BUSINESS

Business excellence awards launched

The National Chamber of Commerce of Sri Lanka (NCCSL) launched the 'National Business Excellence Awards 2004' last week. This award is designed to recognise business organisations making significant contributions to the socio economic development of the country.

According to NCCSL President, Thilak Padmarajadasa, the objective of the award is to recognise and reward business professionals and enterprises that contributed to the economic growth and employment of the country, created sustainable growth and which had institutionalised best practices and business excellence.

The contesting enterprises will be grouped in to extra large, large, medium and small categories based on the turnover or number of employees. The sectors covered for this award would be agricultural and livestock, manufacturing, utilities and infrastructure, banking and insurance, leisure and entertainment, financial services and technology related services.

The winners of this award would receive several benefits from the NCCSL such as a dedicated website and database of industry performance benchmarks, the opportunity to feature the company's success story in the Chamber's brochure of the following year and the opportunity to participate in foreign training programmes, etc.

The evaluation procedure for the awards would take place in three stages. Stage one will comprise a desk review that would be reviewed by technical panel, at the second stage the expert panel will visit short listed organisations and the judges would make their final decision at the third stage.

Secretary, NCCSL, Lal De Silva said that after winning such an business excellence award, his company had performed immensely well by increasing exports overseas. He was of the opinion that such awards would help the potential growth of any business enterprise.

The awards ceremony will be held at the Colombo Hilton on November 12, followed by the launch of the NCCSL official website.

- Shehan Moses

Soft loan of US$ 600 mn for Norochchalai power plant

By Shehan Moses

The government is to construct the proposed Norochchalai coal power plant at the cost of US$ 600 million, which would be funded by a soft loan from the government of Japan. Power and Energy Minister, Susil Premajayanth told The Sunday Leader that the construction of the power plant may begin within the next few weeks.

"We have already completed the feasibility study of this project and if everything is finalised we would start construction in the weeks to come," he said. However, he declined to give a particular date for the commencement of the project.

He added that while there was opposition for this project from various environmentalists and the Bishop of Chilaw in the past, they have not shown any opposition in recent times.

A senior official of the Ceylon Electricity Board (CEB) told The Sunday Leader the project cannot go ahead until the cabinet grants approval.

"The Power and Energy Minister should convince the cabinet of ministers to approve this project, since the previous governments had not shown much interest to pursue this project," the official said.

The official explained that CEB would call for tenders from both local and international construction firms for this power plant project soon after the cabinet approves the proposal, adding that it would take approximately four years to complete the first phase of the project.

"The first phase has the capacity to generate 300 mega watts (MW) of power. However, according to the feasibility study, the government has the option to extend the power plant to two more phases, thereby increasing generation to 900 MW of power," the official said.

The official further said the government could either select Hambantota or Trincomalee for expansion purposes or expand the power plant at the present site in Norochchalai if there is no opposition from the locals, stressing that CEB has received legal clearance regarding the environmental issues in 1999.

"We have the legal right and protection even if any environmentalists argue about this power plant," the official emphasised.

The CEB official said the only solution for any future power cuts is the construction of a coal power plant since Sri Lanka cannot rely much on hydro power generation due to the unstable weather conditions prevailing in the country.

Meanwhile, Convener of CEB Unions, Ananda Nimalaratne stressed his dissatisfaction regarding the delay of the construction of this power plant.

"We suspect that the private power suppliers are lobbying the present and previous governments and various environmental groups in order to prevent the construction of the coal power plant," he said.

"If we build a coal power plant we could save millions of rupees that we presently pay for private thermal power suppliers," he added.

CBK: Follow Sonia's example

By Dinesh Weerakkody

For Chandrika Kumaratunga to remain in power post 2005, debating constitutional reform is one thing but creating mayhem in parliament and threatening opponents is another. The government setting a smoke screen to cover their embarrassment of their behaviour in parliament will help them very little to win the confidence of the local or international community. The UPFA is determined to remain in power and also demonstrate that this constitution cannot work, firstly by destabilising the opposition and secondly by creating anarchy in parliament.

The fact that the UNF is always slow to seize an opportunity and the majority of them are still suffering from post election disillusionment, the UPFA may get over the current unfavorable political situation and the provincial council elections could also be a walk over for the alliance.

This is the first time that a government since post independence has resorted to terror tactics in parliament in an attempt to cover up their minority status.

What they should do instead is find ways and means of cooperating with opposition parties without behaving in the most disgusting manner. On the other hand, it is high time the UNF realises it is going to lose the advantage it has in parliament if parliament is going to meet only once a month and push for an early resumption of parliament.

If not they should either cohabit with Kumaratunga or form a government of national reconciliation with the support of the other parties. If not as some one remarked, the UNF will remain a party in opposition for a long time unable to fulfill the aspirations of its supporters.

Kumaratunga

Kumaratunga continuing in this form will be detrimental both to the government and the country. The JVP today is exploiting this situation at the expense of the country and our future. The people of this country have not entirely forgotten, nor have they forgiven the JVP for its atrocities and the ruination they brought about in 1989 and in the 1970s.

The fact that the JVP-PA together got only around 80,000 additional votes over 2001 and in total got less than 45% of the votes cast is in no way a mandate to tamper with the constitution. The south is not Sri Lanka. We all know Kumaratunga's game plan is to extend her two terms to three or return to parliament as prime minister. Today this game plan is increasingly an elusive one.

Her options now are either seeking a fresh mandate at some point or cutting a deal with Ranil Wickremesinghe. Even a US president gets two terms. The President should know that there is something called voter fatigue and need for fresh thinking. So like Sonia Gandhi who listened to her inner voice, Kumaratunga too should listen to her's and do what is best for her and for the country without overestimating her mandate and come a cropper.

Now this will only happen when Wickremesinghe's UNF starts playing the role of a strong opposition. Now with the joint opposition commanding a parliamentary majority the UNF should capitalise to prevent any Hitlerite tactics on her part.

However, as long as UNF's leadership aspirants harbour parochial political agendas at the cost of the party's unity by trying shortcuts to reach the top, the UNF will remain in shambles and Kumaratunga will not give up her goal to create a new revolutionary constitution using the doctrine of necessity, even though she has failed so far in her quest to remain in power post 2005. Like the BJP, the UNF too needs to initiate a programme to correct its mistakes and urge its party activists to oil the party machinery.

JVP

As for the JVP, the alliance so far has helped them gain social acceptance and reach a larger section of the public, which hitherto shunned the JVP. The JVP having functioned in isolation for some years is now seeing an opportunity to be in the driving seat, because the official SLFP to many today continues to wither and die.

So it seems now the JVP strategy is to push Kumaratunga to fulfill the pledges she gave to the people and to increase their representatives at provincial level. Unfortunately, Kumaratunga may continue to play ball with them to help her in constitution making. If she gives into JVP demands she is sure to lose the support of the international community and the business community.

On the other hand, some of the PA MPs are unhappy that some JVPers are being given preference over long-standing SLFPers. So while the PA and JVP are focused on this game, the economy will slide down while the peace process is put at risk. In fact, the private sector is expecting the economy to grow less than five percent this year. How on earth can the private sector grow and create jobs in this environment? In fact, some business leaders are suggesting the formation of a national council to tackle critical national issues.

Given the PA-JVP pre-occupation there seems to be very little concern about managing the impact of escalating international crude oil prices, leave alone the future power crisis we are set to face. Sri Lanka could soon be faced with depressed economic conditions and low investor confidence.

Therefore, the UNF must try and work together with the UPFA to address the current political crisis and reactivate the peace process. The UNF and Kumaratunga should not reject the call of the people for a national government and heed the repeated requests by the OPA and the chambers. Today the people and the politicians are all equally responsible for the current political and economic crisis.

Private sector

On the other hand, the private sector by simply urging our political leaders to be a role model for the country and work together for peace and development is not good enough. They need to follow the South African model and force the government to perform. However, if the politicians are to take the business community more seriously they will have to come out with something more innovative than holding meetings and issuing statements.

The shareholder money they spend should be targeted more effectively to exert pressure on the government and the opposition to react to their demands. Like in the US we need business leaders who can stand firm and use their money effectively to rally the country in times of crisis, even to the extent of putting the country before profits.

Given the vehement and crude criticism levelled against Oslo by the JVP and the problems that bedevil the peace process, even a man like Jayantha Dhanapala will find it hard to break the deadlock with regard to the peace process and get the parties back to the negotiating table. He could very well run the risk of losing the confidence of the LTTE if the process drags on indefinitely.

Without peace Kumaratunga will not have access to the US$ 4.5 billion. The tension between the government and the opposition, the weakening economic position will all bode ill for peace. However they are all clear indications to all political parties that they need to get their act together and work together. To let matters drift would also delay the much-needed development of roads and implementation of power projects.

In fact, the current uncertainty is ruining economic and business confidence and will affect economic and business performance and put the budget out of control. Today there appears to be consensus among some of the political parties on the need to solve the ethnic problem through peaceful means.

The LTTE also appears to be keen on a solution because of the West's new fight against terrorism. In this context, the major political parties should try and reach some sort of consensus. But this consensus politics can be achieved only when Kumaratunga and her JVP and Wickremesinghe put the country's interest before party or self-interest.

Bury the hatchet

As one respected analyst recently remarked at a forum we have only a bunch of crazy self centered politicians who are only hell bent on staying in power, at whatever cost to the nation. Many forget that they are elected to serve the people and not be served by them.

In fact, neither party got a clear majority in the 2004 general election and that is a clear indication that the people of this country did not want to entrust their future totally to either Kumaratunga's UPFA or Wickremesinghe's UNF, because they wanted both leaders to work together to secure a future and bring about meaningful changes that would eventually bring peace and prosperity to Sri Lanka.

Furthermore the verdict at the last poll was loud and clear indicating the necessity for polarization of all forces in the country to rebuild Sri Lanka. In the final analysis, it is time that both parties bury the hatchet and channel all their energies to the process of nation building based on sound economic priorities on a bipartisan basis.

Masters Ddb to launch Brand Capital 

To better understand global brands and their consumers, DDB Worldwide conducted a major worldwide study among 21,000 adults in 23 countries (2002). The study explored the connection between brands and consumers in North America, Latin America, Western Europe, Central and Eastern Europe, the Middle East, Asia and the Pacific Rim. This study will be conducted again in 2004.

Brand Capital shows how broadly a brand connects with consumers and how strong that connection is for over 1,600 brands. The study shows how brands increase both their breadth and depth of connection. In addition, Brand Capital compares consumer perceptions of brands on the critical measures of quality, leadership, energy, and uniqueness.

Brand Capital makes it possible to profile lovers of a brand - those who would definitely buy the brand and consider it one of their favorites - within each country and around the world. The profile describes the attitudes, interests, activities, wishes, and desired image of brand lovers. Clients learn the global themes that link consumers to their brands as well as important differences between countries that offer opportunity.

Because it combines both consumer perceptions of brands with information about the desires and interests of brand friends, fans and lovers, Brand Capital can be analysed to suggest ways in which a brand can increase its relevance to consumers, both globally and in specific countries. It not only describes a brand's position relative to competitors, but also provides direction for strengthening the connection with consumers in the future.

Masters DDB is affiliated to DDB Needham of USA. DDB is USA's largest and the world's third largest advertising network. DDB Worldwide has been named 'Global Agency Network of the Year' by Advertising Age and 'Global Agency of the Year' by Adweek for 2003.

Group Account Director / Director Account Planning, Masters DDB, Anirban Ganguly said, "I am convinced that Brand Capital will revolutionise the way brand communication strategy is looked at. It has been a success for global brands across various regions and also helped the local biggies as well. I am really excited and so is everybody at Masters DDB, we hope that our clients will benefit hugely from this tool."

Turn around trend at Pan Asia Bank as profits grow 

Pan Asia Bank recorded a 42.65% growth in total assets as at March 31, 2003. The bank reported a very satisfactory growth in operating profits during 2003 and commenced its activities for the year 2004 with an asset book having complied with all statutory requirements and continued with their turnaround trend.

The bank's operating profits after tax in the first three months read as Rs. 10.82 mn for the year 2004, a complete reversal of the status in the first three months of 2003 when the bank incurred a loss of Rs. 21.42 mn.

With 16 branches now in operation, the asset book of the also has grown by 2,249.38 mn, a 42.65% growth from Rs. 5,274.354 mn in March 2003 to Rs. 7,523.742 mn in March 2004, whilst customer deposits have increased by almost 29.37% from Rs. 3,853 mn to 4985.656 mn during the same period.

Managing Director/CEO, Pan Asia Bank, R. Nadarajah said, "We attribute our growth to the positive perception of the bank in the minds of the public and the loyalty of our existing customers. Further, our staff have extended their fullest cooperation and worked really hard to build long standing relationships by understanding and serving their customers with their specific requirement, this practice has taken us a long way."

The bank's net interest income was Rs. 76.96 mn in the first quarter of 2004 compared to Rs. 59.18 mn in March 2003 recording a healthy growth of Rs. 17.783 mn, while non-interest income represented a growth of Rs. 18.523 mn.

Pan Asia Bank was re-capitalised and has cleaned its balance sheet during the year 2003 which helped the bank to maintain capital adequacy and other statutory rations well above the required levels.

The intensive recovery drive for the recovery of delinquent advances have also paid dividends during the year 2003, thus reducing the non performing advance ratio.

New SAPNA publication

The South Asian Perspectives Network Association (SAPNA) will launch its new publication Pro-Poor Growth And Governance In South Asia Decentralisation And Participatory Development shortly.

This 400 page publication authored by Dr. P. Wignaraja and Susil Sirivardana incorporates three years of action research, six country case studies by SAPNA partners and learning from the poor in South Asia. It responds to the major challenge to South Asian governments, the academic community and civil society activists and the donor community to the need for innovative development thinking and action, following the sharpening contradictions and conflict in South Asian societies and the realities reflected in the two recent elections in India and Sri Lanka, not to mention the unmanageable politics in countries like Pakistan, Nepal and Bangladesh. The World Bank itself has recently constructively engaged in re-thinking development in the direction of an innovative policy mix and institutional mechanisms in the light of its experience. This book takes the discourse forward, by identifying six fundamentals which can inform a transitional strategy and practical macro micro policy options which are based not on a priori theorising but on lessons from the ground.

A high level policy maker in the government and SAPNA Partners, Prof. Rehman Sobhan (Bangladesh), Dr. Akmal Hussain (Pakistan), Peter Harold (World Bank) and Mohan Tikku (India) are being invited to comment on the book at the launch. The event, co-sponsored by the Colombo office of the World Bank, will be held in Committee Room A of the BMICH from 5 p.m. to 7 p.m. on June 20.

Importance of ISMS certification emphasised

By Marianne David

A good information security policy protects information from a wide range of threats and ensures business continuity, minimises business damage and maximises return on investment and business opportunities.

A comprehensive information security policy is vital in organisations in order to ensure the confidentiality, integrity and availability of corporate information and customer information. The standard for Information Security Management Systems (ISMS) ISO17799/BS7799 is now one of the world's most popular information security standards.

From 2008 onwards, the European Union will make it a mandatory requirement that companies comply with the ISO17799/BS7799 standard if they want to do business with the European Union, said Managing Director, Corporate Consultants Consortium, S.R. Vickneswaran.

"In order for local companies to do business with the rest of the world using e-commerce as a vehicle, they must comply with this standard. It is only when we have this standard that we can interact with the rest of the world. Come 2008, companies that are not in compliance with this standard will be left out," asserted Vickneswaran.

According to him, the world is moving in the e-commerce direction and irrespective of what industry one is in, e-commerce will be the vehicle for globalisation. No company in Sri Lanka that is working in the global field can ignore e-commerce," he added.

ISO17799/BS7799 is an information security standard that is published in two parts: the ISO/IEC 17799 Code of Practice for Information Security Management and the BS 7799-2:2002 Specification for Information Security Management.

"A lot of business is done using e-commerce. Some companies do all their business over the internet. When selling retail, you need store space, personnel, etc. This is not the case when selling over the internet. The reason why these standards are needed is that people must have a level of confidence. That is why it is so essential," said Chairman / Managing Director, Mechanised Business Applications and Director, Corporate Consultants Consortium, Darrel C. Perera.

"In Sri Lanka we are looking outwards when doing business. In order for local companies to do business with the rest of the world using e-commerce as a vehicle, they must comply with these standards by 2008," he added.

In Sri Lanka, AIT Lanka Limited is the only company that provides consulting services with regard to the ISO17799/BS7799 standard. The company is the local arm of Advanced Information Technology Ltd., a UK-based organisation that offers state-of-the-art consulting services in information security.

AIT specialises in BS7799 implementations and provides British Standards Institute (BSI) consultants to the Sri Lanka Standards Institute (SLSI). The company was formed by Alan J. Perumal.

Perumal, the managing director of AIT, is presently in Sri Lanka to provide consultation for companies on the implementation of the ISO17799/BS7799 standards.

"Perumal will do an audit with the employees of organisations in order to find out what controls should be implemented in each organisation for it to receive certification. He will be in the country from time to time and we will continue the process," said Vickneswaran.

The ISO17799/BS7799 standard consists of 10 controls: security policy, security organisation, asset classification and control, personnel security, physical and environmental security, communications and operations management, access control, systems development and maintenance, business continuity management and compliance. However, not all the controls will be relevant to every situation.

Obtaining the ISO17799/BS7799 standard certification will take around six to eight months, depending on the size of the organisation and its requirements, said Perera. Vickneswaran and Perera are directors and facilitators of AIT Lanka Limited.

Growing disparity between urban and rural sectors 

Dr. Uditha Liyanage illustrated the growing disparity between urban and rural sectors of the country at a presentation last week.

CIM Sri Lanka Branch facilitated the Sri Lanka Institute of Director's power breakfast meeting, which featured Dr. Uditha Liyanage, member of the International Board of Trustees, CIM International UK and past chairman, CIM Sri Lanka branch. Dr. Liyanage, a renowned professional and academic, is also senior faculty of the Postgraduate Institute of Management (PIM).

However, he pointed out the private consumption has doubled in the period 1997 to 2003 and imports of selected item like motor cars/cycles, food and beverages, and medical/pharmaceutical products have increased significantly, over the past decade.

Moreover, an increase in savings and fixed deposits is evident along with advertising expenditure which has increased seven times over the past eight years. The relative household expenditure on food and beverage (i.e. food ratio) has come down from 65% to 43% in the period 1980 to 2002. Dr. Liyanage described these changes as positive. But, he queried whether this means economic growth across the country.

Not so, says Dr. Liyanage. The average household monthly income of a rural household is half of that of an urban household. Poverty is essentially a rural phenomenon. Having discussed the urban-rural disparity, Dr. Liyanage addressed the income and social disparities between the urban and Western Province. Increasing executive salaries, rising income of key traders are indicative of a New Urban Middle Class (NUMC) whose consumerist life style and ideology have spread the confines of the western province.

Dr. Liyanage argued that the country's formal private sector is essentially in the NUMC (i.e. they belong to the NUMC) and is of the NUMC (i.e. they hare the mind set of the NUMC) and is for the NUMC (they, by and large cater to the UNMC).

The growth and development that one witnesses is largely limited to the Western Province and if the private sector is to be faithful to its title of being the nation's engine of growth, then it will have to think beyond its comfort zone and look at the country as a whole.

His call is for a sense of corporate social responsibility, the urgency of which is obvious when one examines the educated rural youth who are alienated from the economic mainstream, the private sector. Dr. Liyanage stressed the need for the private sector to think of the society, at large for its own survival, let alone growth.

'Investor Awareness 2004'

Ceylinco Shriram Securities Ltd. announced plans to celebrate its fourth anniversary with the launch of a new social project named 'Investor Awareness 2004' whereby the company will team up with the Central Bank to educate the general public about the benefits of Treasury bill and Treasury bond investments.

Executive Director / CEO, Ceylinco Shriram Securities, Hiran de Silva said, "Over the past four years, thousands of people and institutions have enjoyed Sri Lanka's safest investment opportunities offered by the Central Bank through our company. We are naturally, delighted to be their trusted investment partner."

"We thought the best way to celebrate four years of our success was to let more Sri Lankans experience the rewards of government securities such as Treasury bills and Treasury bonds, by teaming up with the Central Bank to conduct a series of seminars and workshops around the country. Awareness programmes will take place simultaneously through group discussions, pocket meetings at office level and road shows, while radio and TV programmes are also in the pipeline. We want to educate the public on the safest way to invest their money with zero default risk at a comparatively higher interest rate," he added.

Also associated at the media conference were Chairman, Ceylinco Shriram Securities, Deshamanya Dr. Lalith Kotelawala, Superintendent (Public Debt Department), Central Bank, Dharma Dheerasinghe, Deputy Chairperson, Ceylinco Shriram Securities, Padmini Karunanayake and General Manager, A.H.M. Riyaz.

Dheerasinghe said that it will be the small investors who will benefit by investing in government securities as they will be investing their money on safe and liquid instruments which will give a high rate of return as well. Therefore, investor awareness is of high priority in this market.

He added that the concept of government securities has only penetrated a small segment of the market in and around Colombo. "People think investments in government securities are not for small time savers. Contrary to this one can invest even Rs. 1,000 in government securities. This is an important message that can be conveyed to the public," he added.

Janashakthi grows by 50%

The first quarter results of Janashakthi Insurance clearly reveal huge growth in premium income earnings in comparison to the same quarter in 2003.

The general insurance premium income of Janashakthi in the first quarter 2004 is Rs. 625 million, reflecting an impressive growth of over 50%, whilst the overall premium income has grown by 40% to reach Rs. 766 million.

These results have reinforced the market position of Janashakthi Insurance as the third largest general insurer in Sri Lanka. "Janashakthi is still only in its 10th year of operation and the fact that we are ahead of longer standing private insurance companies, in the general insurance sector is outstanding," said Director/General Manager, Janashakthi Insurance, Prakash Schaffer.

"Our growth in this sector this quarter has been incredible and is a clear indication of the exceptional performance shown by our flagship product, Janaratha Full Option. Janaratha Full Option will continue to create value addition and the motorists of this country stand to benefit immensely from its continuous innovative product development activities," he added.

Intel begins operations in Sri Lanka 

Intel Corporation, the world's largest chipmaker, has started its operations in Sri Lanka in order to increase sales by capturing the local market and standardise wireless technologies Wifi and WiMax. The local office will help identify corporate business and rural infrastructure projects that will use wireless technologies.

"Our vision is to be the leading building block provider to Internet technology," said Director (Sales, South Asia), Intel, G.B Kumar, adding that Sri Lanka is playing its role in the global society of communications and Intel would play a leading role in educating the people of Sri Lanka to go along these technological developments.

He further stated that Sri Lanka is in the front of emerging markets where Intel is stepping up its presence, while China, South Asia and Brazil are the other emerging markets in wireless technology that Intel has identified.

According to Kumar, Intel is looking to support government projects using wireless technology since the chip maker has hopes of wireless technology playing a leading role in the state sector.

Intel has had discussions with leading government officials regarding this matter. However Kumar declined comment further since nothing has been finalised.

It is his belief that every house should have a computer enabled with internet technology, thereby creating the concept of a digital home. Kumar said he is expecting sales to grow about 25% per annum in Sri Lanka.

Intel is staging a national 100 city business advantage seminar series to educate enterprises across the country on the bottom line business benefits of the latest IT solutions and the planning and management of effective technology upgrades of PCs, notebooks and servers.

The seminar series, which will take place throughout 2004, aims to assist Indian and Sri Lankan enterprises in developing and sustaining greater competitiveness in today's fast changing marketplace.

- Shehan Moses

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