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GSP crisis prompts top apparel firms to look beyond Lanka
The loss of the Generalised System of Preferences Plus (GSP+) facility offered to Sri Lanka and the wages board’s recent decision to raise the minimum salary of garment workers by 20% have prompted some top industry players to look for alternatives in other countries.
Industry sources said some major apparel manufacturers in the country were considering the possibility of shutting down their factories here and open then elsewhere to cut costs.
“This is the case at present with factories that have a greater exposure to Europe since they are reluctant to lose the higher margins that could be made through buyers in these markets,” a top industry official told The Bottom Line.
The sources said some players were contemplating on relocation based on the fact that costs of labour and raw materials were much lower in those countries.
It is learnt that some major players are conducting feasibility studies to operate from regional countries such as Bangladesh and the Maldives.
Joint Apparel Association Forum (JAAF) secretary-general Rohan Masakorala said the industry was facing a ‘tough situation.’
“There’s a grave threat of GSP-related orders moving out of Sri Lanka and to countries like India or Bangladesh. Exporters will feel the pinch by late September or October. However, it’s too premature to comment on this.”
He said the turnover forecast for apparels would be around Rs 333bn or US$ 3bn.
According to Masakorala, the minimum wage has risen to Rs 7,900 for a garment employee, starting without any skills.
“I can’t tell what the exact impact would be but certain industrialists will definitely feel the pressure. Although industrialists wanted the Wages Board to have January 1, 2011, as the implementation date the government wanted it to be
October 1, 2010.”
“It will affect within the trade and across the trade although we still haven’t heard of retrenchment or layoffs so far.”
Another top official, meanwhile, said the industry was currently trying to mitigate the loss of the GSP plus by portraying Sri Lanka as a country that is serious about its ethics in manufacturing standards such as employing greener production methods and adhering to accepted labour standards.
Sri Lanka’s garment industry is a US$3.2 billion export business and accounts for around 46% of the country’s export revenue.
Sri Lanka has nearly 300 garment factories including major suppliers such as Brandix, Hirdaramani and MAS Holdings.
Until recently, Sri Lanka had been one of the two Asian countries which enjoyed the GSP Plus benefits for trade with EU countries.
Sri Lanka was awarded the GSP Plus to facilitate its recovery from the Tsunami disaster in 2004.
http://www.thebottomline.lk/2010/09/05/page1.html
Industry sources said some major apparel manufacturers in the country were considering the possibility of shutting down their factories here and open then elsewhere to cut costs.
“This is the case at present with factories that have a greater exposure to Europe since they are reluctant to lose the higher margins that could be made through buyers in these markets,” a top industry official told The Bottom Line.
The sources said some players were contemplating on relocation based on the fact that costs of labour and raw materials were much lower in those countries.
It is learnt that some major players are conducting feasibility studies to operate from regional countries such as Bangladesh and the Maldives.
Joint Apparel Association Forum (JAAF) secretary-general Rohan Masakorala said the industry was facing a ‘tough situation.’
“There’s a grave threat of GSP-related orders moving out of Sri Lanka and to countries like India or Bangladesh. Exporters will feel the pinch by late September or October. However, it’s too premature to comment on this.”
He said the turnover forecast for apparels would be around Rs 333bn or US$ 3bn.
According to Masakorala, the minimum wage has risen to Rs 7,900 for a garment employee, starting without any skills.
“I can’t tell what the exact impact would be but certain industrialists will definitely feel the pressure. Although industrialists wanted the Wages Board to have January 1, 2011, as the implementation date the government wanted it to be
October 1, 2010.”
“It will affect within the trade and across the trade although we still haven’t heard of retrenchment or layoffs so far.”
Another top official, meanwhile, said the industry was currently trying to mitigate the loss of the GSP plus by portraying Sri Lanka as a country that is serious about its ethics in manufacturing standards such as employing greener production methods and adhering to accepted labour standards.
Sri Lanka’s garment industry is a US$3.2 billion export business and accounts for around 46% of the country’s export revenue.
Sri Lanka has nearly 300 garment factories including major suppliers such as Brandix, Hirdaramani and MAS Holdings.
Until recently, Sri Lanka had been one of the two Asian countries which enjoyed the GSP Plus benefits for trade with EU countries.
Sri Lanka was awarded the GSP Plus to facilitate its recovery from the Tsunami disaster in 2004.
http://www.thebottomline.lk/2010/09/05/page1.html
Economic implications of the 18th Amendment
By Azhar Razak
Although certain sections of the government claim the implementation of the 18th Amendment last week could lay the foundation towards an accelerated economic growth derived from the political stability, a senior economist from the main opposition party says it could pave the way for a more politicised and autocratic economic culture.
“The Sri Lankan economy is certainly going to face dire consequences by the implementation of the amendment as it would make regulators such as the Central Bank of Sri Lanka to be completely managed by politicians and questions being asked over its independence,” economist and UNP MP Dr Harsha de Silva told The Bottom Line.
He charged that since the Constitutional Council, which earlier had a say in the appointment of the three non-executive board members to the Central Bank’s Monetary Board, is now replaced with the parliamentary council set up, the President would now get exclusive powers to appoint all five members to the board.
“Earlier although the non-executive board members are appointed by the President on the recommendation of the Minister of Finance, the approval of the Constitutional Council was also required for the appointment of these non-executive board members. However, since the Constitutional Council has now been repealed, additional approvals would no longer be needed in future with the President having powers to appoint anyone as he wishes,” de Silva explained.
He added that the 18th Amendment only required the President to seek observations from the Parliamentary Council, which does not necessarily mean he has to abide by the decisions taken by the council.
The Central Bank has a unique legal structure in which the Central Bank is not an incorporated body. In terms of the Monetary Law Act, the corporate status is conferred on the Monetary Board, which is vested with all powers, functions and duties and the Monetary Board is responsible for making all policy decisions related to the management, operation and administration of the Central Bank.
Meanwhile, heads of universities and academics who met at a recent discussion stated that the 18th Amendment to the Constitution could lay the strong foundation that is required to accelerate economic development in the country. Speaking to journalists, University Grants Commission chairman Professor Gamini Samaranayake said Sri Lanka suffered from both political and economic instability since independence due to the war.
“We believe that the 18th Amendment would give the long felt political stability to achieve the economic stability that is required to accelerate the country’s development process while ensuring the People’s right to appoint a president according to their wish,” Samaranayake pointed out.
He said Sri Lanka was able to record average growth rates of around six percent even during the war and with the political stability it derives from the implementation of the 18th Amendment, it could well mean that we could be heading towards ‘double digit growth rates’ in the future.
“In the past 40 years, although Sri Lanka tried to reduce inflation, unemployment, etc to single digits it had failed in the attempt due to the lack of political stability. Around 47,000 graduates were recruited to the Public Service in 2005. The 18th Amendment is a must for the country’s economic development and that is why even the entire private sector supports it,” Strategic Enterprise Management Agency (SEMA) Financial Service Cluster Director, who is also a senior economic advisor to the President said.
The 18th Amendment was also supported by the Vice Chancellor of the Open University Sri Lanka, Professor Upali Vidanapathirana and the Vice Chancellor at the University of Colombo, Professor Kshanika Himburegama, at the press briefing held at the Sri Lanka Foundation Institute.
One of the objectives of the 18th Amendment to the Constitution is to replace the Constitutional Council by a Parliamentary Council consisting of five members of which three are ex-officio (The Speaker, the Prime Minister and the Leader of the Opposition).
The other two members will be separately nominated by the Prime Minister and the Leader of Opposition to include ethnic groups not represented by the three ex-officio members.
President Mahinda Rajapaksa had earlier said that the Constitutional Council in the 18th Amendment to the Constitution will better assure the supremacy of the Parliament as there will not be a presidential representative in the proposed council and will only consist of parliamentary members.
http://www.thebottomline.lk/2010/09/12/biz_feature3.html
Although certain sections of the government claim the implementation of the 18th Amendment last week could lay the foundation towards an accelerated economic growth derived from the political stability, a senior economist from the main opposition party says it could pave the way for a more politicised and autocratic economic culture.
“The Sri Lankan economy is certainly going to face dire consequences by the implementation of the amendment as it would make regulators such as the Central Bank of Sri Lanka to be completely managed by politicians and questions being asked over its independence,” economist and UNP MP Dr Harsha de Silva told The Bottom Line.
He charged that since the Constitutional Council, which earlier had a say in the appointment of the three non-executive board members to the Central Bank’s Monetary Board, is now replaced with the parliamentary council set up, the President would now get exclusive powers to appoint all five members to the board.
“Earlier although the non-executive board members are appointed by the President on the recommendation of the Minister of Finance, the approval of the Constitutional Council was also required for the appointment of these non-executive board members. However, since the Constitutional Council has now been repealed, additional approvals would no longer be needed in future with the President having powers to appoint anyone as he wishes,” de Silva explained.
He added that the 18th Amendment only required the President to seek observations from the Parliamentary Council, which does not necessarily mean he has to abide by the decisions taken by the council.
The Central Bank has a unique legal structure in which the Central Bank is not an incorporated body. In terms of the Monetary Law Act, the corporate status is conferred on the Monetary Board, which is vested with all powers, functions and duties and the Monetary Board is responsible for making all policy decisions related to the management, operation and administration of the Central Bank.
Meanwhile, heads of universities and academics who met at a recent discussion stated that the 18th Amendment to the Constitution could lay the strong foundation that is required to accelerate economic development in the country. Speaking to journalists, University Grants Commission chairman Professor Gamini Samaranayake said Sri Lanka suffered from both political and economic instability since independence due to the war.
“We believe that the 18th Amendment would give the long felt political stability to achieve the economic stability that is required to accelerate the country’s development process while ensuring the People’s right to appoint a president according to their wish,” Samaranayake pointed out.
He said Sri Lanka was able to record average growth rates of around six percent even during the war and with the political stability it derives from the implementation of the 18th Amendment, it could well mean that we could be heading towards ‘double digit growth rates’ in the future.
“In the past 40 years, although Sri Lanka tried to reduce inflation, unemployment, etc to single digits it had failed in the attempt due to the lack of political stability. Around 47,000 graduates were recruited to the Public Service in 2005. The 18th Amendment is a must for the country’s economic development and that is why even the entire private sector supports it,” Strategic Enterprise Management Agency (SEMA) Financial Service Cluster Director, who is also a senior economic advisor to the President said.
The 18th Amendment was also supported by the Vice Chancellor of the Open University Sri Lanka, Professor Upali Vidanapathirana and the Vice Chancellor at the University of Colombo, Professor Kshanika Himburegama, at the press briefing held at the Sri Lanka Foundation Institute.
One of the objectives of the 18th Amendment to the Constitution is to replace the Constitutional Council by a Parliamentary Council consisting of five members of which three are ex-officio (The Speaker, the Prime Minister and the Leader of the Opposition).
The other two members will be separately nominated by the Prime Minister and the Leader of Opposition to include ethnic groups not represented by the three ex-officio members.
President Mahinda Rajapaksa had earlier said that the Constitutional Council in the 18th Amendment to the Constitution will better assure the supremacy of the Parliament as there will not be a presidential representative in the proposed council and will only consist of parliamentary members.
http://www.thebottomline.lk/2010/09/12/biz_feature3.html
Turnaround at BOGA’s marketing subsidiary
The marketing subsidiary of Bogawantalawa Tea Estates (BTE) Plc, BPL Teas Private Ltd., which used to be a loss making entity over the years, has showed a positive turnaround during the year ended March 31, 2010, a senior official of the firm said.
According to the group’s chairman, tea manufacturer and green tea exporter, BPL Teas made a profit after tax of Rs. 6.9 million during the recent financial year.
“As a result of the continuous efforts made during the recent past, the marketing subsidiary has begun to give positive results as evidenced by declaring a profit after tax of Rs. 6.9 million for the year under review,” BTE Plc chairman D J Ambani highlighted in his message written to the shareholders at the release of BTE’s 2009 annual Report last week.
He said that the company had made a considerable progress during the year and was able to increase the market share especially in highly competitive markets such as Europe and the US.
“In addition to the positive financial results shown by the company, the firm continued to enhance the facilities at the processing centre to meet the high International Standards,” the chairman said.
BTE Plc reported a profit after tax of Rs. 120.4 million for the year ended March 31 2010, a complete turnaround from a loss of Rs. 126.4 million recorded during the corresponding period in the previous year. Gross profit shot up by 144 percent to Rs. 331.8 million helped by a sharp increase in revenues from Rs. 2.8 million a year ago to Rs. 3.56 million. However, the group has not allocated a management fee this year although it spent Rs. 4.4 million on it last year.
The chairman said that BTE Plc has embarked on Agroforestry, Dairy farming and Tea-based tourism projects this year.
“One of the impediments for effective implementation of the above is the lack of clear-cut policy guidelines. Policy consistency is an area in which the plantation sector has had a poor record,” Ambani pointed out.
He said union demand for wage hike also remains an issue considering the long-term viability of the industry as well as the competitiveness of Ceylon tea in international markets.
“There has been almost a 40% wage hike at the last round of wage negotiations which had around Rs. 402 Mn. impact (Incl. gratuity provision) on the cost of production of our company (Rs. 49 per kg of Made tea). It is therefore important that the companies and the trade unions agree to look at the industrial relations issues with a fresh and open mind in the best interest of the industry. This is because the sector cannot sustain any further ad hoc wage increases without linking such increases to productivity and product quality or in other words to “Value Addition”, he outlined.
Meanwhile, BTE Plc which is Sri Lanka’s largest supplier of iced tea to the United States entered into a Joint Venture (JV) agreement in June 2010 with US based, Walters Bay International by incorporating a new BOI company “Walters Bay Bogawantalawa Estates (Pvt) Ltd”.
This JV company has already set up a state of art processing centre at Welisara to manufacture iced tea in packaged form for export to US, in fulfillment of its contractual obligations with the global multiple brands.(AR)
http://www.thebottomline.lk/2010/09/12/biz_news.html
According to the group’s chairman, tea manufacturer and green tea exporter, BPL Teas made a profit after tax of Rs. 6.9 million during the recent financial year.
“As a result of the continuous efforts made during the recent past, the marketing subsidiary has begun to give positive results as evidenced by declaring a profit after tax of Rs. 6.9 million for the year under review,” BTE Plc chairman D J Ambani highlighted in his message written to the shareholders at the release of BTE’s 2009 annual Report last week.
He said that the company had made a considerable progress during the year and was able to increase the market share especially in highly competitive markets such as Europe and the US.
“In addition to the positive financial results shown by the company, the firm continued to enhance the facilities at the processing centre to meet the high International Standards,” the chairman said.
BTE Plc reported a profit after tax of Rs. 120.4 million for the year ended March 31 2010, a complete turnaround from a loss of Rs. 126.4 million recorded during the corresponding period in the previous year. Gross profit shot up by 144 percent to Rs. 331.8 million helped by a sharp increase in revenues from Rs. 2.8 million a year ago to Rs. 3.56 million. However, the group has not allocated a management fee this year although it spent Rs. 4.4 million on it last year.
The chairman said that BTE Plc has embarked on Agroforestry, Dairy farming and Tea-based tourism projects this year.
“One of the impediments for effective implementation of the above is the lack of clear-cut policy guidelines. Policy consistency is an area in which the plantation sector has had a poor record,” Ambani pointed out.
He said union demand for wage hike also remains an issue considering the long-term viability of the industry as well as the competitiveness of Ceylon tea in international markets.
“There has been almost a 40% wage hike at the last round of wage negotiations which had around Rs. 402 Mn. impact (Incl. gratuity provision) on the cost of production of our company (Rs. 49 per kg of Made tea). It is therefore important that the companies and the trade unions agree to look at the industrial relations issues with a fresh and open mind in the best interest of the industry. This is because the sector cannot sustain any further ad hoc wage increases without linking such increases to productivity and product quality or in other words to “Value Addition”, he outlined.
Meanwhile, BTE Plc which is Sri Lanka’s largest supplier of iced tea to the United States entered into a Joint Venture (JV) agreement in June 2010 with US based, Walters Bay International by incorporating a new BOI company “Walters Bay Bogawantalawa Estates (Pvt) Ltd”.
This JV company has already set up a state of art processing centre at Welisara to manufacture iced tea in packaged form for export to US, in fulfillment of its contractual obligations with the global multiple brands.(AR)
http://www.thebottomline.lk/2010/09/12/biz_news.html
MphasiS Lanka sets ambitious growth targets
By Azhar Razak
The newly opened Sri Lankan unit of Indian IT firm, MphasiS is presently finalising a contract with a large multinational that could immediately require the company to hire about 500-1,000 employees, a top official of the firm revealed.
MphasiS, a leading IT services provider headquartered in India, kicked off its operations in Sri Lanka last week following the opening of its Global Delivery Centre in Orion City, Colombo 9, to provide Applications, Business Process Outsourcing (BPO) and IT infrastructure and Outsourcing (ITO) services to clients worldwide.
“We are presently negotiating with a large multinational firm to get outsourcing work for the new Sri Lanka unit. We will be doing a presentation today and if the contract materialises, we are talking about employing anywhere between 500 to 1,000 people,” MphasiS, Chief Executive Officer Ganesh Ayyar disclosed at the inauguration ceremony held at the company’s new office last week.
He said that over the longer-term the company plans to hire 3,000-5,000 people in the space of 36 months.
“As we are speaking, a contract is already being finalised with a large multinational to move its work to Sri Lanka. The work will be shifted in about four weeks,” Ayyar said.
The outsourcing unit presently has a 250-seat office space and has already hired 55 IT graduates to manage infrastructure and application services. Ayyar said that MphasiS has been working on hiring local talent as well as setting up infrastructure since it announced its intention to set up the delivery centre end last year.
“The three main reasons why MphasiS chose Sri Lanka compared to another country in the region – which I do not want to name – are because of the strength of the island’s IT talent pool, the government’s hunger for an accelerated post war growth drive and Sri Lanka’s Board of Investment,” Ayyar claimed.
The new centre was formally inaugurated on Monday by Minister of Economic Development Basil Rajapaksa along with the participation of a large number of other senior officials.
With over 38,000 employees and a global presence across America, Europe, Australia, Asia Pacific, Japan and India, MphasiS has been India’s fastest growing IT company in the year 2009, with a growth rate of 43 percent.
It is learnt that employees at the new Sri Lanka centre will be part of MphasiS Global Talent Pool and groomed as a part of MphasiS Talent Development Programme.
“Sri Lanka’s vibrant talent pool is of strategic interest to us and we hope to expand our footprint here. Our focus in Sri Lanka is holistic. Our aim is to develop the larger ecosystem and be a responsible corporate citizen. We want to build deeper roots into the talent supply chain in Sri Lanka, partnering with academia, industry bodies and the government,” MphasiS Chief Information Officer M G Raghuraman.
MphasiS is a leading provider of applications services, remote management services and BPO services. The company delivers real improvements in business performance for clients through a combination of technology know-how, domain and process expertise. MphasiS services clients are in financial services, healthcare, communications, transportation, consumer and retail industries and governments around the world
The newly opened Sri Lankan unit of Indian IT firm, MphasiS is presently finalising a contract with a large multinational that could immediately require the company to hire about 500-1,000 employees, a top official of the firm revealed.
MphasiS, a leading IT services provider headquartered in India, kicked off its operations in Sri Lanka last week following the opening of its Global Delivery Centre in Orion City, Colombo 9, to provide Applications, Business Process Outsourcing (BPO) and IT infrastructure and Outsourcing (ITO) services to clients worldwide.
“We are presently negotiating with a large multinational firm to get outsourcing work for the new Sri Lanka unit. We will be doing a presentation today and if the contract materialises, we are talking about employing anywhere between 500 to 1,000 people,” MphasiS, Chief Executive Officer Ganesh Ayyar disclosed at the inauguration ceremony held at the company’s new office last week.
He said that over the longer-term the company plans to hire 3,000-5,000 people in the space of 36 months.
“As we are speaking, a contract is already being finalised with a large multinational to move its work to Sri Lanka. The work will be shifted in about four weeks,” Ayyar said.
The outsourcing unit presently has a 250-seat office space and has already hired 55 IT graduates to manage infrastructure and application services. Ayyar said that MphasiS has been working on hiring local talent as well as setting up infrastructure since it announced its intention to set up the delivery centre end last year.
“The three main reasons why MphasiS chose Sri Lanka compared to another country in the region – which I do not want to name – are because of the strength of the island’s IT talent pool, the government’s hunger for an accelerated post war growth drive and Sri Lanka’s Board of Investment,” Ayyar claimed.
The new centre was formally inaugurated on Monday by Minister of Economic Development Basil Rajapaksa along with the participation of a large number of other senior officials.
With over 38,000 employees and a global presence across America, Europe, Australia, Asia Pacific, Japan and India, MphasiS has been India’s fastest growing IT company in the year 2009, with a growth rate of 43 percent.
It is learnt that employees at the new Sri Lanka centre will be part of MphasiS Global Talent Pool and groomed as a part of MphasiS Talent Development Programme.
“Sri Lanka’s vibrant talent pool is of strategic interest to us and we hope to expand our footprint here. Our focus in Sri Lanka is holistic. Our aim is to develop the larger ecosystem and be a responsible corporate citizen. We want to build deeper roots into the talent supply chain in Sri Lanka, partnering with academia, industry bodies and the government,” MphasiS Chief Information Officer M G Raghuraman.
MphasiS is a leading provider of applications services, remote management services and BPO services. The company delivers real improvements in business performance for clients through a combination of technology know-how, domain and process expertise. MphasiS services clients are in financial services, healthcare, communications, transportation, consumer and retail industries and governments around the world
IFS to deploy ERP solution for 9 firms at Flinth Ind. Park
The Sri Lankan unit of global business solutions provider, IFS has recently been awarded with a major contract from owners of Flinth Industrial Park (FIP) to swiftly deploy Enterprise Resource Planning (ERP) systems for all nine companies operating within the park.
IFS has already deployed its fully-fledged solutions for two companies in the park, Cable Solutions Private Ltd and Flinth Industrial Park (the main company managing the firms in the park) while a third company, AeroSense Private Ltd is expected to go live on October 1, officials said.
“We decided from the outset that we needed a globally-reputed ERP provider for the park to ensure that all the functions process smoothly and that is why we selected IFS. We have also given them a target to complete the implementation of ERP to all the companies in the park by the end of this year, which promise we are confident the IFS team could live up to,” Flinth Industrial Park’s Managing Director Michael Thorburn told reporters at a recent press conference.
He said that while there were only a few global companies that could cover all the functions carried out by FIP with their ERP systems, only IFS from the outset had a strong exposure and expertise in manufacturing and supply chain sector and a fully fledged offering that satisfied the senior management.
“IFS had no competition in that aspect as their compliant ability with the most rigid quality requirements necessary in the airspace industry ideally suited our requirements,” Thornburn explained.
FIP is home to AeroSense Ltd, a company manufacturing sensors for aircrafts across the world, and which needs to adhere to the highest levels of quality. This in turn benefited all the other companies in the park, Thorburn pointed out, since the quality assurance system embedded in the ERP had to be of the highest standard.
Meanwhile, IFS South Asia Vice President Jayatha De Silva explained that Flinth’s requirements in an ERP were challenging from the start but IFS was bold and took it on.
“For the success of any ERP implementation there are four factors that need to fall in place. The first factor of success is that the business solution must match the requirements of the business”.
“In this situation, the ERP we offered covered all the functions required by Flinth Industrial Park, including HR, finance, and quality assurance”.
The second factor was the consultants and experienced personnel that went into the task.
“IFS had the potential and the capacity, with its hugely experienced team of consultants to take on this challenge, work long hours, and get the ERP going well within the prescribed time frame.”
The third factor for a successful implementation was the post-implementation, De Silva explained. “The hand-holding is vital for the entire process to run smoothly, and in a project of this scale and magnitude, this is even more important.
“With this in mind, IFS will have two of its own personnel working with FIP, on-the-ground and at-hand, after the ERP goes live in order to ensure the system functions smoothly and to train any new personnel entering FIP, on the ERP.”
The fourth factor was the customer’s readiness, and Jayantha pointed out that in this respect, FIP were extremely supportive.
“When you want the ERP implemented so fast, you need the customer to set his priorities and let us know what is most important first. We found FIP ready with their guidelines and recommendations and ready to compromise in order to focus on what was most vital”, Jayantha explained.
FIP, which brings a unique industrial park concept to Sri Lanka, is the brain child of Swedish entrepreneur and visionary Rune Flinth. The park is based upon the concept that companies should focus mainly on production, while supporting functions such as finance, IT, legal services, quality control and human resources, are handled by the park itself.
Located in a 10-acrea area in Kadawatha, FIP already has eight export-oriented companies in residence, creating products that are highly technical, state-of-the-art and demanding stringent levels of quality in both hardware and software.
FIP is a subsidiary of the Swedish holding company Swedcord Development AB owned by Rune Flinth, who has been an industrialist in Sri Lanka for over 20 years having founded two major companies, Flintec and Toroid. (AR)
http://www.thebottomline.lk/2010/09/19/it3.html
IFS has already deployed its fully-fledged solutions for two companies in the park, Cable Solutions Private Ltd and Flinth Industrial Park (the main company managing the firms in the park) while a third company, AeroSense Private Ltd is expected to go live on October 1, officials said.
“We decided from the outset that we needed a globally-reputed ERP provider for the park to ensure that all the functions process smoothly and that is why we selected IFS. We have also given them a target to complete the implementation of ERP to all the companies in the park by the end of this year, which promise we are confident the IFS team could live up to,” Flinth Industrial Park’s Managing Director Michael Thorburn told reporters at a recent press conference.
He said that while there were only a few global companies that could cover all the functions carried out by FIP with their ERP systems, only IFS from the outset had a strong exposure and expertise in manufacturing and supply chain sector and a fully fledged offering that satisfied the senior management.
“IFS had no competition in that aspect as their compliant ability with the most rigid quality requirements necessary in the airspace industry ideally suited our requirements,” Thornburn explained.
FIP is home to AeroSense Ltd, a company manufacturing sensors for aircrafts across the world, and which needs to adhere to the highest levels of quality. This in turn benefited all the other companies in the park, Thorburn pointed out, since the quality assurance system embedded in the ERP had to be of the highest standard.
Meanwhile, IFS South Asia Vice President Jayatha De Silva explained that Flinth’s requirements in an ERP were challenging from the start but IFS was bold and took it on.
“For the success of any ERP implementation there are four factors that need to fall in place. The first factor of success is that the business solution must match the requirements of the business”.
“In this situation, the ERP we offered covered all the functions required by Flinth Industrial Park, including HR, finance, and quality assurance”.
The second factor was the consultants and experienced personnel that went into the task.
“IFS had the potential and the capacity, with its hugely experienced team of consultants to take on this challenge, work long hours, and get the ERP going well within the prescribed time frame.”
The third factor for a successful implementation was the post-implementation, De Silva explained. “The hand-holding is vital for the entire process to run smoothly, and in a project of this scale and magnitude, this is even more important.
“With this in mind, IFS will have two of its own personnel working with FIP, on-the-ground and at-hand, after the ERP goes live in order to ensure the system functions smoothly and to train any new personnel entering FIP, on the ERP.”
The fourth factor was the customer’s readiness, and Jayantha pointed out that in this respect, FIP were extremely supportive.
“When you want the ERP implemented so fast, you need the customer to set his priorities and let us know what is most important first. We found FIP ready with their guidelines and recommendations and ready to compromise in order to focus on what was most vital”, Jayantha explained.
FIP, which brings a unique industrial park concept to Sri Lanka, is the brain child of Swedish entrepreneur and visionary Rune Flinth. The park is based upon the concept that companies should focus mainly on production, while supporting functions such as finance, IT, legal services, quality control and human resources, are handled by the park itself.
Located in a 10-acrea area in Kadawatha, FIP already has eight export-oriented companies in residence, creating products that are highly technical, state-of-the-art and demanding stringent levels of quality in both hardware and software.
FIP is a subsidiary of the Swedish holding company Swedcord Development AB owned by Rune Flinth, who has been an industrialist in Sri Lanka for over 20 years having founded two major companies, Flintec and Toroid. (AR)
http://www.thebottomline.lk/2010/09/19/it3.html
PABC confident of meeting minimum capital requirement organically – Official
By Azhar Razak
PABC Bank says it is confident of raising the additional capital requirement of around Rs. 500 million through organic growth and would not need to go for another Rights issue to fund the recently stipulated Rs. 3 billion capital requirement by end 2011. Presently, PABC Bank, which has a core capital (Tier 1 capital) of Rs. 2.54 billion as at 30.06.2010, is the only private commercial bank that is short of the increased minimum capital stipulated by the Central Bank of Sri Lanka (CBSL).
“Given the existing strength of PABC Bank’s core capital adequacy ratio and the total adequacy ratio, we are very much confident of easily reaching the Rs 3 billion Tier 1 required through significantly expanding our business in the near future,” Director-CEO, PABC Bank, Claude Peiris told The Bottom Line in a recent interview.
The amended regulations of CBSL requires existing private commercial banks to increase their minimum capital to Rs 3 billion by end 2011, and further raise it to Rs. 4 billion by end 2013 and Rs 5 billion by end 2015.
He stated that, according to recent interim financials as at June 30, 2010, PABC Bank’s core capital adequacy ratio, calculated as a percentage of Risk Weighted Assets, stood at a healthy 19.24%, which is well above the minimum requirement of 5%, while total capital adequacy ratio, also calculated as a percentage of Risk Weighted Assets, was 19.91%, as opposed to the minimum requirement of 10%.
“The fact that we have maintained a higher capital adequacy ratio means that we will have a greater capability to deal with risk going forward, and therefore, we are already planning for a rigorous expansion drive,” he said, pointing further that the Bank will have sufficient time until end 2011 to meet the new requirement.
Expansion plans
According to Peiris, PABC Bank plans to open at least five branches around the island before the end of this year, which could take the bank’s Branch network to 42 by December 2010.
“We have plans to open branches in Embilipitiya, Matale, Ambalangoda, Batticaloa and Kalmunai before the end of this year,” Peiris said.
It has to be noted that PABC Bank went for a Rights issue last year to infuse fresh capital amounting to Rs 563 million, which had been needed at the time to meet a CBSL minimum capital requirement of Rs 2.5 billion by December 2009. In 2006, the CBSL had increased a minimum capital requirement for licensed commercial banks from 0.5 billion to 2.5 billion, to be met by end 2009. However, the deadline was later extended until June 30, 2010.
PABC Bank’s net profit for the June 2010 quarter fell 60% to Rs 83 million from a year earlier, despite lower loan loss provisions, as fee income fell steeply.
Listing requirement
Meanwhile, new regulations set out by the CBSL a fortnight ago, also requires unlisted locally incorporated private banks to list on the Colombo Bourse by end 2011. Union Bank and DFCC Vardhana Bank, at present, are the only two ‘locally incorporated’ private commercial banks that are not listed on the Colombo Stock Exchange. Union Bank is however in line with the ‘minimum capital requirement’, following the receipt of an Rs 2 billion private placement in May 2010. Prior to the private placement being received, the Bank’s equity stood at Rs 1.5 billion.
According to recent media reports, Union Bank is planning to go public at the end of this year or early next year, to comply with the CBSL directive.
However, Sri Lanka’s three largest banks, State-run Bank of Ceylon, Peoples Bank and National Savings Bank are not listed, and the CBSL has not requited them to do so. (AR)
LIRNEasia urges implementation of mHealth programme
By Azhar Razak
Sri Lanka’s ICT policy think tank, LIRNEasia has urged Sri Lanka to implement a ‘real-time bio-surveillance programme’ (RTBP) which uses mobile phones for sharing information following its successful completion of a recent pilot research project.
The findings of the research survey shows that implementation of the project could enable early detection and notification of potential health outbreaks (more importantly some killer communicable diseases) while at the same time reducing costs by 30 percent as the system only uses mobile phones, software applications and a Web interface.
“I am proud to say that we are extremely pleased that the research and pilot project has led to the unprecedented milestone of a significant improvement in capturing and documenting health information. We now have solid proven evidence to support RTBP as an important tool in preventing the spread of devastating diseases. Had these monitoring systems been in place before, we would have prevented the deaths of many,” Nuwan Waidyanathan, Senior Research Manager, LlRNEasia, told a press conference recently.
Some of the findings from the project noted that respiratory infectious diseases are the most common in Sri Lanka, common cold is the most popular but gastrointestinal infectious are, relatively, the most visible, people over 45 years are most vulnerable to both hypertension (high blood pressure) and Diabetes-Mellitus.
RTBP is designed to collect timely relevant health surveillance data and to process this data in order to reliably and quickly detect possible outbreaks of diseases. The pilot project carried out with the aid of a grant of US $ 300,000 from the International Development Research Centre, Canada, was tested out in 12 hospitals and clinics in the Kurunegala District from July 2008 onwards accumulating an average of 7,200 records per week or 300,000 patient records in total.
“They detected 25 prioritised infectious diseases like dengue, malaria and dysentery. They were also the first to utilise other options of investigating other communicable like common colds and non-communicable diseases like diabetes or arthritis,” Waidyanathan said.
Cost reduction
The research which was also carried out simultaneously in South India also concluded that Sri Lanka could reduce its overall expenses by 30 percent with RTBP while India could reduce by 50 percent. It further noted that both India and Sri Lanka presently dedicate very little or no resources to event detection or alerting and that RTBP allows allocating more resources to the upkeep of situational awareness and to crisis response activity
“Bulk of the health departments expenses are spent on data collection and consolidation. They can be reduced by RTBP with the introduction of mHealth at the point of care,” the research findings pointed out.
The research paper urged authorities to invest more in alerting to empower health workers with information on the state of affairs of the health in their regions.
“Following a feasibility analysis, researchers have found that the project would require US $12,000 per month per district to be implemented island wide in Sri Lanka,” Waidyanathan noted.
Technical aspects
mHealthSurvey software works on any available standard java mobile phone. A typical record contains the patient visitation date, location, gender, age, disease, symptoms, and signs. Data is transmitted over GPRS cellular networks. T-Cube Web Interface (TCWI) is an Internet browser based tool to visualise and manipulate large spatio-temporal data sets. Epidemiologists can pin down a potential outbreak of, for instance, a gastrointestinal disease among children in the Wariyapola. Sahana Alerting Module (SAM) allows for the generic dissemination of localised and standardised interoperable messages. Selected groups of recipients would receive the single-entry of the message via SMS, Email, and Web.
“The key paradigm of the bio-surveillance programme is not just about computerising the present day processes but it is about complementing them with revolutionary techniques like “syndromic” surveillance. RTBP’s real time bio surveillance capabilities will enhance the present day passive or non-active passive surveillance to an active surveillance system,” Wayamba Provincial Director of Health Services, Dr. R. M. S. K. Ratnayake said.
He added that since the manner in which responses are sent back to health workers follow a global standard recognised by the International Telecommunications Union, RTBP makes it possible for information dissemination with other national organisations such as the boarder control health authorities as well as across borders with neighbouring countries or global organisations.
Sri Lanka’s ICT policy think tank, LIRNEasia has urged Sri Lanka to implement a ‘real-time bio-surveillance programme’ (RTBP) which uses mobile phones for sharing information following its successful completion of a recent pilot research project.
The findings of the research survey shows that implementation of the project could enable early detection and notification of potential health outbreaks (more importantly some killer communicable diseases) while at the same time reducing costs by 30 percent as the system only uses mobile phones, software applications and a Web interface.
“I am proud to say that we are extremely pleased that the research and pilot project has led to the unprecedented milestone of a significant improvement in capturing and documenting health information. We now have solid proven evidence to support RTBP as an important tool in preventing the spread of devastating diseases. Had these monitoring systems been in place before, we would have prevented the deaths of many,” Nuwan Waidyanathan, Senior Research Manager, LlRNEasia, told a press conference recently.
Some of the findings from the project noted that respiratory infectious diseases are the most common in Sri Lanka, common cold is the most popular but gastrointestinal infectious are, relatively, the most visible, people over 45 years are most vulnerable to both hypertension (high blood pressure) and Diabetes-Mellitus.
RTBP is designed to collect timely relevant health surveillance data and to process this data in order to reliably and quickly detect possible outbreaks of diseases. The pilot project carried out with the aid of a grant of US $ 300,000 from the International Development Research Centre, Canada, was tested out in 12 hospitals and clinics in the Kurunegala District from July 2008 onwards accumulating an average of 7,200 records per week or 300,000 patient records in total.
“They detected 25 prioritised infectious diseases like dengue, malaria and dysentery. They were also the first to utilise other options of investigating other communicable like common colds and non-communicable diseases like diabetes or arthritis,” Waidyanathan said.
Cost reduction
The research which was also carried out simultaneously in South India also concluded that Sri Lanka could reduce its overall expenses by 30 percent with RTBP while India could reduce by 50 percent. It further noted that both India and Sri Lanka presently dedicate very little or no resources to event detection or alerting and that RTBP allows allocating more resources to the upkeep of situational awareness and to crisis response activity
“Bulk of the health departments expenses are spent on data collection and consolidation. They can be reduced by RTBP with the introduction of mHealth at the point of care,” the research findings pointed out.
The research paper urged authorities to invest more in alerting to empower health workers with information on the state of affairs of the health in their regions.
“Following a feasibility analysis, researchers have found that the project would require US $12,000 per month per district to be implemented island wide in Sri Lanka,” Waidyanathan noted.
Technical aspects
mHealthSurvey software works on any available standard java mobile phone. A typical record contains the patient visitation date, location, gender, age, disease, symptoms, and signs. Data is transmitted over GPRS cellular networks. T-Cube Web Interface (TCWI) is an Internet browser based tool to visualise and manipulate large spatio-temporal data sets. Epidemiologists can pin down a potential outbreak of, for instance, a gastrointestinal disease among children in the Wariyapola. Sahana Alerting Module (SAM) allows for the generic dissemination of localised and standardised interoperable messages. Selected groups of recipients would receive the single-entry of the message via SMS, Email, and Web.
“The key paradigm of the bio-surveillance programme is not just about computerising the present day processes but it is about complementing them with revolutionary techniques like “syndromic” surveillance. RTBP’s real time bio surveillance capabilities will enhance the present day passive or non-active passive surveillance to an active surveillance system,” Wayamba Provincial Director of Health Services, Dr. R. M. S. K. Ratnayake said.
He added that since the manner in which responses are sent back to health workers follow a global standard recognised by the International Telecommunications Union, RTBP makes it possible for information dissemination with other national organisations such as the boarder control health authorities as well as across borders with neighbouring countries or global organisations.
http://www.thebottomline.lk/2010/09/19/it1.html
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