Sri Lanka Newspapers - 03/01/2012

SLFFA seminar on ASYCUDA World
The Sri Lanka Customs will be fully implementing electronic submission of Cusdec and Manifest by February 1, 2012 by doing away with the manual system.

All importers and exporters are expected to be prepared for this requirement. Therefore, to familiarize all industry stakeholders in this new e-manifesting system, the Sri Lanka Freight Forwarders’ Association has organized a training seminar to be conducted by Sri Lanka Customs on January 12, from 8.30 a.m. to 1.30 p.m. at the Ground Floor Auditorium of the Ceylon Chamber of Commerce, Nawam Mawatha, Colombo 2.

The training seminar will address aspects such as training to submit electronic Cusdec and training to submit electronic manifest.

This training seminar is highly recommended for operations and IT staff and it is suggested that all import and export organizations make use of this opportunity to obtain training. Further details could be obtained from the SLFFA Secretariat.

http://www.dailynews.lk/2012/01/03/bus18.asp

Tourism promotion in high spending markets needed
Ramani Kangaraarachchi

Manmohan Singh is the General Manager of Malaysian Airlines in Sri Lanka since 2009.

He believes that he brought luck to the country and proud about being able to meet his challenges in a peaceful environment. He is married and blessed with three sons. Singh was interviewed by Daily News Business for Expat Chit Chat. Excerpts of the interview.

Q: What is your educational and professional background?

I graduated from the Edith Cowan University of Western Australia with a major in public relations. My training is in communications.


Manmohan Singh.
Picture by Saliya Rupasinghe

I have been with Malaysian Airlines for three decades now in the various portfolios mainly in corporate communications and decided to try my hand in sales in 2007. I was attached to Malaysia Sales looking after sales in Ipoh and Malacca.

Q: What made you to focus on the travel industry?

I have a penchant for travelling and like to visit new places. And so I thought it would be a good idea to join an airline and what better airline than Malaysia Airlines.

Being the national carrier, it was also like doing national service as well. Actually my focus was in communications as that was my scope of study.

So I joined the Corporate Communications department and was always in the thick of things in the travel industry as we had to keep abreast with all the developments in the industry.

After working in Communications for more than 20 years, I decided that perhaps I should look at a new scope so that I could broaden my horizons.

That opportunity came in 2007 I was entrusted with looking after Sales in Ipoh and Malacca, two domestic stations that had just gone off line and our offices closed because of consolidation.

It involved interacting with the agents in these two areas and to ensure that sales targets were met.

In 2009, I was identified to fill in the Sales position in Sri Lanka and I immediately said yes, even knowing that the country was in a state of civil unrest for the last 30 years.

I could not resist the challenge!! So on May 1, 2009, I came to Sri Lanka and immediately knew that it was going to be exciting.

I got down to doing my job and before you know it, the war ended.

Q: What is your view about Sri Lanka and its people?

Sri Lanka is a beautiful country. I feel sorry that because of the unrest, the country did not have much opportunity to grow and expand like it could have. But there are so many similarities between Malaysia and Sri Lanka. We have the same equatorial climate.

So when I tell my friends in Malaysia that there are Rambutans and Durians here in Sri Lanka, they are indeed shocked!!

The people are the best part of Sri Lanka. They are very hospitable and friendly people and are always accommodating. For me, I have an added advantage because of my name.

It is the same name as the Prime Minister of India so whenever I give my business card to acquaintances, the first remark is that ..Oh you have a very special name after a special person!! So that helps to break the ice and conversations take off from there we are both at ease with each other.

Of course a lot of people think I am from India, so when I say I am from Malaysia, it’s another topic of conversation. Another plus point for Sri Lanka and it’s people is the cleanliness of the place. Generally most places are very clean and tidy.

This is a comment I get from almost all guests that I receive from overseas, especially those who have never been to Sri Lanka.

Traffic is also not as chaotic as some of the other South Asian countries. Most drivers are courteous, but the bus drivers need some help.

Also I have to mention that the Armed Forces personnel that are on duty at various points in the city and outside are exemplary and honourable. I know for a fact that the citizens feel more comfortable when they are around than when they are not.

Maybe it has something to do with the war but these men in uniform are admirable.

Q: How do you see the Sri Lankan market?

I see the Sri Lankan travel market as robust and dynamic.

It is growing in tandem with the growth rate of the country, which is a good sign. If it grows faster than what the country can take, it will give a negative effect in the long run.

The travel market is thriving as is evident by the number of full service carriers that are servicing the market.

Those here on long-term have increased frequency, because of the viability of the market. Since travel is market driven, it will do well because of its vibrancy.

Now that there is a war-free environment in Sri Lanka, a lot of Sri Lankan migrants are coming to Sri Lanka to visit friends and relatives (VFR market).

As Malaysia Airlines is strong in the Australian market, this suits as most of this VFR traffic is from Australia and New Zealand.

With the high spending capacity of the people, this will increase domestic demand for goods and services and when companies make profits, it will in turn create a robust MICE market especially for Incentive travel.

Malaysia is one of the top five destinations for MICE Travel as it has developed a number of tourism products for this market.

The capacity to the Far-East is forecast to increase with airlines planning double daily frequencies. Increasing trends in arrivals will continue into 2012 with target of one million arrivals and the VOA Fee has been reduced after industry pressure.

Robust domestic demand will also fuel various industry profits.

This trend is set to boost not only MICE travel (Incentive groups) but also an increase in Government to Government (G2G) collaboration will create more overseas employment opportunities allowing more labour traffic movements (e.g. Korea).

The VFR Market will continue to grow as a result of Positive Cross-elasticity from high percentage of students and migrants. Corporate sector and GOM travel is also due to increase in business collaboration.

High levels of private consumption will boost leisure traffic further.

Some of the key highlights for this year in terms of events and developments include the opening of the Colombo-Katunayake Highway connecting the airport and Colombo, Playing host to the ICC World T20 in September 2012 and the second Airport in Hambanthota. Malaysian Airlines will continue to be aggressive and focused in the market and aim to capitalize on all opportunities available for business growth which will be the stepping stone for it to be recognized as the preferred premium carrier from Colombo.

Q: What are your achievements and challenges you faced in Sri Lanka?

When I came to Sri Lanka, the Malaysian Airlines flight was a Airbus A330 wide-bodied aircraft plying a triangular routing of KUL-Maldives (MLE) Colombo (CMB) - KUL. This was a four times a week flight.

I am also responsible for MH operations in Maldives. The passenger load was looking healthy and after carefully analyzing the situation, we decided it was time to take our frequency to five times a week.

Then in September 2010, we decided that both stations had enough capacity to stand on its own and so I decided that the time was right to delink both the stations. So we mounted two separate flights, KUL-CMB-KUL and KUL-MLE-KUL. Since both stations were in the four hours flight range, it was decided that we would use the narrow-body B737-800 to service both stations.

Due to the successful business strategies on the team’s part, demand steadily grew and we decided in March 2011, to make our operations into Colombo and Maldives, to daily operations.

I am happy to say that the seat factor on our flights is in the healthy 80s. We are looking to expand and increase our flight frequency further this year.

Another important point to note is that, Malaysia Airlines is the only foreign carrier to have an office outside the capital. We have a branch office in Kandy and are looking to expand to other territories especially in the North and South.

The support that Malaysia Airlines has received from Hemas, our General Sales Agent (GSA) in Sri Lanka, is tremendous and they have been with us every step of the way, assisting us to achieve our goal.

Q: What are the shortcomings you have observed in the Sri Lankan tourism market?

I feel that there is not enough awareness on Sri Lanka by the Tourism Board to high spending countries like China and India.

The tourists from these countries have the capacity to spend and will definitely invigorate the economy with their spending.

The Tourism Board and other tourist related agencies should get together and develop more tourism products in the capital. I have to say that the hotel rates in Sri Lanka are expensive.

Just to give an example, recently I heard of a family of four has decided to go to Singapore and Malaysia because they can get good hotels for US$ 80-100 whereas you cannot get anything less than US$ 130-150 for a comparable hotel in Sri Lanka.

The Tourist Board must bring travel agents from various other countries to showcase Sri Lanka so that travel agents can go back to their respective countries and sell Sri Lanka to their customers.

But of course they must have enough Tourism products to sell. These Travel Agents familiarization tours can be done in collaboration with foreign carriers.

Q: What are your future plans?

I have another year of my tenure left in Sri Lanka. After that it depends where the company will send me. The travel industry is actually very vulnerable.

Travel can be disrupted on political instability, volcanic eruption, floods, terrorism, and workers strike.

These challenges are there all the time. One ceases another starts! So airlines have to be ahead of the game and planning for eventualities is the key. How fast you respond to a crisis is how big or small your losses will be.

For me right now, my priority is to make Malaysia Airlines the carrier of choice for travel out of Sri Lanka.

Malaysia Airlines is an Award Winning Airline and we have won numerous awards for service quality mainly inflight service.

Our cabin crew has won the SKYTRAX World’s Best Cabin Staff award for 2001, 2004, 2007 and 2009.

That is a total of six times over eight years. We are also a Five Star Airline for the last five consecutive years.

There are only six airlines in the world who have this award bestowed on them.

http://www.dailynews.lk/2012/01/03/bus20.asp

Red Bull combats infringers in Commercial Court
The Commercial High Court of Colombo has issued Enjoining Orders and Interim Injunction Notices against Mathurata Agro Impex.

In an infringement action initiated through its lawyers, Sudath Perera Associates, Red Bull pleaded to the Court that as the registered owner of the trademarks “Red Bull”, “Kratingdaeng” and the “Double Bull Device”, Red Bull is entitled to stop Mathurata from importing, distributing, marketing and selling the infringing “Kratingdaeng Red Bull” product that it has been illegally importing from sources in Thailand and Vietnam.

Such acts amount to trademark infringement and acts of unfair competition under the Intellectual Property Act No. 36 of 2003. Sales of the world famous Red Bull Energy Drink have grown considerably since the drink was first launched in 1987 climbing from just over 1 million unit sales in 1987 to over 4 billion cans worldwide in 2011.

Based on these figures, the Red Bull Energy Drink has become the unchallenged market leader for energy drinks globally and in Sri Lanka.

The authorized importer and distributor of the Red Bull Energy Drink product in Sri Lanka is Stassen Exports Pvt Ltd.

Red Bull expends an enormous amount on marketing, advertising and promotional activities and on sponsoring athletes and events particularly with regards to extreme sports such as Formula One, Motorcycle Racing, and the Red Bull X-Fighters World Tour.

Such global events attract very large audiences around the world via various media including television and online coverage and create tremendous brand value and reputation.

The acts of Mathurata are likely to cause damage to the Red Bull brand and dilute the goodwill and reputation associated with the Red Bull trademarks.

It was argued on behalf of Red Bull that due to the tremendous goodwill and reputation and unmatched brand value associated with the Red Bull trademarks, the “Kratingdaeng Red Bull” product imported by Mathurata would be likely to mislead the public and lead the average consumer to mistakenly believe that both the “Kratingdaeng Red Bull” product and the Red Bull Energy Drink product emanate from the same source.

The aforesaid acts carried out by Mathurata were found by the Court to be contrary to honest practices and constitute acts of unfair competition within the meaning of Section 160 of the Intellectual Property Act.

Red Bull’s case was supported by the President’s Counsel, Romesh De Silva, together with Sugath Caldera and Manoj Bandara, as instructed by Sudath Perera Associates.

Commercial High Court Judge Gamini Amarasekera issued Enjoining Orders against Mathurata for the infringement of Red Bull’s trademarks and unfair competition.

http://www.dailynews.lk/2012/01/03/bus21.asp

Frank words on tea from Merrill J. Fernando :

Dilmah invests Rs 10b to promote Ceylon tea
MJF Group Chairman Merrill J Fernando owners of the world renowned, single origin pure Ceylon tea brand Dilmah, spoke about prospects for Ceylon tea.

Fernando commented that although there had been a slowdown due to recession and turmoil globally, he expects demand and prices to grow in 2012.

He was optimistic that the proposed private sector led $10 million Ceylon tea global promotion campaign, if effectively implemented, will boost demand for Ceylon tea by recreating awareness of the quality image Ceylon tea once enjoyed. The campaign will also target unscrupulous packers overseas who pass other teas off as “Ceylon tea” and damage its image and impact demand.

Fernando said that the Tea Board has not advertised Ceylon tea for the last decade or more. Dilmah, he said has spent Rs. 10 billion during this period to promote Ceylon tea and this investment benefits all exporters who should ideally have followed a similar premium strategy. Most chose to ride on the awareness Dilmah re-created but sell at low cost. It is this “sell cheaper” strategy that has led to the current predicament where the country has few genuinely value-added tea brands and a focus on trading as opposed to marketing and brand building.

If the national average export price matches Dilmah’s, Sri Lanka’s earnings from tea would grow from $1.5 billion annually to $3 billion. There in, Fernando said lies the best and logical opportunity to grow the industry.


Fernando with his sons

Fernando stressed the need for investment in replanting tea fields to bring costs down and improve quality. Past high interest rates and high labour costs have deterred replanting amongst companies and smallholders alike. For this, he said, it is critical that the government offers a long- term funding package such as in India, bearing in mind the socio-economic importance of the sector and the inability to fund such a long-term programme with internal funds or borrowing at commercial rates. He also stressed the need to remove present obstacles to commercial forestry.

To support increased demand for Dilmah tea, the group has planned significant investment in tea packaging machinery and facilitates at its Peliyagoda facility. Merrill J. Fernando’s Dilmah Tea is unique in its unwavering commitment to quality Ceylon Tea. In its efforts at educating a new generation of tea drinkers on quality and tradition in tea, Dilmah pioneered the Dilmah School of Tea, a Colombo based initiative that has affiliations in Lyon (France), Prague and shortly also Warsaw.

Fernando believes that the logical way to market a high cost, high quality product like Ceylon tea is to position it as a luxury item and not price-led trading and supplying under foreign traders; brand names which, sooner or later, become major competitors of Pure Ceylon tea, as history would reveal quite clearly.

It is this inappropriate strategy for Ceylon tea, according to Fernando, which has led to some exporters lobbying for imports of cheaper tea to Sri Lanka, to service foreign owned brands and local brands that trade on price. This is in essence a value reduction strategy and not value added.


Merrill J. Fernando

Foreign brands packed here create very unfair competition for Ceylon tea in the longer-term. They exploit the positive perception of Ceylon tea among consumers long after they cease using Ceylon tea. These brands build their quality image by initially relying on Ceylon tea but move to multi origin blends eventually to save cost. It is usually at this point that local packers lobby to allow cheap tea imports, citing the risk of losing of yet another “important foreign brand” who wants to leave due to regulatory hurdles. These regulations have been put in place to protect the local tea industry. Most traders disregard the impact on Ceylon tea producers and the 12.5% of the population that survive on it.

If Sri Lankan exporters do not champion and market Ceylon tea as a premium product, who would? Emulating the multi-origin, cheap tea strategies of highly efficient, volume driven global brands is disastrous and out of alignment with the unique, artisanal, high cost tea that we grow. They must now realign their strategy with the overall interests of the tea industry and work together to regain past glories of Ceylon tea.

When the French wine industry was faced with the growing popularity of cheaper new world wines, did they lobby to allow cheap foreign grapes to blend? Asks Fernando No, instead they refocused on premium strategy and promoted in a less tradition-bound, modern style to new affluent consumers,whilst protecting the mystique and consumer perception of their wines.

Ceylon tea lost a series of markets from the UK and traditional “empire” markets, then Egypt, Pakistan, now Russia and the CIS, largely as Sri Lanka supplied bulk tea or foreign brands and are unable to control the contents of a pack of tea. The country now left with a handful of markets, which will also be lost in time. Clearly, local exporters have been unable to do justice to the growers of Ceylon tea.

Dubai can choose to be a tea hub, as they grow no tea, just as Sri Lanka chose to be an apparel hub, allowing duty free imports of buttons to fabric to hangers since the country did not have existing producers. Even then, apparel manufacturers who took a lowest cost approach have failed and those who adopted a specialized, premium positioning have thrived. But even they have had to open plants in other lower cost countries. Indeed those tea exporters wanting to pursue a multi-origin, low cost strategy without hanging on the coat-tails of Ceylon tea, the only point of difference available to them, should be encouraged to set up plants in Dubai.

Investment on machinery, often second hand, is moderate and employment low in automated plants. The “loss” to Sri Lanka from a setting up a plant overseas is negligible in comparison to the protection of the image of Ceylon tea and the improved focus on the correct, premium strategy for what the country grows. Exporters should first prove with overseas plants that selling cheap could be successful before jeopardizing Ceylon tea producers. In Fernando’s view there is someone always cheaper – multinationals do that best. Once there is consumer awareness that Sri Lanka exports not only Ceylon tea but also that of many origins, that suspicion of genuineness and “what’s in my pack of tea” cannot be reversed if and when the experiment fails.

In tea Sri Lanka has a world-class product. Exporters, whose investment in assets and people is dwarfed by that of the tea-growing sector, need to align their strategies with the national interest. This is more practical than to ask the growers to align with the exporters interest, said Fernando. Concluding, Fernando said that Dilmah was established on a unique philosophy that envisages business as a matter of human service. Recalling the lessons he learned from his parents, Merrill J. Fernando established his business on family values, underlined by integrity, caring and sharing. The MJF Charitable Foundation was established to utilize earnings from the sale of Dilmah Tea around the world to benefit the marginalized and underprivileged. Dilmah Conservation subsequently extended that principle to include the environment. Both organizations fulfill the pledge that Fernando made as a young man in his twenties, to make business a matter of human service.

http://www.dailynews.lk/2012/01/03/bus22.asp

Consumer protection and trade facilitation
Didul Kodagoda Chairman, Sri Lanka Accreditation Board



Didul Kodagoda

“Conformity assessment” assured through third party accreditation is one of the most powerful tools of ensuring “consumer protection”,though the importance of the link between the two is unknown to the public.

“Accredited Conformity Assessment” is the globally used term to describe accreditation and certification processes.

It is a process which guarantees that products, processes, systems or people meet specified requirements. These requirements may be specified in a standard or in a regulation or in a contract.

Accreditation at large provides assurance to the consumers that assessing the conformity of the products they buy to the requirements specified in the standards or stipulated by the relevant regulatory authorities in the country, is carried out by technically competent personnel in an impartial manner with the guarantee of integrity of their actions. Accreditation is implemented on a voluntary basis all over the world.

However, many governments have now realized the importance of accreditation and its impact on consumer protection and trade facilitation resulting in the incorporation of accreditation into existing regulations, thereby making it mandatory in an indirect manner.

The Sri Lanka Accreditation Board for Conformity Assessment (SLAB), with the blessings of the Technology and Research Ministry has initiated discussions with controlling authorities of two regulatory bodies whose regulations have a critical impact on the health and safety of the general public and the environment. They are the Ministry of Health and Motor Traffic Department.

Accreditation of Medical Testing Laboratories
Diagnosis of deceases and subsequent treatment of patients depend on the information provided by Medical Testing Laboratories in their test reports.

Hence the accuracy and reliability of the test results are extremely important. Just as a manufacturing organization has to take necessary action to control the quality of their products a testing laboratory too need to implement certain quality assurance programmes in order to ensure the accuracy and reliability of test results.

“Quality” is never an accident. To achieve quality you need to plan, implement the plans, monitor the outcome and take action if there is any deviation from the plans.

This is applicable for laboratories too. Through accreditation, laboratories will be able to develop their quality management systems to achieve accurate and reliable test results.

More than 400 Private Medical Laboratories have been registered at the Health Ministry todate. The Private Medical Institution (Registration)act under which this registration scheme operates, is being revised and SLAB has made its proposals for incorporating accreditation into this revision.

Also medical professional bodies have submitted proposals to the Health Ministry for accrediting Laboratories operating in the Government Hospitals.

The laboratories operating under Colombo, Ragama, Ratnapura, Kandy and Galle Government hospitals along with the Medical Research Institute and the Blood Bank have been identified by the Ministry to work towards accreditation.

SLAB has already conducted awareness programmes for the employees of the five Government hospital laboratories.

This accreditation programme for medical laboratories both in the Government and the Private sectors would certainly improve the health care system in the country.

Accreditation of Vehicle Emission Testing (VET) Centres
Under the Motor Traffic Amendment Act, no revenue licence is issued to motor vehicles by the licencing authority unless an emission certificate is produced. Regulations made under the Environment Act require the owner of the motor vehicle to obtain this certificate from an accredited garage authorized by Commissioner of Motor Traffic. SLAB has established a Technical Advisory Committee to develop specific criteria for vehicle emission inspection and the draft document is being discussed now.

It is expected to be finalized soon. We are confident that this scheme could be initiated during the first half of 2012. It would ultimately provide control measures to prevent or mitigate environmental pollution due to vehicle emissions.

Trade Facilitation
When goods and services are exchanged across economies it becomes necessary to prove their quality to the intended customers. This is achieved through ?conformity assessment?. When the relevant conformity assessment process is accredited it will facilitate the exchange as no further assessment would be necessary when the goods arrive in the country that imported the items. The Sri Lankan exporter will eliminate enormous costs if he had to submit a report from a foreign accredited laboratory.

The Sri Lanka Accreditation Board is one of the apex bodies in the National Quality Infrastructure which is the institutional framework necessary to regularize and harmonize all the relevant activities required to implement conformity assessment with confidence.

The other institutions are:

* National Standards body for preparing and adapting national standards and adapting international standard wherever necessary

* National Metrology Institute for establishing and maintaining measurement standards traceable to international standards

* Controlling authorities of regulations through accredited conformity assessment process to ensure consumer health and safety.

The above three types of institutions have been in operation in Sri Lanka for a considerable period of time. With the establishment of the Sri Lanka Accreditation Board by an act of Parliament (Act no. 32 of 2005) the national quality infrastructure has been strengthened and through accreditation an important step will be taken in facilitating acceptance and recognition of Sri Lankan goods and services both domestically and internationally.

Furthermore accredited test data would benefit the research and development activity as it ensures the accuracy and the reliability of the data used for R & D.

http://www.dailynews.lk/2012/01/03/bus23.asp

Challenges in marketing brand Sri Lanka
Marketing and selling in favourable Economic conditions:

Prasanna Perera, Marketing and Management Consultant, Chartered Marketer, CIM UK



Prasanna Perera

Sri Lanka as a “Destination” needs to be marketed specially for tourism, education and others. In doing so, the country faces many challenges, that need to be overcome.

In this article, my endeavour is to identify these challenges and provide some insights to deal with them.

Infrastructure
This is a key challenge for developing a Nation Brand. Roadways, airports, sea ports, railways are key infrastructure requirements. Sri Lanka has a long way to go in this area, although many gigantic strides have been made which is commendable.

No country can be a powerful nation brand without world class infrastructure. Funding is key for infrastructure development and Sri Lanka will need to lobby the relevant stakeholders.

In order to build brand awareness and recall, integrated marketing communication campaigns are required, targeting key source markets.

Marketing communications

The Jetliner ship with the tourism logo

Budgetary constraints are the biggest barrier and the government and tourism stakeholders need to address this.

A good example is Britain, which is funding its MARCOM campaign, through joint funding by the Government and the commercial sector.

In the case of Sri Lanka, brand awareness needs to be built and sustained. To do this, Sri Lanka needs to overcome the competitive noise levels.

Natural disasters
Natural disaster can have a major impact on the brand of a country. Tsunami’s earthquakes, hurricanes, are all uncontrollable events. Sri Lanka needs to develop contingency plans for these scenarios, so that the impacts can be minimized. Natural disasters will effect tourism and local exports very badly. We need to be prepared since Sri Lanka is now prone to natural disasters.

Country-of-origin (COO)
This is a phenomenon very important in Nation Branding. Many countries are synonymous for certain products and services. For example, Switzerland for chocolates, Chile for wines, Germany for beer, Japan for electronics. Malaysia for palm oil and New Zealand for dairy.

In the case of Sri Lanka, “Ceylon Tea” is the platform supported by “Sri Lanka Cricket (SLC)”, “Sri Lanka Apparel” and “Gems and Jewellery”.

We must leverage these COO advantages, to develop the nation and the destination brand.

Stakeholder relationships
As a Nation, Sri Lanka has many stakeholders, both domestic and international.

These stakeholders can exert significant pressure on brand “Sri Lanka.”

A proactive approach to stakeholder management is required, to deliver stakeholder expectations and build cordial relationships.

Visas
Entry visas are a key challenge in Nation Branding.

A delicate balance between national security and encouraging visitors needs to be maintained.

In terms of visas to Sri Lanka, the following aspects need consideration.

* Visa fees (Different categories)

* Minimum period of stay

* Procedure in obtaining visas

* Nationalities that can obtain visas on arrival

Sri Lanka has been addressing the visa issue in the last few months and the present system needs to be continuously reviewed.

Exchange rate
Sri Lanka can be perceived as a cheap or expensive destination, based on exchange rates. The Price Positioning of the country must be in-line with the Brand Positioning. In my view Sri Lanka should be positioned as a great value-for-money destination. (Please note that value-for-money does not mean cheap).

Service standards
This is an area that Sri Lanka needs to improve dramatically and fast. Building hotel rooms is well and good but if there is a scarcity of well qualified and trained staff? There is a need to balance the demand and supply equation in terms of manpower. Poor quality service standards will result in negative world-of-mouth and deterioration of Nation Brand image and perception.

Competitors
There are many emerging destinations posing a real threat to Sri Lanka. These are Indonesia, Philippines, India, Vietnam, China and of course the old guard of Thailand, Male and Malaysia.

To achieve a competitive advantage, Sri Lanka needs to position the “Nation Brand” creatively and consistently.

Catchy slogans will not do the trick; The positioning should be built on strong and deliverable value propositions. Take the example of Malaysia, which is positioned as a multiethnic, multi-religious and multi-racial country.

The promotional theme is “Malaysia - Truly Asia.” The underlying value proposition is that by visiting Malaysia, you will experience everything that is Asian.

The results for Malaysia has been outstanding, with over 24 million visitors in 2010.

In conclusion, Sri Lanka needs to have Destination Branding on track, to achieve rapid economic and social development.

Strategic marketing and branding is going to be the way forward.

http://www.dailynews.lk/2012/01/03/bus24.asp

MBSL revises Midcap Index
In a pioneering move, MBSL constructed a stock market index: the ‘MBSL Midcap Index’, which measures the aggregate price level and price movements of medium size companies listed on the Colombo Stock Exchange (CSE).

The All Share Price Index (ASPI) measures the share price movements of all the stocks listed on the CSE while the Milanka Price Index (MPI) measures the price movement of highly capitalized companies listed on the CSE.

There was no index to measure the price movement of medium sized companies listed on the CSE. The MBSL Midcap Index filled this vacuum. MBSL Midcap Index can be used as the benchmark index by individual and institutional investors who prefer growth but are prepared to withstand only conservative levels of volatility in their equity investments.

It can be used as the benchmark index for the introduction of Midcap linked index funds.

The Midcap Index, together with the Milanka Price Index (MPI) generate valuable signals for portfolio managers for switching between larger-cap more sensitive stocks and the midcap less sensitive stocks with more growth potential in response to changing capital market conditions.

The Midcap Index focus in profitability helps to screen stocks with better future prospects that will cross to higher market capitalization in the next year. The Merchant Bank of Sri Lanka PLC revised its MBSL Midcap Index from January 1, 2012.The index which was launched in 1999 is revised annually.

The criteria for selecting the twenty-five stocks of the index remained unchanged and are: Middle Range Market Capitalization, Liquidity and Profitability.

The range for market capitalization for the year 2011 was Rs 2,394 billion - Rs 23.94 billion. With the stock market activity, this range is adjusted for the change in the ASPI annually. Accordingly the range of market capitalization for the year 2012 would be Rs 2.24 billion - Rs 22.4 billion.
http://www.dailynews.lk/2012/01/03/bus25.asp

Market set to consolidate this year
Markets closed with week-on-week gains, as the ASPI gained 91.84 points (1.54%) and the MPI gained 39.30 points (0.76%). The ASPI closed at 6074.42 and the MPI closed at 5229.16 points.

Weekly turnover value during the week was dominated by Commercial Bank of Ceylon Plc amid large crossings; the counter accounted for 45.17% of total market turnover.

Tess Agro and Environmental Resources Investments Plc together accounted for 7.78% of turnover. Weekly turnover value for the week however declined 1.62%to Rs 2.75bn compared to last week ‘s value of 2.80bn, averaging Rs 687.52mn.

The weekly turnover value was dominated by the Banking and Finance sector which accounted for 56.69% or Rs 1558.95mn of total market turnover.

The Manufacturing sector contributed 6.98% to amount to Rs 192.02mn, while the trading sector accounted for 5.86% or Rs 161.28mn. Turnover volumes for the week were yet again led by the Banking and Finance sector which accounted for 27.12% (or 33.67mn) shares being traded.

The Trading sector accounted for 22.72% or 28.21mn shares while 15.38mn shares (12.39%) in the Manufacturing sector changed hands. Market Capitalization increased by 1.54% over the week to close at Rs 2213.87bn relative to last week ‘s value of Rs 2180.38bn. Equity Two Plc topped the price gainers list, rising 21.99%to close at Rs 29.40 compared to last week ‘s closing price of Rs 24.10. Agalawatte Plantations Plc gained 19.42% to close at Rs 49.80, while Lankem Ceylon Plc closed at Rs 260, representing a 15.97% gain.

Tess Agro and Talawakelle Plantations Ltd were also amongst the top price gainers for the week, recording gains of 15.38% and 14.23% respectively.

The highest price drop for the week was recorded by Industrial Asphalts which lost 15.28% to close at Rs 500.30 from last week ‘s close of Rs 590.50. Union Assurance Plc declined 12.04% to close at Rs 108.10 and Metropolitan Resource Holdings Plc closed at Rs 23.70 (a decline of 10.57%).

Foreign sales outweighed foreign purchases over the week, with the net sales position for the week totaling Rs 1.26bn relative to last week’s net buying position of Rs 517.91. Total Foreign purchases declined 89.74% to Rs 93.09mn. Total Foreign sales, in contrast, recorded a significant increase of over 200.00% to Rs 1.35bn, averaging Rs 338.22mn over the week.

Tess Agro topped the volume list accounting for 22.12% (or 27.47mn shares)of the week’s aggregate share volume. Commercial Bank of Ceylon Plc contributed 10.17% of the total share volume as 12.62mn shares changed hands over the week.

Point of view
Markets closed the year on a muted note with the benchmark ASPI closing marginally above 6000 and volumes dwindling progressively over the week.

Despite the recent negative sentiment surrounding volume and foreign outflows, the CSE has in fact remained broadly in line with 2010.

Average volume in 2011 was 2.3bn, marginally lower than 2.4bn in 2010. The net foreign position of the CSE meanwhile -albeit a net sales position - is nonetheless a 42% decrease from the net sales position in 2010.

We maintain our view that the recent market re-rating is justified and believe that the declines in volume indicate a bottoming-out of the speculative trading trend which dominated much of 2011.

We expect markets to be more fundamentals-driven in 2012 as markets consolidate its post-war boom position.

Nevertheless, we advise that macro-fundamentals such as interest rates and FX rates be monitored closely as these will undoubtedly impact equity markets in the year ahead.

http://www.dailynews.lk/2012/01/03/bus26.asp

Sri Lanka Tourism excels in ’11
Shirajiv SIRIMANE



The revamped Dutch Hospital was opened last year and here Minister of Tourism Basil Rajapaksa and Defence Secretary Deleted Rajapaksa at the opening of the Harpo’s Pizza outlet at the venue.

Sri Lanka Tourism which saw a record 800, 000 plus arrivals last year is looking at achieving the illusive target of one million arrivals and, a US $ one billion revenue this year.

In addition the industry is hoping to get over US one billion investments to the country in 2012. One of the biggest properties that would get off the ground this year is the building of the Hong Kong based Shangri-La hotel in Galle Face. In addition Hyatt, Raffles Singapore and many other leading international hotels chains too, are looking at opportunities in Sri Lanka.

The largest ever investment in the country’s leisure sector would happen next year when South Africa’s Sun City resort will invest $ 800 million in a tourism project in Kandana. Sun City resort is run by South African gaming and hotels group Sun International Ltd.

“Sun City of South Africa is going to make an $800 million investment in a 200-acre private property,” SLTB Chairman Dr Nalaka Godahewa, told Reuters in an interview.

Kalpitiya a dedicated up market in tourism is gearing up for a tourism revival with high profile international and local investors showing keen interest in investing in the Kalpitiya integrated tourism resort project.

The Kalpitiya integrated tourism resort project which consist of two phases has 31 islands altogether in Kalpitiya and Puttalam Lagoon areas.


A team of tourism officials headed by the Chairman of Sri Lanka Tourism Dr Nalaka Godahewa and Managing Director Rumy Jauffeur with a group of representatives from travel and tourism Industry warmly welcomed the 800,000 guest John Chambi and Nadia Chambi who arrived via UL 510 SriLankan Airlines flight from London.




Hotels ran in high capacity last year and here Eden Resort and Spa, General Manager, Eksath Wijeratne presenting awards to Eden Qeen at their New year’s party.

This has been a major attraction for Sri Lankan, Indian and other investors.

A significant number of Qatar investors are eyeing the Kalpitiya integrated tourism resort project and the Indian based Delta group is in talks with local authorities to develop tourism in the Kalpitiya area.

The Kalpitiya project spans 5,000 acres of land and is targeted to put up 5,000 hotel rooms.

With the ending of the War, tourism one of the major beneficiaries as there was almost an instant boost to the industry with adverse travel advisories being taken off.

The industry also received another major boost when the National Geographic Traveller magazine nominated the island as one of the Top Six places in the world to visit.

The New York Times has also named Sri Lanka as one of its must visit destinations and the National geographic accolade would tremendously help improve the global tourism image of the country.

The widely read all over the world, acknowledges the peace dividend and its ranking also makes a mockery of the so-called human rights violations allegations levelled against the country.

The magazine said......”Sri Lanka means “resplendent isle,” and the natural charms of this pear-shaped island in the Indian Ocean nearly kisses the southeast tip of India is indeed splendid.

The magazine says that Sri Lanka should be included in the travel plans of anyone planning holidays ..... “What places are calling your name for 2012? Whatever your mood, Traveller magazine has a recommendation for you-from the romantic hills of Croatia to the perfect beaches in Thailand.....”

The other top five destinations nominated are Iceland, Dresden in Germany, Costa Berva in Spain, North Colombia and Oman.

The magazine has also highlighted ‘six must see places and events in Sri Lanka with photographs which includes the Grand Hotel Nuwara Eliya which was upgraded to a four-star heritage property with an investment of Rs 85 million. For the first time in Sri Lanka, a tea bar was introduced to the hotel.

The National Geographic Traveller magazine accolade would also help woo top hotel chains to include Sri Lanka in their investment plans. Already Shangri-La and Sheraton have pledged investments in Sri Lanka while one of the oldest hotels in Sri Lanka the Grand Oriental Hotel too is tipped to tie up with the Raffles hotel chain for further upgrading.




Grand Hotel Nuwara Eliya

To add further glorify the image of the country world’s leading and most discerning and trusted monthly travel magazine in Britain, Conde Nast Traveller selected Sri Lanka as one of the top five destinations to watch this year. The magazine’s travel experts have predicted that Sri Lanka will be among the hottest new holiday destinations for travellers this year.

Unveiling the list of destinations, the magazine reveals that: “One of the great joys of travel is the feeling you’ve discovered somewhere special, somewhere that’s all yours, for the first time - before the developers move in and the crowds descend.

Sri Lanka welcomes 800,000th tourist
Achieving another remarkable milestone in the country’s booming tourism industry, Sri Lanka welcomed the arrival of 800,000th tourist in year 2011 at the Bandaranaike International Airport in the month of December. This is the first time ever; the tourism industry received arrivals exceeding 800,000, making it a ground breaking figure in tourism records. Chairman of Sri Lanka Tourism - Dr Nalaka Godahewa and Managing Director Rumy Jauffeur with a group of representatives from travel and tourism Industry warmly welcomed the guest who arrived in Sri Lanka from London. Sri Lanka Tourism offered a special gift and a complimentary package to the tourist to visit country’s well- known attractions. During the year 2010, total number of tourist arrivals were recorded as 654,476.

Last year has seen a massive contribution from India, Japan, Germany, U.K, France, Netherlands, Italy, and Middle Eastern countries. The month of November 2011 breaks another record being the month which received the highest number of tourists - 90,889 numbers in the history of Sri Lanka Tourism calender years.

All promotional activities and strategic planning of the government of Sri Lanka is aimed at achieving the target number of 2.5 million tourists by 2016.

shirajiv@yahoo.com

http://www.dailynews.lk/2012/01/03/bus16.asp

Sri Lanka tourism recordes 30% growth
Sanjeevi Jayasuriya

The year 2011 has been a wonderful year for Sri Lanka tourism as the arrival target was over 750,000. Sri Lanka recorded 830,000 tourist arrivals at the end of 2011 with a year on year (YOY) growth of 30 percent. Compared to the world tourism industry, Sri Lanka has performed well and expect a 30 percent growth this year as well, Sri Lanka Tourist Hotels Association President Anura Lokuhetty told Daily News Business.

The Western European market showed a growth of 25.5 percent up to November last year where arrivals increased from 226,000 to 281,484 at end of the year. The growth in the Nordian countries of the Western European market such as Sweden and Finland showed an increase. The large number came from the UK where an increase of 1 percent was recorded due to recession prevailing, he said. German showed a 22 percent YOY increase and France showed a significant 60 percent growth. The Eastern Europe recorded a tremendous growth of 38 percent and the reasons for the increase is the markets such as Russia where it accounted for a 46 percent increase.

The Middle East showed an impressive 50 percent increase one YOY basis and South Asia’s largest market India showed a 38.5 percent growth. The entire South Asia recorded a 38 percent growth.

Sri Lanka should seriously look at China where an 67.1 percent increase was recorded. This market has tremendous potential with a highest number of outbound tourists and the country should focus attention to boost the arrivals. Over 30 percent of next year’s growth is expected to come from China. The world tourism industry recorded 953 million and US $ 1 trillion revenue. Its daily earnings reached $ 3 billion. Tourism industry is the highest employment generator where 280 billion people are involved at present. The industry growth for 2010 and 2011 were 4 to 5 percent and 3 to 4 percent respectively.

According to the World Tourism Organization the tourism industry has 3 to 4 percent growth projections for the next ten years. The Asian region recorded a 13.4 percent growth last year where arrivals increased from 180 million to 204 million. It anticipates a 10.11 percent growth this year.

There will be significant growth in the Asian countries and Sri Lanka should focus on tourism to generate economic growth. Sri Lanka could offer compact, diversify and authentic product unlike in high growth countries. Though Sri Lanka is predominantly a beach destination, it could offer culture, nature, agro, community, religious and spiritual attractions.

The sector envisaged 30 percent growth for 2011 with a revenue of $ 830 million. Compared to other industries it has the fastest growth prospects. We need to have a strategic marketing policy and institutional support from the Export Development Board, SriLankan Airlines, Tea Board, National Gem and Jewellery Authority to promote Sri Lanka as a preferred destination for tourists.

We need to create sufficient awareness as we have achieved the figures and should work harder. As regional destinations exceed the million arrival target, Sri Lanka too is in a position to achieve the set targets with quality products.

The next level that supplements growth is the sustainability of the industry and for this a well integrated plan to maintain the growth momentum is essential. This could be achieved through culture, nature and adventure approach.

We need to safeguard our culture while developing it to the highest quality. It is important to pay adequate compensation to community participants. There should be community centres in hotels with access to people in the respective areas. These centres should have stalls and cultural shows, food festivals to mingle with tourists. This will also eliminate harassment that tourists are subjected to by beach vendors. It is a poor technique of selling and this should be stopped. The community centres will be a solution and there need to be proper programs and systems to preserve environment, Lokuhetty stated.

http://www.dailynews.lk/2012/01/03/bus17.asp

ESOFT appoints Empiricalminds as franchisee


ESOFT Computer Studies (Pvt) Ltd Chairman and Managing Director Dr. Dayan Rajapaksha exchanging the MOU with Empiricalminds (Pvt) Ltd Chairman and Managing Director Dr. Prasanna Lokuge. Lasitha Vitharana, Director Empiricalminds (Pvt) Ltd., and Anusha Wickramarathna look on.

ESOFT Computer Studies (Pvt) Ltd., one of Sri Lanka's leading ICT education companies recently entered into a franchise agreement with Empiricalminds (Pvt) Ltd. to deliver ESOFT study programmes in selected areas in the country. Through this new initiative, ESOFT intends fast-tracking its programme of broad basing ICT education in the country via the establishment of a network of study centres in Sri Lanka, thereby contributing towards bridging the widening gap of ICT skills that exist among those in the Western Province and the rest of the country.

Commenting on the new initiative, ESOFT Computer Studies (Pvt) Ltd Chairman and Managing Director Dr. Dayan Rajapaksha said that the primary goal of his company is to take ICT education to the doorstep of the common man and make Sri Lanka an ICT literate nation. "We as ICT professionals have a binding obligation to support the government's noble efforts towards making ICT education accessible to the masses in the country and the only way we could help this cause is through broad-basing ICT education, so we can envelope a larger proportion of students to follow IT and open the door for a world of opportunity," he asserted.

Empiricalminds (Pvt) Ltd., is a company involved in training and consultancy which is headed by ESOFT International Education Pvt Ltd CEO Dr. Prasanna Lokuge one of Sri Lanka's most respected ICT professionals.

The first study centre managed by Empiricalminds will open shortly in Nugegoda.

The ESOFT City Centre which is due to commence shortly has been designed to provide its students with an enriching learning environment and equipped with all necessary infrastructure and learning facilities including fully air conditioned lecture halls, interactive labs, multimedia and other conveniences.

http://www.dailynews.lk/2012/01/03/bus50.asp
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Piaggio expands to Gampaha
With the continuing spiral in demand for Piaggio three-wheelers, Associated Motorways (Pvt) Limited (AMW) recently added a new showroom at Gampaha to its island-wide network of fully-fledged, modern showrooms.

The latest Piaggio showroom is situated on Ja-ela Road, Gampaha. It was opened by AMW General Manager (Piaggio and Eicher) Suneth Sudasinghe. Sales Manager (Piaggio) Amitha Gamage, Manager - Network Development and Marketing Harsha Rodrigo, Area Manager Chathuranga Kapuge, Administration Manager Achini Amarasekera and a large number of special invitees, customers and well-wishers attended the opening.

Speaking at the opening Sudasinghe said that there is a big demand for Piaggio diesel three-wheelers from all parts of Sri Lanka.

He said that AMW is taking steps to open new showrooms in all key towns in Sri Lanka for the convenience of customers who can inspect and purchase Piaggio three-wheelers within the areas they reside in.

As part of this expansion drive, AMW has already opened Piaggio showrooms in the key towns of Kurunegala, Ratnapura, Avissawella, Kandy, Anuradhapura, Badulla, Ampara, Nuwara Eliya, Matara, Negombo, Batticaloa and Dambulla.

At these showrooms, customers can inspect and purchase Piaggio three-wheelers either on a cash basis or under a leasing facility. The prime objective of AMW is to offer customers the opportunity to inspect and purchase Piaggio three-wheelers within the areas they live in.

To meet this objective, AMW has made plans to open many more new fully-fledged, modern showrooms in various other parts of the country in 2012.

http://www.dailynews.lk/2012/01/03/bus50.asp

Sri Lanka's debt to GDP ratio had fallen to 78% by end 2011

Jan 03, 2012 (LBT) - Nivard Cabraal, Governor of the Central Bank said Sri Lanka's debt to GDP ratio had fallen to 78% by end 2011 compared with the corresponding period of 2010 of 82%.
Adding to the above statement he mentioned the island's foreign exchange reserves had fallen to 6.0 billion USD by the end of 2011 enough to cover 4.0 months of imports and higher than the 3.5 months targeted in International Monetary Fund programme.
It was also mentioned at the launch of the central bank's monetary policy road map for 2012, The International Monetary Fund has so far given Sri Lanka 1.7 billion USD under its programme. Foreign exchange reserves are built up by central banks to be used when needed.
The central bank in recent months has been selling dollars to maintain the rupee's peg with the US dollar.However, due to a three percent devaluation of the rupee against the dollar in November 2011 the exchange rate remains under pressure.http://www.lbt.lk/news/economic/947-debt-fall