Roads Bring Development
Roads, bring forth with it development, Sujeewa Mudalige, senior partner PriceWaterhouseCoopers Sri Lanka, an audit firm, told this reporter.
Mudalige, who holds other key appointments such as being the President of the Institute of Chartered Accountants of Sri Lanka, said that he has impressed upon Central Bank of Sri Lanka Governor Ajith Nivard Cabraal over this issue, particularly in the context of developing the A9 roadway to Jaffna.
If that is developed it will lead to several other areas of development, like the opening up of kiosks and restaurants by the way, thereby spurring economic activity, he said.
Mudalige was optimistic that once the Southern Expressway was completed, along with it, that it would generate economic development in the South.
He also said that if Sri Lanka wins its bid to hold the Commonwealth Games in Hambantota in 2018 (see separate story found on page 37), the spin off benefits to tourism, with Yala and Arugam Bay being in the vicinity will be tremendous.
KPMG Ford, Rhodes, Thornton & Co., appointed Shiluka Goonewardene as the firm’s Principal for the Financial & Real Estate Advisory division with effect from this month. Prior to his appointment, Goonewardene had served a six year term with the Mergers & Acquisitions Group of Saudi Basic Industries Corporation (SABIC), a multinational petrochemicals company, where he was involved in a number of strategic acquisitions for the organization. He had also previously been associated with KPMG for a 10 year term from 1995 to 2005 and functioned as Director Financial Advisory and as a director of the firm’s subsidiary Secretaries & Registrars Ltd. “He contributes a wealth of experience in areas of corporate finance, transactions and mergers & acquisitions having advised in a number of transactions across the globe”, Partner and KPMG’s Advisory Head Reyaz Mihular said. Goonewardene is an Associate Member of the Institute of Chartered Accountants of Sri Lanka.
Cement Consumption Grows
Holcim (Lanka), one of the country’s larger cement manufacturers has seen cement consumption in volume terms grow 6-7% year on year in the first two months of the year and expect this trend to continue through to the year’s first quarter.
Pascal Paijens, the company’s expatriate Vice President (Manufacturing) told this reporter that the reason for this growth was due to the development that has sprung-up in the country post war.
Paijens said that Holcim has between 36-37% market share. It sold 1.3 million metric tons of cement last year, he said As clinker mined in its Puttalam plant is insufficient to meet the demand it has to resort to imports. However the company is self sufficient in limestone, another key ingredient that goes into cement manufacture. Limestone is also mined in Puttalam, said Paijens.
Holcim (Lanka) provides employment to over 700. Its parent company is based in Switzerland.
KPMG Ford, Rhodes, Thornton & Co., announced that the firm’s Staff Partner S. Sirikananathan retired from the firm at the end of last month. He joined the firm in 1970 and after completion of his professional education was appointed as a Partner in 1981. During a career which spanned over four decades Sirikananathan served as an Audit Partner and in addition headed the business process outsourcing, finance and administration functions. He was also the firm’s Chief Information Officer.
Sirikananathan also served as a Director/Financial Consultant of the Associated News Papers of Ceylon during the 1990s.
Investing In Education
Two decade old pharma giant Harcourts Pvt Ltd. with diversified assets is moving into the Higher Education sector, said Harcourts Pvt. Ltd. Chairman Ahamed Rheyas.
He said that Harcourts is opening its latest addition under the name Harcourts Institute of Higher Education ( HIHE) at Maradana Road, Colombo. This is a state of the art facility which may be construed as a mini university. “We shall be tying up with reputed colleges and will be granting degrees and diplomas affiliated to reputed universities in Europe and in USA,” said Rheyas.
HIHE will offer Law, Business Management, Entrepreneurship, Computer studies, Pharmaceutical and all other allied areas of study which have good growth scope and job opportunities.
Low Rates Hit Margins
Last year was a testing year for the credit card industry where the operating landscape changed significantly during the latter part of the year with the regulator recommending a rate cap on interest rates. The industry was shaken as the interest rate declined from 36% to 24% overnight, with margins reducing by 12%. Cards industry was sluggish during the year and most of the business drivers such as the number of cards in force, receivables and interest bearing balances were either stagnant or contracted.
Thirteen thousand new American Express (AmEX) credit card holders were roped in last year and attritions, both voluntary and involuntary declined during the latter part of the year with improved economic conditions. No material growth was recorded in card receivables which was in line with the industry which showed a 9% contraction for the year. On the positive side credit card spend increased with destination sales picking up significantly with tourist arrivals, (Excerpts from Nation Trust Bank plc’s (NTB’s) 2010 Annual Report. NTB is the sole issuer of AmEX credit cards in Sri Lanka)
Rs. 5.5 Bn. From Leasing
New business volumes were given a boost by the revival of the vehicle industry in June 2010 when the Government reduced vehicle duties. Vehicle sales increased dramatically in the following months with leasing volumes reaching new heights for the industry. We closed the year with our highest new business volume ever of Rs. 5.5 billion, a creditable achievement from a 50 strong marketing team. Business volumes are also coming from new branches in Jaffna, Vavuniya and Batticaloa. (Excerpts from Nation Trust Bank plc’s 2010 Annual Report)
T Bills Down 5%
Central Bank of Sri Lanka’s (CBSL’s) Treasury (T) Bill holdings in the week ended March 31, 2011 declined by 5.2% (Rs. 112 million) week on week to Rs. 2,024 million.
A decline in CBSL’s T Bill assets means no new money has been released to the economy. CBSL pumps in new money to the economy by subscribing to T Bills and giving cash in exchange to the Treasury. However when a T Bill matures and if it’s allowed to retire with no fresh T Bills issued in lieu, then too there is no addition of new money to the economy.Meanwhile CBSL’s T Bill holdings year on year declined far sharply, by 93.5% or by Rs. 29,093 million to Rs. 2,024 million. (Source: CBSL)