Business

HSBC’s Group General Manager and Global Co-Head of Commercial Banking Margaret 
Leung cuts the ribbon at the entrance to the HSBC BusinessVantage Solutions Centre, Colombo.
Also in the picture is HSBC Sri Lanka and Maldives Chief Executive Officer David J H Griffiths. 
The Bank said that they have been in assisting the SME sector since the 1990s 
and is the only international bank to do so.

SLPA indulges in rhetoric, India surges on

Whilst in Sri Lanka the rhetoric on the construction of Colombo South Harbour continues unabated, thus creating a sense of illusion. Meanwhile the Indian government has approved a tender submitted by a consortium of two Chinese companies and an Indian partner to develop an international container terminal at Vizhinjam Port at a cost of $ 1 billion.

Port and shipping sources said that Vizhinjam which is only 10 nautical miles from international shipping routes has a natural draught of 24 metres and when commissioned will have a capacity of 4.1 million TEUc a year.

Colombo Port as reflected in the Central Bank’s 2005 Annual Report has witnessed a slowdown in the growth of container throughput in 2005 as against 2004. It is already congested on numerous days, which seriously erodes its productivity levels, particularly at Jaya Container Terminal (JCT).

Shipping lines require container terminals to maximize the productivity of every container lift cycle. That’s why the trend is towards twin, tandem or quad lifts from ship to shore and on the yard. Having only one deep draft entrance channel in the Colombo Port has exacerbated the problem of waiting time of container vessels.

"Would we slip back to the late 1990s when some feeder operators choose to impose a congestion surcharge, severely undermining our position as a hub port?" port watchers asked. JCT continues to lose its market share of high revenue yielding domestic containers to SAGT.

During 2005, its market share of domestic containers had declined to 56% from around 65%. More importantly last month (April 2006) SAGT had handled 116,268 TEUS witnessing a growth of 46%. SAGT managed by an international terminal operator has proved that with enhanced efficiency it can handle far more than its designed capacity of 80,000 TEUS per month.

SLPA embarked on the development of the Colombo South Harbour (CSH) engineering designs in 2002 and its foreign consultants in the initial business plan of October 2003 had said that "the long term market forecasts after taking into account competition indicates positive potential for CSH which can be exploited provided that additional port capacity is brought in by 2009 and to facilitate this, enabling legislation and port reform is required.

"Going by current trends, additional capacity is required by 2008. To induct additional capacity by 2008 we should have started building CSH by end 2004. With mega ships coming on Siam, and shipping lines, choosing to induct direct callers into India, the possibility of Colomb Port emerging as the mega hub of South Asia may fizzle out to be a pipe dream.

The Central Bank has proposed that SLPA rather than concentrate on current issues should focus on development and implementation of plans taking technological advancements in to consideration. "What we need from the port management is action and action with less or no talk."

Repeats of Thursday’s closures will drive away business

Some 10,500 employees working in the World Trade Centre (WTC) and the Bank of Ceylon (BoC) Headquarters building, Fort were among those who were taken unawares when the government without warning closed Bank Avenue for vehicular traffic due to a bomb threat.

"This is bad for business and if such closures persist, it will drive away tenants," sources close to WTC said. The WTC has some 120 offices with around 8,000 employees.

"The closure caused panic among some of the staff and business was affected, they said. Around 30-40 of these offices are run by foreign investors.

"A few of the offices operating in the WTC closed shop and sent their staff home," the sources said. If such unannounced closures persist, it will drive away investors, they added.

Government offices such as the BoI and PERC, as well as the CSE, SEC and a few banks operate from the WTC.

"So far none of the tenants have indicated that they would pull-out, but if these panicky closures persist, they will leave the WTC," the souces said. The WTC currently enjoys a 90% occupancy rate.

Five hundred and fifty of the 650 vehicles (that use the WTC car park and those that belong to the BoC ) that were not allowed parking facilities within those premises as a result of this closure, are those that use the WTC car-park.

Bank Avenue, the road running parallel to the WTC and BoC and which takes vehicles to those premises were subsequently opened around 5pm on Thursday. Some of WTC’s tenants are those that come to office in chauffeur driven vehicles. "I sent my car away," one high profile executive, who had to trek it from the Colombo Hilton end (upto which point vehicles were allowed from that side) said.

Meanwhile BoC sources said that their customers who were unable to use BoC’s car-park due to this security operation, also trekked into the Bank from the Hotel Ceylon Inter-Continental end (upto which point vehicles were allowed from that end), after leaving their vehicles with their drivers.

Some 2,500 employees are housed in the BoC building. Over 100 Bank vehicles had to find parking elsewhere on account of this closure.

Ceylinco General makes Rs 2.3 bn.

Ceylinco Insurance’s General Division has reinforced its leadership with strong first quarter results for the year with a turnover of Rs. 2.3 billion (Rs 2,336 million) in premium income, resulting in a 32% growth.

The company said that this has been achieved through a 34% growth from Non-motor and a 30 % growth in Motor insurance categories with a premium income of Rs. 935 million and Rs. 1,401 million respectively.

The leading insurer also recorded a mammoth 72 % growth for the quarter in profitability with Rs. 125 million in profits. A noteworthy feature of this figure is the remarkable profit achieved in non-motor insurance-making a contribution of Rs. 110 million. The motor insurance segment profits also grew during the same quarter to Rs. 15 million.

"We are proud of our growth in the non-motor insurance category which has been brought about by our continued innovation. While our motor insurance category has also grown, we continue to invest our profits in providing unparalleled benefits to our customers," said Chief Executive Director – General Insurance Ajith Gunewardena,

Ceylinco’s VIP ‘On the Spot’ insurance enjoys the market leadership since the introduction of the claim settlement in 2003. It is the only insurance policy that offers motorists a ‘Benz’ for a ‘Benz’ as replacement when customer repairs exceed four days. Ceylinco’s innovation in the area of motor insurance has paved the way for a new paradigm in motor insurance not just for its customers, but the country at large, as the competition has had no option but to transform its services.

Speaking about the performance of the non-motor insurance category, Gunawardena said that meaningful innovation linked to consumer needs has resulted in such a growth. The company recently launched a ‘Marine on the Spot’ insurance scheme for importers, as well as ‘One and Only’, a "unique" personal insurance scheme.

The hassle-free ‘On the Spot’ settlement innovation of the company over the years has been extended to health insurance and now marine insurance. Its continuing innovation in the field of insurance also earned the Gold award for the Most Innovative Brand at the recent Sri Lanka Institute of Marketing Brand Excellence Awards.

The ‘One and Only’ insurance scheme has been launched with a concept of making insurance affordable and convenient to obtain. Initially customers of the Laugfs and Arpico chain of supermarkets are entitled to this scheme at a minimum investment of Rs. 20 made along with their purchases. "According to the purchases, the cover is extended up to Rs one million to cover partial or permanent disablement and even natural disasters to their homes

. Over 250 outlets in the outstations were added to the "One and Only" network, offering the benefit of this unique scheme to their customers.

The General Division has been focusing on improvements to its distribution network with the expansion of its branch network across the country including the North and East and improvements to its call centre and IT network.

Ceylinco Insurance is the leading insurer with a comprehensive range of products in the areas of motor and non-motor insurance. The company delivers its promises through an extensive branch network and trained employees.

Wijesekera sells 5% in Kahawatte for Rs 34 mn.

The momentum that the Plantation Sector received since Thursday due to booming rubber prices spilled over to Friday’s trading as well, with the market recording a satisfactory Rs 273.7 million turnover.

Market sources said that if there are no negative developments over the weekend with regard to the LTTE question, the Plantation Sector will continue to give the bourse a thrust when the market opens for trading tomorrow.

Except for Dialog which contributed to the day’s single highest turnover with Rs 69.7 million, the rest of the heavy weights were from the plantation sector with Kahawatte coming second with Rs 53.8 million, followed by Malwatte Plantations (Rs 17.7 million), Agalawatte Plantations, a rubber plantations (Rs 15.9 million), Balangoda Plantations-rubber and tea (Rs 12.4 million), Kotagala Plantations (Rs 12.2 million), Kegalle Plnatations (Rs 10.8 million), Kelani Valley Plantations (Rs 10.3 million) and the list goes on.

Among the notable trades that took place on Friday was high networth individual Ajith Wijesekara selling a 5% stake in Kahawatte Plantations (a mix of rubber and tea) for Rs 33.75 million, with the buyer believed to have had been Ceybank Unit Trust, an institutional investor.

This transaction was conducted at a premium price of Rs 11.25 a share. Kahawatte, on a total share volume of 4.9 million traded, closed at Rs 8.75, 75 cents more than its previous closing price..

However, the impetus given to the bourse from the Plantation Sector on Friday could not prevent the market from falling due to the instability in the peace front, as a result of which the benchmark ASPI fell by 9.45 points over Thursday’s closing figures to finish the week at 2,211.59 points, while the more sensitive MPI fell by 17.54 points to close the week at 2,805.72 points.

Foreign purchases (Rs 83.2 million) were mainly on Dialog (Rs 68.7 million), executed at prices ranging from between Rs 21.25-21.50. Dialog closed at Rs 21.25 (25 cents down from the previous) on a total share volume of 3.2 million.

Meanwhile, of the top plantation stock, in turnover terms, Kahawatte saw a total volume of 4.9 million shares changing hands, to close at Rs 8.75, 75 cents more than its previous closing price.

Malwatte Plantations, a volume of 1.3 million shares to close at Rs 14.25, Rs 1.50 more than its previous closing price. Agalawatte, a volume of 541,100 shares to close at Rs 28, Rs 2.50 more than its previous closing price. Balangoda Plantations, 588,000 shares to close at Rs 19.75, 25 cents less than its previous. Kotagala Plantations, 514,500 shares to close at Rs 23.25, Rs 1 more than its previous. Kegalle, a total of 186,700 shares to close at Rs 57.50, Rs 3.50 more than its previous and Kelani Valley, a total of 212,700 shares to close at Rs 47.50, Rs 1.50 more than its previous closing price.

Agro show to prepare for globalisation

Ag-Biz, organised by the National Agri Business Council (NAC) aims to attract leading technology, equipment and other support service providers to exhibit their latest innovations to support the local agriculture industry to be more competitive to face global competition.

The exhibition will also showcase the growing importance of the private sector in driving the rural economy and working as a development partner with the state and as a facilitator, technology supplier and marketer to the rural community.

Ag-Biz will cover areas such as Agriculture, Poultry and Livestock, Floriculture, and many more segments which comprise the backbone of the industry.

While traditional products such as tea, rubber, coconut and spices are top earners, non traditional products such as fruits and vegetables, foliage, cut flowers and processed foods are also becoming important to Sri Lanka’s agri-economy.

The agriculture sector has been a major contributor to the Sri Lankan economy over a period of time and with the changes in technology and other developments taking place around the world, Sri Lankan agriculture too needs to be updated to face global competition.

AG Biz has many objectives some of which include the creation of a platform for leading technology and service providers to showcase their latest products, to provide the farming community an opportunity to find partners among the formal private sector in the areas of Knowledge, Technology, Information, Marketing, Finance and Input Supply, to facilitate and provide global technology and service providers with an opportunity to find local partners to represent their interests in Sri Lanka.

In the recent past the formal and informal private sector have been playing an important part in driving the rural economy. Ag-Biz will provide the industry an annual show case where the stakeholders could gather to be acquainted with recent trends and share information. It also gives farmers a first hand opportunity to interact directly with their suppliers and service providers giving them vital feed back.

The NAC will also take the opportunity to recognize contributions by the industry to the national economy. The private sector which is represented in agri-business will recognize frontline performers from the regions, focusing the farming community on best practices.

Present at the media conference announcing the trade fair were Agriculture Development Minister Chamal Rajapakse, Sarath Silva, Chairman, Organizing Committee, NAC President Mario de Alwis, NAC Secretary General Malcom Talwatte, Agriculture Consultant Dr. Gerry Jayawardena and Agriculture Development Ministry Secretary Dr. Tissa Warnasooriya.

Hayleys’ new chairman designate

The Hayleys Group announced that Nirmala Gihan Wickremeratne, Deputy Chairman, will succeed Rajan Yatawara as Chairman effective from January 10.

Wickremeratne, who joined Hayleys in 1971 was appointed to the

Board in 1986, has been Chief Executive of Dipped Products Limited (DPL) and held overall responsibility for the Hayleys Group’s Hand Protection sector since its inception.

Abeyakumar Mohan Pandithage will in turn succeed Wickremeratne as Deputy Chairman. Pandithage joined Hayleys in 1969 and was appointed to the Board in 1998. He has headed the Maritime Holdings Group (now Hayleys Advantis) since its inception and held overall responsibility for the Transportation sector at Hayleys.

Widely known as "Tanky," Wickremeratne holds a B.Sc. degree from Peradeniya University. He has chaired the Sri Lanka Association of Manufacturers and Exporters of Rubber Products and served as a committee member of the Ceylon Chamber of Commerce and as its representative on the National Labour Advisory Council.

The Hayleys Group comprises local and international businesses in Fibre, Hand Protection, Purification Products, Agri Products, Plantations, Transportation, Agri Inputs, Resorts, Consumer Products, Industry Inputs, Textiles, Power and Energy and Investments and Services.