v2025 (2)

v2025

Business

Etihad to resume regular services from Sri Lanka

Starting from June 20, Etihad will resume regular services from Sri Lanka to key cities on its global network via Abu Dhabi.

Flight EY265 will depart Colombo on Thursdays and Saturdays at 0135 hours, landing in Abu Dhabi at 0430 (local time). From Abu Dhabi, the service connects to Barcelona and Zurich on a weekly basis, and to Dublin, Frankfurt, Geneva, London, Madrid, Milan and Paris twice weekly.

 In terms of the safety measures on board, Etihad has implemented an extensive sanitisation and safety programme that covers high standards of hygiene in areas including catering, aircraft and cabin deep-cleaning, check-in, health screening, boarding, crew interaction, meal service, disembarkation and ground transportation, among others.
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Mastercard appoints Rajesh Mani as new country manager

Mastercard, a global technology company in the payments industry, has announced the appointment of Rajesh Mani as the new Country Manager for Sri Lanka & Maldives. Rajesh, who took office earlier in March, will bring over two decades of extensive background in the payments and fintech sectors.

“I’m very confident that Rajesh’s multi-faceted payments background will be of great value to our customers, partners and the team in Sri Lanka & Maldives. As these markets continue to develop and evolve rapidly, Rajesh is very well placed to support our partners towards building a vibrant digital ecosystem in these geographies.,” Mastercard's Chief Operating Officer for South Asia, Vikas Varma said.

In his last position in Singapore, Rajesh led Mastercard’s delivery of domestic payment system infrastructure enhancements in Indonesia, which won the global CEO award in 2018. Further, he also actively led a number of Mastercard’s high impact digital partnerships with key digital clients in Southeast Asia, including Grab, Gojek and Shopee.

“I am honored to have this opportunity, and I’m looking forward to working with the government, all of our customers, partners and stakeholders to support Sri Lanka & Maldives’ vison of digital transformation, financial inclusion for citizens and their overall evolution towards cashless economies,” said Rajesh Mani.

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Relocation and expansion for ETAL in SL

ETAL Group, the manufacturer of magnetic components says that it is relocating and expanding its Sri Lankan manufacturing facility as a response to the increased demand and growth experienced by the company.

The new site in Piliyandala commenced operations in the first quarter of 2020, following the transfer of production from its Rathmalana facility. The new factory provides room for further expansion, with no disruption to customer service, and offers an alternative source for volume production of magnetic components outside of China. As with all ETAL Group manufacturing facilities, following the relocation, ETAL Group Pvt Ltd remains fully certified to ISO 9001, 14001 and 45001.

“Our exciting new facility provides us with the infrastructure to produce higher volumes and the space to add to our existing capabilities going forward. Its opening is a just reward for our dedicated team of employees, many of whom have been with us since the conception of the company. Currently we employ 250 workers in Sri Lanka and have the additional space required to more than double this, meeting growing demand for our consistently high-quality products,” says Scott Robinson, General Manager of ETAL Group Pvt Ltd, in a press release.

The new site in Piliyandala is located in a 5600 square metre compound with 3400 square metres of production floor area and a modular internal infrastructure that allows for flexible, efficient and cost-effective manufacturing.

Capabilities at the new factory include a computer aided component design suite, a mechanical workshop, automatic fine wire winding (linear and toroidal), manual winding, NC and manual soldering, planar assembly, vacuum encapsulation, vacuum varnish impregnation, ferrite core grinding, reflow and electrical verification to fully cover the manufacturing requirements of a wide range of standard and custom designed inductive components and assemblies.

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Fitch revises outlook on People's Leasing to negative

Fitch Ratings has revised the Outlook on Sri Lanka-based People's Leasing & Finance PLC's (PLC) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to Negative, from Stable, and has affirmed the ratings at 'B-'.

This follows the 24 April 2020 downgrade of Sri Lanka's sovereign rating to 'B-', from 'B', with a Negative Outlook to reflect the impact of the escalating coronavirus pandemic on the economy.

Fitch forecasts Sri Lanka's economy to contract by 1.0% in 2020, from 2.3% growth in 2019, due to the impact of the coronavirus pandemic.

"Our base-case scenario assumes that any economic recovery later this year will be gradual, with limited growth prospects for the non-bank financial institutions (NBFI) sector through 2020 and 2021. We expect NBFIs' financial profiles to come under strain from a more challenging operating environment, and for their key credit metrics to be weaker than our previous expectations, notwithstanding regulatory relief," Fitch Ratings said.

The Negative Outlook reflects the increased risk to the company's financial profile from the pandemic and our assessment that the sovereign's weakened credit profile could constrain PLC's rating if it deteriorates further.

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Colombo port resumes normal operations

Operations at the Colombo Port are now returning to normal, despite a few delays in container clearance.

The container backlog at the Colombo Port caused by the Covid 19 closure has now been cleared and the Port has already started the usual operations.

All Ceylon Container Transport Employees’ Union (ACCTEU) General Secretary B.I. Abdeen has explained that although the containers stuck due to the Covid 19 have been cleared, the usual delay is still there when releasing the containers.
“We have been talking about this issue for years but the problem remains the same. This delay is not because of Covid 19,” Abdeen has added.

The Colombo Port is packed with over 40,000 containers after the Covid 19 crisis disrupted economic activities in April, but three container terminals at the Port have been operating throughout the crisis at full capacity.

However, vessel calls have started to decrease.

With lockdown restrictions being eased by the Government on 11 May, the shipyard, which had been operating at a 20-30% capacity, providing only essential repair services and completing vessels undergoing repairs in the yard, is now returning to normal levels.

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Kerry Logistics targets textile sector with joint venture in SL

Kerry Logistics has formed a joined venture with Sri Lanka-based IAS Holdings to increase its global freight forwarding capabilities in South Asia.

The joint venture, dubbed Kerry Logistics Lanka (Kerry Lanka), is headquartered in Colombo, Sri Lanka — conveniently located to act as a crossroads between East Asia, South and South East Asia, Africa and Europe.

In addition to its head office, Kerry Lanka also operates an office and warehouse at Bandaranaike International Airport.

Kerry Logistics Network Limited and its group of companies is a diversified group based in Asia. Their core businesses encompass integrated logistics, international freight forwarding, express, supply chain solutions, seaport management and operations as well as insurance brokerage.

Sri Lanka is a large export of textiles: according to the Central Bank of Sri Lanka’s external sector performance review, 46% of Sri Lanka’s total exports derived from the garments industry in 2019, amounting to $5.6bn.

There are more than 300 apparel manufacturers in Sri Lanka, which are well connected to the major brands in Europe and the US. Thus, Kerry Logistics’ expansion to Sri Lanka will enable it to tap into opportunities in the sector.

Patrick Cheah, executive director of global air of Kerry Logistics, commented: “Located in Sri Lanka, the intersection of freight routes in South Asia, Kerry Lanka will become a significant hub for Kerry Logistics and give a strong boost to our global connectivity.

“Plans are also in place to aggressively focus on the upstream of the supply chain to support the fashion industry vertical.

“The forming of the joint venture also marks the deepening of our presence in the South Asian subcontinent, rounding out our full suite of services in the region.”

Kerry Logistics has also established a subsidiary in Pakistan in 2018 to extend its footprint in the Indian subcontinent. This new subsidiary is in addition to Kerry Indev Logistics in India, which was established in 1984.

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New business of SLIC expected to be subdued

New business generation in the life insurance business of Sri Lanka Insurance Corporation (SLIC) is expected to be subdued over the near term due to the decline in economic activity caused by the COVID-19 pandemic, according to Fitch Ratings.

Fitch also said, “As most insurers predominantly use agency networks that rely on human interaction for distribution. In addition, we expect non-life business growth to slow in light of the government’s temporary restriction on the import of motor vehicles to control currency depreciation.”

Fitch expects the potential pressure on SLIC's earnings from the slowdown in premiums and softer investment yields to be somewhat mitigated by lower claims from motor insurance lines due to fewer traffic accidents following restrictions on travel to contain the spread of the coronavirus. SLIC has consistently maintained its non-life combined ratio below 100% (2019: 95%) for the previous five years, buoyed by its scale advantages and prudent underwriting practices.

Fitch has affirmed the Insurer Financial Strength (IFS) Rating of SLIC at ‘B’. The outlook is negative. The agency has simultaneously affirmed SLIC’s National IFS Rating at ‘AAA(lka)’ with a Stable outlook.

Fitch says that SLIC’s ratings reflect its ‘Favourable’ business profile, and capital position and financial performance that are better than that of the industry. These strengths are partially offset by its high exposure to sovereign-related investments, which caps its investment and asset risk score on the international rating scale at ‘ccc+’ under Fitch’s credit-factor scoring guidelines.

The Negative outlook on SLIC’s international IFS Rating reflects the credit rating agency’s expectations of a further increase in the insurer’s investment-related risks, which are heightened in the international rating scale because of its sizeable exposure to assets linked to the Sri Lankan sovereign (B-/Negative).

Fitch assesses SLIC’s business profile as Favourable’ compared with other Sri Lankan insurance companies due to its leading business franchise, diversified participation and stable business lines across life and non-life insurance sectors, and its large domestic operating scale.

In light of this ranking, Fitch scores SLIC’s business profile at ‘b+’ under its credit-factor scoring guidelines on the international rating scale. SLIC is Sri Lanka’s second largest life insurer and third largest non-life insurer based on gross written premiums.

SLIC’s risk-based capital ratios of 434% for its life and 208% for its non-life segments, which measure its capital position, were well above the industry average and the 120% regulatory minimum.

Fitch expects the insurer’s sufficient capital buffers, strengthened partly by its large unallocated participating surpluses, to somewhat mitigate the impact from any potential investment losses stemming from volatile financial markets as a result of the coronavirus pandemic.

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Huawei gifts hi-tech equipment to Sri Lanka

Chinese tech giant Huawei on Monday (04) donated hi-tech equipment to the Sri Lankan government as part of its efforts to support Sri Lanka's fight against the COVID-19 pandemic, a statement from Huawei Sri Lanka said.

The donation, handed over to Prime Minister Mahinda Rajapaksa here, included five sets of high definition video conference system and six high precision thermal cameras.

Prime Minister Mahinda Rajapaksa said at the hand-over ceremony that he was glad to see ICT sectors contribute unique values during this challenging time, and the Sri Lankan government appreciated Huawei's timely support.

Liang Yi, chief executive officer of Huawei Sri Lanka, said Huawei believed emerging ICT technologies would play important roles under the current situation.

"Huawei will contin uously support Sri Lanka with cutting-edge technologies, to help this beautiful island to win this epidemic battle and bring joy and contentment back to people's life," Liang said. (Xinhua)

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Central Bank suspends business of NatWealth Securities Ltd

The Monetary Board of the Central Bank of Sri Lanka (CBSL) at its meeting held on 28.05.2020, having considered the continuous failure to comply with the directions applicable to NatWealth Securities Limited (NWSL) as a Primary Dealer, acting in terms of the Regulations made under the Registered Stocks and Securities Ordinance and the Local Treasury Bills Ordinance, has decided to suspend NWSL from carrying on the business and activities of a Primary Dealer.
 
Accordingly, NatWealth Securities Limited will be suspended for a period of six months with effect from 01.06.2020.

The CBSL announced today that they will take "necessary measures to ensure that this regulatory action does not have a disruptive impact on the Government Securities market" adding that action will also be taken to facilitate the handling of the interests of the customers and counterparties of NWSL in an orderly manner.

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'Sheraton Colombo' reiterates its commitment to Sri Lanka

Lanka Hotels and Residencies (Pvt.) Ltd., the owners of 'Sheraton Colombo' has reiterated their commitment for the opening of the 320 room property at Galle Road.

"We, as Lanka Hotels and Residencies (Pvt) Ltd., would like to reassure our partners, employees, prospective professionals and all other key stakeholders on the continuity and steadfast commitment for the opening of our flagship Project in Sri Lanka - Sheraton Colombo Hotel, a 320 room property at Galle Road," chairman of Lanka Hotels and Residencies, Don Gamini Gunaratne said in a statement.

Gunarathna said that they had to shutdown as a direct response to the pandemic but assured that they will resume operations once the government of Sri Lanka provides clearance to the hospitality industry and added that the well-being of our employees continues to remain a top priority.

"We are vigilantly monitoring the situation and have taken all proactive precautions to ensure the health and safety of all parties involved is of paramount importance," Gunaratne said.

"Although our plans were to soft launch this property from June 2020 onwards, we have been compelled to pause these plans as a direct response to the emergency prevalent across the country and globally. We are vigilantly monitoring the situation and have taken all proactive precautions to ensure the health and safety of all parties involved is of paramount importance. We will be ready to resume our operational activities once the government of Sri Lanka provides clearance to the hospitality industry," Gunaratne said.

He also noted that they stand by the government to take their vision forward for the country, contributing to the revival of the vibrant travel and tourism industry in Sri Lanka and appreciated all the efforts undertaken by the government, the healthcare workers, the armed forces and the police force who are tirelessly working in order to contain the spread of the virus.

Gunaratne further stated that they look forward to engaging with necessary industry bodies under the guidance given by the government to discuss and strategize on re-energizing the Sri Lankan economy.

 "We have absolute faith we shall overcome this challenge and come out stronger together in the true Sri Lankan spirit," he added.
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Aitken Spence records a profit of Rs 4.2 billion for 2019-2020

Evan after experiencing two black swan events with their distinctive and severe impacts within the space of one year, Aitken Spence PLC remained resilient despite these challenges due to the Group’s diversified business portfolio and strategic direction.

The Group’s financial performance for the twelve months ending 31st March 2020 recorded a year-on-year profit-before-tax of Rs. 4.2 billion compared Rs. 7.3 billion last year.

Despite considerable economic headwinds the organisation’s agile strategy was reflected in the earnings from the overseas businesses that contributed 39% compared to 43% last year. This underlined the exceptional relationships that have been built with global industry players across the key sectors. The Group’s businesses from the domestic market derived 61% earnings of the Group’s PBT for 2019/2020 compared to 57% in the previous year.

The total revenue of the Group ending 31st March 2020 was Rs. 53.5 billion, a 4% drop from the previous year, primarily due to a reduction of revenue from the Tourism sector which was affected by the significant impacts mentioned above. However, the drop was compensated by the commencement of the operations during the third quarter of the year of Heritance Aarah, the flagship hotel in the Maldives.

The total assets of the Group increased by 14% to Rs. 140 billion. The Group invested Rs. 10 billion in capital expenditure across many sectors with the highest investment incurred in the power generation segment to fund the construction of the pioneering waste to energy power project, the first of its kind in Sri Lanka. This reflects the organisation’s confidence in its future earnings growth capacity.

The Group’s expansion increased to 9 countries as the Maritime & Freight Logistics sector re-established its presence in South Africa whilst the Tourism sector commenced operations in Myanmar during the year.

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Nestlé ranked best F&B company in Sri Lanka

Nestlé was recognised as Sri Lanka’s number one F&B company at the recent Business Today TOP 30 awards. The company jumped nine places from its previous ranking to become one of the top 10 companies on the list, which featured Sri Lanka’s best-performing corporates across all industries.

The event awarded organisations that had achieved growth in challenging times during the 2018-2019 period, demonstrating resilience and ingenuity in serving consumers and supporting the country’s economy. This is the fifth consecutive year Nestlé has been recognised by Business Today.  

 “We are honoured to be recognised as one of Sri Lanka’s top 10 corporates by Business Today, in acknowledgement of the contribution we make every day to the country and its people. We have always placed Sri Lankan consumers’ needs first in everything we do - helping to nourish their families, develop their communities, and protect their environment” said Fabrice Cavallin, Nestlé Lanka’s Managing Director.   
nestle cover picManaging Director of Nestlé Lanka Fabrice Cavallin receiving the award from Prime Minister Mahinda Rajapaksa at the Business Top 30 awards.

As one of Sri Lanka’s oldest multinationals, Nestlé celebrates 114 years in the island this year. Its range of popular products serve Sri Lankans right from birth to old age, with recipes carefully tailored to ensure it meets local tastes and nutritional needs. Approximately 90% of the products sold by the company in Sri Lanka is made locally at its factory in Kurunegala.

In 2019, Nestlé provided its consumers with close to 1 billion micro-nutrient enriched servings through its products. Through its business, Nestlé also supports the livelihoods of almost 30,000 Sri Lankan families – from farmers and suppliers, to distributors and employees – by sharing expertise, and providing training, employment and business opportunities.

The company is currently one of Sri Lanka’s largest fresh milk collectors and one of the world’s largest exporters of coconut milk powder. The company is also aggressively driving its 2025 commitment to make all of its packaging 100% recyclable or reusable. It has made good progress, with more than 80% of its current packaging already recyclable. It will no longer offer plastic items in its promotions from April this year, and are working together with its stakeholders to launch Sri Lanka’s first UHT milk carton recycling facility by mid-2020. 

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