While Health Minister Nimal Siripala de Silva has mooted the ban of polythene and is having discussions with his Cabinet colleagues on this matter in order to submit a Cabinet paper and subsequently make it law through Parliament, S. Rajalingam, General Manager Lanka Polybags, a company that is into the manufacture of polythene warns that if polythene is banned it would put to risk 200,000 direct jobs.

There is only one country in the world that has banned polythene and that is Bangladesh. But according to Anver Dole, a director of Polypacks and CI Plastics (a group of companies that is into the manufacture of plastic crates and garbage bags) and a former President of the Institute of Chemistry, Bangladesh is currently reviewing the wisdom of this ban.

According to both Dole and Rajalingam, what the Minister had mooted was the ban of plastics and not polythene. They said that polythene bags (‘siling’ ‘siling’ bags), polythene lunch sheets, yoghurt and ice-cream cups and syringes and saline bottles-used by health services, the general makes of which, all fall under the genre of plastics.However that may be, de Silva told The Morning Leader that what he had mooted was the ban of polythene and not plastics. He said that his proposal to ban polythene was because studies had shown that one of the main pollutant causes in the country was polythene.

De Silva said that a primary cause of mosquito breeding was polythene blocking drains and discarded containers in which rain water had collected-also becoming a breeding ground for mosquitoes.He said that the economic cost of such a ban would have to be weighed against the health cost to the nation (due to pollution caused by polythene). He said that it would be up to the industry to come up with alternates.

But Rajalingam countered de Silva by saying that the industry together with the public sector, some years ago, had come up with a scheme to put a stop to plastic pollution, which, if implemented would have had made Sri Lanka ‘polythene pollution free’ in three years.

This proposal, which according to Rajalingam is contained in a document running into several pages, made many recommendations, including for households to have separate bins to dispose of glass, plastic materials and organic waste (such as food waste) respectively. And if proper sorting is not done at the household level, the local authority concerned to refuse to collect the garbage from such households.

And also education-at the school (on garbage separation), household and local authority levels respectively, with the industry to fund this programme. He said that they had wanted to work out such a programme beginning at the public health inspector level. But at the school level it had been shot down by an education ministry official who had said that they don’t want ‘garbage’ to be taught to children.

However that may be, this scheme had been accepted by the then Environment Minister A.H.M. Fowzie, but was never implemented, he said. Another moot point that Rajalingam raised was that his company was in the business of manufacturing polythene covers to the garment industry. He said that garment exporters used these polythene covers to encase their garment exports to countries/regions such as the USA and EU, in this industry, which is Sri Lanka’s single biggest foreign exchange earner.

Does then de Silva’s proposal to ban polythene also mean the ban in the manufacture of such polythene covers, required by the buyers of our garments in the USA and EU, to which regions 90% or more of our garments exports go? There were other key matters raised by Rajalingam, like the high cost of polythene substitutes. Whereas the cost of a polythene lunch sheet is only two and a half cents, the cost of using alternates was much more. For instance the cost of using a plantain leaf as lunch wrapping paper is Rs 1.25, 50 times the cost of using polythene lunch sheets and that of oil paper Rs 3,50, over 100 times the cost of polythene sheets, he said.

Meanwhile, Dole said that wrapping lunch packets in newspapers (as an alternate to polythene sheets) would make the user liable to food poisoning because of the toxicity of the ink. Another issue raised by Rajalingam was the high cost of investment made by polythene manufacturers, which he said was around Rs one billion on extruders and cutting machines and lastly, the wide use of polythene, which according to him was around 7-8 million numbers of polythene lunch sheets that are being used daily and thrice that quantity as far as the daily use of polythene bags are concerned, a ban of which could cause enormous socio-economic problems.

He said that in order to encourage the re-use of polythene, the government should instead increase the minimum thickness (gauge) of the polythene. According to Dole, the Environment Ministry had proposed that the thickness be increased from the current 12 microns requirement to 20 microns (one micron=one millionth of a metre).

The LTTE is observing these standards in those areas controlled by them and is also not allowing polythene bags to be carelessly strewn around, these are some of the lessons that the government may learn from the Tigers to control polythene pollution, he said.

Rajalingam further said that there are some 40 industries in the country that are involved in the recycling of plastics such as polythene. He said that a kilo of waste polythene fetches around Rs 50-60 a kg. There were in fact a few industries that import waste polythene for recyling purposes because of not obtaining sufficient quantities locally, he added. Two such industries were Hiden Plastics and Poly Dine International. Some of these industries import around 5-6 containers of waste polythene monthly, he said.

Rajalingam said that at one meeting called for by the Plastics and Rubber Institute, a representative from the Balangoda local authority had said that he had 20,000 kg of polythene waste, but did not know how to dispose of it. "But within a few days after he made his complaint, his total polythene waste material was cleared by a vendor involved in the business of recyling polythene waste," said Rajalingam.

These therefore are some of the issues that de Silva should look into, before going ahead with his proposal to ban polythene. In fairness to the Minister, he told this reporter that the views of all the ministries would be considered before submitting his proposal to ban polythene. It would also do well if he also simultaneously re-visits the private sector proposal submitted to his predecessor, before ‘rashly’ going ahead with his proposal to ban polythene.

The dates for the technical sessions between the commerce departments of India and Sri Lanka in order to broaden the scope of the Indo-Lanka Free Trade Agreement (ILFTA) to embrace services and investments and also to remove some of the items that are in the negative lists of these countries have been tentatively fixed from April 24-27.

Talks in this regard, known as the Comprehensive Economic Partnership Agreement (CEPA) will be held in Colombo, with the local delegation to these talks being led by Acting Director General Commerce N.C. Magedera. the Indian delegation will be led by its Commerce Ministry Joint Secretary M.V. Shastri.

With regard to the shortening of Sri Lanka’s negative list, Commerce Department’s Deputy Director Nimal Karunathilake said that the views of the local stakeholders in this connection are currently being sought. Sri Lanka has some 1,200 items in its negative list and India, 196 items.

India wants some 500 items removed from Sri Lanka’s negative list, he said. They include items such as paints, toothbrushes and combs. The Indian request for the removal of paints from Sri Lanka’s negative list has irked the ire of some local paint manufacturers. Currently the import duty on paints is 28%. No finality on this matter has however been reached.

Karunathilake however said that in narrowing down the scope of the two countries negative lists, the sensitivities of the respective local manufacturers would be taken into account. For instance, local rubber manufacturers want ‘rubber’ removed from the negative list, because of a shortfall of rubber for local consumption. But on the other hand the local rubber producer wants rubber to remain in the negative list, he said.

But there needs to be a start, at least some of the items-which hardly bring any government revenue or which would be less harmful to local industries in the event they are allowed duty free entry to the respective countries due to the fact that very few or no local industries manufacture such items, will have to be removed from the negative list, Karunathilake said.

They may have to be taken out from the respective negative lists in order to make a start, he said. Karunathilake further said that the Finance Ministry is keen that such a list should be finalised soon and the Department is having talks with the industry in this regard.

Meanwhile, Sri Lanka wants India to remove the requirement that six million of its eight million pieces of garment export quota that are allowed duty free status to India, should be from fabric sourced from India.

"Though Sri Lanka enjoys duty free status of its garment exports to India upto a maximum of eight million pieces, this quota is hardly used due to the condition that six million of these pieces should be from fabric sourced from India," Karunathilake said.

"We want such non tariff barriers removed," he added.

While exports to India from Sri Lanka, other than those items in India’s negative list currently enjoy duty free status (Sri Lanka has been given a breather due to the smallness of its economy to be compliant), the island is deemed to reciprocate in full (other than those items which are in its negative list) by 2008.

Suren Mirchandani of Deccan Aviation Lanka Ltd. (DAAL), one of three airline operators selected by the Civil Aviation Authority (CAA) to operate flights to India denied rumours that they were going to withdraw from this operation due to ‘high ground handling charges’ levied by SriLankan Airlines which has a monopoly in the provision of these services at the Bandaranaike International Airport (BIA) till 2008.

He however refused to comment on ground handling charges. Mirchandani said that they plan to start their flights later this year, and have been given a choice of 19 Indian destinations to choose from. They are Calcutta, Ahamadebad, Jaipur, Goa, Port Blair, Bodh Gaya, Calicut, Cochin, Trichy, Trivandrum, Visahakapatnam, Amritsar, Patna, Lucknow, Guwahati, Varnasi, Aurangabad, Bhupaneshwar and Khajuraho.

He said that they will select the destinations to which they hope to fly and the number of frequencies in another month’s time. The company will deploy three Air Bus A320s in this service.

DAAL is a joint venture between Favourite Investments Ltd and Deccan Aviation, Bangalore, where the latter company operates 200 domestic flights out of 53 airports in India. Deccan and Favourite each have a 48% equity in DAAL, while the balance 4% is held by DAAL employees. Mirchandani said that the objective of DAAL is to make Colombo the hub for its international operations.

The recent tie-up between Mabroc Teas (Pvt) Ltd and Kelani Valley Plantations Ltd (KVPL) in running an estate in Nuwara-Eliya producing green teas for the export market is reaping dividends.

A kilo of value added green teas fetches between $ 10-40 in the export market, whereas value added black tea exports fetches a low $ 10-25 in comparison, said its Commercial/Financial Director Claude Perera.

However, green tea exports occupy only a small percentage of Mabroc’s total exports. Of the company’s four million kg of tea exports last year, 150,000 kg were green tea exports. The teas are mainly exported in the form of tea bags and caddies (in metal tins). Due to aggressive marketing, the company plans to increase its exports by 25% to five million kg. this year

"Our annual advertising budget in those countries that import our teas is around $ 500,000, with much of it being below the line advertising (such as point of sales promotion) because of high advertising costs in both the print and electronic media, said Perera.

"The demand for green teas is because of its health value," said Perera, whose company mainly exports its teas to the CIS states, Baltic countries, Czech Republic, Germany and Japan, and to a lesser extent to Australia and South Korea. The bulk of the company’s exports goes as black tea.

Oliphant Estate that produces the green teas has 51% of its equity held by KVPL and the balance by Mabroc. KVPL, a Hayleys company, also holds a 40% stake in Mabroc. The balance 60% is held by Mabroc’s original five directors who also have a 5% stake in KVPL.

"Previously almost all of our green tea exports were imports brought for the purpose of re-export," said Perera. But now with Oliphant’s operations, the tide has changed, with the majority of green tea exports sourced locally, he said.

"With the collapse of the Soviet Union, we used to advertise in the electronic media in the former Warsaw Pact countries because advertising rates were then low in those countries," he said. "But things changed during the last eight years or so, with advertising costs in such countries now on par with the West," said Perera, who markets their teas under the Mabroc brand name.

This 18 year old billion rupee turnover company operates its factory at Kiribathgoda and has its head-office at Kotte, providing employment to around 250.

Perera said that the collapse of the Soviet Union and with it the opening-up of virginal markets for teas in the former Warsaw Pact countries, gave an opportunity for companies such as theirs to promote new tea brands.

"The West was already saturated with traditional brands such as Liptons, Twinings and Brooke Bonds, giving us little or no room to export branded teas to those markets," he said. "We were exporting bulk teas to those markets then, but Anselm Perera of Mlesna changed the status quo by beginning to export value added teas," he said.

Hemas Holdings Ltd has appointed business leader Lalith de Mel as Chairman of the Board. A press release said that the company has been committed towards corporate governance and professionalism, and the appointment of a non-executive independent Chairman is a further step in this direction.

Husein Esufally will continue to lead Hemas as Chief Executive Officer. De Mel has served on the Hemas Board since 2003 and has been closely involved in its transformation as a listed company. He counts over 40 years of Board experience in Multinational and Sri Lankan companies. He received his primary education at St.Joseph’s College Colombo, and is an alumni of Cambridge University, UK and Harvard Business School, USA.

The International Air Transport Association (IATA) said that international passenger traffic grew by 6.8% and international freight traffic by 5.4% in February. The year-to-date passenger traffic growth of 6.4% is in line with industry projections of 6.5% growth in 2006.

International freight traffic grew by 5.3% for the first two months of the year after a period of volatility and weakness in 2005. "February, traditionally the slowest month for international traffic, brought both good news and solid growth. The recovery in freight has stretched to three months with growth of over 5% resulting from strength in international trade. While passenger growth was in line with projections, North American carrier growth of 3.6% is significantly below the high levels recorded in 2005 as US carriers re-allocated

domestic capacity to higher-yielding international markets," said Giovanni Bisignani, IATA Director General and CEO. The Middle East remains the fastest growing region with a 15.3% passenger traffic gain largely being matched by capacity growth as new aircraft are delivered to the region. Improved economic conditions in Continental Europe and Japan led to increases of 7.3% in Asia and 6.4% in Europe. Load factors also improved. February’s passenger load factor of 73.3% was 1.2% higher than in February 2005.

Freight demand also grew at a slightly higher rate than freight capacity. Middle East (19.9%) and Latin America (10.7%) led the world with double-digit freight traffic growth rates. European freight volumes (2.1%) are finally seeing positive volume growth after two months of decline. "February’s growth supports a new and cautious optimism that is returning to the industry. Cost cutting and growth will reduce 2006 losses to $2.2 billion and lead to a profit of $7.2 billion in 2007.

We are moving in the right direction, but a 3% return on capital invested is a long way from sustainable profitability," said Bisignani.

"As industry prospects improve, staying focused on efficiency and cost reduction remain at the top of the industry’s recovery agenda. Our industry partners must step up to the plate and match airlines’ efficiency efforts, particularly in Europe-home to the 15 most expensive airports in the world. The European Commission has recognised the need for greater transparency in airport costs and is committed to a Lisbon Agenda to make Europe more competitive. On Friday, we will present a strong case for more efficient airport infrastructure to the European Commission," said Bisignani.

Fitch Ratings Lanka Ltd (FRL) assigned a ‘AA(sri)’ national rating for the issue of Rs 2,500 million 2006/2011 unsecured subordinated redeemable debentures of Commercial Bank of Ceylon Ltd. (CB), a press release said.

The bank retains the option of issuing upto Rs 3,000 million in the event of oversubscription. The agency also affirmed the ‘AA+(sri)’ rating assigned to CB’s senior debt, the ‘AA(sri)’ rating assigned to CB’s existing subordinated debentures and the ‘AA-(sri)’ [DoubleAminus(sri)] national rating assigned to CB’s 2001/06 and 2003/08 preference shares. The rating outlook is stable.

The ‘AA(sri)’ rating denotes a very low expectation of credit risk. It indicates very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. The subordinated debentures, in terms of priority, will rank below deposits and all senior debt obligations, but will rank above ordinary and preference shares. Consequently, and in accordance with FRL’s criteria, the rating assigned for the subordinated debentures is one notch lower than CB’s implied senior debt rating of ‘AA+(sri)’.

CB recorded high loan growth in 2005 and is currently the largest private sector bank in Sri Lanka with assets of Rs 180.1 billion as at end 2005. Though the bank’s traditional focus was corporate banking, CB has lately paid greater attention to retail and consumer banking.

Profitability in terms of ROA improved to 1.32% in 2005 compared to 1.18% in 2004. CB’s capital position however has not kept pace with its balance sheet growth over the last few years. The bank’s equity to assets ratio declined from 9.5% in 2000 to 7.8% in 2005. To some extent the impact of its lower capital position was mitigated by an improvement in asset quality and higher provision cover. CB’s gross NPL ratio was 3.3% as at December 2005 (4.4% as at Dec. 04). Solvency, as measured in terms of Net NPL/Equity improved to 13.4% as at end Dec. 2005 (16.8% as at Dec 04), which compares well in the local context.

The decline in equity/assets ratio is largely attributed to significantly higher taxation, but also higher dividend payouts by CB, reducing the bank’s ability to build up reserves. Effective tax rates for CB were high at over 46% in both 2004 and 2005, while CB’s dividend payouts have steadily increased from 16% of net profits in 2002 to 30% of net profits in 2005.

FRL notes that CB’s ability to accommodate any deterioration in asset quality, (while maintaining a high solvency position required for this rating category) is weaker on account of its lower capital position. Hence trends in asset quality and equity position are viewed as key rating triggers going forward. CB’s reported total capital adequacy ratio and Tier I ratio was 12.08% and 9.68% respectively as at Dec. 05 (13.16% and 10.78% as at Dec 04).

The initial public offering (IPO) of Vallibel Power Erathna Ltd, the first such issue for this year, will open tomorrow, a press release said. The IPO will consist of 50 million new ordinary shares of Rs. one each at the offer subscription price of Rs. eight each.

The Rs. 400 million in equity so raised will be used by the company primarily to retire long term loans obtained for project financing and secondarily to be invested as equity in Didul (Pvt) Ltd. Both these companies are part of the Vallibel Power Group controlled by Dhammika Perera. Besides being a first by a company from Perera’s diverse corporate group, the IPO will be unique in that prospective investors in the offering would be entitled to the bonus issue of two shares for every one held. This in effect will reduce their holding price to Rs. 2.67 following the bonus issue.

Vallibel Power Erathna is the owner, developer and operator of the Erathna Hydro Power project. With a power generation capacity of nearly 10 mega Watts (mWs), this small-scale hydro project is at present the largest such projects commissioned in Sri Lanka. The project, on which construction began in July 2002, began commercial operations in mid July 2004. With an investment of around Rs. 740 million, the project’s cost per generation capacity of around Rs. 75 million per mW is well below the current rule of thumb cost, which can exceed Rs. 120 million per mW. As such the Erathna project is regarded as one of the most capital efficient and profitable in the industry.

The Erathna project is located in Kuruwita, Ratnapura. This region receives some of the highest annual rainfall and is regarded as the richest area for small hydropower development. The project is ‘run-of-the-river’ and utilizes the water flow of the upper reaches of the Kuru Ganga, which originates in the Peak Wilderness region and is a tributary of the Kalu Ganga. Voith Siemens, the reputed German producer of turbine machinery is the manufacturer of the twin turbines which are the key components of the project. The entire plant is operated, regulated and monitored from water intake to power generation, by means of a computerised control system.

Vallibel Power Erathna is a subsidiary of Vallibel Power Ltd., part of the Vallibel Group of companies controlled and run by Perera. At present Vallibel Power accounts for a total operational capacity of almost 19 mW (from the Erathna and Didul projects), which represents among the largest aggregate of operating capacity in the industry. The Group has four other projects under construction. When all these are fully complete and operational, Vallibel Power is expected to account for a total generating capacity of nearly 43 mW, which would make the company a leader in small-scale hydropower generation in Sri Lanka.

Perera is a leading entrepreneur and investor with interests in a diverse range of businesses including banking and finance, shipping, manufacturing, hotels, tourism and entertainment. His Group includes the listed companies Pan Asia Banking Corporation, Royal Ceramics, LB Finance, Connaissance Holdings and the Fortress Resorts. His expertise is in corporate re-engineering and he has several company revivals to his credit.

CIC Paints Sri Lanka, recent winner of ICI global award for Leadership in Community Involvement, takes on refurbishing a building belonging to the Colombo Municipal Council (CMC) for the use of street children, a press release said. This ‘Drop –in –Centre’ for street children, housed in a building at Baseline Road, will be funded by CIC Paints’ Dulux Child Protection Trust Fund (DCPTF), the operational aspects being attended to by the National Child Protection Authority (NCPA).

On being revamped by CIC Paints, the building will get a new look and feel, and meet the ‘requirements of a centre for children.’ "The CMC’s foresight in permitting a care centre to be housed in these premises is commendable," said Gerald de Saram, Managing Director CIC paints (pvt) Ltd; co trustee of DCPTF. He also added, "a centre of this nature provides protection and guards against abuse – the very problem DCPTF is committed to address." The plan is to completely overhaul the building. The proposed plan includes redoing the garden, offering children the added facility of outdoor activities and games.

CIC Paints commitment to Safety, Security, Health and Environment (SSHE) go beyond compliance to a culture of ‘caring and giving in a sustainable environment.’ With an initial contribution of Rs.500,000, DCPTF was launched in 2001, ‘confirming its dedication to SSHE.’ It finances projects involved in addressing the issue of child abuse in Sri Lanka. DCPTF’s work was augmented by an awareness cum fund raising campaign where the company donated 50 cts from each litre of paint sold over a period of two months’ to the fund. The hitherto unspoken problem of child abuse in Sri Lanka was brought to the notice of the public by the strategy to place 50 tills at selected branches of Hatton National Bank and at channel partner outlets.

CIC Paints used their inhouse marketing skills to create awareness of the issue of child abuse at all levels, giving an impetus for those whose fulltime work is in caring for abused children.

In Sri Lanka, child abuse is no longer a dark secret but a serious problem of grave concern. Children from all strata of society, irrespective of economic or social background are subject to violence and sexual abuse. The incidences are on the rise due to the silence of the victims. Silence most often being attributed to, fear of reprisal. CIC Paints made a concerted and deliberated decision to make it a priority to assist those involved with work related to child abuse and protection of victims.

The initial assistance from DCPTF went to Jeewana Kanda Lama Niwasaya, a home for abused children run by a missionary couple. This home, continues to receive assistance from the Dulux CPTF; moving on to other projects, as the Trust continues to grow.

CIC Paints, in undertaking this, their latest project in association with the CMC is taking the stance of addressing the most vulnerable groups living in Colombo. Planned as a preventive against child abuse, this centre will also cater to the needs of victims. The company hopes to complete work on the building and premises by mid June and be in operation by early July 2006.

A Memorandum of Understanding (MOU) was signed recently between the Consortium of Humanitarian Agencies (CHA) and the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) to encourage effective cooperation between the private sector and the many humanitarian agencies in Sri Lanka in the rebuilding of tsunami affected enterprises.

A press release said that CHA is an association of 94 international and national agencies working in Sri Lanka to support humanitarian relief and related work. CHA has been involved in tsunami relief and recovery efforts through its Human Security Response Programme (HSRP) (formerly the CHA Post-Tsunami Recovery Programme). It is a ‘key’ national player with I/NGOs, government, and civil society organizations in the areas of coordination, information dissemination, and education for tsunami recovery.

Established in 1973, the FCCISL has over 50 trade chambers and association member bodies islandwide. It is involved in tsunami rehabilitation efforts through its "Back to Business" Project (BBP) to enable affected MSMEs in the tsunami-ravaged areas to rebuild businesses and lives. FCCISL’s goal is to rehabilitate a minimum of 10,000 affected enterprises and generate employment for 50,000 people within a period of three years. As of end February 2006, FCCISL’s BBP has assisted 4,130 enterprises.

The release quoting CHA Executive Director Jeevan Thiagarajah said that CHA and FCCISL and their respective members have similar objectives: "we want to ensure that Sri Lanka does truly ‘build back better’ after the tsunami," he said.

Thiagarajah added that at CHA they believe in partnerships and in what can be achieved when different actors come together with one common goal. This agreement is based on leveraging the unique strengths of both the private and humanitarian sectors to encourage innovation, stimulate investment and foster sustainable growth and development in Sri Lanka.

FCCISL President Nawaz Rajabdeen said that this is a unique and strong partnership between the corporate and NGO sectors.The initial focus of the partnership will be on working collaboratively with the Reconstruction & Development Agency (RADA), formerly TAFREN.

RADA co-ordinates and assists government agencies and institutions at national and district levels in their reconstruction and rehabilitation efforts. The joint collaboration of all three parties at the national and district levels will allow for improved coordination of micro, small and medium enterprises (MSMEs) development activities and minimize duplication of efforts.

Future efforts of this partnership between CHA and FCCISL will evolve to focus on the development of all areas of the country, with a primary focus on areas where inequity exists for development opportunities.

Lanka Orix Securities (LOS) opened a branch office in Matara recently, a press release said. The branch will provide a range of value added services such as internet trading and research and be equipped with many automated trading computers and data viewers. "We are expanding our network of services to Matara to provide investors with professional advice and enhanced facilities in a market driven by retail investors," said LOS Managing Director Tushan Wickramasinghe.

LOS which was among the top two brokerage firms in terms of turnover in 2005 has embarked on a rapid expansion programme, opening branches in Kandy, Kurunegala and at the Colombo Stock Exchange (CSE) Trading Floor within the last one year. All the branches have been ranked number one by the CSE in terms of turnover in the last seven consecutive months. The Matara branch is headed by Kasun Galwatta who has a BA in Business majoring in Banking and Finance from Victoria University.

"We are confident that our astute team of investment advisers will provide enhanced investment opportunities to investors in Matara," said LOS’ Executive Director and Head of Branch Operations Rohan Senewiratne. The CSE launched its first branch in Matara in June 1999 to cater to a growing base of domestic investors and the branch in Matara contributed 4.8% of total domestic turnover in 2005.

LOS’ network expansion to the provinces is aimed at catering to the increasingly important segment of local investors who have been the mainstay of the Colombo bourse in recent times. Local investors accounted for 78% of turnover in 2005, a reversal from 1993-1994 when 60- 70% of turnover originated through foreign investors. The new branch is located at Station Road, Matara. LOS has been in operation since 1991 and caters to a diverse client base of institutional investors, corporates, high net worth individuals, retailers, and foreign investors.

The company is a subsidiary of Lanka Orix Leasing Company (LOLC)which is an associate company of Orix corporation, Japan. ORIX Corporation is listed on the Tokyo and New York Stock Exchanges and its network spans 23 countries. It is the single largest leasing company in the world.

DHL has expanded the geographical reach of its ‘Time Definite Delivery’ (TDD) service to Sri Lanka, a press release said. This will enable customers in Sri Lanka to send their urgent and time-sensitive documents and parcels to 158 cities in 34 countries in the Asia Pacific, Europe and the Middle East.

A suite of time-definite delivery products, DHL’s TDD portfolio comprises ‘StartDay Express’ which offers next day door-to-door delivery by 9am and ‘MidDay Express’ which offers next day door-to-door delivery by noon.

TDD enables customers to track the status of their shipments via the DHL website. DHL also pro-actively notifies TDD customers, via email or facsimile once the deliveries have been made.

Country Manager DHL Sri Lanka Chaminda Hewamallika said, "A highly-popular service, TDD was enhanced 18 months ago in Asia Pacific both in terms of geographical coverage and service offerings to better meet the needs of customers. Its geographical coverage was expanded two-fold, while the product offering, which previously catered only to documents, was extended to include low-value declarable packages in response to an overwhelming demand for such a service. The availability of the TDD service from Sri Lanka to different countries is listed below: Asia Pacific StartDay Express (Singapore, Hong Kong, Thailand, Taiwan and Philippines).

Asia Pacific - MidDay Express (Singapore, Hong Kong, Thailand, Korea \Japan, Malaysia, China, Australia, India, Taiwan and Philippines). Middle East - MidDay Express (UAE).Europe - MidDay Express (Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland and UK).

A high powered seminar on risk management and new trends in trade finance was delivered to top corporate clients of Commercial Bank by two eminent professionals from JPMorgan Chase Bank, a long-standing correspondent bank of Sri Lanka’s leading private sector bank. Vice President - Sales Credit & Rate Markets JP Morgan Mumbai, Ramesh Swamy and the Asia Head of Trade Services JP Morgan Singapore Asif Raza delivered presentations on areas of risk management and trade finance that are the subject of intense attention in the global finance industry, to over 150 of the country’s CEOs and senior managers from the corporate sector.

Addressing the seminar, Managing Director Commercial Bank Amitha Gooneratne said: "We have gained vast experience and expertise in corporate banking and trade finance activities and have always tried to add value to our customers by organising seminars of this nature. This will enable our customers to be aware of the latest trends in trade finance activities and risk management, an area of growing importance."

In his presentation on risk management and hedging strategies pertaining to financial market activities related to interest rates, exchange rates and other related products, Swamy said that risk management involves four steps: risk identification, risk measurement, quantification of risk and risk management strategies. He explained that there are different options, such as whether it is more cost effective to borrow funds from offshore markets or to borrow from domestic markets. "Too many companies fall into the trap of borrowing from offshore markets without developing their own domestic markets. When the Asian market crisis happened in 1997, all the Asian companies suddenly tried to carry out borrowing activities from their domestic markets which were unprepared for the large volume of funds required."

He said that one vital tool which can be used to control cost and hedge risks are derivatives, which are being widely used by corporates for better risk management. If risks can be successfully hedged through the use of derivatives, the likelihood of market induced financial distress is greatly reduced and earnings volatility can be better managed. Hedging also helps gain a more favourable outlook from rating agencies and equity analysts who carefully evaluate the risk management systems of a company.

Making a case for the use of derivatives, Swamy said: "Derivatives offer a quicker and less expensive way to replicate transactions, allows unbundling a package of risks embedded in a transaction, allows the separation of interest rate decisions from funding/credit decisions and does not require funds to execute a view and allows the thinking of the company to remain confidential."

In his presentation on new trends in trade finance covering new ideas and strategies in managing day-to-day commercial activities, Raza said there is a wider market and acceptance for trade around the world and the two drivers around it are meeting the new funding requirements and accessing cheaper off-shore financing available for trade related transactions.

From a teacher earning a paltry salary of Rs 300 a month, to owning a flat in London worth Great Britain Pounds (GBP) 230,000, the success story of accountant turned property developer of luxury apartment complexes, Nimal Perera (58) who runs Premier Pacific International (Pvt.) Ltd.

Perera attributes his success to his profession, coupled with the spirit of entrepreneurship. Among the new ventures he is looking at is investment in property development with a Middle-Eastern partner, where the monies would be pumped in by this investor, with Perera only having to manage the property and another investment at Nawam Mawatha by a Belgian party, where in that investment too, Perera’s job is confined to only managing that property, without having to pay a cent as investments, as that too would be pumped by his Belgian partner.

"I didn’t go after these investors, they came after me," said Perera. It was word of mouth advertising that made these investors learn about me, he added. And in addition, the fact that my completed constructions had won ICTAD awards, also went a long way, said Perera.He however said that the proposed development at Nawam Mawatha has run into some snags, with the owner of this property at the last minute, refusing to sell this land. Perera’s property investment in Sri Lanka began in 1999, with the completion of an eight storeyed building comprising a total of 40 luxury apartments opposite the Public Library at an investment of Rs 490 million in 2001.

This investment which won the ‘ICTAD Excellence Award,’ saw these apartments being sold at prices ranging from Rs 4.5 million to Rs 16 million. His second investment, called ‘Premier Pacific Pinnacle’ at Duplication Road, Bambalapitiya was completed in 2005. This building won the ICTAD merit award and was built at a cost of Rs 1.2 billion. It comprised ground plus mezzanine floors and 11 upper floors. The apartments in this complex was sold at prices ranging from between Rs 6.2-13.9 million.

These two investments were done in collaboration with some of Perera’s Indian friends in the UK. They were followed by Premier Pacific Topaz at Kollupitiya, a joint venture costing Rs 2.5 billion, done with an Indian trading house based in Hong Kong called Sunshine Far East. This project, on completion in December of next year will have a basement, mezzanine and ground floors, plus 20 upper floors.

Upon completion it will consist of 49 residential apartments, 105 hotel type ‘studio’ apartments, two dedicated floors for a restaurant and clubhouse and six floors for car parking. These apartments are priced at between Rs 5-42 million, with only 35% reserved for pre-selling.

Perera’s logic in putting a cap on pre-sales is because of escalating property prices, as a result of which he feels that he can make more money by selling these apartments only after they are completed.

His buyers are mainly Sri Lankans living abroad, as well as foreigners. And his latest project is ‘Regency’ which was recently launched at the old Sherman and Sons Headquarters Building at Sri Sangaraja Mawatha, Colombo. This investment would comprise the construction of a Twin Tower building costing Rs 2.7 billion.

Each tower will comprise a total of 11 storeys, two basements and a ground floor, said Perera. This building which is due to be completed by March 2008 will have its apartments priced at between Rs 6-27 million, said Perera. But life was not a bed of roses to this property developer.

Perera, sixth out of a family of 11 children had his education at St Benedict’s College, Kotahena. But then tragedy struck, when Perera, who was only 13 years, lost his father. " But my mother was a fighter," said Perera. "She didn’t give up, but started a band called Junior Rythmiers, where the members of the band were my brothers and sisters, in order to keep the home fires burning," he said. This band was successful, said Perera. " But I was the only one in the family who was not musically inclined," he added.

"And knowing the hardship that the family was going through, the priests who were running St Benedict’s, gave me a teaching appointment," he said. "I was 16 years old at that time, having just completed my O’Levels," Perera said. "I was paid a monthly salary of Rs 290, plus another Rs 10 as cost of living allowance," he said. "My first desire was to do law and not accountancy," said Perera. But as I didn’t have the requisite qualifications, I opted for accountancy instead, he added. "I sat for the ICMA exams as CIMA was then known," he added.

But my first exposure to business came when I was working in the company of my future brother-in-law (BIL), who was the local agent for Ray Bans, said Perera. "It was not only that I helped my BIL to have his books in order, but I also learnt that costings are not just the addition of labour plus the cost of items, with the profit margin added on, but it was the market that decided on the price of an item and not the other way around.

"This was an important lesson that I learnt in life," said Perera. Where, to be successful in business, one needs to know how much the market is willing to pay for one’s product and accordingly structure your costs, and not the other way round," he said. Perera said that after his stint at Ray Bans, he joined Mackwoods as an accounts clerk. He was attached to the BASF Dies Division at Mackwoods. Mackwoods then bought over Sterling Winthrop, which factory was at Mutwal.

Perera was sent over to Winthrop’s Mutwal factory to prepare its accounts. He then completed his accountancy exams and was a fully fledged accountant by the time he was 24 years of age. Perera afterwards joined BCC which had been recently nationalized as an accountant. While being the company accountant, he was also made the head of the company’s supplies division. In 1977 he joined the Tea Research Institute (TRI’s) as its chief accountant.

"During my tenure as TRI’s chief accountant, five commercial estates were brought under its wing," said Perera. They were Waltrim, Matakale, Dampatenna, St Joachims and St Coombs, which had a combined area of 10,000 acres, he said.

TRI substations were established in Galle and Hantane and a commercial orientation to TRI’s operations was given at that time. But Perera’s biggest break was when he got the job as head of finance of a leading multilateral donor agency’s operations in Nigeria in 1979.

"I was entitled to an annual package of $ 250,000 in this new responsibility," said Perera. The education allowance I got from this institute was $ 30,000, he added. Perera served in this multilateral donor agency for 20 years, before returning to the country for good in 1999, where he launched Premier Pacific International. He said that his exposure to property development was when he was serving in the TRI, during which period the Institute put up three buildings. And even during his tenure at this multilateral development institution, he had his exposure in property trading.

For instance during this period he bought a house at Mill Hill for GBP 172,000 and sold it for GBP 500,000 before his return to Sri Lanka for good. Perera who has three children educated them at Mill Hill. "All my children are either professionals or studying for a professional qualification," said Perera, who firmly believes that education inculcates the right values in a child. The eldest Nishan (28) is a Management Information System Engineer attached to Praxis Computer Systems, UK. He obtained a Second Class Upper at Imperial College, London, said Perera.

His second son Nirosh (23) who obtained a first class honours in Electrical and Electronics Enginneering is attached to Honda, UK, while the youngest, a girl, Nishali, is reading for her degree in International Relations at the London School of Economics.

His philosophy as far as his children are concerned is that it is better to be ‘poor child of a rich father’ than ‘a rich child of a poor or a rich father.‘ "I invested in educating my children so that they won’t go wrong," said Perera. "I had a Mercedes Benz in London, but I didn’t allow my eldest child to drive that vehicle until he graduated," he added. Perera is confident that when he is no more, his children will take over the running of his property development company. "Even when I was working abroad, I used to make it a point to come to Sri Lanka with my children regularly so that they will not forget their roots," he said.

Some 10,300 Sri Lankans will celebrate Avurudu earlier than others this year, thanks to Ceylinco Life.

A press release said that the life insurance leader plans to distribute Rs 25.6 million in Avurudu Cash Bonuses’ to loyal policyholders during the final weekend before the dawn of the National New Year, continuing a practice it introduced to the industry in 2004.

These cash bonuses will be delivered door to door for the third year running by Ceylinco Life personnel between April 7-9 and will make some policyholders richer by as much as Rs 100,000.

This will bring the total value of Avurudu cash bonuses paid out by Ceylinco Life over three years to a whopping Rs 65.4 million. These special bonuses are in addition to the regular annual bonuses paid by the company to active policyholders and forms part of Ceylinco Life’s ‘Life Rewards’ portfolio of special benefits that only the company’s policyholders are eligible to.

"With this year’s payment of cash bonuses, Ceylinco Life has on its own accord given more than 29,676 policyholders an additional reason to celebrate," the company’s Chief Executive Director R. Renganathan said. "The trust they have placed in us and their loyalty have earned them extra rewards." Avurudu Cash Bonuses will be paid to policyholders who completed either the tenth or the fifteenth year of their policies as at December 31, 2005. These bonuses are the only cash bonuses and the only home-delivered cash bonuses in the local insurance industry. The 10,300 long-standing Ceylinco Life policyholders eligible to receive these cash bonuses this year will have representatives of the company actually knocking on their doors with cheques that are immediately encashable. The bonuses are structured so that the rates at which bonuses are computed increase with loyalty. For example, an active policy with a sum assured of Rs one million will be entitled to a cash bonus of Rs 25,000 on completion of 10 years and Rs 50,000 on completion of 15 years.

Ceylinco Life, which branch network is the country’s largest in the insurance sector, achieved a record Rs 4.8 billion in premium income in 2005, enabling the company to consolidate its position as the market leader.The company sold 145,139 new policies in 2005, achieving an average of more than 12,000 new policies a month and a 28.7% year on year (YoY) growth in new business during the year.

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