60 acres of land in Ja-Ela where the public could avail themselves of entertainment, amusement and adventure, all in one location.

The land has been obtained on a 99 year lease, while the total project cost is estimated at around Rs 1.6 billion. Chairman, Ceylinco Group, Deshamanya Lalith Kotelawala together with Deputy Chairman, Ceylinco Securities and Financial Services Group (CSFSL), Bandula Ranaweera, signed the agreement on behalf of Ceylinco Theme Parks Pvt Ltd, along with Director General, Board of Investment (BOI), Arjuna Mahendran. The project is fully sponsored and approved by the BOI.

"We embarked upon this project as we wished to branch out into an entirely new area of real estate. Furthermore, the Ceylinco Group wished to provide the public with a totally new form of entertainment, hitherto unavailable to our people" said Kotelawala.

Cinema halls, roller coasters, rail carts, jungle adventures, orchid and rose gardens will all be features of the theme park, with accommodation facilities for tourists as well.

Water coasters, a pirate ship, river cave with rapids, flying saucers, a maze, water chute, water umbrella, children's striking car, children's water playground, karaoke lounge, pub, shops, green houses, a car park with parking facilities for 250 vehicles and 35 tourist buses, a 100 room three star hotel with swimming pool, a guest house, reception hall, heli pad and many more facilities are included.

"We are hoping to obtain the help of foreign experts to serve as consultants to the project and are currently sourcing them" said Ranaweera.

Mobiles to monitor asthma

Asthma sufferers could soon benefit from a system which allows them to check their condition via mobile phone. The system hooks an electronic lung capacity measuring device - known as a peak flow meter - up to a mobile phone which gathers, records and submits accurate asthma data in real-time to doctors.

Currently asthma patients need to monitor and record their lung capacity on a daily basis, and visit their doctor every three months to have their condition assessed. But the system is inaccurate and it also does not allow for immediate action to improve the condition.

This system, the brainchild of telemedicine firm e-San, will allow doctors to receive immediate alerts of patients whose conditions have deteriorated.

The ability to generate automatic messages to patients will also save time and resources for hard-pressed GPs. Prof. Lionel Tarassenko of the Oxford University said.

Initially, 100 asthma patients in the Slough area of the UK will be given a free mobile device-O2's XDA, which is a combined phone and personal digital assistant for the duration of the trial. There are around 3.5 million asthmatics in the UK, which has one of the worse records for the condition in Europe.

Chief Executive, e-San, Clive Peggram is convinced that mobile monitoring of conditions such as asthma, diabetes and high blood pressure will become the norm. "In two or three years time people will routinely use their mobile phone for the management of chronic conditions," he said.

He thinks that applications such as the asthma monitoring could be sold as part of the uses of future mobile phones. Professor Lionel Tarassenko, co-founder of e-San and Professor of Engineering Science at Oxford University, said the device will benefit both patients and doctors.

"Research has shown that effective self or assisted management of asthma reduces the severity of symptoms and the risk of hospitalisation," he said. "The ability to generate automatic messages to patients will also save time and resources for hard-pressed GPs," he added.

Scan mineral water gets SLS certification

Scan Products Manufacturing Ltd. recently announced that their product Scan Mineral Water has received SLS certification, which only a few other companies in Sri Lanka have received. Scan Mineral Water is bottled in strict purification plants which have obtained ISO certification. These are the same state-of-the-art plants in Horana where Sunquick is bottled.

In Sri Lanka, the use of bottle water has grown rapidly over the past couple of years. As a result, many brands of mineral water have entered the market. It is advisable to always look for the SLS logo on the bottle before purchasing it, as many of these unknown brands are bottled in conditions which do not adhere to stringent purification practices and may be contaminated.

Ericsson wins GSM/GPRS 1800 order
from Mobitel

ERICSSON has been awarded an order from Mobitel, Sri Lanka as sole supplier for migration of their network from TDMA to GSM 1800 based cellular mobile services and introduction of GPRS.

The contract was awarded to Ericsson following a very rigorous tender evaluation process and amidst intense competition.

The GSM/GPRS 1800 network will be rolled out in three phases, with initial installations scheduled to begin in the second quarter of 2003.

When completed, Mobitel will be able to provide island wide coverage and to offer prepaid services, MMS and roaming from day one to its subscribers.

"Mobitel's goal is to give our valued customers a cost effective seamless island wide coverage. The people of Sri Lanka for the first time, will experience a GSM mobile network, whose core values are underpinned by unrivalled customer care coupled with crystal clear clarity, as well as all the other extra value added services that Mobitel provides its customers," said Chief Executive Officer, Mobitel, Lalith De Silva.

"We will also benefit from the positive working relationship with Ericsson which has spanned the last six years." To facilitate the network launch, Ericsson is also supplying a range of services, including business consulting and initial network design and installation.

Ericsson also is providing consulting services to support Mobitel in developing, deploying and marketing the most appropriate and attractive voice and data services for the Sri Lanka market.

"Mobitel's continuing confidence in Ericsson's leading technology and our unparalleled position in deploying GSM and GPRS networks is very gratifying. We are honored to have been chosen by Mobitel for this very prestigious contract," said Managing Director, Ericsson Sri Lanka, Bimal Dayal.

No hassle with Kangaroo cabs

No hassle, no fuss, and just a call away is the best way to describe the Kangaroo cab that seems to have become popular among a wide clientele in the country. For many of us calling a cab and getting to our destination on time is of utmost priority.

However, when it comes to choosing a cab most people prefer to use a cheaper cab company. But in such cases what we don't realise is that we should first study the service and quality of the vehicles before we decide to use them

Managing Director, Kangaroo Cab (Pvt) Ltd., Sunil Fonseka agrees that many cab and taxi services are presently operating in the market. "However, though most of these cab services offer a very cheap rate they can be unreliable at times," he said.

According to Fonseka, many clients have faced problems with other companies as vehicles haven't been available on time. "However, one call is all it takes for Kangaroo to respond immediately."

Prior to 1977 it was the Morris Minor cars that were in operation. While the charge was cents 50 for one mile, due to the introduction of the open economic policy in 1977 the local currency rapidly declined on the face of the US$. "This drastic change made almost all imports exorbitant and that also included the Morris Minor car," Fonseka said.

As the Morris Minor could not withstand the new economic order, the once prominent taxi service gradually faded away. Then came the introduction of three wheelers that were imported and distributed by a reputed company.

"This company was successful in capturing the market due to their cost effectiveness. However, the new trend of three wheelers could only cater to a certain rank of people," Fonseka said.

According to Fonseka, during this time there was an urgent need for a sophisticated vehicle that could provide better security, comfort with dignity and a reliable chauffeur. Kangaroo did not hesitate to respond to this timely need and infuse a fleet of chauffeur driven AC cabs geared with electronic fare meters and radio communication equipment.

"However, as pioneers in this field we regretfully witness a taxi culture that is being molested owing to lack of professionalism," Fonseka said.

When Kangaroo first started their cab service in 1988 its primary intention was to cater to the public at large. "At this time almost all corporate bodies and financial institutions had their own 'pools' under a transport unit with around 25 to 100 vehicles. The pool vehicles were plying with numerous common hazards and was a liability, which was seriously indicated in its balance sheets," Fonseka said.

Considering the ongoing cost factors of an institution, on the basis of maintaining 25 cars in its pool, a sum of Rs. 10,961,100 per year could be saved if they used the service of Kangaroo cabs.

A leading development banking institution that had its own vehicle pool today uses the Kangaroo cab service. Kangaroo cabs have also signed a contract with the Central Bank of Sri Lanka and the Finance Ministry. The company is associated with every leading financial institution in Colombo and a selected clientele that have been with the company since their inception.

Using Kangaroo cabs means no need to supervise, control and discipline drivers, no risk of pilfering petrol and your institution does not get involved with any accident claims.

There is no need to maintain vehicle maintenance charts, no need to supervise any repairs to see if genuine parts are fitted or bogus bills submitted, no idling drivers gossiping and creating unnecessary problems.

Alternate arrangements don't need to be made when a driver is absent, no record keeping of payments of overtime, EPF and ETF, no worries of drivers misusing vehicle and no necessity to have a driver's rest room.

Kangaroo cabs have 75 cars and offer a 24-hour service. "Depending on the demand we hope to add more cars to our fleet," Fonseka said.