28 April 2011

Royal Wedding Highlights Ceylon Sapphire. Sri Lanka Gem and Jewellery Association Gifts Sapphire & Diamond Hair Pin to Kate Middleton

28th April 2011, www.dailynews.lk

The Export Development Board in association with the Sri Lanka Gem and Jewellery Association wanted to highlight the Royal family's deep and long-standing connection to the Ceylon Sapphire over many generations, dating back to Henry V and more recently with the Princess Diana and Kate Middleton.

SLGJA and EDB has launched an innovative and informative website targeting Royal wedding to promote Ceylon Blue sapphires www.ceylonsapphire.co.uk.

The target was 250 UK and international media that are covering the Royal Wedding, featuring the areas of news, fashion, culture and lifestyle.

The Export Development Board having identified the gem and jewellery sector as a thrust Industry to reach an Export target of US$ 1 billion by 2015 saw the opportunity for the gem industry to raise the profile of the Ceylon Sapphire on the back of the Royal Wedding, EDB Chairman Janaka Ratnayake said.

"This will reinforcing our belief that Ceylon Sapphires today are extremely valuable and more rare than diamonds. This unique campaign by the EDB and the SLGJA, reinforces the unmatched superiority of the Sri Lankan gem mining industry globally and the richness of our history going back hundreds of years with the association of precious stones.

SLGJA Chairman Macky Hashim said, "This is the first time that SLGJA have embarked on an international campaign of this nature to raise awareness about the rarity and value of the Ceylon Sapphire.

The second stage of the campaign was the creation of a replica Ceylon Sapphire and diamond hair pin, which was gifted on behalf of the Sri Lanka Gem and Jewellery Association, as a gift to Kate Middleton to wear on her wedding day.

The purpose of this extremely valuable, Ceylon Sapphire hair pin surrounded by diamonds was to act as Kate's 'something blue' in the tradition of most weddings where the Bride must wear 'something new, something old, something borrowed and something blue'.

The hair pin was being delivered to Kate Middleton's family home in Berkshire this week.

The story was fed into the press, getting coverage on popular wedding blogs.

The ring itself, crafted by the Crown Jewellers - Asprey & Garrard of London, at the time was valued at 28,500 pounds, it is now estimated to be worth a whopping 32 million, in short it is priceless.

Some of the other famous sapphires, including the Logan Sapphire, and the Asprey & Garrard designed "Heart of the Ocean" Sapphire, are from the mines of Sri Lanka.

With the announcement of the Royal wedding, jewellers have been overwhelmed with orders for replica rings, with some retailers reporting an increase in sales of 800 percent for Ceylon Sapphires.

Related Info :

Prince William's Royal Engagement Ring Boosts Sri Lankan Gem Trade

Sri Lanka Sees Over 20pct Growth in Gem, Diamond & Jewelry Sector during First Half of 2010

Sri Lanka Worker Remittances in January 2010 Record an Increase of 20pct

28th April 2011, www.dailynews.lk, By Charumini De Silva

Sri Lanka’s foreign remittances from expatriate Sri Lankans have recorded an increase of 20 percent in January compared to last year. This is despite the volatile situations around the world, which affected the foreign exchange earnings of many countries.

The Central Bank said foreign remittances during January recorded US$ 377 million, which is an increase of 20 percent compared to the corresponding period last year.

Establishing collective agreements with overseas employers for higher wages and salaries, the expansion of the exchange houses network by commercial banks, an increases in the number of persons taking up high-end jobs overseas, the Government’s ongoing initiative to promote inwards remittances through formal channels and opening of new bank branches in the Northern and Eastern provinces were instrumental in attracting a higher level of workers’ remittances, the Central Bank said.

A senior official of the Sri Lanka Bureau of Foreign Employment told Daily News Business that over 61,157 workers had left for employment abroad during the first three months this year.

During January around 20,702 workers and in February 18,854 workers had left for employment abroad. During March over 22,101 workers had left for employment marking the highest departures for this year.

“Most of the employees had gone to work in Middle East countries, which is still the traditional market that dominates foreign employment while there was a small percentage of people who had taken up employment in other parts of the world.

However, there was a substantial increase recorded in the number of skilled workers seeking foreign jobs,” the official said.

According to the Central Bank annual report 2010 a considerable increase in inward workers’ remittances to US $ 4.1 billion helped offset the trade deficit to a great extent in 2010.

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40pct Growth in Earnings of Listed Companies in the Colombo Stock Exchange Forecast in 2010 Compared to 18 to 22pct in Regional Countries

28th April 2011, www.dailynews.lk, By Charumini De Silva

The CSE has been able to capture more attention and interest in foreign investments compared to the regional markets.

There will be a 40 percent growth in the earnings of listed companies in the Colombo Stock Exchange (CSE) whereas the listed companies in the regional countries will record a growth of around 18 to 22 percent for this year.

Speaking to the Daily News Business Richard Pieris Securities CEO Jayantha Perera said the country indicates a positive economic outlook with the low interest rate regime encouraging tax system. “The growth momentum will continue,” he said.

The listed companies and investors will benefit remarkably while contributing immensely to enhance the economy.

The expected earnings in the market are trading currently at a price earning multiply of around 14 times.

“Investors are coming back and little collections on certain counters such as banking, food and beverage and retail sectors are noticed. Since the commodity prices have increased these counters have attracted an impressive number of investors. The overall market will re-bound fully at the beginning of May. Currently, there are a flock of buyers, but not enough sellers. This generates a lower daily turnover in the market,” he said.

There will be a number of upcoming Initial Public Offerings (IPOs) in the next few months and those who will not enter the capital market within the next couple of months will definitely regret.

The existing companies and the investors are harnessing high returns on their investments. There will be around four IPOs lined up for the next three months and this indicates the confidence level of both foreign and local investors over the CSE.

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Sri Lanka IPOs To Triple after Colombo Stock Index Posted the Biggest Gain in Asia

Colombo Stock Exchange Earnings Soared 126pct Year on Year to Rs121.1bn in 2010. This year to Mirror the Same

Colombo Stock Exchange All Time High. All Share Price Index Closed at 7,193.10

Colombo Stock Exchange to Double Market Cap to $20bn by 2012

Colombo Stock Exchange Becomes Best Performing Capital Market in the World Recording 111.14pct Growth

India's Axis Bank to Enter Sri Lanka

28th April 2011, www.lankabusinessonline.com

India's Axis Bank has been given preliminary approval to set up a unit in Sri Lanka, with a formal license to be given after the bank meets regulatory requirements, an official said.

Sri Lanka Central Bank's director of banking supervision Yvette Fernando said a provisional letter of approval has been issued to Axis Bank with requirements to be met by the end of the year.

A branch setting up in Sri Lanka has to bring in 3.0 billion rupees of capital.

State Bank of India and Indian Bank already have branches in Sri Lanka. Indian Bank has been expanding.

Vietnam Opens Embassy in Sri Lanka after 30 Years

27th April 2011, www.dailymirror.lk, By Dianne Silva

The Ambassador designate from Vietnam Ton Sinh Thanh handed over his credentials to President Mahinda Rajapaksa last morning. The Embassy has been reopened in Sri Lanka after a lapse of almost 30 years.

“We had an embassy in Sri Lanka in the 70’s, but had to close it down due to the terrorist situation. But we have reopened the Embassy since both Sri Lanka and Vietnam are in a new era—where the war is over in Sri Lanka and Vietnam has developed rapidly,” Ton Sinh Thanh told the Daily Mirror.

The Ambassador extended support towards Sri Lanka in the wake of the release of the report by the Panel of Experts appointed by UN Secretary General Ban Ki-Moon. “The international community should support Sri Lanka in the reconstruction and reconciliation of the country. Further the post war issues of Sri Lanka should be solved by the Sri Lankan people themselves without interference from other countries. The UN can play an active role in this process of reconstruction and reconciliation,” he said.

“Vietnam and Sri Lanka have always supported each other in the international arena and we will continue this support,” he added.

He further said he hoped to increase interaction between the two countries in the areas of trade, investment, tourism and culture.

“Trade between the two countries is growing very fast and in the past year it had increased by more than 50 per cent, from 60 million USD to 90 million and I hope to increase this figure very soon,” he said.

He added that the two countries could share experiences on attracting investment into their countries. “There is over 190 billion USD invested in Vietnam in over 120 projects and this expertise of drawing in investment can be shared with Sri Lanka. Vietnam can also invest in Sri Lanka in the areas of fisheries, oil and gas exploration and construction,” he said.

These areas had been discussed during Ton Sinh Thanh’s meeting with the President. “The President welcomed these areas of cooperation between the two countries and said he would extend fullest support towards the activities of the Embassy,” he explained.

Speaking on the cultural integration between the two countries he said the many similarities would be an opening for cultural exchange. “We are both Buddhist countries and therefore can have joint religious activities. Further, we can enrich our cultural connection through exhibitions in each other’s countries thus creating greater understanding,” he said.

Image: The Ambassador designate from Vietnam Ton Sinh Thanh meets with members of the Sri Lanka-Vietnam Business Council at a reception following his handing over of credentials to President Mahinda Rajapaksa, Pic by Nisal Baduge

Sri Lanka's Public Debt Reduces to 81.9pct of GDP in 2010

27th April 2011, www.dailynews.lk, By Ravi Ladduwahetty

The Government debt as a percentage of GDP has declined to 81.9 percent in 2010 from 86.2 percent in the previous year due to improvements in fiscal operations, says the Central Bank of Sri Lanka.

Central Bank Deputy Governor Dharma Dheerasinghe told Daily News Business yesterday that higher revenue collection which reduced the borrowing requirement, the reduction in the discount factor (which is the net difference in the book value and the face value of issues and maturities of Treasury bills and Treasury bonds) as a result of declining yield rates in government securities and the appreciation of the rupee vis-a-vis major foreign currencies, as well as higher economic growth contributed to the reduction in the debt to GDP ratio.

In nominal terms, the total outstanding government debt increased by 10.3 percent to Rs. 4,590 billion as at end 2010. As a percentage of GDP domestic debt declined significantly to 45.8 percent of GDP in 2010 from 49.8 percent of GDP in 2009, while foreign debt declined to 36.1 percent of GDP in 2010 from 36.5 percent of GDP in the previous year, he said.

The share of domestic debt in total government debt declined further in 2010 to 56 percent from 58 percent in 2009. Repayment of high cost domestic borrowings with the proceeds of the international sovereign bond and the increase in availability of foreign funds reduced the share of domestic debt in the total debt stock.

The share of medium to long term debt to total domestic debt stock declined marginally to 76 percent in 2010 from 77 percent in the previous year, while 84 percent of medium to long term domestic debt comprised Treasury bonds.

The share of Treasury bills in short term debt increased to 83 percent in 2010 from 79 percent in the previous year.

The outstanding stock of Rupee loans continued to decline to Rs. 88 billion in 2010 from Rs. 112 billion in 2009 due to the repayment and non issuance of Rupee loans during the year, as the debt management strategy has been to move towards more market oriented debt instruments.

Reflecting the increasing reliance on non bank borrowings, the outstanding debt held by the non bank sector increased by 10.5 percent to Rs 1,873.8 billion in 2010.

Accordingly, the outstanding stock of Treasury bills and Treasury bonds held by the non bank sector increased by 19.5 percent and 12 percent, respectively, in 2010.

The EPF and NSB continued to be the major investors in government securities, accounting for 46 percent and 15 percent, respectively of the outstanding debt stock held by the non bank sector, the Deputy Governor said.

The outstanding debt obligations of the government to the domestic banking system declined by 2 percent to Rs 691.7 billion in 2010. The outstanding debt held by the Central Bank declined by Rs. 31.2 billion to Rs. 78.4 billion, while outstanding government debt held by commercial banks increased by Rs. 17.2 billion to Rs. 613.3 billion in 2010. Consequently, the share of banking sector debt in the total domestic debt stock declined to 27 percent in 2010 from 29 percent in 2009.

Retirement of the Central Bank’s holdings of Treasury bills reduced the government debt outstanding to the Central Bank. While, Treasury bill holdings of commercial banks increased by Rs 60 billion to Rs 220 billion, Treasury bond holdings of commercial banks declined by Rs 26 billion to Rs 162 billion, reflecting the appetite of investors for short term instruments.

Further, other outstanding government debt held by commercial banks declined to Rs 230.8 billion in 2010 from Rs 247.5 billion in 2009.

World Bank Elevates Sri Lanka’s Status to Fnding Provided to Middle Income Earning Countries. IFC Funding for Private Sector Explored

27th April 2011, www.dailynews.lk, By Ravi Ladduwahetty

Satisfied with Sri Lanka’s economic performances, the World Bank has elevated Sri Lanka’s status to funding provided to middle income earning countries.

This follows the recent meetings the Sri Lanka delegation headed by International Monetary Cooperation Minister Dr Sarath Amunugama had with the World Bank Managing Director in Washington recently.

The other members of the delegation comprised Central Bank Deputy Governor Dharma Dheerasinghe, Assistant Governor Ananda Silva and Additional External Resources Director Sarath Kumarasiri.

Sri Lanka will be now be eligible for international Bank for reconstruction and development funding in addition to the international development assistance (IDA) funding in the World Bank deciding to provide double the funds, Dr Amunugama told the Daily News yesterday.

The assistance will be for education, health and development of national and provincial roads countrywide.

This would also mean that in addition to the concessionary funding that Sri Lanka had received through the IDA funding, it will also avail itself of the funding which will be available through IBRD funds which will be at commercial rates.

The minister also said that most concessionary funding has been made available to Sri Lanka though the World Bank and the Asian Development Bank and similarly, the standby arrangements regarding the country’s foreign reserves which is now in force with the International Monetary Fund also provides very concessionary terms. These concessions are in terms of interest rates, grace periods and periods of repayment.

Dr Amunugama also has explored the possibility of funding from World Bank associates such as the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) which are tailormade for the private sector which could provide funding for Sri Lanka’s private sector.

This is in the light of the IFC already having provided funding for many blue chip corporates in Sri Lanka over the years.

Meanwhile, there will also be a meeting between Treasury Secretary Dr P.B. Jayasundera and World Bank Country Director in Sri Lanka Diaerietou Gaye shortly to discuss the Country Assistance Strategy for Sri Lanka for the three year period between 2012 and 2015.

It will be at this meeting that will be decided what the projects would be, and their corresponding funding. Though the World Bank has said that it will double the allocations for Sri Lanka, the funding will be on a project- by project basis. Of the projects those in the pipeline will be the continuation of a $ 100 million allocation for secondary education for Sri Lankan schools which includes curriculum development, information technology, mathematics and science education for which the infrastructure such as the classrooms have been developed. This project is at the appraisal stage, top Treasury sources said.

There is also a US $ 100 million program for the development of the health sector which will be for the prevention of the non-communicable diseases such as heart diseases, cancer, diabetes and asthma.

The third one will be development of the network of national and provincial roads including the Ambepussa - Trincomalee Road which the World Bank will be part fund the project with the other partners- the ADB, Korea and Japan as well.

Related Info :

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Tourism Development in Northwest Sri Lanka Attracts Investments. Construction Work of a Hotel in Kuchchaveli Underway

26th April 2011, www.island.lk, By Mario Andree

Sri Lanka Convention Bureau General Manager Vipula Wanigasekera said construction work of one hotel in Kuchchaveli, Northwest Sri Lanka off Trincomalee, has commenced after investors successfully completed interviews with the Treasury. He declined to disclose who the investor was.

The Island Financial Review last month reported that the government signed five MoUs with three local and two international investors to develop Kuchchiveli.

Authorities are planning to lease 500 acres of land in the North East coast to potential investors at Rs. 20 million an acre in order to develop tourism infrastructure.

Wanigasekara said only one bid was so far finalised while the others were still being processed.

He said the Kalpitiya islets project also captured the attention of many large investors who are pouring in their proposals, however the government is yet to make a decision.

The Kalpitiya project earlier attracted 11 bids which were rejected because the government felt that the islets had more earning potential.

Sources told The Island Financial Review the new hotel in Kuchchaveli was being built by the International Construction Consortium. Further, 11 plots of land also have been recognized in Hambanthota for development and already 7 investors have sent in their proposals.

Sri Lanka expects 800,000 tourists this year while capacity constraints loom around the country, several investors have bided to develop properties in order to support the growth.

Tourist Hotel Association, President, Anura Lokuhetty said the country would reach 800,000 tourists this year while more rooms are being built to support the future growth.

He said Sri Lanka is on track of achieving 2.5 million tourist arrivals by 2016 while the room capacity is expected to increase by more than 30,000.

Last year, arrivals grew 46.1 percent recording 654,476 tourists, for the first three months this year increasing by 34.1 percent to 215,124.

Lokuhetti said considering last year’s growth the sector expects the numbers to grow within the capacity available.

The country has 15,000 hotel rooms in the formal sector and 7,000 in the informal sector, which could support nearly 900,000 at an average 6 nights stay.

Related Info :

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Masterplan for Tourism Development of Kuchchaweli Area - The Longest Coatal Belt of Trincomalee

$350mn Havelock City Project to be Expedited due to Growing Demand for Residential & Office Space. Overseas Realty has already Sold 25pct of Phase 2

27th April 2011, www.dailynews.lk, By Ravi Ladduwahetty

Overseas Realty Ceylon Ltd PLC (ORCL) will fast track the $ 350 million Havelock City project to complete it in three years in the backdrop of growing demand for modern buildings.

The company has decided to fast track the project in the growing demand for residential and office space in the backdrop of sustainable peace, ORCL Group CEO Pravir Samarasinghe told Daily News Business yesterday.

Measures have been taken to fast track the project with simultaneous development of the balance of the residential phases and the commercial component which will be spread over 18 acres having four million square feet. Phases three and four will be completed next year.

Under Phase 1, Park Towers and Elibank Towers comprises a total of 226 apartments.

Over 95 percent of these apartments have been sold, and Phase 2, Layards and Davidson Towers comprise a total of 225 apartments and 25 percent have been sold already.

Both towers have 22 levels each and include a combination of 2,3, 4 bedroom apartments and penthouses.

The piling has been completed and construction will commence in August, he said.

Commenting on the potential of the backdrop for property development ORCL Chairman S P Tao in his annual report told shareholders: “The resolution of the conflict that has lasted 30 years has ushered in peace and a stable government focused on developing the country to claim its rightful place in South Asia and eventually the global economy. Certainly, there are tremendous opportunities for city planning and development to cater to urbanisation and service related industries, all of which would require more and better modern buildings to enhance performance and efficiency.

This is also a clarion call to our Company to seize the challenge to build the balance 3.5 million square feet in Havelock City to be ready for the inevitable demand in the future.

Related Info :

Developer Tao in Colombo to Present Final Phase of $350mn Havelock City Project

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Expolanka IPO to Raise Rs2.4bn Opens on May 12

27th April 2011, www.dailynews.lk By Indunil Hewage

Taking a leap from a family run business to a public quoted company, Expolanka Holdings Limited announced the launch of their Initial Public Offering (IPO) to list the company on the main board of the Colombo Stock Exchange to raise Rs 2.4 billion yesterday.

The company will issue 172 million ordinary voting shares at an offer price of Rs 14.

Post IPO issued shares would be 1.95 billion shares.

The opening date of the issue will be on May 12 and will close on June 2.

The main objective of the issue will be to increase the working capital by Rs 1 billion.

The company will go for an expansion of existing warehouse capacity to supplement the group’s expansion into local transport and logistics sector which is the core business of the company with Rs 500 million.

In addition the reduction of long term debt outstanding would be one of the objectives of the issue.

Expolanka Group CEO Hanif Yusoof invited all to explore opportunities in a Sri Lankan company spreading its wings in the globe.

“We are on the look out to expand our presence in the fields of travel and tourism with market expansions in China and India, tertiary education, business process outsourcing, agriculture, commodity trading, tea, herbal pharmaceuticals and others,” he said.

“We need to raise our working capital to support revenue growth of the company and are going for bridging finance.

“We do not want to go for an overtrading situation and has managed to control the growth over a period. Sizeable free float of the issue will also assist Sri Lankan based investors exposure to a fast growth regional business,” Expolanka Holdings Chief Finance Officer Mushtaq Ahamed said.

Under the future strategies of the company, the company expects to go for a branch expansion plan in the Southern province to facilitate increased business potential from new infrastructure in the Colombo and Hambantota ports.

In the international trading sector, the company plans to increase production capacity to meet the demand for export produce whilst strengthening the network for packed tea both locally and globally.

The company will also move into new regions in waste paper market activities and is also positioned to develop a metal trading service in the local market.

Iamge: Expolanka officials announcing the IPO at the press conference. Picture by Rukmal Gamage

Related Info :

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27 April 2011

Sri Lanka IPOs To Triple after Colombo Stock Index Posted the Biggest Gain in Asia

26th April 2011, www.bloomberg.com

Sri Lanka initial public offerings may more than triple to a record this year after the nation’s stock index posted the biggest gain in Asia, according to managers of three of the five share sales since Jan. 1.

The number of IPOs may jump to as many as 25 from seven in 2010, according to investment firms Acuity Partners (Pvt) Ltd and John Keells Capital, which led three sales that accounted for 69 percent of the $28.9 million total raised in 2011.

Companies are lining up to sell stock after the Colombo All-Share Index soared more than threefold since the end of a 26-year civil war in May 2009 and climbed 11 percent so far this year. With the Securities and Exchange Commission predicting market capitalization could climb by 27 percent to about 3 trillion rupees ($27 billion) this year, the IPOs may weigh on share prices, according to John Keells Capital, the investment arm of Sri Lanka’s largest listed company.

“There might be a little bit of a reallocation of funds and resources from existing stocks to IPOs,” Chinthaka Ranasinghe, assistant vice president at John Keells Capital, said in a phone interview from Colombo. “You might see a little bit of a correction.”

John Keells Capital and brokerage Taprobane Securities (Pvt) Ltd. managed the $13.6 million offering for tea and rubber producer Free Lanka Capital Holding Ltd., the country’s biggest IPO this year. The 180 initial share sales in Asia Pacific emerging markets have raised $20.1 billion so far in 2011, while the 519 deals worldwide have raised $68.9 billion, according to data compiled by Bloomberg.

‘Strong Bite’

Stocks in the Sri Lankan index were valued at an average of 26.6 times reported earnings as of the week ended April 21, according data on the Colombo Stock Exchange website. That’s the highest valuation in the Asia Pacific region apart from the 27.4 price-earnings ratio for New Zealand’s NZX 50 Index. Equities in the MSCI Emerging Markets Index are valued at 13.4 times earnings, while the MSCI World Index is at 14.8 times.

“It’s very expensive,” said Acuity Partners’ Group Chief Executive Officer Ray Abeywardena. “A global investor has a wide market to select from, so a new stock coming out at 12 to 13 times multiples will be a strong bite.”

The eight IPOs priced in Sri Lanka last year raised a total of $36.5 million, according to Bloomberg data. Laugfs Gas Ltd. was the largest, raising $22.6 million for the sale of voting and non-voting shares. The voting stock has climbed 52 percent since the company started trading on Dec. 8.

‘Huge Appetite’

“There’s a huge appetite,” Abeywardena said. “People are very hungry for the right one. But it will be determined by valuations.”

New listings with higher valuations may still attract investors, according to Vajira Kulatilaka, chief executive of National Development Bank Plc’s investment banking division.

“Some stocks may come at higher PEs because there’s a growth story happening here,” said Kulatilaka, whose firm managed the IPO for Dialog Axiata Ltd., the Sri Lankan unit of Southeast Asia’s second-largest mobile-phone provider Axiata Group Bhd.

Dialog was valued at 21 times earnings when it first started trading in 2005, Kulatilaka said. The company’s share sale raised $85.4 million, the most among all of the country’s new listings since 2003.

Investment Plans

Sri Lanka’s economy expanded 8 percent in 2010, the most since 1978, the statistics department said on March 29. It grew 3.5 percent in 2009 after President Mahinda Rajapaksa’s government ended the Liberation Tigers of Tamil Eelam’s quest for a separate homeland, prompting companies including Shangri- La Asia Ltd. and Nestle Lanka Plc to announce investment plans in the country.

The All-Share Index surged 96 percent in 2010, the world’s best performance apart from Mongolia, and extended the rally this year in Asia’s best performance.

External factors including higher oil prices increased the risk of “corrections” and “some kind of tapering off,” said Dinal Wijemanne, managing director of Taprobane Securities. The brokerage is aiming to manage as many as six more share sales this year, in addition to the Free Lanka Capital Holding deal.

“The last two years’ performance is not sustainable, with the number of IPOs coming in this year,” Wijemanne said. “Maybe local investors got a bit spoiled by the kind of returns we experienced, but it’s just not possible to maintain that.”

To contact the reporter on this story: Kristine Aquino in Singapore at kaquino@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

Sri Lanka to Develop Trade Ties with Mexico with a View to to reach North American Markets. Mexican Envoy Predicts More Indian Investment here

26th April 2011, www.island.lk

Sri Lanka is keen to expand trade ties with Mexico and eventually gain greater access to markets in the US and Canada. A visiting Mexican diplomat says he was keen to promote Mexican and Indian investments in to Sri Lanka. Business partnerships between Mexican and Sri Lankan companies will help accessing the difficult North American markets.

Identifying focal points of representation for trade in Mexico, and in Sri Lanka, will be a step in this direction, said Rishad Bathiudeen, Minister of Industry and Commerce.

The minister made these comments he met Jaime Nualart, Mexican Ambassador to India, Bangladesh, the Maldives and Sri Lanka at the ministry premises in Colombo 3. Nualart is leading a Mexican business delegation to Colombo. This is the first ever official Mexican business delegation to visit Sri Lanka.

"The bilateral trade between Sri Lanka and Mexico stand at US $ 63 million. But what is important is that this is still a small volume and there is much potential between the two countries to enhance it further," Bathiudeen said.

Mexico was ranked Sri Lanka’s 26th largest export destination in 2010. Sri Lanka’s exports to Mexico have increased gradually since 2002, from US$ 38.26 million to US$ 60.99 million in 2010. Sri Lanka’s exports to Mexico are currently dominated by cinnamon, taking 60% of the total volume.

"To enhance the regularity of our bilateral cooperation and strengthen it further, frequent visits by business delegations to each other countries are crucial. Also, participation in trade fairs will strengthen trade cooperation further. To achieve our bilateral trade targets, we need to pursue a strategic trade vision, especially to harness synergies of Mexican and Sri Lankan entrepreneurs through mutually beneficial partnerships to exploit promising market opportunities in the US and Canada, opened by the North American Free Trade Agreement (NAFTA)," the minister said.

Bathiudeen informed the Mexican delegation that apparel, construction, pharmaceuticals, high-end shopping malls and multiplex cinemas are promising areas for investments in Sri Lanka.

Mexican Ambassador Nualart said that he would also invite Mexican businesspersons in India to invest in Sri Lanka. He expressed strong interest in investing here in food processing, multiplex cinemas and construction, specially shopping complexes.

"We want to share information and latest data with Sri Lanka", Nualart said.

Aldo Ruiz (Investment and trade Commissioner, Mexican Ministry of Economy), said: "Bringing Mexican food processing technology here will enormously assist Sri Lanka’s agro base (to access international markets)". Speaking of Mexican investments in India, Nualart said that housing, industrial electrical transformers, water pumps, catalytic converters and food products are key Mexican manufacturing investments in India.

Bandula Somasiri, Acting Director General of Department of Commerce, addressing the delegation briefed the delegation on Sri Lanka’s liberal trade regime and its opportunities for Mexico. "Sri Lanka wants to diversify its exports basket to Mexico," he said.

"The bilateral trade between the two countries stand at US $ 63. Our exports to Mexico amount to US$ 61 million while imports amount to US$ 2 million. What is important is that I strongly believe that our bilateral trade volume is still a small volume and there is much potential between the two countries to enhance it further," Bathiudeen said.

"What is exciting is that new products such as apparels, rubber and coconut-based products, are added to our export basket. Some other potential products for export expansion are tea in value added form, processed vegetables and fruits, prefabricated building materials, tents, sails, activated carbon, gem and jewellery, leather products and ceramic and porcelain," the minister said.

Sri Lanka Stall Attracts Large Crowds at 2011 London Book Fair

26th April 2011, www.island.lk

The Sri Lanka Publishers Association, The Booksellers and Importers Association of Ceylon and the Export Development Board jointly organised the Sri Lanka stall at the 2011 London Book Fair in Earl’s Court, UK in mid April, which attracted large crowds.

Many of the recent publications of Sri Lankan publishers in English, Sinhala and Tamil were displayed and there was keen interest from booksellers, librarians and institutions from a number of countries including UK, Europe, Australia, USA, India, Pakistan, Singapore, Malaysia and Japan. A number of British authors also visited the stall and explored the option of getting their books published in Sri Lanka.

The delegates to the Book Fair had an opportunity to interact with those who came to the stall and to show the variety of books published in Sri Lanka.

The event also provided an opportunity to highlight the wide range of subjects covered by the publications and the excellent quality of the printed books. A catalogue specially produced for the Fair was eagerly taken away by the visitors.

In addition, visits were made to a number of stalls of international publishers at the London Book Fair and discussions held. Brochures for the Colombo International Book Fair were also distributed. According to Book Fair officials, over 23,000 publishing professionals attended the 40th London Book Fair this year, held from April 11 to 13. It is the premier book fair in the spring in Europe and is the window to the world for publications in the English language.

Sri Lanka Increases Taxes on Imported Vehicles

25th April 2011, www.lankabusinessonline.com

Sri Lanka has raised import duties on several categories of petrol-engined cars and three wheelers with steeper increases seen in larger hybrid vehicles, which had exceptionally low taxes earlier, officials said.

A senior Treasury official said there were revisions on several categories of vehicles.

On petrol cars with standard engines with capacities below 1,000 cubic centimeters the effective total tax rate will go up from the current 95 percent to 120 percent.

Between 1000 to 1,600 cc the effective rate will go up from 119 to 128 percent. On three wheelers the effective rate will go up from 38 percent to 50 percent.

On hybrid cars with engines below 2,000 cubic centimeters total duties will go up from 38 percent close to 50 percent.

Deputy director general of customs Ajantha Dias said an excise duty was raised by 8.0 percent on small hybrids but it will take up the total duties by a larger amount when added together.

On hybrids between 2,000 to 3000 cc duty will go up close to 75 percent and above 3,000 cc to 100 percent.

At the current rates even the large hybrids are taxed at a lower rate than smaller petrol cars.

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22 April 2011

Sri Lanka’s First Unit Trust Company NAMAL Leverages Market Position with Backing from Union Bank

21st April 2011, www.island.lk

Union Bank’s strategic acquisition of a 51% stake of NAMAL will enable Sri Lanka’s first unit trust company to leverage its well established market position with the strength and backing of one of Sri Lanka’s fastest growing Banks.

NAMAL is forging ahead with a new strategic direction backed with the expertise of a new Board of Directors supported by well established product lines, a strong brand image and a customer base that will take the company to new heights says Avancka Herat, the newly appointed Executive Director of NAMAL.

He further stated that "as part of the new strategic direction and business strategy, the company is considering branding as an integral element and recently unveiled a new corporate identity that projects the transformation of NAMAL as a much stronger and dynamic player, whilst communicating the brand premise of value creation for investments to its preferred target audiences. The current shareholders of NAMAL are Union Bank, DFCC Bank and Ennid Capital.

NAMAL declared the 19th annual dividend for its flagship National Equity Fund (NEF), of Rs 2.50 per unit on the 30th March 2011 to all its unit holders.

S. Jeyavarman, CEO of NAMAL highlighted that NEF pays out annual dividend in the month of March every year, has done so continuously from its inception in 1992, 19 years ago. This dividend of Rs. 2.50 per unit translates to a 25% tax free dividend for investors who entered the fund at Rs 10/-. In the relevant dividend year ended 28th February 2011, the unit buying price increased from Rs 22.13 to Rs.30.63 a highlighted 38.4% increase, he said.

NEF being the balanced fund invests in both equity and debt markets and the Fund has the added advantage of being able to change its asset allocation to best suit the movements of the respective market, thereby adding value to the investor in the fund while enhancing the overall risk adjusted return to the long term investors. The current dividend mainly comprised gains and income from equity investments and income generated from fixed income instruments.

The good news to the investors in the fund is that the funds’ share portfolio has grown in the medium term in line with the objectives of the fund.

The National Equity Fund (NEF) was the first unit trust fund established in Sri Lanka, by National Asset Management Ltd (NAMAL) the company that pioneered Unit Trusts in Sri Lanka. NAMAL has seven unit trust funds under its management, which cater to diverse investor risk/return profiles.

NAMAL in the recent years launched NAMAL Amana Equity Fund and NAMAL Gilt Edged Fund 1 and NAMAL Acuity Value Fund, under close ended categories of funds. The units of the NAMAL Acuity Value Fund are listed on the Colombo Stock Exchange. "Our objective is to provide investors with a choice of the investment opportunities to choose appropriate funds for their long term investment needs and to plan specific financial needs" stated Jeyavarman.

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'LinkConnector Validation'

Sri Lanka Industrial Productivity up 10.9pct in 2010

21st April 2011, www.lankabusinessonline.com

Labour productivity in Sri Lanka's industry rose 10.6 percent in 2010 racing ahead of economy-wide gains which were dragged down slower increases in agriculture and services, according to official data.

Overall labour productivity in all three sectors rose 6.6 percent from a year earlier to 343,000 rupees. Labour productivity is measured as gross domestic product per worker in constant 2002 prices.

Sri Lanka's industry is largely private sector driven and large portion of factory industry is export oriented, making it subject to global competition. Some domestic industrialists who are close to rulers however are lobbying for protection.

The Central Bank says more efficient and reliable transport and power could help industry improve productivity.

Productivity growth in agriculture was 5.1 percent. In Sri Lanka there is a close nexus between rulers and farmers including landowners.

Each year the sector gets about 25 billion rupees in fertilizer subsidies and there is also heavy protection from imports leading to volatile prices and food insecurity for the entire population.

With high and volatile food prices, rulers have asked workers in industry and services to farm their backyards, front yards and grow vegetables instead of flowers, a situation not seen in Sri Lanka since the closed economy days of the 1970s.

Analysts say farmers in India and Pakistan are able to produce better quality food at much lower prices than Sri Lanka's farmers.

"There is further room to increase the productivity in the Agriculture sector through use of improved seed varieties, new technologies and innovations, and mechanisation, which could be promoted through farmer awareness by way of an effective extension service," the Central Banks said in its 2010 annual report.

"In addition, increasing value addition by promoting agro-based processing industries, improving awareness on proper usage of fertilizer, rehabilitation of irrigation networks, and infrastructure facilities would also help increase the productivity in the Agriculture sector."

The services sector showed the smallest improvement in productivity at 4.6 percent. Most of the government, rulers and state workers are in the services sector. There was no separate breakdown of the productivity of government.

GDP in government services is measured in terms of salaries as there is no measurable output in some state services. Last year however wages were restrained and total state workers fell slightly.

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Sri Lanka Port Profit Go Up in 2010

21st April 2011, www.lankabusinessonline.com

Sri Lanka Ports Authority (SLPA), which runs the island's ports, increased revenue and operating profit in 2010 on the back of the global economic recovery which generated double-digit growth in cargo flows.

The SLPA's operating profit increased by 126 percent to 4.4 billion rupees in 2010 from the previous year while revenue rose by 21.2 percent to 28.3 billion rupees, according to the central bank.

The SLPA's operating expenditure increased by 11.7 percent to 23.9 billion rupees over the same period.

"The capital expenditure incurred by the SLPA during the year increased to 6.1 billion rupees compared to 3.8 billion rupees in 2009," the bank's annual report said.

"With the gradual recovery in international trade, the performance of port operations increased significantly in 2010."

Container cargo flows at Colombo port rose 19.4 percent to hit a new record of 4.1 million containers last year "supported by steadfast growth in both import-export and transhipment cargo," the bank said.

The number of containers handled in 2010 was also 10.8 percent higher than the total of 3.7 million TEUs (twenty-foot equivalent container units) handled in 2008, the highest-ever performance before the global recession.

Transhipment cargo handling increased by 18 percent in 2010 from the previous year, while the total cargo handled at the port of Colombo increased by 26.7 percent.

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Demand Drives Sri Lanka Land Prices to New Highs. Rs8mn for 25sq metres in Some Areas

21st April 2011, www.dailynews.lk, By Indunil Hewage

The local real estate market is showing significant growth in the recent past attributable to increasing sales and customer demand for lands.

The growth is expected to continue in the years to come. The land prices are picking up considerably in the face of present outlook in the industry.

Prime Lands Chairman Premalal Brahmmanage said land prices need to be within the reach of people and should not be overpriced.

Commenting on the big land allocation for mega projects in the Colombo city limit, he said there are a few big land blocks in the Colombo city limits and allocation of these lands would not have a huge impact on prices and sale of lands used for domestic housing market activities in Colombo.

“However, when lands are allocated for commercial purposes in the city, it will have some sort of impact on land prices.

In addition, the government has taken a timely decision to regulate and streamline the selling of paddy and coconut cultivated lands for various purposes in an uncontrollable manner by giving a proper value to good lands in the respective areas,” Brahmmanage said.

Lanka Lands Operations Manager Lalith Chandana said land prices in Pasikudah, Nilaveli, Kalpitiya, Dambulla, Anuradhapura and Hambantota have seen a marked increase comparison to the last couple of years and the growth is attributable to drastic expansion in tourism and construction sectors.

According to Chandana a perch of land in Kalpitiya, Colombo 7, Kollupitiya, Gampaha, Hambantota are being sold at a price of over Rs 4.5 million, Rs 8 million, Rs 6 million, Rs 250,000 and Rs 100,000 respectively.

Sri Lanka Coir Fibre Exports Increased Sharply in 2009 due to Demand from China

21st April 2011, www.dailynews.lk, By Ramani Kangaraarachchi

Raw fibre exports has increased sharply in 2009 due to the increased demand mainly from China.

Export Development Board (EDB) Assistant Director Export W K Amarasinghe told Daily News Business that Sri Lanka has exported 144,000 metric tonnes of raw fibre to the value of USD 40,000 in 2009.

This is an increase of nearly three fold compared with the quantity exported in the year 2000 which was 50,000 metric tonnes.

Meanwhile, Sri Lanka has earned USD 78 million worth of foreign exchange in 2009 from exported value added coir products which include more than ten items such as coir brushes, mattresses and geo mats.

However, Sri Lanka Coir and Alike Products Manufacturers Association President Lakshan Thilakaratne said exporters of value added fibre products have faced a problem due to the shortage of fibre to meet their requirement. The problem is severe this year compared to previous years as a result of the coconut shortage. When coconut prices go up artificially the cost of production goes up resulting an increase of selling price creating problems with clients," he said. These value added coir products are exported to Far East, Western and European countries.

The industry has the capacity to expand this sector while giving a large number of employment if sufficient stocks of fibre is available and it will give an income of several folds than from raw fibre exports.

At present more than 35,000 industrialists are involved in the coir manufacturing sector which is an informal sector.

Sri Lanka is the largest row fibre exporter in the world and the exporters have to pay an additional Cess to export raw fibre.

Dutch Family Makes 250,000th Tourist Arrival in Sri Lanka for 2010

21st April 2011, www.news360.lk

A Dutch National and his family were into a surprise when they landed at the Bandaranayake International Airport last evening to spend a holiday in Sri Lanka.

Ronke Noordhuis was welcomed by the Sri Lanka Tourism officials by garlanding him and his family, for becoming the 250,000th tourist who arrived in the country during this year.

Sri Lanka Tourism offered a special gift and a complimentary package to Noordhuis keeping its promise of rewarding the 250,000th tourist.

This is the first time Noordhuis who is working as a finance manager in Qatar has visited the country.

He and his wife Inge along with the three sons is expected to visit Negombo, Kandy, Sigiriya, Dambulla, Nuwara Eliya and southern beaches during their ten day stay in the Island.

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Sri Lanka Tourist Arrivals in March 2011 Up by 43.5pct

12th April 2011, www.lbr.lk

Sri Lanka's tourism arrivals rose 43.5 percent in March 2011 to 75,130, with steep increases seen from South Asia and several European generating markets, data from the tourist promotion office showed.

March arrivals were the highest ever for a single month since December 2010, when 84,000 visitors came, an official said. Last year Sri Lanka's tourist arrivals rose 46 percent to 654,476 after a 30-year war ended.

Arrivals from Western Europe, a key source of revenue to the country's resort hotels, rose 37.6 percent to 30,003.

Visitors from France rose 105 percent to 5,899, Sweden rose 260 percent to 1,446, Italy rose 78.2 percent to 1,112, The Netherlands rose 74 percent to 1,951 and Germany was up 11.3 percent to 5,904. Britain, the largest western market, was up 3.4 percent to 8,852.

South Asian visitors were up 64.5 percent to 21,063 with India rising 58 percent to 12,613 maintaining its position as the top source of visitors, while Pakistan surged 237.7 percent to 2,067. Maldives rose 48 percent to 4,677.

Australia and New Zealand rose 50 percent to 3,540 and North America was up 16.8 percent to 3,990. Middle East rose 38 percent to 4,067 and East Asia rose 29.3 percent to 7,033.

Chinese arrivals increased 69 percent to 1,361, Japan rose 22.7 percent to 1,525 and Malaysia was also up 22.7 percent to 1,329 and Singapore was up 31.6 percent to 1,198.

In the first quarter, arrivals were up 34.1 percent from a year earlier.

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Sri Lanka Tourism Statistics and Tourist Arrivals

20 April 2011

India was the Largest source of FDI to Sri Lanka in 2010

19th April 2011, www.lankabusinessonline.com

India was the largest source of foreign direct investment to Sri Lanka in 2010 with 110 million US dollars followed by Malaysia with 72 million US dollars and the United Arab Emirates 66 million dollars, the Central Bank said.



Telecoms continued to lead FDI, the Central Bank said. Malaysia's Axiata, which owns Sri Lanka's Dialog Axiata, has been a top source of FDI to Sri Lanka. UAE's Etisalat has also bought into the telecom sector. India's Airtel also owns a mobile firm.

Sri Lanka's foreign direct investment in 2010 was 516 million US dollars, including 39 million US dollars in loans, down from 601 million US dollars a year earlier, the Central Bank said.

There was also 43 million dollars of outward investment by Sri Lankan firms, up from 20 million dollars a year earlier.

This reduced the net FDI figure in Sri Lanka's balance of payments (without third party loans) to 435 million US dollars, which was higher than the 384 million US dollars recorded a year earlier.

"It is necessary for Sri Lanka to attract more non debt creating foreign investment flows if it is to increase the level of investment required to maintain the envisaged economic growth path, given the shortfall in domestic savings," the Central Bank said.

"Creating a business friendly environment is needed to improve investor confidence and attract foreign investments."

"While the recent relaxation of exchange control regulations, a strengthened macroeconomic environment as well as the re-establishment of peace in the country incentivise investment, further steps need to be taken to encourage foreign investments."

A working group was already identifying measures to improve Sri Lanka's 102nd place in the World Bank's 'Doing Business' ranking.

Analysts say Sri Lanka has also other problems including increasing problems with rule of law and governance which authorities will need to address.

Sri Lanka's foreign investment promotion agency, the Board of Investment is expecting a billion US dollars this year, partly helped by several high profile hotel projects on state land in Colombo.

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Sri Lanka Telephone Density Reaches 100.8 Lines per 100 Persons in 2010 as Fixed & Mobile Connections Overtake Population

20th April 2011, www.lankabusinessonline.com

Sri Lanka's telephone density rose to 100.8 lines per 100 persons in 2010 showing that fixed and mobile connections had overtaken the population, in a telling demonstration of the results of ending a state monopoly.



Telephone density rose from 86.6 in 2009 in a country with a population of 20.6 million, according to data published by Sri Lanka's central bank.

Mobile phone users grew 20.9 percent to 17.2 million while fixed access wireline which has slumped in 2009 recovered to grow 2.9 percent to 897,000.

Industry analysts say owners of more than one mobile subscriber identity module (SIM) is growing.

Wireless fixed access phones grew 4.3 percent to 2,674,000.

Sri Lanka's telekom market was a state monopoly until the mid 1990s when a privatization and liberalization drive was launched. Sri Lanka Telekom, a state fixed wireless operator was sold to Japan's NTT and two wireless operators were licensed.

At the same time arbitrary pricing was replaced by a regulated tariff re-balancing plan where local calls were raised progressively to allow the fixed operator to deal with lower termination revenue in a global environment of de-regulation.

Prices have since stabilized and have even fallen in some areas in real terms.
Mobile services, which originated as a private business with Millicom International Cellular starting South Asia's first mobile network saw competition, when Australia's Telia started a joint venture with the incumbent fixed operator.

Sri Lanka now has five mobile firms, in a fiercely competitive market.

Another recent growth sector has been broadband both in mobile and wireline. A key reason for the expansion in the wireline sector has been broadband data.

Data showed that internet connections including mobile broadband had grown 79.2 percent to 430,000 in 2010.

Meanwhile payphones in service fell 4.4 percent to 7,054.

The data also showed that mail use has declined. Letters per inhabitant had fallen to 17 from 20 a year earlier.

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Sri Lanka Banking Sector Profits Up in 2010

20th April 2011, www.dailynews.lk

The year 2010 was a high performance year for the local Banking industry in the last decade.

The banking industry achieved a considerably high level of profits in 2010. The profit after tax amounted to Rs 57.5 billion last year and this is a 111 percent growth in comparison to a profit of Rs 27.2 billion in 2009, the Central Bank said.

This was reflected in improved Return on Assets and Return on Equity ratios, which increased from 1 percent and 11.8 percent respectively, in end 2009 to 1.8 percent and 21.6 percent respectively in end 2010.

The significant growth in profitability was mainly attributed to a higher increase in fee-based income, a lower increase in none-interest expenses and the reversal of loan loss provisions due to reduced provisioning requirement.

According to the Central Bank the total assets of the banking sector recorded a 18 percent growth last year compared to 2009. The loan growth of 23 percent significantly contributed to this assets growth in the banking industry. The growth of loans was mainly in respect of agriculture, consumption, infrastructure , trade and construction sector. The negative growth of credit card advances continued and was at a negative 3 percent while against pawning indicated a significant growth of 40 percent.

Further overdrafts and term loans including housing loans recovered from the negative growth of 14 percent and 11 percent respectively, reported in 2009 to a significant growth of 35 percent and 24 percent respectively by the end of 2010.

The growth of funds raised through deposit products declined from 19 percent in 2009 to 16 percent in 2010. However deposits remained the main funding sources accounting for 73 percent of total liabilities.

Total borrowing recorded a significant growth of 28 percent in 2010 against the negative growth of 15 percent in 2009 and the share of borrowings in total funds increased marginally from 13 percent to 14 percent, the Central Bank said.

MTD Walkers Buys Colombo Engineering as It Reenters Marine Engineering Industry. Kiran Atapattu Remains in Senior Post

20th April 2011, www.dailynews.lk

MTD Walkers PLC acquired 100 percent equity of Colombo Engineering Services Private Limited.

The company making an announcement to the Colombo Stock Exchange said the total purchase price of Colombo Engineering was Rs 275 million.

With this recent acquisition, MTD Walkers has re-entered the marine engineering industry to now become the biggest ship repair company in Sri Lanka.

MTD Walkers bought over Colombo Engineering Enterprises (CEE), a fully integrated, ultra-modern ship repairing facility which is strategically located within the port of Colombo.

The new company is re-branded as Colombo Engineering Services (Pvt) Ltd.

MTD Walkers Chief Operating Officer Lal Perera said, “This is a very exciting time in our company’s development. By re-creating this division for marine services we will be able to meet the needs of all marine engineering services required for ships plying our waters. Our acquisition of Colombo Engineering Enterprises will allow us to serve our clients with a dedicated specialist team and the Walkers workshop will add value to manage the complex calculations and operations these projects require.”

The new company, Colombo Engineering Enterprises will leverage on the existing Walkers’ fully equipped workshop to expand the current services offered by the Company. During the past, the lack of proper ship repair services has meant that many of the ships had to bypass the port of Colombo and travel to Singapore.

Kiran Atapattu has been appointed Head of the Marine Engineering Division of MTD Walkers PLC with immediate effect.

With his years of experience in this industry, Atapattu will continue to lead the operations delivering strategic services to vessels entering the Colombo Port.

Colombo Engineering Services (Pvt) Ltd., has fully-equipped marine engineering facilities for ship repair work, the most modern technology and equipment for underwater services and backed-up by a fleet of high-powered crafts to respond to requirements in the high seas.

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Sri Lanka Registers Ozone Friendly Ceylon Tea Logo being the First Country in the World to Produce Ozone Friendly Tea

20th April 2011, www.dailynews.lk, By Ramani Kangaraarachchi

Sri Lanka being the first tea producing country in the world to be recognized as a producer of Ozone Friendly tea will register the Ozone Ceylon Tea logo in 30 tea importing countries from 2011 to 2012.

The launching of the new logo will take place in Colombo next month.

Sri Lanka Tea Board Promotion Director Hasitha De Alwis told Daily News Business that Sri Lanka Tea Board (SLTB) has completed the registration of the Ozone Friendly Pure Ceylon Tea logo in Sri Lanka.

As a preliminary measure, Sri Lanka Tea Board, in consultation with tea industry stakeholders, finalized the demarcation of tea factories under each agro-climatic region. Suitable descriptive narrations for protection of Ceylon Tea and other seven regional teas were formulated thereafter.

The approval of the Cabinet was obtained for Sri Lanka Tea Board to register Ceylon Tea and other seven tea growing area names under Geographical Indication and Certification mark in Sri Lanka and other foreign countries on behalf of the Government of Sri Lanka.

Alwis said the protection of a GI registration for a particular product in the home country is a pre-requisite prior to applying for international registration.

The main seven tea growing regions (Nuwara Eliya, Dimbula, Uva, Udapussellawa, Kandy, Ruhuna and Sabaragamuwa) as certification marks under the Geographical Indications.

SLTB is now contemplating to initiate action to apply for international registration for the said GIs in 50 target markets during 2011 and 2012 with funding support from the Industry and Commerce Ministry.

He said worldwide demand and popularity for Ceylon Tea has made it a national brand for Sri Lanka. Since Ceylon Tea Propaganda Board time, the country has spent substantial funds to promote Ceylon Tea in important tea consuming countries.

Due to the premium price received regularly for Ceylon Tea, the overseas packers frequently misuse the name by packing other origin teas as Ceylon Tea.

Therefore, Sri Lanka Tea Board (SLTB) decided to protect the Ceylon Tea name as well as seven major regional tea growing areas under Geographical Indications as Certification Marks under the Trade Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization.

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Elephant Reach Plans Three more Hotels to Promoting Agro, Spiritual & Eco Tourism in the Face of Increasing Demand

20th April 2011, www.dailynews.lk, By Indunil Hewage

Elephant Reach Hotel, which is a subsidiary of Lanka Hotels and Travels (Pvt) Ltd is looking forward to expand its presence locally by adding three more major tourists hotels in the years to come.

Elephant Reach will add another 21 rooms while upgrading the existing 35 rooms. In addition Elephant Reach will construct a spa and a museum for elephants with Rs 100 million worth of estimated investment.

Speaking to Daily News Business Lanka Hotels and Travels Operations Director Malinga Fernando said Elephant Reach will be promoting agro, spiritual and eco tourism in a dynamic manner in the face of increasing demand from local and foreign travellers for these areas. "It is sad to note that the world has identified Sri Lanka a low budget destination.

"This is a very damaging for the future of the tourism industry," he said.

"There are ample opportunities to promote spiritual tourism in Sri Lanka with tourists' keenness and inquisitiveness for Buddhist philosophy. In addition, we find it difficult to promote and expand the tourism industry in the Northern and Eastern parts of the country due to lack of transport facilities and it is the duty of responsible authorities to look at the civil aviation sector seriously to promote the tourism industry," Fernando said.

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Sri Lanka BIA Airport to Add another Runway as Traffic Grows

19th April 2011, www.lankabusinessonline.com

Sri Lanka's international airport is to acquire 100 hectares of land to build a parallel runway required to handle growing aircraft traffic that could soon saturate existing capacity, an official said.

A post-war economic and tourism boom has led to an increase in the number of airlines flying to the island as well as in the frequency of flights.

Johanne Jayaratne, executive director of Airports and Aviation Services (Sri Lanka), a state agency which operates airports, said increasing traffic made the need for a parallel runway at the island's sole international airport at Katunayake more urgent.

He said 32 airlines now use the airport, just north of Colombo, with Aeroflot expected to resume flights soon.

The airport now handles 3,354 monthly scheduled flights, excluding charter flights, he told a recent forum.

The single runway has a capacity of 42,000 aircraft movements a year.

"We're now doing over 30,000 and will be close to maximum capacity," Jayaratne said.

That made it important to go ahead with building a proposed parallel runway at the airport but it was difficult to expand in the densely populated and industrialised area.

"We now handle 12 aircraft movements an hour during peak times. Our capacity is 25. It will catch up on us pretty fast. So we're actively pursuing the acquisition of land to ensure we can have a parallel runway."

An air force base and an export processing zone to the north and south of the airport were constraints, Jayaratne said.

"Acquiring land is going to pose its own challenges but the importance of acquiring land is pretty obvious to everybody."

A parallel runway close to the present one was not desirable owing to safety concerns, making it necessary to acquire about 100 hectares of land.

H M C Nimalsiri, director general of civil aviation authority, told the forum that a parallel runway at Katunayake would help airlines reduce costs.

"If we can provide a parallel runway with the necessary separation they can come with less fuel and more payload."

Aircraft now fly to Sri Lanka with extra fuel in case they have to divert to airports in India or the Maldives if the Katunayake runway is closed in an emergency.

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