CB responsible for inflation

By Ruan Pethiyagoda

In response to the Central Bank's dismissal of a draft report published by the IMF last year, senior economist Dr. Harsha de Silva has said that the Central Bank must stop criticising its detractors and instead assume responsibility for controlling inflation.  

In a statement released yesterday, the Central Bank chastised a draft report published by the IMF, which suggested that foreign factors such as rising oil prices had minimal effect on Sri Lanka's spiralling inflation. According to the CB, the release "reflects the lack of professionalism on the part of those who approved the paper for distribution."

   The paper was written by an IMF researcher, and reviewed by a panel of four colleagues before being approved for release by Charles F. Kramer, Chief of the IMF division that covers Sri Lanka.

Speaking to The Sunday Leader on the CB's dismissal of the IMF paper's findings, Dr. Harsha de Silva said that the rebuttal was "nothing new."    "When S&P downgraded Sri Lanka and changed our rating from stable to negative, they (the CB) accused S&P of being partisan and called them various names. When Fitch downgraded our rating two weeks ago they did the same thing."

   Dr. de Silva pointed out that according to the CB, "every time someone says something that is not the position of the Governor of the Central Bank, then they say it is wrong. Several people including myself have been critically analysing inflation for the last several months, and have been saying there is a serious problem with bad monetary management."

He concurred with the IMF report's opinion that despite every other country being affected by high world oil prices, other countries in the region have managed to control inflation. "Every other country can keep their inflation in the 5-6% region, so there is no reason for Sri Lanka to have an inflation rate nearly five times as high. When we say these things they call us names," 

 "It is a matter of inability and intellectual immaturity to understand the other side of an argument. Economics is not an exact science, there are always differing views. We have to be intellectually mature enough to appreciate each other's views."    According to Dr. de Silva, "it is obvious that the monetary management program is out of control." He said a Central Bank of a country "must take responsibility for inflation" and "not just one side of it."

  "They say that they are controlling the demand side of the inflation, but amount is undefined. You can't control an undefined component. In well governed countries, Central Banks target inflation, and take whatever measures are necessary to control it."    When asked how to improve the current situation and control inflation, Dr. de Silva said that this can only be done by a depoliticised and independent Central Bank. "The Central Bank has been politicised like never before by this government," he noted.

   "In 2002 the CB monetary law was amended with the specific objective of creating independence. They expanded the monetary board from 3 members to five and mandated that three of these had to be appointed by the Constitutional Council. That was the first step of independence. Now we all know what has happened to the Constitutional Council. So now all kinds of jokers are getting appointed to the CB monetary board. Obviously they are political henchmen," he alleged.  

"When the government is spending on all kinds of subsidies and wasteful programs the CB has to accommodate their requests, in other words by printing money. Right now we have stopped printing money for a couple of months. We are paying for the sins of all the money printing last year. As if there was no tomorrow the CB was printing money and denying it." He said that even HSBC, who spearheaded last year's controversial US$ 500 million bond issue, had released a report concurring with the IMF view that Sri Lanka's out of control inflation is a result of over-printing money. 

 "It is not intellectually mature to disregard and rubbish a report that is trying to tell you what the problem is. They have actually bombed all the messengers locally and now they are going after the foreign messengers," he warned.  

Dr. de Silva said that looking forward, the government should move to create an independent Central Bank to resolve the current economic crisis, beginning with appointing the Constitutional Council to facilitate the appointment of the three members of the CB Monetary Board that are appointed by the CC.

Colombo port, highest security in the world

The US Coast Guard has identified Colombo Port as the port with the highest security in the world.

Chief Inspector Creighton W. Goldsmith of US Customs & Border Protection Force (CBP) speaking at a seminar in Colombo last Saturday said that this observation was made by two officers of the US Coast Guard who recently inspected the Colombo Port.

They were impressed by the high walls surrounding the Port, the security checks being implemented and the weapons that were in place to be used for the defence of the Port, said Goldsmith who is currently based in the US Embassy in Colombo.

Goldsmith further said that there were four container X-Ray machines in place at the Colombo Port.

After 9/11, the USA, in its attempt to strengthen border security, has partnered with governments from around the world to strengthen security in their seaports and airports as well.

Colombo Port is the main point of export of Sri Lanka apparel, whose major export markets are the USA and the EU. Apparel exports are also the country's single biggest foreign exchange earner and the biggest export from Colombo Port to the US and EU markets.

Additionally, Colombo Port is also the hub port in the South Asian region.

"The container is the biggest threat to security," said Goldsmith. Worse is if there is a nuclear bomb in a container, he said.

"The drug smuggler needs to get it (container) back, but not so the terrorist who won't mind it being destroyed along with the bomb it is carrying," he said.

Goldsmith said that under the post 9/11 security arrangements, US Customs require bill of lading information from shippers at least 24 hours prior to the container getting into the ship.

Those should include information such as the number of boxes that are being exported, the seller's name and address, the manufacturer's (supplier's) name and address, who is the consolidator and the country of origin.

Prior to "9/11" such information was needed only three days before the vessel docked at a US port, he said.

They (US Customs) do checkings electronically to ascertain the relationship between the shipper and the consignee. "We want a known shipper, only thing we are concerned about is an imposter," Goldsmith said..

 "We can now X-Ray entire containers and can detect radiation emanating from those substances that go to make nuclear bombs," he said. An entire container could be examined in two minutes.

Goldsmith further said that under the US government's Container Security Initiative (CSI), they have 600 officers stationed overseas, working with different Customs organizations from around the world, whilst at the same time partnering with international trade.

"If we examine a container in Colombo, there is almost a 100% guarantee of a free ride to the USA of this container under the CSI," Goldsmith said.

However, one of the drawbacks in Sri Lanka Customs operations is that they process documents manually, he said.

"Because of the efficiency of Sri Lanka Customs, in the six months I have been here, I have witnessed no delay," Goldsmith however said.

The USA's CSI initiative is operational in 55 international ports, including that of Colombo.

But only about 2-3% of containers going into the USA from Sri Lanka are scanned, said Goldsmith. Around 7,000 containers are weekly exported to the USA from Colombo.

But by 2012, the US government wants all containers entering the USA scanned. However, for all practical purposes that is not going to happen, he said. The status quo, vis-…-vis the current security checks in place will continue, Goldsmith opined.

He also said that under the USA's Customs-Trade Partnership Against Terrorism (C-TPAT), 40 different local companies have had applied for the above partnership.Goldsmith also said that a ship with 8,000 containers may well be carrying as much as 6,000 containers to Wal-Mart, a departmental store and the USA's single biggest importer.

He also said that they were working in developing the "smart" container so that no one could tamper with it after the owner locks it.

War premium on vessels docking at port

Though the USA says that the Colombo Port has the highest security in the world, not so international re-insurers, who charge a war risk premium on vessels docking at the Colombo Port, a shipper and an academic said.

Rohan Masakorala, Course Director, Academy for International Trade & Transport quoted a US Customs officer last Saturday  who said that two US Coast Guard officers had deemed that the Colombo Port had the highest security in the world at a seminar in Colombo. After the Colombo Airport was attacked by the terrorists in July 2001, international re-insurers have begun levying a surcharge on all ships and planes entering the Colombo sea-port and airport..

Masakorala further told The Sunday Leader that the Joint Apparel Association Forum (JAAF), the apex body of the country's apparel industry, has impressed upon the government, of  the importance of implementing e-commerce among all state sector bodies, including that of Customs.

Apparel exports are Sri Lanka's single biggest foreign exchange earner. Masakorala is also JAAF Deputy Secretary General.

Masakorala who was one of the speakers at a seminar on the USA's Container Security Initiative (CSI), made this statement, after The Sunday Leader queried from him that one of the chief concerns of US Customs is that Sri Lanka Customs still processes their documents manually.

"Deadlines have been set for state agencies to convert their operations to ecommerce before the year end," Masakorala, who declined to give further details said.

Airline growth retards

International Air Transport Association (IATA) released  international traffic data showing that the global passenger load factor (PLF) fell to 73.3% in February.   This is 0.6% below the PLF in February 2007.

Moreover it is the most significant drop in the PLF in 4 years.  Traffic data for February is skewed by the leap year. The extra day hides the continuing slow down in demand. Unadjusted traffic figures showed year-on-year (YoY) increases of 9.2% and 5.9% for passenger and cargo demand respectively.

"When we adjust for the impact of the leap year, passenger demand increased by 4-5% while freight was even more sluggish in the 2-3% range. Demand is still growing. But clearly we are in a different league from the 7.4% and 4.3% growth that we saw in 2007 for passenger and freight respectively.

Things are slowing down," said IATA Director General Giovanni Bisignani.   "Load factors tell the story. They fell in the four largest carrier regions, showing the growing impact of the US economic slowdown on the  airline industry," said Bisignani.  European PLF recorded the single largest drop of -1.6% to 71.7%.  Asian carriers saw their PLF fall by 0.3% to 75.2%, while North  American airlines experienced a 0.4% drop to 74%. The Middle East  saw a 0.9% fall to 72.6%, balanced against a 20.3% growth in  passenger traffic supported by the oil business.   This is strong growth even taking into consideration the leap-year impact. 

 The exceptions were Africa, where a contraction in supply boosted PLF by 2% to 67.4% and Latin America where a strong balance of payments and  commodity demand from Asian trading partners boosted load factors by 0.9% to 73%.

Against the backdrop of a slowing US economy, the US-EU Agreement  on Open Skies took effect on Monday (March 31). The weak US dollar and strong Asian and European economies are boosting US exports and outbound travel. US carriers are growing Trans-Atlantic traffic in double-digit figures. By contrast, the competitiveness of Europe's carriers is negatively impacted by the strong Euro which is also dampening European exports. 

"US-EU Open Skies will be yet another variable in a complicated equation," said Bisignani. "Out of Europe's busiest international hub-Heathrow-there are 25% more weekly flights scheduled to serve the US market.   Consumers will benefit from greater choice and lower fares due to intensified competition. We expect a counter-cyclical boost in this month's (April) traffic as result. The question will be how much and for how long."

"Trans-Atlantic competition will increase this month thanks to new route opportunities. Now what we need is the full set of commercial freedoms to be able to serve those opportunities effectively. Stage two talks must address the liberalisation of ownership rules so that airlines can merge or consolidate where it makes business sense. Every other industry has the opportunity to go global. Why not airlines?" said Bisignani.

Bombs give publicity

What the USA knows about Sri Lanka is when a bomb goes off. (Chief Inspector Creighton W. Goldsmith of US Customs & Border Protection Force at a seminar in Colombo last Saturday)

10 mn. containers screened

One of the security measures adopted by the USA in the post "9/11" era is the Mega Ports Initiative. Kenneth Ames, Project Manager for Mega Ports Initiative (MPI) of the Colombo Port, speaking at a seminar last Saturday said that this initiative is to detect radio-active material that may be used to manufacture nuclear bombs. He said that Sri Lanka Customs has partnered with them in the MPI initiative. It was implemented in Colombo in 2006. Since then, some 10 million containers have been scanned.

US airlines take 769 mn., passengers in '07

US carriers operated 10.7 million domestic and international flights in 2007, Reports USA's Department of Transport (DOT) and carried a record 769.4 million passengers, up 25 million over  the previous record set in 2006.

Domestic passengers totalled 679 million, up 3.1% over 2006; international, 90 million, up 4.7%. Average load factors were 79.9%.  Meanwhile, a record 56.7 million international visitors travelled to the USA in 2007, reports the U.S. Department of Commerce, an 11% increase over 2006. Arrivals from Canada totalled 17.7 million and Mexico,15.1 million; 46% of overseas arrivals were from Western Europe.

Visitors spent $122.7 billion on travel to and tourism within the USA, 14% over 2006, outspending US travellers abroad by $17.8 billion. US citizen international air travel increased almost 3% in 2007, with travel to Europe up 3% and to Asia up 8%. (Washington Aviation Summary)

Stock market announcements

Vallibel Power Erathan Ltd., has declared a tax free interim dividend of 30 cents a share. Excluding dividend (XD) date is April 22 and payment date May 5. Asiri Hospitals Ltd., has declared an interim dividend of 75 cents per share for the financial year 2007/08.  XD date is April 23, 2008 and payment date May 6.

Asiri Surgical Hospital Ltd., has declared an interim dividend of 75 cents per share for the financial year 2007/08. XD date is April 29, 2008 and payment date May 6.

Arpico Finance Company PLC has announced a rights issue in the proportion of  "1 for 6" at an issue price of Rs. 55 a share. The quantity offered in this connection is 262,500 shares. Excluding rights date is May 8, 2008; EGM and provisional allotment May 7, splitting May 30, renunciation June 6, dispatch of provisional letter of allotment May 14 and trading starts on May 22, 2008.

Commercial Bank has announced a final dividend of Rs. 2.50 a share for the financial year 2007 for both voting and non voting shares. AGM on April 4, excluding dividend (XD) date April 7 and payment date April 14, 2008. Pan Asia Banking Corporation PLC has declared a first and final dividend of 75 cents per voting share for the financial year 2007. AGM on April 24, 2008, XD date April 25 and payment date May 2, 2008.

Environmental Resources Investment PLC has declared a rights issue in the proportion of 24 for 1 at an issue price of Rs. 10 a share subject to shareholder approval. Quantity offered is 417,265,920 shares. EGM and provisional allotment on April 28, excluding rights date: April 29, splitting: May 22, renunciation: May 29 and dispatch of provisional letter of allotment: May 6. Cargills Ceylon Ltd., has offered an interim dividend of Rs. 7.50 a share for the financial year 2007/08. XD date is April 8 and payment date: April 22.

The company also made an announcement to sub-divide their shares into 40 ordinary shares.  Stafford Hotels PLC has declared a 50 cents interim dividend. XD date is March 11, 2008 and payment date March 25.

Vidullanka PLC has proposed the capitalization of its reserves in the ratio of 1 for 10. Excluding capitalization date is March 24, 2008 and EGM/allotment on March 19. Pan Asia Banking Corporation PLC has declared a 75 cents first and final dividend per share with dates to be notified. Ceylinco Insurance PLC has declared a first and final dividend of Rs. 3 per share for the financial year 2007.

AGM on March 27, 2008; XD date March 28 and payment: April 3, 2008. Regnis Lanka Ltd., has declared a Rs. 3 final dividend per share.

AGM on March 27, XD date on March 28 and payment date on April 3. Singer Industries (Ceylon) Ltd., and Singer Sri Lanka Ltd., have declared a Rs. 2 final dividend each. Singer Sri Lanka's XD date is March 28 and payment date April 3, while Singer Industries' AGM will be held on March 27, XD date March 28 and payment date April 3.

James Finlay and Company (Colombo) PLC has declared a Rs. one per share final dividend. AGM on March 26, XD date on March 27 and payment date on April 2. Talawakelle Tea Estates PLC has declared a Rs. 2.50 per share interim dividend subject to a 10% tax. XD date on March 4 and payment date on March 17.

Seylan Merchant Leasing Ltd., has declared a 50 cents final dividend for the financial year 2007.  AGM on April 28, XD date on April 29 and payment date on May 5.

Swara's creatives to Thailand

Every year the premier advertising body in the country, the Accredited Advertising Agencies Association holds a young creative competition locally and selects the best talent to represent the country in Asia's biggest Advertising festival, Asia Pacific AdFest.

In its first year of existence, BBDO Swara saw its young guns come out victorious.

Shanuki de Alwis and Mark Perera of BBDO Swara competed against the young talents of 11 agency teams in the country and were adjudged 'head and shoulders' above the rest.

de Alwis and Perera will soon represent the country in the premier regional advertising competition in Thailand along with the best young talents of 18 countries in the Asia Pacific region. At AdFest they will first undergo training and seminars conducted by industry gurus from the region and then compete to win the coveted 'Young Lotus' title. Additionally, they will get an all-expenses paid exposure & participation to the AdFest event itself, which awards the best of creative in advertising across the region.

BBDO Swara CEO Keith Wijesuriya said, "It's the beginning. We spent the first year since starting up lying low, getting our people and act together. 2008 is the year we plan to come out and play. BBDO is obsessive about work. And Perera, de Alwis and all the guys are the product of that obsession. We are proud of these guys and wish them the very best for AdFest as we prepare them for it.'

The young creatives say that while they were nervous at the competition, they were sure their idea was both different and interesting.  de Alwis said, 'Facing the power-packed judging panel was intimidating, but we were there for all or nothing and when we heard we made it, I witnessed my partner Perera make the biggest creative leap, 6 feet above ground.'

A veteran in Advertising, Upali Herath said, 'I am a great believer in BBDO's philosophy, 'great work, works best!' I presume it was this inherited value and learning that made de Alwis' & Perera's idea appeal to the judges both creatively and commercially.'

Strategic Planning & Creative Director Kunal Roy believes that there are 3 reasons for Alwis & Perera' winning: "One, good talent; two, idea-centric, people-focused communication which we call TotalWork and finally intensive training on the knowledge rolled out by the Network including BBDO University.

RAM reaffirms BFL's rating

RAM Ratings has reaffirmed Bartleet Finance Ltd's (BFL's) long and short-term financial institution ratings at BBB- and P3, respectively.

The long-term rating has a stable outlook. The reaffirmed ratings are premised on the Company's moderate financial performance, funding and capital adequacy levels. RAM Ratings has also taken into consideration BFL's improving asset quality.

BFL is a small player that accounted for only 1.84% of the registered finance companies' (RFCs) industry asset base as at FYE March 31, 2007 (FY Mar 2007). Even though the Company has six branches outside Colombo, the deteriorating macro-economic environment and competition from banks have impinged on its loan growth.

Despite the deceleration in the growth momentum of its loan base, BFL's asset quality has improved, albeit with the possibility of weakening in the future. The Company has banked on the booming hire-purchase (HP) segment in Sri Lanka which accounts for almost 80% of its lending portfolio. As BFL began HP vehicle financing only in 2005, this segment is relatively new. As such, RAM Ratings considers this category of assets to be unseasoned, as evident from the marginal increase in delinquencies.

On the whole however BFL's collection and monitoring have improved considerably. Furthermore, hefty write-offs in the previous two years have helped the Company lower its double-digit gross non-performing-loan (NPL) ratio to 4.44% as at end FY Mar 2007 (industry: 4.46%).

The Company's decelerating asset growth and better collections have meanwhile reduced its bank borrowings. Nonetheless, the rising interest rate environment has shifted BFL's deposit mix towards the shorter end, thus broadening the negative funding gaps in the "less than 1 year" bracket. Against this backdrop, the continued absence of a formal asset-liability management process can become a concern.

At the same time the Company's profit performance was dampened by larger than average overheads and loan-loss provisions. BFL closed its books for the FY Mar 2007 with a pre-tax profit of LKR 64.46 million (FY Mar 2006: LKR 103.68 million). Looking ahead, RAM Ratings expects the Company's financials to weaken further owing to its contracting margins.

Elsewhere, BFL's Tier I and overall capital-adequacy ratios have improved due to the slower growth of its loan base. Nonetheless, the Company's weakening financials and anticipated higher dividend payouts as a result of deemed dividend tax is likely to keep its capital-adequacy ratios at moderate levels.

RAM Ratings is a domestic credit rating agency and is a 100% owned subsidiary of Malaysia's rating agency RAM Holdings Berhad which is an affiliate of Standard & Poor's, the world's largest rating agency.

Sierra ties up with Raffles

Sierra Cables, & an ISO certified company in the cable manufacturing industry recently signed up with Raffles Solutions to implement an ERP solution, Microsoft Dynamics NAV.

Alucop Cables is the fully owned subsidiary and the manufacturing arm of Sierra  and has grown into one of the foremost BOI companies. The decision to go for a world renowned ERP solution has been one of Sierra's primary goals, where it would meet with their objective of being technologically geared to keep pace with the industry's demanding requirements.

Raffles is a leading technology consulting partner of Microsoft specializing in the management of enterprise management system for mid - to - large size organizations across Asia. A Microsoft Gold Certified Partner, the company is an expert in Microsoft Dynamics, a solution suite for business process automation developed specifically for growing mid-size to large scale organizations.

Raffles will implement areas such as supply chain management, financial management, business intelligence, inventory, quality control & manufacturing.

New capital needed for sustainability

The capital intensive nature of banking business and the fact that growth in risk weighted assets cannot be supported solely by internally generated funds make it imperative that banks are required to approach their shareholders for infusion of new capital.

Nations Trust Bank PLC (NTB) has recorded a compounded annual growth rate (CAGR) in assets of 28% over the past five years, including the recently concluded rights issue.

NTB has approached shareholders' four times over the short history of nine years and shareholders have infused Rs. 3,100 million to the core capital.

With funds infused through the recent rights issue and to be infused in 2010 and 2011 on conversion of warrants into shares, the Bank is confident that its capital requirements to support the growth plans in the medium term can be met.

The Central Bank has directed that all licensed commercial banks (LCBs) fulfil the minimum capital requirement at two levels in terms of Section 19 of the Banking Act No. 30 of 1988.

The two levels of capital requirement are a minimum core capital requirement of Rs. 2.5 billion irrespective of the size and complexity of operations, and a Basel Accord based on capital adequacy ratios of 5% and 10% for tier 1 and tier 1& 2 respectively.

As at December 31, 2007, NTB and NTB Group had: Core capital (tier 1)-NTB: Rs. 2,579 million and NTB Group: Rs. 2,789 million.

Total capital (tier 1 & 2)-Bank: Rs. 3,830 mn., and Group: Rs. 4,044 mn. Capital Adequacy Ratio (CAR)-tier 1 (%): Bank: 7.08 and NTB Bank Group: 7.20%.

CAR: tier 1 & 2-Bank: 10.52% and Group: 10.44%.

NTB began operations with an initial capital of Rs. 500 million which was increased by the infusion of additional capital (including share premium) of Rs. 455 mn., through a 7 for 10 rights issue in 2003.

The bank's capital was further increased by Rs. 1.066 billion in 2006 on account of the merger with Mercantile Leasing Ltd., with 60% of this increase being contributed by the two founder shareholders of the bank, John Keells Holdings PLC and Central Finance Company PLC. The bank's recent rights issue raised another Rs. 1.048 billion for NTB.

(NTB 2007 Annual Report)

17,000 hrs. lighting time

Fluorescent lamps (tube lights) in Sri Lankan offices and factories have been taken to a new level of sophistication and economic sense with the introduction of a new generation of state-of-the-art fluorescent lamps from Philips by Hayleys Consumer Products Ltd (HCPL), a key player in the local lighting solutions market.

Part of the global lighting leader Philips' Professional Lighting products portfolio, this new range includes efficient fluorescent lamps lasting upto 17,000 hours, have the lowest mercury content in the industry, are flicker-free, and when used with recommended high frequency electronic ballasts, can save 60-80% in electricity consumption and be dimmed to suit the requirements of the user.

"These new products have been rated best-in-class around the world and their arrival in the local market cannot be more timely in the context of rising electricity costs," Hayleys Lighting Business Unit Manager Janaka Kiridena said.

"Although they cost more than the standard fluorescent tubes, these new tube lights result in considerable savings through reduced maintenance, longer replacement cycles and substantial savings on electricity."

"The days when the same type of tube light was used to provide lighting at different locations are now over," Kiridena said, adding that the new Philips lighting range comprised products for both indoor and outdoor applications with weather-proof fittings.

HCPL's Professional Lighting Unit Manager Ruwan Withanage said the company has also introduced a range of Philips high frequency electronic ballasts for use with these new fluorescent lamps. These ballasts can also be used with standard fluorescent lamps to reduce energy consumption and prolong the effective life of the products, he said.

A member of the Hayleys conglomerate which has been adjudged a Business Superbrand by Super brands Organisation, Hayleys Consumer is the sole representative in Sri Lanka for several leading international brands in Photo Imaging, Philips Consumer and Professional lighting, and Personal Care which include Fuji film, P&G and Gillette.

Hoteliering & fertilizer business

Cinnamon Lodge, Habarana recently launched an initiative: selling 5 kg and 10 kg packs of compost to both its visitors and guests, as well as those of the neighbouring Chaaya Village, Habarana.

The compost is made up of garden waste collected from the two hotels, along with farmyard manure, crop residue, dolomite and top soil, in order to improve its quality.

"The preparation of the compost was started a few years ago," said Cinnamon Lodge Manager Sarath Wickremasinghe. "The idea occurred to us because of the large amount of garden waste collected from the two hotels Cinnamon Lodge and Chaaya Village on a daily basis: around 750kg to 1,000 kg. of dried leaves each day! We have the capacity to produce 1,000 kg. of compost each month." Two large pits (20'x 20'x10' in size) were then prepared in which to allow the leaves to decompose. The dried leaves are left in these  pits for a total period of six months. Meanwhile, separate compost pits  have been prepared for the purpose of the two hotels and the vegetable  plots.

John Keells Holdings Director Sumithra Gunesekera said, "This is an excellent opportunity, not simply to utilise the garden waste from the two hotels, but also to give our guests an opportunity to participate in our ecological practices. In the process we also hope that we can drive home the message of recycling and reusing principles that we try to adhere to."

5 child savers to Disneyland

HSBC recently launched a special Disneyland promotion for HSBC Children's Savings accountholders.

This promotion entitled children with an accumulated savings balance to win 5 packages to Disneyland-Hong Kong.  The winners of the all expense paid travel to Disneyland were Miss T Mendis, Master A R Kasturiarchchi, Master M Seyon, Miss S. Jeyakumar and Master D N Bartholomeusz. A fun-filled evening was organised at Twinkles recently to present the winners with airline tickets. Magic shows with a treasure hunt coupled with plenty of food, music and gifts were the order of the day for all 80 children savers who participated.

Each winner received two return airline tickets for themselves and an accompanying parent to spend a two nights and three days stay in Hong Kong with two passes to enter into the magical wonder of Disneyland.  

Opening a children's savings account at HSBC is the beginning of an international relationship and is an investment that will only prosper once the children grow into young adults.

HSBC's global presence assures that no matter where customers travel to, access to funds will never be difficult. At the same time, the bank's local focus allows flexibility in meeting specific local needs. Some of the benefits accompanying the Children's Savings Account include an interest rate as high as 15.5% (subject to change) and 1% more if the balances are over 200,000, special welcome gifts, birthday gifts (the value of which is based on the account balance), computer loans when the child reaches 10 years of age for 25% more than the balance available in the account, upto Rs.100,000.

 The account is designed to introduce children to good financial management skills at an early age, enabling them to take charge of their lives when they mature into adulthood. At the age of 12, a child becomes eligible for an ATM card that allows him/her to check account balances via local ATMs and make deposits. Children are also given a sense of control by Personal Internet Banking and access to Phone banking service where they can check account balances. In this way it is hoped HSBC will achieve its aim to give young children the experience necessary to navigate today's fiercely competitive economic world.

Additionally, for all accounts over Rs20,000, the bank offers the parent or guardian a free life insurance cover of Rs100,000 until the child reaches 18 years. This amount will be credited to the minor's account in the event of the demise of the parent or guardian. Plus, a hospitalisation cover of 500 per day for the child.

When the customer turns 18, the children's savings account can be converted to a normal savings account. "The customer is then eligible to open an E Saver account, upon earning a salary of Rs10,000 a month and with an initial deposit of Rs1,000."

The children's savings account then, brings together a range of banking services for everyone in the family-from toddler to grandparent.

Grants, 50 years old, forging partnerships

During a dynamic celebration on the rooftop of the agency's newest and plushest office, Grant McCann Erickson (GME) Board of Management shared details of the agency's plans for 2008 in terms of the myriad ways they intend to celebrate and commemorate the company's 50th anniversary.

"In the 50 years since its inception, GME has scaled heights, winning national and international acclaim for its advertising campaigns, including Sri Lanka's first Gold award for marketing at the 2007 Pacific Asia Travel Awards for its Home Away from Home campaign for Sri Lankan Airlines," says GME Chairperson and daughter of its founder Reggie Candappa, Mrs Neela.Marikkar.

 "This is the first time in the country's history that an ad agency has reached this golden milestone and today we celebrate a half century that the agency has spent interpreting and conceptualizing ideas that have created some of the most original and enduring images in local advertising. The gift of original ideas is one that we have given consistently over the years, creating successful platforms for our clients, changing public perceptions and shaping this country's advertising landscape."

Reggie established Grant Advertising (Ceylon) Ltd on April 1, 1958. The agency entered into a strategic partnership with international advertising powerhouse McCann-Erickson Worldwide, in 1993, creating GME.

From a single client during its fledgling years, the GME client portfolio has grown in stature to feature some of Sri Lanka's most respected corporates and high profile public service accounts. GME has also expanded its service portfolio, offering integrated support services that are independently run, including marketing communications corridor Response Marketing, Grant PR, Sri Lanka's largest public relations company, media AOR arm Universal McCann and in-house production company, Juice.

 "Right throughout our history, we have used our talents not only for brand building, but also to promote social causes often on a pro bono basis. Many of these campaigns have not only won gold awards for outstanding creativity, but also made a difference in peoples attitude towards social issues," says.Marikkar.

Staying in line with the issues that are closest to the agency's heart, and marking this watershed in the Sri Lankan advertising industry, GME is launching a special Corporate Social Responsibility project together with the Association of Friends of Prisoners' Children, which raises funds for children of prison inmates through a scholarship programme.

GME will sponsor 50 Children of Prisoners to ensure they enjoy better opportunities in life through the benefits of education.

 Marikkar said, "These children, who are vulnerable to the pitfalls of society need every encouragement to ensure they are able to succeed in life, and providing a sound education is a step in the right direction.

Through our sponsorship of 50 Children of Prisoners for this the 50th Anniversary of GME, we hope to draw attention to this neglected segment of society and inspire others to provide similar support to these children who are in need of our assistance."

Another project will be a book spanning 50 Years of the Ad Industry in Sri Lanka which will be published mid year as a tribute to Reggie.

GME also plans to toast the hundreds of satisfied clients, who have passed through its doors. Client-agency relationships have flourished over the past half century. Singer is just one of the many clients who have maintained a long standing relationship with the agency, "Singer has been a client of the company for 49 years," says.Marikkar. "Our relationship with Singer is of importance, especially since we have seen them grow along with us, becoming Sri Lanka's number one power brand."

Such shared success will reach a new level as GME enters the next 50 years. Part of this relationship building endeavour will be a series of workshops conducted by the agency to introduce clients to what they can expect from the ad industry in term of business innovations, Experiential and Digital Marketing.

As the agency that boasts some of the bestprofessionals in the industry, GME will celebrate its gifted staff with a special staff family day out and awards for service excellence to those who have accompanied the agency on its journey of success. In addition, the company also plans to bring its fellow agencies and members of the media together to foster greater understanding and create solidarity, as they host an inter-agency bowling competition.

Mrs. Marikkar says: "We are an agency who had small beginnings with one man's vision.  In a fledgling advertising industry at that time, Reggie had the creativity, talent and the courage to think tall which took this agency to the top in record time. The then Grant Advertising has today become The Grant Group of Companies branching out from being a single entity, to include several marketing communication companies and multiple advertising agencies..making Grants the largest integrated marketing communications Group in Sri Lanka, with billings in excess of Rs.2 billion and a staff of 170."  

NTBs by India stifle trade

Whilst the whole of South Asia is hit by Terms of Trade shocks with a barrel of oil hitting a record 107 dollars last week, the vibrant and resilient export community in Sri Lanka continued to drive growth, bringing in a mammoth US$ 7,700 million in 2007, and helping the country to cushion the impacts of the increasing energy bill. What is required now is a quick indepth analysis of the export performance and then capture some key action points, to better this number in 2008.

We have to understand that the year is going to be a challenging one, given that Sri Lanka's major export destination -USA showing signs of a recession.

For the 2nd month in succession retail sales declined to hit a low 6% in February-job losses in the last two months in the USA driving up to 85,000. We also know that China will get quota free access to garments that Sri Lanka now has leadership on.

 The electricity price hike will make our exports pricier by around 8-9% (the latest estimates coming out) which further adds to the challenge. We all know the challenge that Sri Lanka faces in the EU-the key growth market last year. The only positive sign is that the spirit and resiliency of our export community in absorbing  challenges and the past track record of riding the wave of challenge successfully. However, as the National Chamber of Exporters Chairman said "How much resiliency can this industry demonstrate?" is a question we will have to see in the years to come.

FTAs failed?

Whilst we can be proud of the 2007 export performance, if we do a detail analysis on the strongly emphasized area last year-free trade agreements (FTAs) with South Asian counterparts, the export numbers are not at all encouraging.

Exports to India in 2007 even though is up 5% above 2006, it is however below the 2005 revenue by 7.8% to 514 million dollars. The quota utilization of the strategic products of Sri Lanka-Tea and Garments is below 6%. Sri Lankan exporters experienced non tariff barriers by Indian authorities like tariff rate quantities (TRQs), delays in custom clearance of cargo, port restrictions, necessity for several tests to be carried out in India even though  certificates had been issued by relevant authorities here. That resulted in many Sri Lankan exporters losing confidence on bilateral agreements which are essentially designed to promote fair competition and equitable benefits.

The poor performance of Sri Lankan exports into India on the strategic sectors of Tea and Garment in 2007 was a repeat of the 2006 performance, which means that there has been no result on the many representations made by Sri Lankan authorities. I feel its time that Sri Lanka become tough and play the man's game of business

As I said at the ADB-UNTAD Conference on trade in South Asia, its time that we capture " The lessons learnt is the last  5 years of trade in South Asia" and make this a priority in the agenda  at  the SARC conference in August in Sri Lanka.

When it comes to Pakistan the performance is 5.2% below the 2006 performance to US$ 55 million in export revenue. Once again the strategic sectors of sheet rubber, crepe rubber and block rubber have taken a beating. We need to understand why this has happened and the corrective action that is required. We need to drive harder the strategic sectors than just exporting intermediate products.                                 

Original Objectives

If we go back in time the original objectives of the FTA in the case of India for instance, it was based on the premise of a study done on the regional comparative advantage (RCA) to drive a equitable trade between regional partners so that each country can benefit from the comparative advantage that one posseses in a country. The key obstacle to this end was the gradual removal of trade barriers over a period of time.

Both countries agreed on a list of products which are in the negative list, phasing out list and zero duty lists and the time frame to achieve the end objective of freer trade between the countries. The time frame was important so that suppliers can get adjusted to international competition and visa versa. Currently, except for the 429 products in the negative list of India, all other products of Sri Lanka have a zero duty access technically into India. From an Indian point of view other than for the 1,180 products in the negative list, all other products from India  are entitled for duty free access into Sri Lanka.

Basket of Goods-skewed

After 8 years, when we look at the reality of the trade between Sri Lanka and India, we see a skewed basket of exports like processed food (essentially Vanaspathy), Copper, Electrical machinery, Aluminum, articles of stone, organic and inorganic products to name a few getting across to the Indian Market whilst the "strongholds" of Sri Lanka -Garments and Tea facing the wrath of the Indian authorities  has deprived Sri Lanka to do some serious brand building initiatives in an overseas market for sustainability. A point to note is that 86.1% of the products exported to India are under concessionary duty rates which mean that the export performance is a direct reflection of the performance of the FTA.

Closing down of Factories

If we get into the brass-tacks of this romance between Sri Lanka and India on the FTA, we can see that a number of projects invested in Sri Lanka increased from 34 to 105 in 2006, however most of them closing down over time that actually off sets the benefits of international trade.

After all many Sri Lankans were working in these companies and would have lost their jobs. The sectors include bakery shortenings, energy saving bulbs and plastic products. Sri Lanka also experienced in midway the rules of the game changing where TRQs were introduced by India. The latest victim being 'Pepper,' to the already victimized product -Vanaspathy.

Even though Sri Lanka's share of the total pepper market in India is only 5%, we saw India slamming a TRQ of 2,500 MT per annum ceiling on Sri Lanka despite protests by Sri Lankan pepper exporters. That once again needs to be taken up at an FTA review session before we agree to any more tariff cuts for Indian products at this end.

Challenge

A key point to note is that in any bilateral agreement we are dealing with entrepreneurs and hence there will be a time of testing global markets and evaluating not only the financial opportunity, but the working relationships of agents/importers in the global market. Hence there will be a time of test marketing that we need to provide   for a potential exporter to mature. But the key is to provide an environment for fair competition to take place. If not we are doing more injustice to our exporters than facilitating export growth. Whilst supporting trade, the ban on export of metal scrap from Sri Lanka is justifiable, given that the local foundry industrialist requires sufficient raw material at affordable prices for value addition. However, we cannot hide behind this fact but search for new avenues for growth on our established products. We must drive the rubber sector harder into Pakistan. Drive the world acclaimed garments sector into India. We also need to be cognizant of the probable trade agreement between the EU and India and the ramifications it can have on Sri Lankan exports. Will there be trade diversion. If this happens what impact will it have on the Sri Lankan workers?

Way forward- focus on key sectors

The key question to ask is why Sri Lanka is dependant on the export of such consumables, than focus on traditional product categories that can benefit due to Sri Lanka's competitive advantage. May be we need drive policy for high end apparel products targeting the upper Indian consumer so that a typical Sri Lankan exporter finds this opportunity attractive, than the EU or US markets.  

May be we should also evaluate the options of exporting soft drinks where the local market leader has credentials of being  one of the three select countries that has beaten the global giant Coca Cola. We must penetrate more strongly the confectionary business and biscuits where Sri Lanka is strong  in manufacturing and marketing.

Sri Lanka should also pursue extending the well established service sector products into India, which in 2007 contributed to almost 63% GDP to Sri Lanka. Multi branded Cargills and Keells Super must be allowed to enter the multi million dollar retailing sector of India. This exposure will help Sri Lankan supermarket chains get the much needed  honing skills of competing in this entrenched industry before expanding to the rest of the region. We also need to review the performance of the on going sectors under the FTA- for instance Tea. 

Key issues to be addressed in future FTAs

Apart from lower input costs, the other aspects that will affect FTA agreements for countries like Sri Lanka in relation to the giants of India are flexible laws.. Sectors which provide considerable employment and can be vulnerable should be kept out of the agreement so that FTAs do not create social issues in a country.  We need to be mindful of the possible FTA's looming between the EU and China nd India and China that can lead to drastic changes in the economic landscape between countries and the impact it can have on  already existing trade partnerships.

Tariffs Changes

An FTA must also provide for tariff structures to be inverted if the duties on finished products are brought down under the FTA agreement, whilst those on raw materials and intermediate goods that go into the production of these goods remain at high levels. If not Sri Lanka's SMEs can become uncompetitive, compared with those countries with low duties on raw materials or if its home grown.                                        

Uniform duty

When FTAs are discussed, the focus should be more on the finished product and low priority should be given to the raw material. In some instances powerful lobbies from large raw material manufacturers keep raw material pegged at high levels, whilst the finished product would attract zero duty under the FTA by 2009. 

The only way forward in this case is to have a uniform rate of duty for all products, with the lowest possible slab  at 5% or 8%. One needs to have simple procedures and remove discretion or discrimination that can hurt SMEs. This can also help the key issue in our part of the world where porous borders exist. Studies carried out by " ICRIER" and other key trade bodies have revealed that the magnitude of such parallel trade in goods is depriving the exchequers of SAFTA members. One way out is to sufficiently incentivise actors engaged in parallel trade, to trade their products using legal channels. The other way is to create a trade facilitating architecture that can arrest such parallel trade.  

Raw Materials

Even a bigger challenge lies clearly defining what qualifies as raw material, immediate and finished products. Such ambiguity in definitions is one of the loopholes generally used by some powerful lobbies. Recently the problem of rules of origin (ROO) weighed heavily on the SMEs. Depending on the partner country, FTAs have different clauses under ROO with regard to amount of value addition that qualifies a product to be of the same origin as the country with whom the FTA is being signed.  

Buying photos online

Seylan Bank PLC recently signed up with Pinthoora.com as their latest merchant to the Internet Payment Gateway (IPG).

Pinthoora.com is engaged in selling photographs via their website. This site holds photos of nature, animals and birds taken by professional photographers.  Any interested customer can now log on to this site and buy  photos and pay through any VISA credit card or simply debit their accounts with Seylan Bank.

Seylan has offered IPG solutions to a number of clients based locally and overseas.  This service provides merchants the facility to engage in E commerce by linking their site to Seylan accounts and VISA network for payments.

As such customers gain convenience by virtually browsing the merchants' goods on offer.  By using a virtual "shopping cart" they finalize their purchases and make payment by credit card through the secure payment gateway provided by Seylan.

The merchant in turn delivers the goods to the customer and in the process avoids unnecessary crowding of the counters/display areas and avoids other overhead expenses such as provision of parking space.

The merchants could also electronically track the type of goods and services availed of and as such create a profile of the customers as well as avail themselves of information regarding the demand for the various types of goods and services on offer.

Seylan is in the process of increasing its share of merchants thereby adding to the merchants' bottom line by reducing costs and helping them maintain a proper data base of customers so that they could also build loyalty schemes centred round carefully segmented customers.

Merchants wishing to tie-up with the Seylan Bank's Internet Payment Gateway may get in touch with  Shiran Yatagama.

With this hi-tech, cutting edge electronic payment system, the IPG  would prove to be the channel of choice for both merchants and their customers in the future.

Bates-15 years

Today Bates celebrates its 15th Anniversary. It has come a long way and has established its standing as an agency to reckon with in strategic thinking, creativity and PR leadership. It has several clients who have been with them for many years and who have continued to strengthen it with additional business, furthering these solid and mutually satisfying relationships. New exciting brands and clients have also come to Bates in recent years as they discover its capabilities.

On April 17 its PR operation will become part of the global PR network Burson-Marsteller through an affiliation with Genesis Burson-Marsteller India which is consolidating BM's South Asian footprint.

Not only will Bates benefit from being a part of a leading global  network, but will stand to gain further expertise and training to distinguish  is leadership in this field.

This month Bates is also tying up with another WPP and GroupM network, Mediaedge:cia or MEC Global which will give media planning, buying and new media expertise of the highest capability to be among the best media AORs.  It is most gratifying to note that in a fickle industry Bates has many staff that has been committed to it over many years-many who celebrate 10-15 years with Bates.  Their dedication, talent & teamwork has the secret of its success.

Phoenix wins silver at Goa

Phoenix Ogilvy, the first Sri Lankan agency to win several international regional awards scored yet another first recently, when they won the silver award at the Goafest 2008 for their campaign for the Sri Lanka Federation of Visually Handicapped.

 No Gold was given out in the public service and charity category, making the win even more significant. This entry competed against South Asian entries, including India, to achieve this status.

 This is the second occasion that a campaign for the visually handicapped created by Phoenix Ogilvy (PO) won a regional award.

In 2005 Phoenix won a silver award at the Abby awards for their campaign 'Don't be blind to the blind.' This year, PO also won three Gold awards at the Abby's for their campaigns against sexual and gender based violence for UNHCR.

The campaign which won the silver award at Goafest last Saturday did touch an emotional cord with the Sri Lankan public when it hit the media in December last year.

"It was satisfying to collect this award on behalf of PO and to be praised afterwards from the Jury President of the Integrated Campaign Category Agnello Dias, National Creative Director JWT and other colleagues in the Indian advertising fraternity for the Sri Lankan campaign," said Ogilvy South Asia Executive Creative Director Sumanto Chattopadhyay.

PO is the only Sri Lankan agency to be adjudged as a finalist in Cannes and the 20th London International Advertising Awards at Hammersmith. "It is heartening we won this Award at Goafest amidst competition among South Asian countries. It is a worthwhile award about which we can be proud," said PO Chairman Irvin Weerackkody.

Seylan wins for innovation

Seylan Bank won the "Best Branch Automation and networking Project" Award 2007 at the Asian Bankers Summit 2008 held in Hanoi recently for its pioneering "Palm Top Banking" project.

The award signifies the outcome of leveraging cutting edge technology coupled with human talent to satisfy the customer's convenience of mind.

Seylan Bank introduced Palm Top Banking (PTB) for the first time in Sri Lanka and the Asian Region, enabling customers to conduct banking transactions at home, office or anywhere else they may be.

This concept revolutionized the manner in which banking was done in this country and was a result of the vision of its founder Chairman/Managing Director Dr. Lalith Kotelawala to take banking to the people. PTB is operating through a team of mobile business development officers (BDOs) who call over wherever the customer wishes and attend to his/her banking requirements online. 

This pioneering system was developed by the NCS group, an IT and communication engineering service provider in the Asia Pacific and Middle East regions. 

It enables BDOs to carry out secure banking transactions on a Personal Digital Assistant (PDA).  Each BDO equipped with a PDA and a small portable printing device can perform functions such as cash and cheque deposits, cash withdrawals, Ceylinco Fast Cash remittance disbursement, loan application and account opening.

If a customer wishes to apply for a loan, the BDO submits the loan application electronically, and the system performs the customer credit checking.  Once creditworthiness is ascertained, the BDO is able to provide an in-principle approval to the customer on the spot. 

The system uses wireless technology to update transactions real-time and incorporates multi-level security features like stringent encryption, authentication and E-signature.

The solution provides Seylan with a convenient new channel for conducting banking business, giving it an advantage over competition.  With the mobile device becoming the branch, it will allow the Bank to reach out to customers beyond the current branch network rapidly and without the burden of physical infrastructure. Seylan has set a new benchmark in taking the bank to the customer with the human factor, hi-tech and all.

GSK grabs 1st, 3rd places

One of GlaxoSmithKline's (GSK's) won the annual Pharma Promoters Association (PPA) Quiz this year, clinching the 'PPA Challenge Trophy,' while the other secured third place.

This was the 16th PPA Quiz and teams from 24 companies participated with members of each team drawn from various business units and departments. Each team consisted of six members of whom at least two were medical promotion delegates (MPDs).

Family Planning Association of Sri Lanka Medical Director Dr Shreen Wilatgamuwa set the questions covering the areas of Sports, International Affairs, Science and Medicine, History and Politics and Business Knowledge (Finance, Economy, Marketing and Management).

GSK Human Resources Director Ms. Kumudini S. Welmillage said: "It gives us satisfaction to see our teams take two of the top three places. GSK encourages versatility among staff at all levels and our performance at the quiz demonstrates the calibre of our people."

The victorious teams comprised  Puneet Das, Shamali Perera, Padmika Seneviratne, A. Anushane, Ishak Sahabdeen, Prathapa Tiranagama, Tiran Gunarathna, Monira Rafeek, Mohamed Faleel, Kishani Wikramaratne, Harsha Wijesinghe and Affan Yusuf.

The "PPA Quiz Nite" was initiated in 1991 for fostering a sense of togetherness among the PPA fraternity, especially MPDs.

Sampath at Passport office

Sampath Bank opened their newest branch at the Passport Office at Punchi Borella recently.

Sampath Savings and "NRS" (Non Resident Sri Lankan) Foreign Currency Accounts will offer customers higher returns, 'SET' ATM Card to access the account from anywhere in the world, foreign currency exchange facility and many more.

Sampath has made its presence as a world class service provider in the industry and has expanded its branch network.

It is also focusing on continuous process improvements using the best

technological developments in the world with the intention of improving customer service through automation.

HNB uplift for cancer patients

Hatton National Bank (HNB) recently helped build a Counselling Centre at the Maharagama Cancer Hospital.

The Counselling Centre was funded by HNB under its corporate social responsibility initiatives. HNB chairman Rienzie T. Wijetilleke  opened the Counselling Centre.

 Among participants at the opening ceremony were Cancer Hospital Dr. Indrani Amarasinghe, Director (Dr.) Kanishka Karunaratne, Deputy Directors Dr Mrs Paranagama and Dr Wasantha Dissanayake, HNB Managing Director R. Theagarajah, Deputy General Manager J. R. P. M. Paiva & ASB Germany Programme Manager Richard J. Gant.

Karunaratne said that the incidence of cancer in Sri Lanka is high and treatment and care for cancer patients were of importance. He said while the focus is on treatment and medication, little attention is paid to the trauma that comes with it.

The Counselling Centre is step forward in this direction.  He said that the Counselling Centre is a reality today due to the support of HNB Samariter Bund (ASB) Germany and the initiative of Amarasinghe and Dr Kosala Muthukumara whose efforts have resulted in this dream becoming a reality.

Theagarajah said that HNB has identified the importance of counselling to overcome the trauma associated with cancer and the effect it has on their loved ones. He said that a lot of resources go to support cancer medication, equipment, medical equipment and other infrastructure but the mental well being of these patients also need to be looked at seriously.

 He said the Counselling Centre (CC) would help in preparing the patients and their loved ones to face the challenges the patient and family face with cancer. He said that HNB is happy to initiate the first such CC to be set up in Sri Lanka at the Cancer Hospital, Maharagama.

He further said that HNB while supporting the counselling aspects is also mindful of the financial repercussions faced by the patients and their family members. After identifying this aspect Theagarajah said that HNB intends to create a fund in collaboration with the hospital authorities to help the needy undergo treatment for cancer.

The professional training of the counsellors was carried out with the assistance of Samariter Bund (ASB) Germany.

Bankers to Hanoi

Bi-Annual General Assembly of the Asia Pacific Rural and Agricultural Credit Association (APRACA) and the FIN Power Regional Rural Finance Forum was held in Hanoi recently.

The conference covered a wider range of discussions of rural finance, bilateral comparisons between different Regions  and countries.

The conference was attended by over 150 delegates representing 50 member countries of APRACA covering Asia.  The Sri Lankan financial sector was represented by the Central Bank of Sri Lanka, Bank of Ceylon, People's Bank, Hatton National Bank & Sanasa Development Bank.   The Sri Lankan delegates covered extensive field visits to Danag  and Hue cities.

JKH invests $ 6 mn. in BPO

John Keells Holdings PLC (JKH) has invested US$ 5.72 million for a 44% equity stake in Quatrro Finance & Accounting Solutions Private Ltd (Quatrro F&A).

JKH and Quatrro believe that Sri Lanka has the potential to be a major location for F&A outsourcing due to the skill level of finance and accounting professionals in Sri Lanka and the availability of qualified accountants, particularly for higher verticals of F&A.

Quatrro F&A is the India based Financial and Accounting (F&A) business of the Quatrro group headed by Raman Roy.

JKH and Quatrro in 2006 announced a partnership to develop a business process outsourcing (BPO) business in the Asian region, initially focusing on India and Sri Lanka.

Quatrro F&A has acquired the Chicago based Financial Process Outsourcing LLC (FPO) in a structured financing transaction using a combination of instruments including debt and equity.

 FPO is a niche player in F&A outsourcing "vertical," focusing on small and medium enterprises. FPO currently has facilities in the USA and Mumbai with 500 staff.

The F&A outsourcing vertical has grown rapidly over the last few years as the cost advantages from labour arbitrage are compelling. It is expected that Quatrro F&A would in due course have a facility in Sri Lanka.

The investment in Quatrro F&A is a step forward in JKH's plans of building a regional BPO business. JKH currently has BPO facilities in

Gurgaon and Colombo with 550 staff. With the investment in

Quatrro F&A, JKH's presence in the BPO business will be significantly

enhanced.

Quatrro, founded by Raman Roy, is a BPO company focusing on pioneering new service lines, geographies and business models in BPO. The company provides a range of "vertical" and "horizontal" service offerings which are targeted towards global clients in North America, Europe and Asia.  Quatrro's solutions encompass Risk Management and Fraud, Technical Support, Finance and Accounting, Market Research, Knowledge Services and Mortgage Processing.

S L showcased in Bangkok

Sri Lanka will be showcased at the upcoming PATA CEO Challenge Programme to be held in Bangkok from April 28-30, 2008.

The theme will be 'Confronting Climate Change' and industry leaders and  CEOs from the region will be sharing their best practices at interactive discussions of boardroom challenges related to climate change.

Sri Lanka Tourism (SLT) Chairman Renton de Alwis will be speaking on Sri Lanka's 'Earth Lung' initiative as one of the keynote speakers.

Some of the other speakers are TUI Travel Sustainable Development Head Ms. Jane Ashton, Marriott Lodging International President Edwin Fuller and Executive Chairman Banyan Tree Hotels and Resorts Ho Kwon Ping.

Subsequently de Alwis will be a panellist at the breakout sessions on boardroom challenges to discuss Destination Challenges.

Serendib Leisure Management Ltd CEO Srilal Miththapala, will be one of the CEO participants in the breakout interactive discussions of board challenges in the category of Regional Hotels and Resorts Challenges.

 Miththapala will be on the panel along with Ping, Minor International Chief Operating Officer Michael Sagild and Six Senses Resorts and Spas Chairman Sonu Shivdasani.

Miththapala will be presenting some of the initiatives taken by the Hotel Sigiriya in the area of energy conservation and carbon emission mitigations.

It is opportune and noteworthy that Sri Lanka has been included in this programme, and it will afford an opportunity to showcase to the world, the initiatives taken in this regard by SLT and its partner stakeholders.

5 star treatment

Nawaloka Hospitals has been rated once again as the only hospital amongst LMD's top 100 Companies compiled by Brand Finance, coming in at the 35th position with an all time high brand value of Rs 636 million and an  enterprise value of Rs 2,319 million.

The Hospital has also come up to the 4th position amongst Most Loved Brands, 7th position amongst Most Loyal Brands, 7th position amongst Functional Performers, whilst it's brand value as a percentage of its  enterprise value is 27; a commendable performance which leaves Nawaloka  ahead of its competitors.

Nawaloka Hospitals Deputy Chairman Jayantha Dharmadasa said that they had made a name for themselves with a series of healthcare innovations and a strong and dynamic marketing philosophy which had served to propel the hospital as a top of the mind Brand vis a vis the public.

According to Brand Finance, "there is still a potential for value (which means wealth in the hands of investors) to be created by Sri Lankan brand marketers. CEOs need to focus on value creation and demand that their marketers contribute more to value creation.

LMD Marketing Director Bryan Emmanuel said : "Increased awareness of the Hospital's innovations alongside an aggressive marketing approach has paid dividends in the case of Nawaloka Hospitals."

According to Brand Finance, "Brand Equity is  the stock of goodwill that a brand owns in the minds of customers and prospective customers."

With regards to future plans, Dharmadasa said that they hoped to open their new wing with 100 beds, along with many new facilities for both patients and consultants by July 2008.  "We will then have over  400 beds  which will be the best in the private sector with patients being able to enjoy a 5 star atmosphere."