High drama occurred at Asiri Hospitals’ board meeting on Tuesday when its chairman Premapala Pitapanaarachchi was kicked out and its former managing director (MD) Ananda Wimalasena who was booted out only a few months ago was brought in as its new chairman.

Insiders alleged that the "schemer" behind these doings was the Hospitals’ new managing director, billionaire businessman Ashok Pathirage who was earlier alleged to have been responsible for kicking-out Wimalasena as MD and a board director at a board meeting held only a few months ago and taking his place.

Pathirage who owns Softlogic and who recently acquired Uni-Walkers, has business interests here and abroad. He is believed to be having around a 25% stake in Asiri Hospitals Ltd (AHL) and about a 6% stake in Asiri Surgical Hospitals Ltd (ASHL). Both hospitals, which are publicly quoted, have a common board of directors, though their shareholdings vary.

AHL is the second largest shareholder of ASHL with a 28.7% stake in it. Insiders said that the kicking-out of Pitapanaarachchi was allegedly done in a masterful manner by Pathirage at Tuesday’s board meeting held at ASHL. It was not on the Board’s agenda.

Ten of the Board’s 11 directors or their proxies had been present at this meeting, with the absentee being Dr. S. Selliah. Those present had been Tissa Weerasinghe, Mrs D. Wimalasundera (finance director), Dr Manjula Karunaratne (chief operating officer), Avanka Herath, Sunil Fernando, H.M. Jayasinghe, Dr D.S. Rajapakse, Premapala Pittapanaarachchi (chairman), Ashok Pathirage (MD) and P.P. Subasinghe.

Herath is the Sri Lanka Insurance Corporation (SLI) nominee as it has a 14% stake in AHL, while Fernando represented Pitapanaarachchi’s son Chamin who also has a board seat at Asiri. The Pitapanaarachi family has an 11% stake in AHL and a 10% stake in ASHL. Rajapakse is on the Board by virtue of the fact that DSI has a 3% stake in AHL.

The drama unfolded when Pathirage proposed Wimalasena to the Board.

His proposal met with no objections and Wimalasena who was lurking in the background, then took his seat in the Board.

The high point of the drama was then reached, when Pathirage proposed the name of Wimalasena as its non-executive chairman. His grounds were that Pitapanaarachchi who has business interests overseas had no time to devote his full attention to Asiri. Pathirage told The Sunday Leader that another reason why he proposed Wimalasena was because Pitapanaarachchi was allegedly sowing seeds of disunity among the Board. However, Pitapanaarachchi will continue to serve on the Board, he said. Pitapanaarachchi was not immediately available for comment.

Pathirage’s proposal was won by a show of hands, by a majority of "four to five," with Weerasinghe abstaining. Those who voted for Wimalasena were Pathirage, Karunaratne, Wimalasundera, Jayasinghe and Rajapakse and for Pitapanaarachchi, Pitapanaarachchi himself and Fernando, Subasinghe and Herath.

The Subasinghe family (Subasinghe’s father D.K. Subasinghe was formerly Asiri Board chairman before he was kicked out and replaced by Pitapanaarachchi allegedly due to Wimalasena’s (who was then MD) manoeuvres last year) has a near 30% stake in ASHL. They had been seeking for two additional board seats in ASHL which was allegedly scuttled by Pathirage. The Subasinghes however have hardly any shares in AHL. Insiders said that the reason why SLI/Herath would have voted with Pitapanaarachchi (and not with Pathirage) may be due to the fact that business magnate Don Harold Stassen Jayawardena who controls SLI does not see "eye to eye" with Pathirage. Weerasinghe who abstained from voting has a 10% stake in AHL and a 7% stake in ASHL.

There was speculation whether as a result of these manoevres, it would even lead to the splitting-up of the Asiri Group, as the Subasinghe and the Pitapanaarachchi families jointly have a near 40% stake in ASHL, a highly profitable venture, which began operations a few years ago.

Though Sri Lanka’s economy has been growing at an average rate of 4-5% in the past decade, poverty has however declined marginally, World Bank Country Director Naoko Ishii said.

In fact the gap between the rich and the poor in certain provinces have widened, said Ishii. The rich have got richer and the poor, poorer, she warned. Ishii said that poverty in the period 1991 to 2002 had declined by a marginal 3%, from 26% to 23%.

Ishii, speaking at a lecture on "Sri Lanka economy: Future directions" held on Wednesday said that the gini co-efficient that measures equity in growth has shown that except for the Western and Central provinces and marginally in the Southern and North Central provinces, the disparity of the rich getting richer and the poor, poorer, was widening. This study has however excluded the conflict ridden Northern and Eastern provinces (NE). Other than the conflict which has been shaving off 2-3% of GDP growth annually, there have been other reasons for this state of affairs.

Much of the country’s growth (50%) has been concentrated in the Western Province, while other areas have seen little or no growth. Poverty in the Western Province in this period had been reduced by 40%, but the pace of poverty reduction in the other provinces has been much slower.

Ishii said that a joint World Bank-ADB study done recently has identified several reasons for this state of affairs that hinder investments, thereby job creation and poverty reduction.

Among those were electricity, cost of finance, transport and access to finance. In addition, the rural areas of the country were plagued with a low demand for goods and services and the lack of market information, while the urban sector was plagued by economic and regulatory policy uncertainty, macro-economic instability, anti-competitive or informal practices, skills and education of workers, corruption, customs and trade regulations, crime, theft and disorder and the tax administration.

Though the urban economy has integrated with the global economy, the same cannot be said of the rural economy. Among the other hindrances to poverty reduction and job creation were a captive land market, the requirement of 178 weeks pay to dismiss labour and though literacy was high, they do not meet market needs.

Sri Lanka is found wanting in operating in a knowledge based economy. Internet, computer and telephone usage compared with countries like Singapore and Malaysia was poor.

She said that though Sri Lanka has a high human development index, it scores poorly on research and development, contributions to scientific and technical journals and in making patent applications. The country’s high literacy rate does not meet the needs of the market, said Ishii.

Moneys allocated by the budget to develop the coconut industry have instead been used to fund the war, Coconut Development Minister Salinda Dissanayake said.

Dissanayake speaking at an industry seminar recently said that despite these constraints, measures have been taken to develop the c’nut industry. He said that the Ministry has embarked on a programme to grow palm oil so that coconuts could be put to better use. This project envisages bringing under cultivation 20-30,000 acres under palm oil. Among the other measures taken are that though provincial councils have the authority to fragment lands that are less than 10 acres, but in the North Western Province (NWP), where exists the Coconut Triangle, lands of over one acre, if they are to be fragmented, will need the permission of the Coconut Development Board.

Other measures taken are, the 15% VAT charged on coconut oil being removed; steps taken to standardize c’nut oil in order to prevent adulteration; in addition, programmes have been implemented to plant 320,000 coconut trees, with 230,000 of this target having already been met. The target of 320,000 would be met before the year end.

Steps have also been taken to grow 10,000 acres of coconut as household plantations. Twenty thousand acres have already been demarcated in Welioya and Trincomalee for this purpose. "The government has implemented programmes to issue funds to coconut growers owning lands of less than ½ an acre in order to develop their coconut lands,’ Dissanayake said.

An issue he stressed at the seminar was that 40% of the 75% of coconuts that were being used for food purposes was going waste due to improper handling. "When coconut is squeezed by the hand to get coconut milk, 40% goes waste," he said.

Dissanayake also said that the demand for virgin coconut oil (Nevun Pol Thel) as well as coir related products kept on increasing day-by-day and that the Coconut Development Ministry was taking every possible step to go forward and have a healthy competition with the rest of the world.

Rocell, the mainstay brand in the lifestyle and home decor sector unveiled an architectural masterpiece at Nawala Road to house and display the brand’s ceramic and porcelain collections, said a statement.

Opened by Deputy Chairman Dhammika Perera, who noted; "built at an investment of Rs 100 million, the showroom is truly world class. Designed to be on par with the best of showrooms in the lifestyle and home décor sector in Europe, the showroom was conceptualized to be undisputedly the only one of its kind in Sri Lanka."

A veritable giant, in terms of scale and size, the showroom boasts of 7,000square feet of display space and is unique in design and concept. Avant-garde in every sense, the architectural design impresses not only from the inside but also from the outside as the open format glass structure lends an unobstructed view of the interior from three perspectives.

"Our intention was to let our customers have the freedom and the accessibility to the widest range of mix and match possibilities, for them to spend their time at leisure weighing their options without being rushed into a purchase decision. We understand that customers are making involved decisions when it comes to home décor and that they require the right environment to do so. This is why we have introduced a work-zone that allows customers to lay out tiles and borders to visualize the end effect, introduced day light lighting to ensure what you see is what you get and installed purpose-built display racks from Spain to enhance ease of browsing" said Royal Ceramics Director Marketing and Business Development Tharana Thoradeniya.

It is not only the latest floor masterpieces that are on display here but also a stunning pre-launch display of Rocell taps from Guglielmi, Italy. Guglielmi, the foremost and renowned contemporary designer tap will be launched to the Sri Lankan market by Rocell within the coming months.

Royal Ceramics Lanka Ltd., a public quoted company manufactures homogeneous vitreous porcelain and glazed ceramic tiles at two state of the art manufacturing facilities.

Mistry described •Net as a "Framework" on which developers could build applications. The one key word to describe •Net is "Connectivity"; connecting systems, applications, devices, and people. •Net has now evolved to version 3.0 while retaining its original philosophy of providing an enabling technology across myriad application domains.

Mistry opined that a lot of information systems (IS) provide a "ho-hum" user experience in terms of access to salient information. Microsoft has a range of IS products that leverage the versatility of •Net, so users can interface with even disparate and legacy systems optimally.

Raigama pointed out that •Net and Microsoft’s range of IS products make development efforts easier and quicker. The development environment itself handled most low-level issues such as connectivity, so developers can be more productive. It also translates into a quicker time to market, enabling commercial products to get a lead on competition.

Technically, •Net consists of two main components. The •Net Framework is a collection of Class Libraries, much like APIs (Application Programming Interfaces). The other is the CLR or Common Language Runtime. •Net is a fully Object Oriented and Managed framework so that developers can concentrate on creativity rather than, for example, tracking memory allocation.

On the question of cost of development tools, Mistry asserted that the •Net SDK (software development kit) is a free download, as are the "Visual Studio Express" tools. These provide a royalty free opportunity for small-time developers and students to be up and running with the technology.

Furthermore, educational institutions can avail themselves of department-wide licensing for a fraction of the cost of the retail product. Students no longer have to learn on bargain "old version" tools, so fresh graduates hit the ground running.

Sri Lanka has much potential and enthusiasm, judging by the activities of IT students he had met. However, the IT industry itself was largely providing base-level services. He stressed that three things were required for Sri Lanka to get off the ground in IT. Primarily, a respect for intellectual property rights was essential. All IT professionals should be ambassadors for IPR. Without this, companies and developers would not achieve the returns they deserve. Second, students must train on the latest technology, to be productive immediately on graduation. Third, since low English proficiency seems to be impeding IT dissemination, systems should be made that use local languages.

NB: Microsoft’s flagship IT conference "Tech•Ed 2006" was held from October 25-27 at Waters Edge. The event showcased Microsoft’s range of server, client and developer products and its roadmap for the future. Divided into several "Tracks", participants could choose a specific area of interest to follow. Several hundred participants, including decision makers, developers, designers and very significantly, IT students, for whom a separate track was designed, attended.

Sri Lanka is looking for public-private partnerships (PPP) to take its development process forward and not donor assistance, Central Bank Governor Ajith Nivard Cabraal told The Sunday Leader.

Buttressing this statement, Cabraal speaking at a seminar on "Sri Lanka economy: Future directions" that was held on Wednesday said that it is better to channel foreign inflows from Sri Lankan labour working overseas for development works than to seek donor assistance which comes with several conditions. And the country is working in this direction when it comes to several infrastructure development works. He said that donor assistance for a low figure as $ 100 million comes with stringent conditions. However, foreign remittances have been increasing rapidly, by over 20%.

This has made it possible for the country to shore up its balance of payments position. This year, foreign remittances from 1.3 million workers is expected to touch the $ 2.3 billion mark, while next year it’s expected to grow to $ three billion.

Cabraal further said that Sri Lanka should look for new growth areas to fund for its investment works and also for tourism growth, such as tapping countries like China and India that have been experiencing high growth.

"What matters is to have a clear direction and to go in that direction," he said.

Cabraal however said that what was worrying was that though Sri Lanka’s unemployment rate is under 6.5%, the percentage of those between 20-29 years who are unemployed was high.

When The Sunday Leader asked whether the government plans to tap the $ 4.5 billion pledged at Tokyo, Cabraal said that the government was not focusing on that path. "It’s the PPPs that we are looking at, the power projects lined-up are bigger than the Accelerated Mahaweli Development scheme," he said.

On fiscal stability, especially with regard to interest rate and exchange rate stability, Cabraal said that there would be minimal government intervention in this regard. "We will allow market forces to determine their rates," he said.

On education reforms, Cabraal said that it is happening, silently. "We don’t want to shout about it, as it would then create problems," he said.

The world demand for activated carbon (AC) was 130,000 metric tons (MTs) annually, with Sri Lanka supplying between 16-18,000 MTs. World demand was increasing at a rate of 6% annually.

Charcoal is made to manufacture activated carbon (AC), an ingredient that is used for treating drinking water, gas masks, the recovery of precious metals (especially gold) and as an antidote against poisonous Kaneru.

Haycarb Managing Director Ananda Hettiarachchy speaking at a seminar on the coconut industry that was held recently said that different types of AC could not be mixed during application.

Haycarb is the world’s biggest manufacturer of coconut based AC. It is also an associate company of Hayleys Ltd. "Our peak charcoal production has been 50,000 MTs yearly. But over the last year, more than half of the charcoal consumed in Sri Lanka had been imported due to a production shortfall," Hetitiarachchy said.

In order to produce one MT of AC, three MTs of coconut shell charcoal has to be used. The cost of charcoal production has also become an issue and the other problems which keep on adding to the list are the high cost of oil, loss of electricity and the cost of labour, "which had increased in Sri Lanka, in comparison with other countries."

With regard to the price per MT of charcoal in coconut growing countries, Indonesia has a competitive advantage. "Their price is $ 110 per MT, while ours is $ 230 PMT. The prices in Philippines, Thailand and our neighbouring India are also below that of Sri Lanka," said Hettiarachchy.

Highlighting the threats faced by the Sri Lanka AC industry, he said that the diminishing availability of charcoal due to a reduction in production and the use of shells for energy stand out. The lack of clear government policy on investment, environmental regulations (Pollution control regulations) and the lack of manpower for charcoal making were other issues.

The alternatives that could be considered were backward integration in charcoal and energy, to invest in more energy efficient processes and the introduction of waste heat recovery. Hettiarachchy further said that in Sri Lanka, no foreigners were involved in these technologies and Sri Lankan engineers have been entirely responsible in building these technologies. "We have to work with authorities to formulate regulations and protect the local industry from foreign predators. We should increase and start production in other countries of the world," Hettiarachchy concluded.

Nine Belgian companies recently visited the island to explore trade opportunities. There are already over 35 companies with Belgian commercial interest operating in the country.

Main imports from Belgium are diamonds (which are value added and re-exported to Belgium), pharmaceutical products, organic chemicals and machinery. Among Belgian investments Loadstar Tyre company, said to be the largest exporter of solid tyres and which is done in collaboration with the Jinasena Group.

Trade Promotion Officer Belgium Consulate Dominoque Tanghe said that discussions will take place on trade and joint business ventures related to such as production and operation of luxury trains (which will give new dimension to the tourism industry in Sri Lanka), building bridges, roads, tunnels, water works and other large infrastructure programmes and Information Technology (IT).

Sri Lanka’s Counsellor for International Trade for Belgium Sicille P.C.Kotelawala said that the arrival of the Belgian trade delegation at this time would be an opportunity to further build bilateral trade and commercial relations between the two countries.

She stressed that the political step taken by the leaders of the country’s two main political parties could lead to prosperity.

"This merger would be the only and final means towards peace and with our contribution too, we hope to build this island into a proactive and vibrant place with foreign exchange flowing into the country," Kotelawala said.

Kotelawala further said that the most significant export is diamonds and 70% of these diamond exports are produced by Blue Diamonds Ltd. a joint venture between Ceylinco and a Belgian company Rosy Blue NV.

She also said that the Belgian connection with regard to diamonds dates to 1982 and since then they have been producing cut and designed pieces for export. "The Colombo Cut has made a name of its own, internationally," she said.

The idea of building Blue Diamonds Ltd., initiated in the mid 1970s with Ceylinco Consolidate Chairman Dr Lalith Kotelawala. It is a100% export oriented company with 1,500 highly skilled diamond cutters. Their present turnover stands at $ 200 million. Their fully-fledged factory in Seeduwa conducts all stages of cutting and polishing.

The life size cricket ball manufactured by Blue Diamonds, with floating diamonds is to enter the Guinness Book of World Records as the first of its kind.(SR)

Sri Lanka’s over-dependence on garments that brings in 50% of its export revenue is not healthy because it shows that there is no proper export diversification, World Bank Country Director Naoko Ishii said.

Speaking at a seminar on "Sri Lanka economy: Future directions" on Wednesday she said that Sri Lanka should diversify her export portfolio. Three products that she identified in this regard were processed agriculture, eco-tourism and business process outsourcing (BPO). Though Sri Lanka is a fertile land, even fruit juice is imported.

She however said that though the tea sector was organised, the majority of Sri Lanka’s spice exports (an item that she identified for export diversification) were exported in bulk form, including Ceylon Cinnamon. The growers, processors and exporters were not integrated. There was hardly any value addition or branding involved in such exports. Ishii, in this connection said that there is a lesson in branding and value addition that Sri Lanka could learn from Malaysia.

She said that in a drive launched in the 1970s and 1980s, Malaysia was able to transform palm oil exports from a raw bulk export to a value added export. This was possible because the Malaysian government funded in research and development (R&D) and integrated the product with the needs of the market.

As a result, it changed from a natural based economy to a high value added export economy. For this to happen there has to be a clearly defined public-private partnership (PPP).

Ishii said that the fundamental role of the government is to provide the road for the private sector to develop. "Integration of the rural and urban economies and the export of high value added goods are the way forward," she said.

The main exports of coconut kernel products are copra, coconut oil, desiccated coconut (DC) and coconut milk and coconut milk powder (CM/CMP).

The dominating factor in descending order would be coconut oil, DC, copra and CM/CMP. Managing Director Adamjee Lukmanjee Murtaza Lukmanjee speaking at a recent seminar on the coconut industry said that having only an export value of 4% of total kernel exports in comparison with the balance 96% dominated by the rest of the world, does not give Sri Lanka clout to command prices.

He said that more money could be made by exporting CM/CMP and DC rather than exporting coconut oil.

Last year coconut exports brought in a total of $ 72 million in foreign exchange, which, if converted to coconuts was equivalent to the export of 492,347, 468 nuts. This included 1,426 metric tons (MTs) of coconut oil (12,548,900 nuts); 33,377 MTs of DC (267,016,000 nuts); 16,857 MTs of copra; 40,601,49 MTs of fresh nuts and 5,430 MTs of CM/CMP.

According to estimates, 150,000 MTs of edible coconut oil is at present required in Sri Lanka. Lukmanjee therefore said that the importation of edible coconut oil and the export of more value added coconut products would bring a significant ‘net gain’ to the country.