Sri Lanka is located astride the sea lanes that will carry an increasing proportion of global trade, a fact that makes Sri Lanka’s future very important to America. The Indian and Sri Lankan experience as two successful, market-oriented, multi-ethnic democracies can serve as powerful examples to other countries in this region, according to Robert O. Blake Jr. US Ambassador to Sri Lanka.
He was delivering the third annual Sujata Jayawardene Memorial Oration at the BCIS Auditorium organized by the Alumni Association of the Colombo University this week.
Prefacing these remarks, he said that the shift of America’s foreign policy from Europe to Asia had several roots. Recent studies have shown that if current trends continue, the four largest economies in the world by 2040 will be the US, China, India and Japan.
The value of the US’s trade with Asia already exceeds that of its trade with Europe - and the gap is likely to grow.
If the spike of violence and hostilities seen in Sri Lanka over the last six months continues, it could have profound negative effects on the country’s society and economy, he said adding that the brain drain that results from young Sri Lankans leaving the country to escape the violence – and those abroad electing to stay abroad – is damaging. On the other hand, if the peace dividend can be seized, Sri Lanka will prosper in this new Asian century.
Blake pointed out that the United States, as a ‘friend of Sri Lanka’, has been a long-term partner in the country’s development, and is helping in many ways on the terrorism and military fronts. However, he does not believe that there can be a military solution to this conflict.
In Blake’s view, preparing Sri Lanka’s education system for the 21st century would require a four-pronged approach:
1. Considering the country’s pent up demand for higher education, due to limited intake in local universities, the only option now is to pursue studies abroad. Proffering a solution that would not place an undue burden on state coffers, Blake suggested that private universities be allowed to exist alongside public universities.
2. With English having become the universal language of business and science, Blake noted that Sri Lanka can do more to help youth prepare to compete in 21st century by improving English language training.
3. Training teachers to teach the skills employers really want, to think creatively and critically - and qualities like leadership, team work and communication - can be taught through interactive instruction methods.
4. In part because of the absence of private universities, many young Sri Lankans go abroad to pursue their higher studies.
Saturday, March 3, 2007
Concerns: Going… Going… Gone?
In today’s complex business environment, Petty pointed out, shareholder value is determined by a range of performances, including the organisation’s corporate social responsibilities
The next time you order a succulent cheeseburger at McDonald’s, pay close attention to the biodegradable packaging in which it is served. Recognizing the risks to the environment from its polystyrene cups and packaging, these have been phased out and replaced by materials that are eco-friendly. McDonald’s is one of innumerable firms that have literally started cleaning up their act.
Corporate Social Responsibility (CSR) and the related aspect of Sustainability are the subjects uppermost in the minds of accountants today. This represents both a challenge and an opportunity for accountants under whose purview corporate reporting has traditionally been.
Triple Bottom Line (‘3BL’) Reporting
3BL Reporting is a concept whereby the traditional reporting on financial and economic performance of organisations has been expanded to encompass two more parameters. The new parameters are social performance and environmental performance. John Petty (National Vice President, CPA Australia) explained the concept at a workshop conducted by him earlier this week. The workshop was presented by the Technical Directorate of The Institute of Chartered Accountants of Sri Lanka.
The impetus and need for 3BL emerged out of the state of affairs that prevailed at the fag end of the 20th century. It was a time when certain large corporates were behaving irresponsibly and doing unacceptable things to the ecology.
In today’s complex business environment, Petty pointed out, shareholder value is determined by a range of performances, including the organisation’s corporate social responsibilities. The 3BL commitment harmonises the traditional financial bottom line with environmental quality and social integrity issues.
• Economic viability builds on the traditional measures of success.
• Environmental quality focuses attention on aspects like pollution reduction programmes, greenhouse gas emissions, energy utilisation and air quality.
• Social integrity and community focus refer to aspects like human rights, philanthropy, providing employment opportunities to the disabled, skills training for disadvantaged persons in the community and business ethics.
Petty provided several examples of organisations that have moved beyond generating annual financial reports. Philips International, for instance, has a ‘Sustainability Report’ that has adopted a 4 Ps approach: Profit, People, Planet and Propriety. The last named, Propriety – or governance - is an extension of the 3BL approach.
Petty challenged accountants to move beyond the traditional ‘bean counters’ role. “This myopic focus on profit and loss statements and balance sheets should stop,” he urged. Pointing out that no value is added by having management pore over these statements every month, he suggested that they be generated quarterly instead.
Research shows a distinct correlation between good social and environmental performance on the one hand and financial success on the other. Benefits of 3BL implementation include reduced risk, more efficient use of resources and enhanced reputation, leading to loyalty of customers.
Eco-efficient firms are able to create greater shareholder value than their industry competitors while minimizing environmental risk and impact. Petty pointed out that, on the Dow Jones, the Sustainability Index consistently outperforms the overall index. Quoting from the book by Freeman et al, ‘Environmentalism and the New Logic of Business’, he said that there is no aspect of our world that can escape the scrutiny of environmental analysis.
Petty insists that environment and society must be an integral part of the strategic planning process. A 3BL report should typically commence with a CEO statement. This should be followed by a profile of the reporting organisation, an executive summary ad key indicators, vision and strategy, policies, organisation, and management systems.
At a panel discussion on the issue, Ravi de Silva, Consultant – Social & Environmental Management, Aitken Spence Hotels exhorted corporates to adopt a proactive and responsible approach towards the environment. “You should have a Sustainability Policy,” he said. “Review where you are and where you want to go.”
In the Sri Lankan context, De Silva recommends that organisations be a part of the community through stakeholder consultation. “Do assessments on the impact that your organisation is having on the environment,” he added. Talking of the Kandalama Eco Park that he has been involved with, he said that they do not generate any garbage, only waste that is recycled. The 1.5 million visitors to the Eco Park have helped build awareness.
Deshini Abeyewardene, Manager – Public Relations, SriLankan Airlines, said that implementation is the key to success, for which managements need to invest the initial time and money. Talking of the financial spin-offs of adopting 3BL Reporting, Ms Abeyewardene gave the example of MORI, a company that has been able to command a price premium of 40% on its products because it is perceived to be an ethical company.
The next time you order a succulent cheeseburger at McDonald’s, pay close attention to the biodegradable packaging in which it is served. Recognizing the risks to the environment from its polystyrene cups and packaging, these have been phased out and replaced by materials that are eco-friendly. McDonald’s is one of innumerable firms that have literally started cleaning up their act.
Corporate Social Responsibility (CSR) and the related aspect of Sustainability are the subjects uppermost in the minds of accountants today. This represents both a challenge and an opportunity for accountants under whose purview corporate reporting has traditionally been.
Triple Bottom Line (‘3BL’) Reporting
3BL Reporting is a concept whereby the traditional reporting on financial and economic performance of organisations has been expanded to encompass two more parameters. The new parameters are social performance and environmental performance. John Petty (National Vice President, CPA Australia) explained the concept at a workshop conducted by him earlier this week. The workshop was presented by the Technical Directorate of The Institute of Chartered Accountants of Sri Lanka.
The impetus and need for 3BL emerged out of the state of affairs that prevailed at the fag end of the 20th century. It was a time when certain large corporates were behaving irresponsibly and doing unacceptable things to the ecology.
In today’s complex business environment, Petty pointed out, shareholder value is determined by a range of performances, including the organisation’s corporate social responsibilities. The 3BL commitment harmonises the traditional financial bottom line with environmental quality and social integrity issues.
• Economic viability builds on the traditional measures of success.
• Environmental quality focuses attention on aspects like pollution reduction programmes, greenhouse gas emissions, energy utilisation and air quality.
• Social integrity and community focus refer to aspects like human rights, philanthropy, providing employment opportunities to the disabled, skills training for disadvantaged persons in the community and business ethics.
Petty provided several examples of organisations that have moved beyond generating annual financial reports. Philips International, for instance, has a ‘Sustainability Report’ that has adopted a 4 Ps approach: Profit, People, Planet and Propriety. The last named, Propriety – or governance - is an extension of the 3BL approach.
Petty challenged accountants to move beyond the traditional ‘bean counters’ role. “This myopic focus on profit and loss statements and balance sheets should stop,” he urged. Pointing out that no value is added by having management pore over these statements every month, he suggested that they be generated quarterly instead.
Research shows a distinct correlation between good social and environmental performance on the one hand and financial success on the other. Benefits of 3BL implementation include reduced risk, more efficient use of resources and enhanced reputation, leading to loyalty of customers.
Eco-efficient firms are able to create greater shareholder value than their industry competitors while minimizing environmental risk and impact. Petty pointed out that, on the Dow Jones, the Sustainability Index consistently outperforms the overall index. Quoting from the book by Freeman et al, ‘Environmentalism and the New Logic of Business’, he said that there is no aspect of our world that can escape the scrutiny of environmental analysis.
Petty insists that environment and society must be an integral part of the strategic planning process. A 3BL report should typically commence with a CEO statement. This should be followed by a profile of the reporting organisation, an executive summary ad key indicators, vision and strategy, policies, organisation, and management systems.
At a panel discussion on the issue, Ravi de Silva, Consultant – Social & Environmental Management, Aitken Spence Hotels exhorted corporates to adopt a proactive and responsible approach towards the environment. “You should have a Sustainability Policy,” he said. “Review where you are and where you want to go.”
In the Sri Lankan context, De Silva recommends that organisations be a part of the community through stakeholder consultation. “Do assessments on the impact that your organisation is having on the environment,” he added. Talking of the Kandalama Eco Park that he has been involved with, he said that they do not generate any garbage, only waste that is recycled. The 1.5 million visitors to the Eco Park have helped build awareness.
Deshini Abeyewardene, Manager – Public Relations, SriLankan Airlines, said that implementation is the key to success, for which managements need to invest the initial time and money. Talking of the financial spin-offs of adopting 3BL Reporting, Ms Abeyewardene gave the example of MORI, a company that has been able to command a price premium of 40% on its products because it is perceived to be an ethical company.
Banks lent to non-existent businesses
The unbridled extension of credit by banks over the past three years has been a cause for concern. This is because the focus of the banking system during this period ought to have been on consolidation and not on credit expansion.
The doubling of credit over this time-frame has been a significant factor contributing to the Cost-of-living Index having increased to an annual average of 12%. Cases of banks and financial institutions lending to even non-existent businesses have been identified, according to Dr P B Jayasundara, Secretary, Ministry of Finance & Planning who made these observations while stressing the need for the banking system to improving the ‘quality’ of its lending.
Explaining the rationale behind the budget proposal, impacting banks and financial institutions, that restricts provisioning for bad debts to 1% of loans outstanding, Dr Jayasundara said that this proposal would nudge banks towards improving credit quality. The handsome spread that banks earn between their borrowing and lending rates would make it possible for the banking system to absorb the higher taxation. The focus on ‘lending quality’ would result in slower credit expansion and would also have a beneficial effect on inflation.
He was speaking at a seminar on ‘Budget 2007: A Path Ahead’ organized by the Society for International Development’s Sri Lanka Chapter, held last week in Colombo.
Dwelling on budget making, he said that the consultative process adopted this year resulted in 760 individual proposals being received, in addition to some very comprehensive proposals from the chambers. This ensured wide stakeholder participation. Every single proposal had to be evaluated, resulting in the task being more difficult than it would otherwise have been. Despite this bottom-up approach that was adopted, the budget succeeds in capturing the underlying vision of ‘Mahinda Chinthana’.
This year’s GDP growth of 7% is being achieved despite a slew of challenges like post-tsunami reconstruction, high oil prices and the escalation of violence, Dr Jayasundara pointed out. The broader gamut of initiatives that has resulted from the consultative process would help achieve the 8% growth that has been targeted in next year’s budget. Casting the onus for delivering this growth squarely on the private sector, he indicated that, with the sole exception of the railways, no sector of the economy is controlled by the public sector.
Presenting the macro-economic and central bank perspective, Dr Rani Jayamaha, Deputy Governor, Central Bank of Sri Lanka highlighted the three underlying themes of the budget:
• Achieving sustainable economic growth beyond 8%
• Attempting to reduce income disparities by focusing on building infrastructure, while simultaneously addressing poverty and unemployment
• Becoming a service hub in South Asia that links up with the global supply chain.
While highlighting the urgent need to control inflation, she said that the various proposals to reduce expenditure and increase revenues would help. The measures to curb credit expansion would also go towards alleviating the problem. Dr Jayamaha described the budget as a “forward-looking, stage-setting document that sets out a ten-year strategic horizon”.
Looking at the budgetary provisions from the private sector perspective, Nirmalie Samaratunge, President, The National Chamber of Commerce of Sri Lanka described the budget as “progressive” and indicated that it is geared to stimulate growth. She was also of the view that the budget aims at addressing the country’s economic future and ensuring its fiscal stability.
Some positive features for the private sector were that there are no new taxes, only modifications in tax rates; the energy issue has been adequately addressed; the budget helps to embrace advanced technologies and promotes Research and Development. She identified the three thrust areas of macro-economic consolidation:
• Sustainable GDP growth, in conjunction with a reduction in the budget deficit and management of inflation
• Regional and rural development beyond the Western Province
• Development of infrastructure.
Samaratunge also cautioned that implementation would be the key to success. She probably stated the obvious by concluding that the over-riding consideration in achieving the budget goals is the return to peace: “Development must go hand-in-hand with peace.”
The doubling of credit over this time-frame has been a significant factor contributing to the Cost-of-living Index having increased to an annual average of 12%. Cases of banks and financial institutions lending to even non-existent businesses have been identified, according to Dr P B Jayasundara, Secretary, Ministry of Finance & Planning who made these observations while stressing the need for the banking system to improving the ‘quality’ of its lending.
Explaining the rationale behind the budget proposal, impacting banks and financial institutions, that restricts provisioning for bad debts to 1% of loans outstanding, Dr Jayasundara said that this proposal would nudge banks towards improving credit quality. The handsome spread that banks earn between their borrowing and lending rates would make it possible for the banking system to absorb the higher taxation. The focus on ‘lending quality’ would result in slower credit expansion and would also have a beneficial effect on inflation.
He was speaking at a seminar on ‘Budget 2007: A Path Ahead’ organized by the Society for International Development’s Sri Lanka Chapter, held last week in Colombo.
Dwelling on budget making, he said that the consultative process adopted this year resulted in 760 individual proposals being received, in addition to some very comprehensive proposals from the chambers. This ensured wide stakeholder participation. Every single proposal had to be evaluated, resulting in the task being more difficult than it would otherwise have been. Despite this bottom-up approach that was adopted, the budget succeeds in capturing the underlying vision of ‘Mahinda Chinthana’.
This year’s GDP growth of 7% is being achieved despite a slew of challenges like post-tsunami reconstruction, high oil prices and the escalation of violence, Dr Jayasundara pointed out. The broader gamut of initiatives that has resulted from the consultative process would help achieve the 8% growth that has been targeted in next year’s budget. Casting the onus for delivering this growth squarely on the private sector, he indicated that, with the sole exception of the railways, no sector of the economy is controlled by the public sector.
Presenting the macro-economic and central bank perspective, Dr Rani Jayamaha, Deputy Governor, Central Bank of Sri Lanka highlighted the three underlying themes of the budget:
• Achieving sustainable economic growth beyond 8%
• Attempting to reduce income disparities by focusing on building infrastructure, while simultaneously addressing poverty and unemployment
• Becoming a service hub in South Asia that links up with the global supply chain.
While highlighting the urgent need to control inflation, she said that the various proposals to reduce expenditure and increase revenues would help. The measures to curb credit expansion would also go towards alleviating the problem. Dr Jayamaha described the budget as a “forward-looking, stage-setting document that sets out a ten-year strategic horizon”.
Looking at the budgetary provisions from the private sector perspective, Nirmalie Samaratunge, President, The National Chamber of Commerce of Sri Lanka described the budget as “progressive” and indicated that it is geared to stimulate growth. She was also of the view that the budget aims at addressing the country’s economic future and ensuring its fiscal stability.
Some positive features for the private sector were that there are no new taxes, only modifications in tax rates; the energy issue has been adequately addressed; the budget helps to embrace advanced technologies and promotes Research and Development. She identified the three thrust areas of macro-economic consolidation:
• Sustainable GDP growth, in conjunction with a reduction in the budget deficit and management of inflation
• Regional and rural development beyond the Western Province
• Development of infrastructure.
Samaratunge also cautioned that implementation would be the key to success. She probably stated the obvious by concluding that the over-riding consideration in achieving the budget goals is the return to peace: “Development must go hand-in-hand with peace.”
Advertising Must Boost Sales
“The codfish lays ten thousand eggs,
The homely hen lays one;
The codfish never cackles
To tell you what she's done.
And so we scorn the codfish
While the homely hen we prize,
Which only goes to show you that
It pays to advertise!”
-Anonymous
The objective of marketing communication (or advertising) is to make consumers walk into your store and experience your product or service. When several alternative products or services are competing for their share of the customer’s wallet, this is a challenge of fairly daunting proportions. It takes every resource in the marketing manager’s armoury to ensure that advertising works – creativity is certainly one of them.
In typical commercial organisations, the prime criterion for evaluating efficacy of marketing communication is advertising’s ability to drive incremental sales. The secondary motive is to build the brand image of the organization.
In order to entice a consumer to try your product or service offering, creativity in advertising is desirable. Ceteris paribus, a creative and aesthetic advertisement would be more impactful than a staid one. There is much to be said in favour of creativity: Creative advertising would break through the clutter and ensure greater visibility – and can consequently achieve more bang for your media buck. Creativity is the input or the treatment, while effectiveness is the output or the result.
In the business of cinema, a broad categorization exists… ‘Commercial movies’ draw in the masses while ‘Art movies’ attract a more discerning audience. A similar trend has been observed in marketing communication.
As Finance Head of a US$ 170 million retailing enterprise, I allocate my advertising money based on expected results. An advertisement that merely elicits gasps of admiration - or even wins awards without significantly enhancing current or future sales - represents wasted money. If I was compelled to choose, I would want advertising that effectively boosts my sales while simultaneously enhancing my brand’s image.
Advertising agencies have been known to give vent to their creative urges, while the onus is on the client to ensure brand salience and appeal. To ensure alignment of purpose, progressive clients have introduced performance based bonus (linked to sales) for their creative agencies.
The homely hen lays one;
The codfish never cackles
To tell you what she's done.
And so we scorn the codfish
While the homely hen we prize,
Which only goes to show you that
It pays to advertise!”
-Anonymous
The objective of marketing communication (or advertising) is to make consumers walk into your store and experience your product or service. When several alternative products or services are competing for their share of the customer’s wallet, this is a challenge of fairly daunting proportions. It takes every resource in the marketing manager’s armoury to ensure that advertising works – creativity is certainly one of them.
In typical commercial organisations, the prime criterion for evaluating efficacy of marketing communication is advertising’s ability to drive incremental sales. The secondary motive is to build the brand image of the organization.
In order to entice a consumer to try your product or service offering, creativity in advertising is desirable. Ceteris paribus, a creative and aesthetic advertisement would be more impactful than a staid one. There is much to be said in favour of creativity: Creative advertising would break through the clutter and ensure greater visibility – and can consequently achieve more bang for your media buck. Creativity is the input or the treatment, while effectiveness is the output or the result.
In the business of cinema, a broad categorization exists… ‘Commercial movies’ draw in the masses while ‘Art movies’ attract a more discerning audience. A similar trend has been observed in marketing communication.
As Finance Head of a US$ 170 million retailing enterprise, I allocate my advertising money based on expected results. An advertisement that merely elicits gasps of admiration - or even wins awards without significantly enhancing current or future sales - represents wasted money. If I was compelled to choose, I would want advertising that effectively boosts my sales while simultaneously enhancing my brand’s image.
Advertising agencies have been known to give vent to their creative urges, while the onus is on the client to ensure brand salience and appeal. To ensure alignment of purpose, progressive clients have introduced performance based bonus (linked to sales) for their creative agencies.
Whither Equity Markets?
It has been heartening to observe the seemingly inexorable rise in the stock markets this year. With the Colombo Stock Exchange’s market capitalization having peaked at US$ 7.38 billion, the obvious question is: Where do we go from here?
Despite the feel-good effect of this milestone, one must admit that the equity culture has not yet really caught on in Sri Lanka. There seem to be factors that result in savings finding their way into real estate and bank deposits rather than into the equity market.
A vibrant and liquid capital market is imperative for the balanced growth of any economy. As business entities gradually move up the continuum from family-controlled enterprises to professionally-managed corporations, it is necessary that they have access to equity markets. However, the dearth of public issues – Initial Public Offerings (IPOs) or otherwise – suggests that not enough is being invested in equity by the general public.
The two essential ingredients for a flourishing stock market are safety and liquidity. While Sri Lanka’s financial markets have a fair degree of systemic safety, the lack of liquidity in the equity markets appears to be a significant impediment.The Colombo Stock Exchange’s market capitalization is US$ 7.38 billion and the average daily turnover is US$ 3.69 million – or merely 0.05% of market capitalization. If one was to take the Indian equity markets as a benchmark, the average daily trading is about US$ 2.34 billion, which works out to 0.32% on the market capitalization of US$ 730 billion. Hence, even taking India as an example of what is possible, there is ample scope for a six-fold increase in traded volumes on the Colombo Stock Exchange.
To develop the equity markets in this country, we need more robust institutions – mutual funds and depositories, for instance. The average person, with discretionary funds to deploy, would not invest in equity unless he is educated about and aware of the risks and rewards of equities as an asset class. There is a need for pioneering institutions (like Merrill Lynch and Franklin Templeton) to play this role.
The growth of equity markets typically has the effect of a ‘virtuous cycle’ – Economies of scale result in reduced transaction charges that intermediaries charge. This lowering of such costs would draw more people to the market. The business press and other media can also play a responsible lead role in this connection.
As markets mature, investors tend to value companies based on expected future performance, rather than on ‘historical’ measures like net asset value or dividend yield. Despite the low liquidity of most shares and the general mood of pessimism that prevails in this country, share prices are at an all-time high today. That is a good sign.
Theoretically, the market capitalization of a company is the discounted value of all future cash flows of the company. If that is the case, persons investing in equities today believe that the future is brighter than it has ever been before.
Despite the feel-good effect of this milestone, one must admit that the equity culture has not yet really caught on in Sri Lanka. There seem to be factors that result in savings finding their way into real estate and bank deposits rather than into the equity market.
A vibrant and liquid capital market is imperative for the balanced growth of any economy. As business entities gradually move up the continuum from family-controlled enterprises to professionally-managed corporations, it is necessary that they have access to equity markets. However, the dearth of public issues – Initial Public Offerings (IPOs) or otherwise – suggests that not enough is being invested in equity by the general public.
The two essential ingredients for a flourishing stock market are safety and liquidity. While Sri Lanka’s financial markets have a fair degree of systemic safety, the lack of liquidity in the equity markets appears to be a significant impediment.The Colombo Stock Exchange’s market capitalization is US$ 7.38 billion and the average daily turnover is US$ 3.69 million – or merely 0.05% of market capitalization. If one was to take the Indian equity markets as a benchmark, the average daily trading is about US$ 2.34 billion, which works out to 0.32% on the market capitalization of US$ 730 billion. Hence, even taking India as an example of what is possible, there is ample scope for a six-fold increase in traded volumes on the Colombo Stock Exchange.
To develop the equity markets in this country, we need more robust institutions – mutual funds and depositories, for instance. The average person, with discretionary funds to deploy, would not invest in equity unless he is educated about and aware of the risks and rewards of equities as an asset class. There is a need for pioneering institutions (like Merrill Lynch and Franklin Templeton) to play this role.
The growth of equity markets typically has the effect of a ‘virtuous cycle’ – Economies of scale result in reduced transaction charges that intermediaries charge. This lowering of such costs would draw more people to the market. The business press and other media can also play a responsible lead role in this connection.
As markets mature, investors tend to value companies based on expected future performance, rather than on ‘historical’ measures like net asset value or dividend yield. Despite the low liquidity of most shares and the general mood of pessimism that prevails in this country, share prices are at an all-time high today. That is a good sign.
Theoretically, the market capitalization of a company is the discounted value of all future cash flows of the company. If that is the case, persons investing in equities today believe that the future is brighter than it has ever been before.
Hayleys and the Three Wise Men
Collectively, these three wise men of Hayleys have logged in 114 years of experience with the company. Therefore, when Rajan Yatawara – Chairman and CEO, who retires at the end of this month, N. G. Wickremeratne – Chairman designate and A. M. Pandithage - Group Director shared the story of Hayleys’ success with a select gathering last week, it was an evening to remember.
At the recent CSR awards ceremony, Hayleys had been selected as the Best Corporate Citizen for the third successive year. The session of ‘Knowledge Sharing with the Best Corporate Citizen of Sri Lanka’ was organized by The Sri Lanka Shippers’ Council, an affiliate of the Ceylon Chamber of Commerce. Starting off the proceedings, Yatawara exuded a paternalistic sense of pride in the organisation that he joined in 1966. He reminisced about the pioneering days of 1973 when Haycarb imported three kilns “to make charcoal in a modern fashion”. The onus of making a success of the project fell upon his able shoulders.
In his anecdotal style, Yatawara led the audience on a walk down memory lane of Haycarb’s checkered history. He emphasised that the company really began to grow only after they attempted to transform themselves from a commodity trading business to a value addition business. He described encounters with uninterested governments and inebriated clerks, with incomprehensible formulae and quality standards that were conspicuous by their absence. He spoke of various project reports that Hayleys toyed with before shelving them – toothpicks and clothes pegs! - and one that saw the light of day - rubber gloves.
The tempo changed from flamboyant nostalgia to fact-based analysis when Wickremeratne took the podium to speak on the impact of the macro economic environment and government policy on export growth. The fundamental reason why ‘we’ need exports, he said, is to earn foreign exchange to pay for imports.
Wickremeratne also described how dramatically the composition of Sri Lanka’s imports has altered over the past decades. Consumer goods constituted over 60% of the country’s import basket in 1960. However, with some degree of self-sufficiency having been achieved in consumer goods, the country’s imports are more in the nature of ‘intermediate goods’ now.
According to Wickremeratne, Sri Lanka’s post-independence economic history has had three distinct phases. The 1948 to 1956 period was when the commodity boom ensured that tea and rubber exports were more than adequate to fund our imports. However, declining commodity prices during 1956 to 1977 led to large and unsustainable current account deficits – and import restrictions.
The post-1977 era was when the late J R Jayawardene changed the orientation of state policy and had the foresight to lay the foundation for a liberalized economy. However, subsequent developments have resulted in other Asian countries (who started later) forging ahead and stealing a march over Sri Lanka.
Broadly, Wickremeratne clustered the country’s economic problems into two sets: (a) low capital formation due to a plethora of reasons and (b) an artificially over-valued exchange rate that puts Sri Lankan exporters at a price disadvantage. He suggested that containment of inflation, and “reduced influence of state” on the currency and labour markets would remedy these problems to a significant extent.
With Sri Lanka’s strategic geographical location, the transportation sector will continue to be of paramount importance to the country - as well as to Hayleys - in the future. Pandithage, the Chief Executive of Hayleys Advantis, went on to conduct a virtual SWOT Analysis of the sector as it exists today. In an overview that was brilliant for its comprehensiveness, he indicated what would be required for the country to continue to garner a sizeable chunk of future transportation business. He also spoke of the new gateways and investments expected under the ‘Mahinda Randora Infrastructure Development Initiative’.
Pandithage highlighted the criticality of Colombo South Harbour to Sri Lanka, as well as the strategic fit of the Southern International Airport at Weerawila. Talking of competition, he said that Sri Lanka currently has the upper hand on productivity. He emphasised, however, that infrastructure needed to be enhanced to counter moves of competing ports like Vallarpadam (Kochi), Jebel Ali Free Zone and Port Klang Free Trade Zone.
At the recent CSR awards ceremony, Hayleys had been selected as the Best Corporate Citizen for the third successive year. The session of ‘Knowledge Sharing with the Best Corporate Citizen of Sri Lanka’ was organized by The Sri Lanka Shippers’ Council, an affiliate of the Ceylon Chamber of Commerce. Starting off the proceedings, Yatawara exuded a paternalistic sense of pride in the organisation that he joined in 1966. He reminisced about the pioneering days of 1973 when Haycarb imported three kilns “to make charcoal in a modern fashion”. The onus of making a success of the project fell upon his able shoulders.
In his anecdotal style, Yatawara led the audience on a walk down memory lane of Haycarb’s checkered history. He emphasised that the company really began to grow only after they attempted to transform themselves from a commodity trading business to a value addition business. He described encounters with uninterested governments and inebriated clerks, with incomprehensible formulae and quality standards that were conspicuous by their absence. He spoke of various project reports that Hayleys toyed with before shelving them – toothpicks and clothes pegs! - and one that saw the light of day - rubber gloves.
The tempo changed from flamboyant nostalgia to fact-based analysis when Wickremeratne took the podium to speak on the impact of the macro economic environment and government policy on export growth. The fundamental reason why ‘we’ need exports, he said, is to earn foreign exchange to pay for imports.
Wickremeratne also described how dramatically the composition of Sri Lanka’s imports has altered over the past decades. Consumer goods constituted over 60% of the country’s import basket in 1960. However, with some degree of self-sufficiency having been achieved in consumer goods, the country’s imports are more in the nature of ‘intermediate goods’ now.
According to Wickremeratne, Sri Lanka’s post-independence economic history has had three distinct phases. The 1948 to 1956 period was when the commodity boom ensured that tea and rubber exports were more than adequate to fund our imports. However, declining commodity prices during 1956 to 1977 led to large and unsustainable current account deficits – and import restrictions.
The post-1977 era was when the late J R Jayawardene changed the orientation of state policy and had the foresight to lay the foundation for a liberalized economy. However, subsequent developments have resulted in other Asian countries (who started later) forging ahead and stealing a march over Sri Lanka.
Broadly, Wickremeratne clustered the country’s economic problems into two sets: (a) low capital formation due to a plethora of reasons and (b) an artificially over-valued exchange rate that puts Sri Lankan exporters at a price disadvantage. He suggested that containment of inflation, and “reduced influence of state” on the currency and labour markets would remedy these problems to a significant extent.
With Sri Lanka’s strategic geographical location, the transportation sector will continue to be of paramount importance to the country - as well as to Hayleys - in the future. Pandithage, the Chief Executive of Hayleys Advantis, went on to conduct a virtual SWOT Analysis of the sector as it exists today. In an overview that was brilliant for its comprehensiveness, he indicated what would be required for the country to continue to garner a sizeable chunk of future transportation business. He also spoke of the new gateways and investments expected under the ‘Mahinda Randora Infrastructure Development Initiative’.
Pandithage highlighted the criticality of Colombo South Harbour to Sri Lanka, as well as the strategic fit of the Southern International Airport at Weerawila. Talking of competition, he said that Sri Lanka currently has the upper hand on productivity. He emphasised, however, that infrastructure needed to be enhanced to counter moves of competing ports like Vallarpadam (Kochi), Jebel Ali Free Zone and Port Klang Free Trade Zone.
"Lead with Consciousness” – MPW
- Innovate: You cannot survive tomorrow with yesterday’s tools
- ‘Sathosa’ was a mistake; we didn’t anticipate political change
COLOMBO: The fact that leadership and management play a vital role in organisations is self-evident. However, while delivering the keynote address at the 18th LBR-LBO Forum this week, M P Wickramasingha, Chairman, Ceylon Biscuits Ltd, exhorted CEOs to go beyond these. He asked the gathering of corporate high-flyers to evaluate and change its attitude towards everything, including business rivalry. Providing an example of what is possible, he said, “When we won a contract from the Education Ministry, we took two-thirds and gave one-third to the competition!”
Leadership, according to Wickramasingha, involves not merely seizing every opportunity that arises, but also proactively creating opportunities. “Leaders are made”, he opined, “Some might have the latent talent, but everybody can develop in areas in which they are not naturally gifted.”
The essential attributes of a good leader are confidence, willingness to accept challenges, and an ability to inspire others. However, all these would come to naught, Wickramasingha said, without vision. In an interesting comment, he said that the vision of Singapore’s first Prime Minister, Lee Kuan Yew (1958), was that Singapore should become like Ceylon!
“Remember that the first 3 letters of management are MAN – and man is a creature with emotions, preferences and weaknesses”, advised Wickramasingha. Besides, it pays to have a committed workforce, he said, because then there would be less labour disputes. He regretted that, as organisations expand, workers become isolated, factories get automated, and the human touch is lost. He advises that management’s attitude should be genuine and called for the introduction of ethics in all dealings with staff, to preserve that human touch.
Wickramasingha defines Consciousness as ‘awareness or knowledge’, and said that learned scientists are recognizing a new era of consciousness. The application of consciousness in management sometimes results in ‘gut feelings or promptings that come either from within oneself or from higher dimensions’.
Holding up old-time carpenters and masons – who used to take immense pride in their work - as a shining example, Wickramasingha asked the gathering to “Strive for perfection. Pay attention to details. Work not only for financial benefits, but also for the satisfaction and pride that come from a job well done… Strive for material growth and self development together.”
Wickramasingha stressed the need for innovation and change, cautioning that “You cannot survive tomorrow with yesterday’s tools... Sony, for example, has an obsolescence plan for products that it introduces.”
Talking of the “unimaginable possibilities of the human mind”, Wickaramasingha said that he meditates regularly. “Try brain stilling instead of brain storming”, he suggested. “Learn to be introspective, to look down at yourself from a pedestal.”
In response to a question from the audience, Wickramasingha exhibited remarkable candour when he admitted that he had made a lot of mistakes along the way. “Sathosa was one of them. We didn’t anticipate the quick political change – and what one government did, the other undid.” Ceylon Biscuits Ltd intends to make an initial public offering (IPO) of equity shares. “That’s a board decision,” Wickramasingha said. Speaking exclusively to the Sunday Times FT later, he said that the IPO would hopefully take place this year, “if nothing (adverse) happens to the stock market.”
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