First with the news and free with its views                                     First with the news and free with its views                             First with the news and free with its views                                    


July 8, 2007  Volume 14, Issue 3










CPC hedge to protect refinery margins

Ceylon Petroleum Corporation (CPC) is having talks with Standard Chartered Bank (SCB) to protect the margins made by its refinery at Sapugaskande, CPC sources who did not want to be named said.

Currently the refinery is making a gross profit of around $ 4.50 on a barrel by refining crude oil to finished products like petrol, diesel and kerosene and selling them to CPC's marketing arm through which the finished products are retailed to the end-user via fuel stations.

"We are however talking of keeping a 'cracker margin' (the margin kept after converting crude to refined products and selling them) of around $ five a barrel," the sources said. "If margins fall below $ five, the Bank will compensate us, but if the margins go beyond $ five, then the Bank will keep the excess profits," they said.

The sources expected this new hedging operation to be on stream in a couple of weeks time.

Sapugaskande has the capacity to refine around 50,000 barrels of crude oil a day. That translates to refining 6,000 metric tons (mts) of crude and converting them to 550 mts of petrol, 1,500 mts of diesel and 700 mts of kerosene respectively, the sources said.

"If the refinery had been modernized with a new hydro-cracker plant, as had been the plan soon after the J.R.Jayewardene government came into power in 1977, Sapugaskande would have by now doubled its cracker margin to around $ 10 a barrel," the sources said.

The building of a hydro-cracker plant was aborted then due to allegations of corruption and politicization of that project.

The present government however has plans to modernize and expand Sapugaskande's refinery capability.

Sapugaskande at present has the capacity to refine only half of the country's requirement of refined petroleum products.

However, building a refinery is a costly affair. Sapugaskande, when it was built in 1969 cost only Rs. 175 million. But nowadays, building a refinery would cost around $ two billion, the sources said.

They further said that the refinery made a loss in December when petrol prices were the same as crude oil prices, selling at around $ 58-57 a barrel for both products.

" It was cheaper for the CPC to buy petrol direct, rather than buy the crude and have it refined at Sapugaskande then," the sources said.

It is to protect the refinery of such situations that we are contemplating in hedging the cracker margins of the refinery, they said. In the last quarter of last year, as there was no hedging mechanism in place to protect the refinery's cracker margins, it made a loss of $ 30 million, the sources said.

However, since January the refinery has been running at a profit, making a profit of $ three million last month .

In March the CPC hedged against the import of diesel prices, a refined product, by employing SCB as its hedge bank and made a saving of around $ 1.5 million. This saving was made on two hedges, the sources said.

But hedging against the import of refined petroleum products at this juncture may not be feasible because it appears that the prices of such products appear to be peaking, they said.

Hedging in such instances is only good if prices are rising, and to protect the CPC against such increases, the sources said.

They further said that as per Singapore prices, the price of a barrel of petrol as of Friday was $ 86.70, diesel $ 85.50, kerosene $ 85.40 and crude oil: 70-72.

However, in the last couple of days there have been a steep rise in prices, with petrol going up from $ 83 to $ 86.70 a barrel, diesel from $ 80 to $ 85.50 and kerosene from $ 82.75 to $ 85.40 a barrel.

For accounting purposes, the CPC's refinery arm and its marketing arm function as separate units. The CPC which until last month was subsidizing petrol, diesel and kerosene, recovered these losses by jacking up the retail price of a litre of petrol by Rs. 5 to Rs. 111, diesel by Rs. 4 to Rs. 71 and kerosene by Rs. 16 to Rs. 67. It made a Rs. 1.5 billion loss last year, the loss of which was blamed on the government not refunding the subsidy of Rs. 2.1 billion incurred by the CPC in selling kerosene at subsidized prices then.

Dialog goes CDMA

Dialog Broadband Networks, a fully owned subsidiary of Dialog Telekom Ltd, (DTL), on Thursday  launched their fixed wireless operations based on CDMA technology, said a statement.

The official launch was held inKurunegala under the patronage of Kurunegala Mayor Nimal Chandrasiri Silva. It was also simultaneously launched in Kandy,Puttalam, Kegalle, Kalutara and Ratnapura.

CDMA technology also offers subscribers a host of other benefits such as call holding/waiting, SMS, CLI, call transfer, call forward, voice mail, fax, three way calling and call conferencing facilities.

Sri Lankan Jack-Fruit Salad at FoodEx Japan 2007

This dried Jack was supplied by Team Four (Pvt) Ltd which was a FoodEx Japan 2007 participant from Sri Lanka.(JETRO News)

Browns re-invests in W&G

It's ironical that the Browns Group that recently sold its 70% stake in Walker and Greig Ltd.,  (W&G) to Lionheart Investments Ltd., at Rs. 5.75 a share, had allegedly bought back some of W&G shares at Rs. 7 a share.

This would make Lionheart, when they make their mandatory offer to buy the remaining W&G shares, as per stock market rules, to make their offer at Rs. 7 a share to the remining shareholders, as the offer document in regard to Lionheart's mandatory offer had allegedly not been made at the time Browns made their re-purchase, the sources said.

They further said that Lionheart is run by an American called Scott Neuson who has substantial experience in day trading in global markets such as Nasdaq. He apparently runs an office at the Lanka Orix Securities Ltd (LOSL) building in Colombo. LOSL Managing Director Thushan Wickramasinghe is also said to be having a stake in Lionheart.

19% of capex target met

Government expenditure and lending minus repayments in the first four months of the year increased by 8.9% to Rs. 245.3 billion when compared with the corresponding period last year.

This comprised a current expenditure figure of Rs. 186.8 billion, a 7.7% increase over the previous year and a "capital and lending minus repayments" figure of Rs. 58.6 billion, a 13.3% increase over the corresponding period last year.

The budgeted capital and lending minus repayments figure for the full year is Rs. 301.8 billion, of which the government has been able to cover only 19.4% of the target, despite the fact that only two thirds of the year is still remaining,

Meanwhile, the budgeted "expenditure and lending minus repayments" figure for the year is Rs. 898 billion, of which the government has met 27.3% of this target. The budgeted current expenditure figure is Rs. 596.2 billion, of which 31.3% of the target has been met so far.

(Source:Central Bank)

 "Full toss" to EPF

Senior economist Raja Senanayake said that since there are reports that Fund (EPF) moneys have been invested in a risky venture like Mihin Air, the bank (Central Bank) should categorically deny it.

In Singapore the law places restrictions on the Central Provident Fund there from inappropriate investments even if Parliament passes a law.

Article 22e Moneys of the Central Provident Fund:  "The President, acting in his discretion, may withhold his assent to any Bill passed by Parliament which provides, directly or indirectly, for varying, changing or increasing the powers of the Central Provident Fund Board to invest the moneys belonging to the Central Provident Fund."

Murali joins Ceylinco Life

By Kshanika Argent

Life goes and so do people, according to spin wizard Muttiah Muralitharan speaking to The Sunday Leader at a press conference where it was announced that he would be joining Ceylinco Life and lending his image as a sportsman and family man to create awareness about the value of life insurance.

The man described as the greatest  cricketer in Sri Lanka's history, leaves Janashakthi Insurance and joins his Sri Lanka team colleague fast bowler Chaminda Vaas to support Ceylinco's 'Life's 'Life, Love, Protection' campaign, an initiative that seeks to increase the penetration of life insurance, currently hovering below 10%.

When asked about why he made the move from Janashakthi to Ceylinco, Muralitharan said that his contract had expired and Ceylinco Life had approached him. He said, "It's time to move on, friendships are different and they will last, but this is purely  professional."

On the subject of how he plans to promote life insurance to the masses, Muralitharan said it would be commercial, mostly through TV and press ads. 

Ceylinco Life's Chief Executive Director R. Renganathan said that Muralitharan will be one of the elements of the company's multi-faceted communications campaign, helping to generate greater consciousness among Sri Lankans that life insurance is an essential safety net against an uncertain future, through print and electronic media campaigns, interactive programmes, point-of-sale material and signage.

"We welcome Murali to the team," he told reporters in Colombo. "His universal appeal and strong commitment to family values will bring even greater resonance to our efforts to take the message of life insurance to the masses."

Ceylinco Life's campaign is designed to build better understanding at a generic level, of the need for and value of life insurance, rather than to promote specific insurance products,  Renganathan said, explaining that studies by Ceylinco Life had indicated that one of the causes for the relatively low penetration of life insurance was a lack of understanding of the rationale for these products.

He said that in most developed markets, associations have been set up to promote life insurance. However, since no such organisation exists in Sri Lanka, Ceylinco Life has taken the initiative to educate the public on the value of life insurance as part of its responsibility as the market leader.

Communications campaigns launched late last year and supplemented earlier this year by endorsements by fast bowler Chaminda Vaas had contributed to a notable growth in life insurance awareness,  Renganathan disclosed.

Muralitharan, a Ceylinco Life policyholder himself said: "As a father and  husband, I am fully conscious of the need to plan for the future and for the protection of my family. I believe that life insurance is essential for people in all walks of life, and I'm proud to be associated with Ceylinco Life's efforts to take this message to all parts of Sri Lanka. Life insurance is not for those who die, it is for the people who live," he stressed.

"Ceylinco Life's vision is to protect every Sri Lankan family with insurance and its approach to business is well articulated in the slogan Big or Small, Ceylinco protects them all," he said. "I look forward to supporting this effort by endorsing life insurance as an embodiment of  life, love and protection."

Aviva absorbs WNS operations

Close on the heels of its first successful transfer in Bangalore, India, Aviva Global Services (AGS) has announced the successful transfer of over 300 accounting and finance professionals from WNS Customer Solutions in to AGS in Colombo on July 2, said a statement.

"We are proud to become a part of the Aviva family. Over the last three years we have been focused on successfully delivering to the stringent performance metrics and service level agreements. Aviva has been supportive and happy with the performance delivered by the Colombo centre. We are geared up to ensure that we pursue the agenda of delivering excellence in everything we do," said AGS Lanka (Pvt.) Ltd., Country Director Kalum Katipearachchi.

"With the establishment of a financial and accounting centre of excellence owned and managed by a world class company, the benefits to the country include; the provision of professional employment, the investing in and the continuous development of skills and training for employment, as well as foreign revenue," he further said.

AGS is the business process and IT outsourcing  (BPO and ITO) arm of Aviva Plc.

Aviva - UK's largest insurance company and the world's 5th largest - had previously announced its plans to grow to 7,800 BPO roles in the subcontinent by end 2008. Off shoring has always been a key component of Aviva's global growth strategy providing it with flexibility, productivity, process and cost efficiency while maintaining the high quality of customer servicing expected.

Aviva has built offshore BPO roles in partnership with three vendor partners - EXL, WNS and 24/7 Customer under the BOT model. Aviva is demonstrating its commitment to India and Sri Lanka by transferring over 4,500 of its third party BPO vendor staff to its own offshore division, AGS over the course of this year (2007). This successful transfer marks a momentous achievement as the sheer size and scale of such a transfer, is unique to the IT / ITeS industry across India and Sri Lanka.

Cathryn Riley, Chair AGS, based in UK quoted, "This is a moment of pride for both Aviva plc and AGS, as we welcome our colleagues in Sri Lanka in to the Aviva family. As planned, the transition has been seamless and transparent to the UK business units, our employees and also to end customers."

AGS CEO Rajnish Virmani said: "This successfully executed transfer will serve as a great learning and indeed is a matter of pride for us. The build and transfer of operation in Sri Lanka marks a critical step in the execution of a well laid-out off shoring strategy for Aviva. A critical success factor in this journey has been the close relationship we enjoy with WNS and they will continue to run our legal services division here in Colombo. The. BOT (Build, Operate and Transfer) contract with them has enabled Aviva to ramp up rapidly and gain `speed to market'."

Speaking of the transfer, WNS Global Services Enterprise Services CEO Eric Selvadurai said, "WNS is proud of our association with AGS, and are  pleased that our BOT contract delivered the promised efficiencies. The Sri Lanka centre, housing a `Finance and Accounting Centre of Excellence' is a world class operation, and we were committed to managing a smooth transition."

The Aviva operations in Colombo will house the 'Finance & Accounting Centre of Excellence' and will boast of a team of about 300 finance and accounting professionals most of whom are either in the process of acquiring their CIMA / ACCA certification or are already CIMA / ACCA certified professionals.

Next only to UK, Colombo has the distinction of producing the highest number of CIMA / ACCA certified finance and accounting professionals in the world, and was therefore the natural choice of destination for the Finance and Accounting Centre of Excellence. The Lanka operations cater to Aviva's business units as a captive knowledge process outsourcing unit providing high-end finance and accounting services to Norwich Union Life, Norwich Union Insurance and Aviva Corporate Finance.

Hyatt Colombo presented in London

Sri Lanka's most prestigious water front residencies-Celestial, was recently presented in London at the Hyatt Regency London-The Churchill, said a statement.

The presentation which was well attended was followed by cocktails. The 45-storey building once completed will have 176 luxury apartment units and the Hyatt Regency Colombo.  All apartments at Celestial feature luxuries of amenities with every apartment offering a gorgeous view of the Indian Ocean and the Colombo city.

The Hyatt Regency Colombo will feature 246 luxury guest rooms and suites which will offer a spectacular view of the ocean.  The hotel will offer a range of facilities and services with Hyatt's full concierge service available for all apartments, multi cuisine restaurants and martini bar and "the best of" recreational facilities.

Ceylinco Homes International is a member of Ceylinco Consolidated, one of Sri Lanka's largest and most respected business conglomerates with diverse business interests and is headed by Ceylinco Consolidated Chairman Dr. Lalith Kotelawela.

The company has pioneered numerous unique housing concepts in Sri Lanka, benchmarking quality and innovation being the hallmark of its success and is today the market leader and trendsetter in the luxury property market in the country.

Addressing the gathering, Sri Lankan High Commissioner in London Mrs. Kshenuka Senewiratne who was the chief guest said, "It is a source of great joy for me to be part of this event that is introducing to you Ceylinco Celestial Residencies which will soon adorn Sri Lanka's commercial capital Colombo as the city's tallest building with 45 floors.

With it Ceylinco will regain owning Sri Lanka's tallest building, a primacy this company held even during my childhood days. I recall that it was the Ceylinco building that first introduced the escalator to Colombo, and remember my childhood fascination with this moving stairway. In fact it led Singapore's Prime Minister Lee Kuan Yew to recall in his memoirs, that at that time even Singapore could not boast of having an escalator.

Ceylinco Consolidated has therefore in my view been the pioneers of modernization and innovation in Sri Lanka."

Deputy Chairperson Ceylinco Homes Group Mrs. Padmini Karunanayake, the driving force, disclosed that all one bedroom apartments at Celestial have been sold out. 

Ceylinco Consolidated Director and Executive Director Ceylinco Leisure Properties Ltd (the owning company of Hyatt Regency in Colombo) Dr. Punarjeeva Karunanayake made a presentation on appreciation of property values in Colombo and financing available for purchase of apartments at Celestial. 

Deputy General Manager Miss Denise Abeyeratne who was the compere for the evening also made an informative and detail presentation on the project highlighting the options available for prospective investors. 

With an impeccable record of delivering super quality property with strong brand recognition, Ceylinco Homes is the only property developer in Sri Lanka to be recently awarded the prestigious "Superbrand" status.

Prizes for Formula Plus holders

Sri Lanka Insurance Corporation Ltd (SLIC) is ahead of every other insurance company in the market, be it in life, general (including motor insurance), according to SLIC CEO Nalaka Godahewa.

Speaking recently at a press conference that was held to announce SLIC's Formula Plus Motor Insurance, which has an array of fabulous prizes  on offer-one of a kind in the motor insurance industry, Godahewa said that the company's innovative approach has paid off over the years in terms of growth.

He said that SLIC has broken most insurance industry records.

Customers who buy or renew a Formula Plus comprehensive Motor Insurance policy from now upto December 31 will be eligible to enter the draw every two months by way of coupons given based on the premium amount of the policy the customer obtains.

New policyholders will receive a single coupon for every Rs. 10,000 block of the value of the premium.

An "exciting" line-up of prizes awaits the lucky winners every two months, with a Grand Prize of Rs. one million in cash, five consolation prizes of car DVD/CD equipment, ten home theatre  systems or car CD equipment, 50 camera phones and 100 Formula Plus watches are to be won at each draw, which is held every two months.

There will be three draws held in the second half of 2007. The coupons received from now till August will be drawn in September, coupons received from September to October will be drawn in November and  coupons received from November to December will be drawn in January 2008.

Godahewa added, "Today with the busy life styles, what is most important to the customer is convenience and at Sri Lanka Insurance, everything we do is aimed at providing a superior customer service.

Our state of the art Formula World Collision Repair Centre at Seeduwa is one of the best examples to show how we differentiate our superior services from our competitors. Our impressive growth figures in the recent past are ample evidence to prove that we have superseded all competition in this aspect. The confidence that customers placed with us endorse the fact that we are in the right direction, providing customer convenience. We constantly innovate our products and services to align our offers with  customer expectations."

SLIC's Formula Plus Motor Insurance is the most service-oriented motor insurance policy in Sri Lanka. A highly personalized service offered to Formula Plus policyholders ensures customer convenience at every customer contact point.

Formula Plus policyholders enjoy unique benefits such as settlement of claim within 24 hours, 24 hour call centre support for accurate assessment of damage to your vehicle anywhere islandwide and 24 hour free roadside assistance service also islandwide.

Formula Plus has also introduced many firsts in the motor insurance among them being the launch of the country's first state-of-the-art Collision Repair Centre- Formula World in July 2006.

Formula Plus policyholders are entitled to make use of the expertise of the Formula World Collision Repair Centre, the only state- of- the -art repair centre of its kind in South East Asia and for that matter the world, according to COO Suren Galagoda.

 The modern methods adopted at this repair centre will ensure that your vehicle is restored to its original condition and all repairs are as per manufacturer's specifications. The company's second Collision Repair Centre is currently being built in Kandy and will be operational by the year end.

Formula Plus is the only motor insurance policy that gives customers the option of receiving cash for the claim settlement or the facility of getting the vehicle repaired at Formula World.

Seylan pays highest rate

The "Millennium 30" one month deposit was another first from Seylan Bank  when it was launched  in October 1998, said a statement. 

 It was the first one month deposit ever to be introduced by a  bank in Sri Lanka.

So far it has proved popular among Seylan Bank customers. Especially in a rising interest rate scenario, the deposit has given prospective customers the opportunity to earn a higher interest in subsequent months.

It effectively means that you would be able to take a fresh investment option every month. 

It also gives customers the opportunity of earning interest on a monthly basis @ 16% p.a. at present, which is the highest rate for a one month deposit as at date.

In addition, for maximum flexibility, investors on a short stint abroad may give one standing instruction, to roll over the deposit until further notice along with accumulated interest and switch funds to an alternate deposit in Seylan Bank's ample portfolio of products on their return.

This would also add upto a compounded rate of interest automatically, at the end of the period for which automatic renewals take place.

Fixed monthly commitments could also be met by matching the interest earned from Millennium 30 deposits.

Commitments such as housing loan instalmetns, lease rentals, house rentals, school fees and employees' salaries could be easily matched in a simple and practical way.

Another innovation from Seylan Bank, the most progressive in the market which has captured the hearts and minds of its depositors, the statement in conclusion said.

Harcourts introduces cure for pimples

Lanka Herbals (Pvt.) Ltd. a Harcourts Group subsidiary company has found a cure for pimples, said a statement.

 The product has also been rated as a number one seller in Sri Lanka by a research conducted by a reputed local research institute. The product not only cures pimples but also removes black heads and scars.

The name of the product, Pimple Cure Herbal Cream is approved by the Ayurvedic Department by a team of medical specialists. It is imported from a GMP/ISO 9001 2000 certified company in India.

This product has been scientifically tested and proven for the treatment of pimples, bleak heads, and white heads. It is a superior quality product  and is available at all pharmacies, supermarkets and cosmetic stores islandwide at a reasonable price.

Marketing Director Mohamed Ruzzan a chartered marketer says that in response to a growing number of people seeking "historical" medical treatment that originated in ancient India, "Pimple Cure" is expected to create a new concept in the market.

There are many high priced cosmetic products available in the market today which simply claims that it is herbal without however registering with the Ayurvedic department.

Consumers should be careful in buying such herbal products which may not give the desired effect for the price paid.

Today Lanka Herbals is marketing a range of natural products which has gained wide popularity among the medical profession  and health conscious customers.

New product  launches with a strategic plan are expected to contribute significantly to the company's turnover. A big image, high mission statement and objectives will hardly bear any fruit or become realities, "unless we provide the customers a quality product at an affordable price.

Our mission is to provide natural medicine at an affordable price to the patient."

Sicille, deputy Chairperson

Mrs. Sicille P.C. Kotelawala has been appointed as Ceylinco Insurance Ltd's deputy chairperson, said a statement.

She succeeds S. Ratnadas who retires from the position after completing 51 years. However, Ratnadas will continue to remain on the Board.

Ceylinco Insurance is the successor to Ceylinco Insurance Co., Ltd. Established in 1939, it was the first Ceylonese insurance company whose chairman was the late senator Justin Kotelawala.

Sicille Kotelawala brings with her the charm, grace and a wealth of experience, having served the company in the capacity of a director for a considerable period of time. Dr. Lalith Kotelawala is the chairman, while Rajkumar Renganathan serves as chief executive director-Life and Ajith Gunawardena as chief executive director-General of Ceylinco Insurance.

Ceylinco Insurance is a flagship company of a leading business conglomerate in Sri Lanka, Ceylinco Consolidated.

HSBC at 115  notches several firsts

Last sunday  marked HSBC's completion of 115 years in Sri Lanka, said a statement.

On this day in 1892, HSBC opened its doors in Sri Lanka, just 27 years after its first offices were established in Hong Kong and Shanghai.

 Today, the HSBC Group has 10,000 officers in 82 countries and territories worldwide; offering personal financial services, commercial banking, corporate, investment banking and markets, and private banking among other activities.

 HSBC is now the largest foreign bank and the fifth largest private bank in Sri Lanka; acknowledged as the best trade services bank, one of the leading personal financial service providers in the country and the undisputed leader in the local credit card market.

Formerly known as the Hongkong Bank, "HSBC" was established as a uniform, international brand name in 1999. What started out as a comparatively small financial services operation has today branched out to 14 branches with a staff of more than 1,600 employees in Sri Lanka.

Corporate Banking Services: An impressive record.

In possession of local and foreign currency lending capabilities, HSBC's Commercial and Corporate and Institutional banking have a complete range of finance structures as well as a strong appetite for providing working capital and/or trade financing.

The bank has also supplied financial support to a large number of multinationals and domestic borrowers, and won numerous awards in Asia for being the best bank in Trade Services and Payments and Cash Management.

HSBC has also received accolades for being responsive to the growing Small and Medium Enterprise market, having a special centre just to cater to the varied needs of this market segment.

Personal Banking Services: Fulfiling the needs of different customers.

Although it has been popular as a corporate bank, HSBC is now making a mark in personal financial services too. Understanding the changing needs of customers according to their age and level of income, the bank created Premier, PowerVantage and E-saver to cater to different market segments.

The bank has also introduced Personal Instalment Loan (PIL), Personal Instalment Loan Plus (PIL+) and Home Loans. With these loan schemes customers are able to make the most of timely bargains, take care of unexpected expenses or build their homes.

Undisputed leader in credit cards.

HSBC is also the proven leader in the credit cards market in Sri Lanka. With over 250,000 cards and counting. HSBC has demonstrated that credit cards are no longer a luxury but a commodity suited to the pace of customer's lifestyles. Accordingly, the bank has provided a number of excellent privileges to HSBC credit cardholders: Lifting the 2% surcharge on fuel, the Rewards programme, Home & Away, Air Miles, Automatic travel insurance from Hayleys AIG Insurance and the HSBC 0% Instalment Scheme are some of the privileges on offer for HSBC credit cardholders.

The bank also offers credit cards to those who do not even have an account with HSBC, as long as they meet the age and income criteria. These credit cards are accepted both in Sri Lanka and at over 17 million establishments the world over, ensuring HSBC credit cardholders a  "welcome" anywhere in the world.

Revolutionising Banking in Sri Lanka.

HSBC has a worldwide reputation for its pioneering work in the field of technology. The introduction of the first Day and Night Automated Banking Centre is a first for Sri Lanka. These centres include Personal Internet Banking and Phonebanking Services and a customer services desk in addition to the requisite ATM machine.

Currently HSBC has 15 such centres - including at the Sentra Super Market, Maharagama; Cargills BigCity, Moratuwa and at the MAS Intimates premises, Ratmalana.

HSBC also launched its new and improved phonebanking service where customers can use the new phonebanking service to carry out a range of banking transactions using the system, in addition to checking recent transactions, carrying out transfers and paying their bills.

Furthermore, HSBC has also taken the initiative to increase the bank's local outreach by entering into a partnership with the Posts Ministry, allowing customers to make cash and cheque deposits at 39 post offices islandwide. This launch is the first of its kind by a private bank in Sri Lanka.

Going beyond Banking: HSBC and Corporate Responsibility (CR).

Sharing its success with the marginalised sections in society has been HSBC's practice throughout the years. The HSBC Group advocates two main strategies of CR - education and the environment. Under these, HSBC Sri Lanka has carried out many long-term projects. Environmental awareness campaigns were launched to maintain a cleaner environment and preserve the natural beauty of the Sinharaja forest and the Horton Plains, while HSBC staff members were sent on the Homestay programme, where they had the opportunity to participate in environment based activities with villagers living in the buffer zones surrounding the Sinharaja forest.

HSBC has also revamped five history galleries in the Colombo National Museum to foster and promote an awareness of the country's rich culture and heritage. These galleries now contain detailed information panels, a state of the art lighting system and attractive displays. HSBC also empowers the marginalised sections of society, for example, partnering SAPSRI to support the Beeralu lace makers in Mirissa and assisting the would be women entrepreneurs living in Colombo's slums. These examples are just few of the various other corporate responsibility activities HSBC takes pride to be involved in.

Anton, only rep. at Dusseldorf

Anton has been selected as the only pvc manufacturer from Sri Lanka to participate in K Messe Dusseldorf fair, the most prestigious international plastics and rubber trade fair this year, said a statement.

Anton commands a 40% market share in the local PVC products market and has the widest range of such products manufactured under one roof along with the largest distributor network.

The company is now in the process of introducing some new products to the market, which will fulfil the advanced requirements of the 21 st century.

Participation at the fair to be held this October is limited. Anton was selected following recommendations by the Export Development Board and the Foreign Ministry's Trade Council. 

The fair is expected to draw some 2,900 exhibitors and over 200,000 trade visitors. The event enables exhibiting companies to forge contacts and seal many deals as it has a reputation for being the most important meeting place not only for the industry but also for potential buyers from key user sectors.

 Here, specialists in the fields of construction, automotive engineering, packaging, electrical engineering, electronics, communications, medical technology, aviation and aerospace have an opportunity to catch up on the latest plastic and rubber applications and gauge future trends. .

A wide range of Anton products, including PVC pipes, door panels, ceiling, cladding, moulding and rainwater gutters will be displayed at the exhibition.

St. Anthony's Industries Business Development Manager Priyantha Wanigaratne said they considered it a privilege to be selected to this event which brings together leading plastics and rubber manufacturers from around the world. He noted that this is an ideal opportunity to showcase the export potential of  Lankan made PVC products.

The brand has earned a reputation for its quality, having achieved both SLS and ISO 9001-2001 status, and has been certified as being compliant with who standards. Last year, it was conferred 'Superbrand' status.

Anton is also reputed for its innovativeness. Since 1960, it has been in the forefront of introducing new products that cater to the requirements and enhance the living standards of the people. It has set high standards in the industry for others to follow, and has served the nation as an exemplary corporate citizen.

The plastics industry holds great potential for the future due to its exceptionally varied technical properties and its value for money. "Plastic is the bedrock of our entire infrastructure as well as of all key future technologies,"  K-Fair sources said.

Incoming free from Tigo

Tigo, the new kid on the block (prepay mobile in Sri Lanka), has introduced every customer's dream package, incoming free with no daily rentals, said a statement.

To launch their new package, the Tigo 'Blue Men'  (who created a furor when they took to the streets to introduce Tigo to the local consumer in January this year) are currently parading the streets of Colombo once again outlining the benefits of Tigo's latest value added offer to the consumer. 

"This package benefits everybody as it offers you all incoming calls free, irrespective of the duration of the call or time of day and is an all round winner," said Tigo's Commercial Director Aniljit Singh. "Any customer who spends more than Rs 600 a month on mobile telephony, be it in pre or post pay can benefit from this package as there is no daily fee or monthly rental."

Singh said that Tigo believed in making mobile telephony affordable to all segments of the market. "The response displayed by customers to this package has been tremendous as not only does it offer Incoming free, but has affordable outgoing call rates which are only Rs. 5 per minute anytime during the day".

In addition Tigo had added further value by way of allowing subscribers to call from their Tigo to any other Tigo for a mere Rs. 3 per minute anytime of the day for five selected numbers which the customer has the liberty of changing monthly.

Tigo's exciting new package also brings you more facilities by way of 30 SMS/5 MMS, as well as upto 1000 kb of GPRS browsing absolutely free every month. "All you have to do is have a monthly usage of Rs. 600." This product is now available and can be purchased for Rs. 800.

"We consider this package to be the 'best tariff plan' currently available in the market with all incoming free," said Singh. He also said that as a result of Tigo's islandwide coverage, customers would be able to connect to each other from all over the island. "Tigo plans to grow in the prepay category whilst being the brand of the people. We want users' to express themselves the way they want, where ever they want and any time they wish to." Tigo's latest offer is available countrywide at all main dealers as well as A & B class retailers.

Tea kg. fetches $ 0.30 more

Total tea production in the first five months of the year amounted to 120.1 million kilos, a 13% decline when compared with the corresponding period last year, the Tea Board said.

Meanwhile, January-May tea exports of 117.8 million kilos reflect a deficit of 10.1 million kg. compared to 127.9 million kgs. of last year for the same period, Forbes & Walker said.

However, the FOB unit value has shown an increase of Rs. 54.34 per kg., or 19.7% gain.

The average unit FOB value for 2007 of Rs. 330.12 per kg., is equivalent to $ 2.96, whilst corresponding unit FOB value of Rs. 275.78 per kg., is equivalent to $ 2.66 per kg.

Tea in bulk and tea in packets have shown a decline in volume compared to the corresponding figure. However, these two categories have gained considerably in terms of value.

Meanwhile, tea imported for re-export for the current year at 5.8 million kg. show a 1.1 million kg. or 24% gain compared to 4.6 million kg. imported in the same period last year.

CIS continues to be the largest importer of Sri Lanka teas, although total imports by CIS show a marginal decline. UAE has retained the second position followed by Iran and Syria.

Iran has increased imports by four million kgs. for the period as against last year, whilst Syria and Jordan have imported lesser volumes compared to the corresponding period.

Delegation to Indian ICT summit

The Information and Communication Technology Agency of Sri Lanka (ICTA) will be leading a delegation of ICT companies and other relevant stakeholders to the NASSCOM IT-BPO Strategy Summit 2007 that will be held in Bangalore from August 6-7, said a statement.

The summit, which is one of India's premier conferences of the IT-BPO industry promises to provide a bird's eye view of the IT/BPO sector and its transformation over the past few years, ICTA. Programme Manager Fayaz Hudah said.

 "The Indian BPO industry has been growing at about 75% year on year and notching up revenues of more than USD 9.5 billion. They employ more than 540,000 in this industry alone, apart from the IT services, engineering and R&D work that is being carried out.

The Indian "ITES"-BPO industry has also matured in terms of the types of services it provides to its global clients. From a situation where ITES-BPO organizations were predominantly into basic data entry tasks, today, the Indian industry has graduated to a high proportion of voice-based services and a range of back-office processing activities including Business Transformation Outsourcing (BTO) services". The summit will provide fresh insights on the developments and trends defining the market and their implications for both solution providers and customers. The latest data on the industry analyzed by industry gurus and consultants, best practices and case studies shared by service providers and business and delivery models spotlighted by industry leaders will be some of the areas covered.

This summit is being promoted to the local ICT industry as an event that will provide a much needed learning experience about the market leader in this field: India, best practices and expected future trends. The ICTA is also planning on organizing some site visits based on the participant's interest areas to coincide with this event which would potentially include visits to companies, training institutions and IT parks, ICTA COO Reshan Dewapura said.

"This will be an opportunity for the emerging Sri Lankan ICT industry and also key academics and decision makers to expose themselves to this booming industry in India and to understand the type of effort that needs to be undertaken to align the local systems to reap the benefits of the globally booming industry".

CBSL officers to be questioned on FFCs

Central Bank of Sri Lanka (CBSL) officers who were responsible for the regulation and supervision of banking and non-banking financial sectors during the period 1991 to 2005 will be called before the Presidential Commission of Inquiry to investigate into matters relating to failed finance companies (FFC), said a statement.

The Commission which is presided over by retired supreme court judge Priyantha Perera opened the sessions on Monday (July 2) where CBSL's present Director, Department of Supervision of Non-Bank Financial Institutions Mrs L K Gunatillake was questioned by the Commission in regard to CBSL's regulatory role vis--vis finance companies.

The other Commission members are Faisz Mustapha (PC), Eastman Narangoda and  Ajith Surendra Ratnayake. Former CBSL secretary Mrs Nandani Dissanayake has been appointed as the Secretary of the Commission.  The Commission is empowered to inquire into and report, inter alia, that include  the following matters: To examine the individual conduct for the deficiencies associated in connection with the items highlighted in the COPE Report of June 22, 2005 by relevant CBSL officials who have been in charge of the regulation and supervision of banking and non-banking financial sectors during the period 1991 to 2005; To make recommendations on appropriate steps to be taken against any official/s responsible for such deficiencies; To examine the possibility of recovering amounts due on account of loans given to FFCs by CBSL during 1991-2005 and make recommendations on action to be taken  and

to make recommendations for action to be taken against directors of such FFCs for mismanagement of companies and misappropriation of  funds, if any and to make specific recommendations for remedial measures.

Securities go outstation

In a fresh initiative to deepen the government securities (GS) market and to make it more convenient for retail investors to access GS, the Central Bank  (CB) will establish new retail sales outlets for GS at its regional offices in Matara, Matale and Anuradhapura, Centre for Central Banking Studies Rajagiriya and its Customer Centre at the Ceylinco building, Colombo, said a statement.

  At the same time, new sales outlets will also be established at all regional centres of LankaClear (Pvt) Ltd. This new initiative is expected to enhance the access of retail investors and the general public to the GS market and thereby enhance the market's investor base.

These new retail sales outlets will be managed by NSB Fund Management Co. Ltd. and LankaClear.

It has been observed that, at present, the GS market is largely concentrated in the Western Province (WP), in particular around Colombo and suburbs.  In this context, CB has recognized that there is a vast potential for treasury bills and treasury bonds market outside the WP as well. Accordingly, these new sales outlets are expected to popularize GS among retail investors who do not have much experience in investment in GS.

This would also provide  an opportunity for them  to get an "attractive" return on their investments.

Investors would be able to buy treasury bills or treasury bonds of any maturity and/or any value at these outlets. Their investments will be recorded in the usual manner, at CB's Central Depository System.

New foreign fund

Lionhart Investments Ltd., a global investment company, has entered Sri Lanka's securities market after the purchase of 75% of the locally listed company, Walker and Greig Ltd., said a statement.

The transaction also signifies the entrance of a new foreign Fund to the Colombo Stock Exchange (CSE) which is an important development for the future of capital markets in Sri Lanka.

 Lionhart has been working with Lanka ORIX Securities (Pvt) Ltd (LOSL) during the past few months. Lionhart is a UK incorporated company that is permitted and regulated by the Financial Services Authority (FSA) to carry out investments management and advisory services to a range of investment companies considered as hedge funds that engage in a range of multi-strategy arbitrage techniques and investments.

  Lionhart is a global organization located across the three major time zones and has a strong track record in capital preservation.  The Company's investment strategies are aimed at achieving returns of absolute capital appreciation, regardless of market conditions and benchmarks.

 It is hoped this global hedge fund will infuse some activity to the local market which is dull at present.

 Circumspect in investments

It has been observed, of late, that certain persons are expressing an opinion that the Government is obtaining funds from the Employees' Provident Fund (EPF) to meet specific expenses, the Central Bank (CB) in a press release said.

The following press release is issued as the Fund owes  a clarification to its members in this regard.

The Government issues treasury bills and treasury bonds to raise money to meet its recurrent as well as capital expenditure.  The Fund invests in these government securities (GS) on the basis of FMU's advice which takes into account the funds available for investment and interest rates.

 In addition, the Fund invests in the share market and corporate debentures issued by highly rated private companies.  Since investing in government securities is risk free, it needs to be said that from a long period of time, the Fund has been investing more than 98% of its total investments in GS.  Trade unions representing the members of the Fund have indicated their satisfaction of this investment process.

Due to EPF 's investment policy, the Fund was in a position to pay 10.1% (declared rate) as interest to its members in 2006.  Since, in terms of the provisions in the relevant Act interest to be paid to its members has to be based on the balances lying to the credit of members as at December 31, in fact, the actual rate paid was 10.3% in 2006.  This was higher than the average interest rate paid on fixed deposits in the banking system.

 The interest rates paid by the EPF to its members during the last three years are as follows.

Year                 Interest Rates
                         (Declared %)

2004                                9.5
2005                                9.0
2006                               10.1

The EPF received Rs.17 billion as net annual contributions and earned over Rs. 40 billion as investment income during the year 2006 and its current investments stand at Rs. 500 billion.

It is the responsibility and the policy of the Fund to invest these funds in investments with the lowest risk with maximum benefits to its members.

The Fund has consistently observed this policy from its inception in 1958 up to now.  A Fund Management Unit (FMU) comprising professionally competent persons is available to provide professional advice to the EPF on its investments.  It is the responsibility of this Unit to study the investment opportunities that exist in the economy on a daily basis and advise on available investment opportunities.  The Fund categorically states that all its investment decisions are made on the basis of FMU's advice.

Rates fall with liquidity injection

Call money market rates after peaking at 38% on Tuesday, dropped down to around 14.5% at Friday's  trading (Friday's peak rate), market sources said. They attributed this decline to the market once again becoming liquid.

The market had Rs. four billion of excess liquidity on Thursday, the sources said. Pressure on rates had been mounting after the Central Bank (CB) rejected several treasury bill and bond auctions recently, because the market was demanding rates higher than what the CB was willing to pay.

As a result, around Rs. 21 billion worth of bill and bond auctions were rejected by the CB, including two weekly treasury bill auctions, causing a liquidity crunch, resulting a pressure on rates. However, the CB has been rejecting treasury bond auctions for the past several weeks.

But the CB has made the market once again liquid by releasing new money to the system and also by getting captive funds to invest in the rejected auctions, it is speculated. As a result, causing a fall in rates, with the market once again becoming liquid by easing supply constraints.

The CB will be holding an auction for Rs 11.3 billion worth of maturing treasury bills on Wednesday. This is in addition to Rs. 2.9 billion worth of bills having being already reserved for subscription.

Meanwhile, the rupee closed at Rs 111.50 to the dollar on Friday, virtually holding on to its Thursday's levels, which sources attributed to market sluggishness.

The Colombo bourse, dogged by a high interest rate scenario, returned a modest turnover of Rs. 154.1 million at Friday's trading.

Among some of the main trades done on Friday were: Two hundred and eighty five thousand three hundred shares of Ceylinco Insurance done at Rs. 180 a share; 100,000 shares of JKH done at Rs. 144 and 900,000 shares of SLT done at Rs. 36. These three transactions accounted for nearly two thirds of Friday's turnover, by contributing a total of Rs. 98.2 million.

The benchmark ASPI fell by 15.25 points over Thursday's closing figure to finish the week at 2,523.96; while the more sensitive MPI fell by 29.36 points to close at 3,501.43. Market capitalisation slumped by Rs. five billion to Rs. 812.9 billion, its ninth lowest figure for the year.

LWL looks to China

Lanka Walltile Ltd. (LWL), the "premier" wall tile manufacturing company in Sri Lanka continues on its exceptional and increased performances in recent years as was evidenced from its released provisional (before audit) financial statement for the year 2006/07, said a statement.

The Company showed a 16% increase in its turnover when compared to the previous year by achieving a sale of Rs.911 million against Rs.786 million. The profit after tax also registered a 16% growth at Rs.145 million  (subject to audit) against Rs.125 million in 2005/2006. Earnings per share also increased from Rs.3.84 to Rs. 4.47.

Whilst LWL showed healthy growth in very difficult local market situations, and competitive export markets during the year under review, the Group consisting of Lanka Walltile Meepe (Pvt) Ltd., its fully owned subsidiary, Lanka Tiles Ltd., the floor tile manufacturer, Unidil Packaging Ltd., the carton manufacturing company and Ceetee Plantations Ltd., the Horana Plantations management company, collectively, also performed well.

Group turnover registered Rs. 5.7 billion as against Rs.4.9 billion the previous year, an 18% growth with profit after tax and after minority interest registering Rs.335 million as against Rs.282 million the previous year, which is a 19% increase. All these figures are subject to Audit. Group earnings per share increased from Rs.8.68 to Rs.10.32.

"LWL has been aggressively promoting its wall tiles with a constant revamping of new and exciting designs displayed at its Nawala Showrooms and throughout its islandwide distributor network," said Company Managing Director Lucky de Chickera.

"We are also aggressively pushing our export sales in the USA, Canada, Hong Kong, Singapore and Australia through participation at international exhibitions and personalized visits to distributors  and agents in those countries," he added.

LWL personnel also visited the 21 st Chinese International Ceramic Industry Exhibition in Guangzhou province recently to source new materials, machinery  and pigments.

 "This is the 3rd consecutive year we have visited this exhibition and each year it keeps getting better and better" de Chickera said. "Competition amongst suppliers is getting stronger and more acute, whilst the technology is improving by leaps and bounds." LWL is looking at sourcing much of its requirements from China due to its lower costs and improving quality.

"An aggressive marketing and sales strategy coupled with a constant sourcing of competitively priced material and machinery have helped us to give all stake holders a continuing and increased return on their investment and input," de Chickera said.

F & G  into holiday resorts

The Finance and Estate Guarantee Real Estate Company Ltd., established its fourth branch at Rangiri Dambulla on June 21, said a statement.

Under this branch, facilities are due to be provided in areas such as housing projects, land sales and finance.

Parallel to this event, the foundation stone for the housing scheme due to be implemented through this branch was laid at the auspicious moment. at Trincomalee road, Pelwehera, Dambulla.

Thirty seven houses are due to be built under this housing scheme. Meanwhile, F & G Property Sales Company Ltd., laid the foundation stone for its own building at Dambulla.

This building is to house its fourth branch.

The foundation stone for the original housing scheme was laid by F & G Deputy Chairman Mervyn Jayasinghe, Kurunegala Mayor Nimal Chandrasiri de Silva, Matale Pradeshiya Sabha Chairman K.G. Somapala, Miss Sri Lanka Ms. Aruni Rajapakshe, F & G Executive Director Mohan Perera and Director / General Manager of the F & G Real Estate Company Ltd., Chalaka Perera.

Pillewe Vihare Chief Incumbent Ven. Polonnaruwa Seelananda Sanghanayake Thera and Mihintale Rajamaha Chief Incumbent Ven. Walawahangunuwewe Dharmmaratana Thera performed the religious rites.

Arrangements will be made to enable customers to buy houses under an easy payment scheme. The houses will be built on the model of holiday resorts.

Training on customer care

Only companies with excellent customer service will survive in the future, a statement quoting Deputy Managing Director (Motor) Associated Motorways PLC (AMW) and Ceylon Motor Trade Association President Ranjan de Silva said.

The occasion was the inauguration of an attitudinal training programme for 57 AMW employees and conducted by customer service trainer Dhammika Kalapuge that was held at Ceylon Continental Hotel recently.

De Silva continuing said that AMW is taking all possible steps to offer excellent customer service. He also said that AMW is expanding parking facilities and also setting up a state of the art new body repair facility to provide necessary infrastructure together with planned regular staff training to provide excellent customer service to remain in profitable business.

Business & war

M.A.L.Aruna Fernando, a Chartered Institute of Management Accountants (CIMA) fellow and an Associate member of the British Computer Society was elected President of CIMA last Friday. 

 Expressing views on the present situation in the island and as to how CIMA feels about the business climate, Fernando said that going through certain phases is a common thing for any country in the world.

"Business can be done even in conflict situations. The war in Sri Lanka has been continuing for over two decades now, but it doesn't mean that businesses close down.

In fact, we are planning to conduct a seminar on how to do business in conflict situations in the near future.

  When questioned how CIMA coped when it came to competitition from other professional bodies, Fernando said that the CIMA members' 'profiles' itself were more than enough to attract students as 40% ofthe members were CEOs of reputed companies.

"In addition, most of our students are employed and these are key factors we use to drive in more students towards following courses at CIMA," Fernando added.  (SR)

HSBC funds new pavilion

The CR&FC new pavilion, sponsored by HSBC and the Football Federation of Sri Lanka, was opened recently, said a statement.

 HSBC together with the Football Federation & members of the CR&FC have sponsored this building for a period of 10 and 20 years respectively.

With the construction of the pavilion, rugby and football fans can now enjoy a better view of their favourite teams in action.

Air line profitability after seven year lapse

The International Air Transport Association (IATA) released traffic results for May that showed 5.5% growth in year-on-year  (YoY) international passenger demand.

 Growth in freight demand  rose to 5% (up sharply from 2.8% in April). This was the largest increase since September 2006, said a statement.

"The industry is expected to turn a profit of US$5.1 billion in 2007-the first black number since 2000 . impressive investments in more fuel-efficient fleets that we saw again at the Paris Air Show last week, and you can see an industry that is on target for a projected 25% increase in fuel efficiency by 2020," said IATA Director General Giovanni Bisignani.

 Average load factors remained strong at 73.7%, up 0.1% YoY. "The pick-up in freight, led by Asia, could be the first sign of strengthening demand. Over the next months we will be watching the impact of several changing conditions, including intensifying competition from other modes of transport and structural changes such as manufacturers producing lighter goods.

On the passenger side, growth has stabilised while strong competition is keeping load factors high even as carriers aggressively expand international routes to take advantage of some liberalising markets," said Bisignani.

Middle East (ME) airlines saw the strongest passenger demand growth in May with a 19.6% increase that also boosted load factors to 70.8%. African airlines recorded demand growth of 11.2 %, driven by improved regional economic performance and growing links with Asia and the ME.

Latin American airlines showed the first demand growth in a year with a 4.2% increase following airline restructuring. Of the three largest regions, Asia Pacific recorded 5.1% growth, while Europe recorded a slower 3.2% increase due to increased competition from new entrants and no-frills carriers. North American demand rose 4.2% while recording the highest average load factor of all regions at 80.4%.

Air freight demand growth was led by airlines in the ME at 10.5%. However, Asia Pacific airlines drove overall freight growth, with demand doubling from 3.8% in April to 7.6% in May, reflecting the strong levels of economic and trade growth in the region.

Air freight demand growth remained sluggish in North America (2.6%), Europe (1.6%) and Latin America (1.1%) while African air freight demand dropped sharply (-3.6%).

Exporting to EU

The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) recently entered into a partnership agreement with the Centre for the Promotion of Imports from developing countries (CBI), Netherlands, said a statement.

CBI is an agency of the Netherlands Foreign Affairs Ministry under the responsibility of the Development Co-operation Minister. Speaking at the MOU signing ceremony which took place at the Hilton Hotel, Rotterdam, CBI Managing Director Ton Lansik mentioned that the partnership with FCCISL will aim at realising synergies both at the conceptual and operational levels and supporting complementarities.

 He added that Sri Lankan exporters will benefit with value added, demand driven and client focused export development services offered within the framework of the partnership agreement.

With the signing of this partnership agreement, FCCISL will become a partner of a global network of business support organisations which will benefit Sri Lanka in terms of information on economic scenarios, trends, services and products, best practices and issues on export to the EU market. Within the framework of this partnership,the services provided  include : Institutional development activities; Technical cooperation; Information on market developments and Activities on building up competencies on export marketing and management.

Union Assurance conducts "Motor clinic"

Union Assurance under the flagship brand Union Motor motor insurance policy conducted a  "motor clinic" at Kiribathgoda, said a statement.

Vehicles were checked to ensure basic safety standards with interior cleaning attended to by employees of registered garages and service stations with Union Motor in the vicinity.  Union Motor clinics are conducted together with Union Motor partner garages islandwide.



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