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Business

Flemingo urges world to stand by Sri Lanka after Easter attacks

Flemingo International, one of the world's premier duty free service providers, has called on both the world of travel retail and the wider world to stand by Sri Lanka.

In the wake of the Easter Sunday bombings that targeted churches and luxury hotels in Colombo, research from Forward Keys said that more than 80% of bookings to Sri Lanka were cancelled.

Flemingo is, however, urging people to still visit a destination that was named by Lonely Planet as the best to visit in 2019.

The retailer used Blue Storks Head of Travel Retail Marine Bemelmans and Head of Inflight Sales & Marketing Jan Simonson Hoefnagels as a positive example. The pair recently started a two-week tour of the island driving a Tuk Tuk.

Bemelmans and Hoefnagels explored Flemingo’s arrivals store after landing before heading to Negombo, where they met up with Flemingo International Directors Paul Topping and P Thimmayya.

After a morning spent learning how to drive a Tuk Tuk in Negombo, Bemelmans and Hoefnagels headed on to Sigiriya to spend the next two days exploring the cultural triangle.

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A statement from Flemingo said: “It is great to see the two travellers supporting the country, demonstrating their passion to see the island and drive their Tuk Tuk themselves. We recommend you follow in the footsteps of Marine and Jan.

“While they cannot compensate for the slowdown in tourism, they understand that every little bit goes a long way. Several countries including India and China have relaxed the travel restriction against Sri Lanka this week.

“So, go out there and give them a wave, a clap, a shout of “well done” as their branded Tuk goes rolling down the highways. The country needs more of them coming here. And no, you don’t have to drive a Tuk Tuk. Just come and enjoy what is on offer, we promise you won’t be disappointed.”

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CBSL pays over 10 billion to ETI depositors with no financial assistance from GoSL

The Central Bank of Sri Lanka (CBSL) would be paying the now defunct finance Company, ETI Finance Limited (ETIF) depositors a total amount in excess of Rs 10 billion without any financial contribution from the Government of Sri Lanka (GoSL), the CBSL said in a release.

A number of regulatory measures have been taken on the company from time to time which resulted in, inter alia, the directors of ETIF transferring their personal assets including EAP Broadcasting Co Ltd and Swarnamahal Jewellers Ltd, and the directors giving an undertaking to transfer additional personal assets to cover the negative net worth of the company.CBSL would like to emphasise that as a result of the regulatory actions taken since the time of identifying the issues of ETIF, the company was able to realise this amount of cash to repay the depositors by disposing theassets transferred to ETIF. Further, CBSL has also initiated several legal actions against the directors of ETIF to seize personal assets of the directors and transfer those proceeds to ETIF.

Considering the extremely vulnerable liquidity position of ETIF and its inability to repay the depositors, the Monetary Board (MB) of the Central Bank of Sri Lanka (CBSL) issued directions on 02.01.2018, restricting the operations of the company. Further, based on a proposal submitted by the company, MB gave its concurences on 21.02.2018 to dispose identified subsidiary, sub-subsidiary companies and investment properties of ETIF for a total consideration of USD 75 mn, with the view of repaying the depositors utilising the sale proceeds.

The said transaction had to beconcludedexcluding certain assets for a total consideration of USD 70 mn, which was received in 4 tranches and assets to the corresponding value were transferred to the buyers. Since the buyer did not remit the remaining USD 5 mn, ETIF has retained its subsidiary, Swarnamahal Financial Services PLC (SFSP), which was intended to be transferred for the corresponding value. ETIF and SFSP, along with CBSL, are currently considering alternative measures to revive SFSP. Since SFSP was retained by ETIF for the USD 5 mn not received, there has been no financial loss to ETIF despite the transaction being not completed in its entirety.

Based on the exchange rates at the time of receiving money through the above 4 tranches, ETIF has received over LKR 11 bn so far. These funds have been already utilised to repay 20% of the deposits and accrued interest liabilities of ETIF. The company is currently processing a further 10% repayment to the depositors.

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CA Sri Lanka engages with stakeholders on SLFRS 9 post implementation review

The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) commenced the post implementation review of SLFRS 9 Financial instruments with the engagement of key stakeholders. CA Sri Lanka has adopted the full version of SLFRS 9 in 2014 with an effective date of financial periods beginning on or after 01st January 2018.

Consequently, CA Sri Lanka organised a series of training programmes and workshops to raise awareness and also provide application level training on the adoption of SLFRS 9.

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A resource person makes a point at a workshop organized by CA Sri Lanka for stakeholders on SLFRS 9

In early April 2019, CA Sri Lanka represented the meeting organised for the bankers with Hon. Prime Minister Ranil Wickremesinghe on the impact of lending to the SME sector which was one of the subject areas. The Institute also contributed to compile a report on Reduction in Market Interest Rates and Enhancing Lending to the SMEs together with the representatives of bankers and the Central Bank of Sri Lanka. At the meeting with Hon. Prime Minister, it was agreed to assess the impact to the Financial Services Industry due to the SLFRS 9, Basel III and Regulatory Changes.

Accordingly, CA Sri Lanka conducted a post implementation review of SLFRS 9 with series of forums with the CEOs and the representatives of Sri Lanka Banks' Association, Finance Houses Association of Sri Lanka, and Leasing Association of Sri Lanka. Further, a separate discussion was held with the panel of auditors. In addition, written comments were obtained from the financial services industry as well as Chartered Accountants in Public Practice.

CA Sri Lanka gathered further observations and comments with regard to practical concerns encountered with the financial services industry in relation to the SLFRS 9, Basel III and other related regulations issued by Central Bank of Sri Lanka from all stakeholders. Subsequent to the forums, discussions and written submissions; the technical committee of CA Sri Lanka developed a draft report with the insights on the way forward. CA Sri Lanka submitted this draft report to the Central Bank of Sri Lanka for further consideration on the areas that are under their purview. CA Sri Lanka intends to issue additional interpretation guidance on the SLFRS 9 in due course.

This draft report includes areas such as Temporary Overdrafts (TD); Non-Performing Loans; restructured and rescheduled loans; exposures denominated in foreign currencies; threshold of the SME loans and consideration on registered partner organisations; impact on the capital adequacy, profitability and other operational matters and special concessions on the industries which are affected due to the prevailing conditions in the country.

In response to the global financial crisis in 2008, this standard emerged, and it prudently replaces the existing Incurred Loss Model with a forward-looking Expected Credit Loss model (ECL) which considers historic, current and forward-looking data which is in line with the recognition of revenue. Accordingly, the financial services industry is required to establish a robust credit risk management framework within their enterprises which enables them to absorb any external intrusions.

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IRCON wins USD 91 million rail contract in Sri Lanka

IRCON International Ltd., has bagged an international railway contract worth $91.27 million from Sri Lanka Railways, sources from the Ministry of Transport and Civil Aviation said.

The contract is to upgrade Northern Railway line from Maho to Omanthai in Sri Lanka. Under the contract, IRCON will the upgrade the single line broad gauge track of around 128 km in length, including associated infrastructure works, said a release. This is an item rate contract, financed through Exim Bank of India as per Indian lines of credit.

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Russian tour operators visit SL 

A group of 12 tour operators from St. Petersburg, Russia is currently in Sri Lanka for a familiarization tour with Aitken Spence Travels.The group leader Gorodenskiy Dmitry stated that he along with his other colleagues are very happy to be in Sri Lanka, which incidentally is their first visit although they have been promoting destination Sri Lanka.

“We are very happy about the security provided and felt everything is very normal. We love the Sri Lankan people and they are so friendly and helpful,” said Gorodenskiy.

He was confident that his Russian colleagues in the group will promote destination Sri Lanka and drive the much-needed tourists to the island.

The group visited Sigiriya and climbed the 660 ft tall rock capitol of King Kasyapa which is a UNESCO World Heritage Site. Sigiriya is considered one of the best-preserved examples of ancient urban planning.

The group would also make their way to the Dambulla cave temple, the Kandy Temple, experience a tea plantation, visit the gentle giants at the Pinnawela elephant orphanage and sum the tour by spending some time to enjoy the beach prior to departure.

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Laugfs inaugurates South Asia's largest LPG transshipment terminal

Laugfs Terminals Ltd officially inaugurated the operations of its state-of-the-art LPG transhipment terminal at the Hambantota International Port, the largest of its kind in South Asia, with the first of its LPG cargo brought in by the Sri Lankan-flagged vessel Gas Success, part of Laugfs Maritime’s own LPG vessel fleet. 

The new Laugfs LPG Terminal is an important energy infrastructure in the Indian Ocean, having strategically located amidst key international maritime trading routes connecting west to east.

The first LPG cargo discharge on board Laugfs Maritime’s LPG ship, Gas Success, was ceremoniously initiated by Laugfs Chairman W.K.H.

Wegapitiya, Laugfs Group Managing Director Thilak De Silva and Hambantota National Port Group CEO Ray Ren, with the presence of Hambantota International Port Service Co. Ltd CEO Captain Ravi Jayawickrama, Laugfs Maritime Director/CEO Dr. Leslie Hemachandra, Laugfs Terminals Director/CEO Ananda Premachandra and General Manager Heshan De Silva.

“This marks a historic occasion not just for Laugfs but for our nation as well as the entire Asian region,” commented Wegapitiya.

“The first revolutionary step taken towards realising Sri Lanka’s vision to become a maritime and logistics hub in South Asia was propelled in the early 1970s by the ground-breaking initiatives taken at the Colombo Port to create a hub for container transhipment. 

What we are initiating today with the Laugfs LPG transhipment terminal will be a trigger for the second such revolution in fulfilling this ambitious vision of our country by creating an energy hub surrounding the Hambantota International Port. 

The economic and social impact of this to Sri Lanka is tremendous and multi-fold,” he added.

With a projected annual export value of US $ 500 million, the 30,000 MT LPG terminal represents a significant investment in infrastructure development in Sri Lanka. 

The new LPG Transhipment facility will also serve to initiate coastal shipping services between Hambantota and Colombo ports for the first time in the country. 

The Laugfs terminal operations are expected to create and support many direct and indirect industries surrounding its activities, generating employment and income generation opportunities for the country.

“Over the past two decades, Laugfs has been able to stride ahead with true entrepreneurial vision as a world-class Sri Lankan conglomerate that could proudly etch the Sri Lankan flag on the global map,” remarked Laugfs Group Managing Director Thilak De Silva.

Strategically located in close proximity to some of the largest emerging LPG markets and key international trading ports in the region, the Laugfs LPG transhipment terminal will garner multiple benefits to the regional LPG players, elevating its significance as a central LPG hub in South Asia. 

With tremendous opportunities to support the regional growth of the LPG industry, plans are also underway for the capacity to be extended to 45,000MT by the completion of the second phase of the project, marking a total project investment of US $ 85 million. 

The new Laugfs LPG terminal will operate as a central hub for LPG importing, re-exporting as well as provisioning to retailers.

The terminal is also expected to support Laugfs Gas’ rapid expansion plans in the region to become an integrated regional LPG player in the Indian Ocean Rim area by leveraging on the synergies and strengths within its energy value chain. Over the years, Laugfs’ energy presence has rapidly expanded across the region in line with the Sri Lankan government’s keen interest in the sector. Laugfs’ presence in the sector ranges from LPG downstream activities in Sri Lanka and Bangladesh by Laugfs Gas, to LPG ocean freight services and related logistics with its own fleet of LPG vessels by Laugfs Maritime and energy trading by Dubai-based SLOGAL Energy DMCC.

Laugfs has continued to build its stake in the energy value chain with strong investments in energy infrastructure and the Laugfs transshipment terminal at Hambantota will be an important addition to this journey.

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Central Bank extends regulatory actions on The Finance Co.

The Monetary Board of the Central Bank of Sri Lanka (CBSL) has decided to extent by another three months from May 15, recent actions taken in connection with the troubled The Finance Company PLC (TFC). 

"The Monetary Board of the Central Bank of Sri Lanka (CBSL) initiated a number of regulatory actions, as temporary measures, under the provisions of FBA, on The Finance Company PLC (TFC) with effect from 15th February 2019, with a view to safeguard the interests of the depositors and other stakeholders of the company," the CBSL said in a press release today.

Regulatory measures include suspension of accepting new deposits, withdrawal of deposits and disbursement of loans and advances to facilitate the restructuring process of TFC.

CBSL stated that the Monetary Board decided to extend the said regulatory actions in order to consider the business restructuring proposal submitted by the company and added that interest due on deposits will be paid continuously.

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Russian tourists land in Sri Lanka; a boost to the tourism industry

At a time when the Sri Lankan tourism industry is recording a significant drop in tourist arrivals, a group comprising 52 tourists from Russia reached the Bandaranaike International Airport (BIA) on Wednesday.
 
The group arrived at the BIA at 8.20 am, today (05), in Russian aircraft S-6265, which arrived from Moscow, Russia.
 
The visitors had said that even though Russia was aware of the brutal attacks, they still wanted to visit Sri Lanka as planned while dismissing claims that the country was unsafe for travel.
 
The Russian tourists are expected to spend around 12 days in Sri Lanka in areas such as Weligama, Hikkaduwa and Bentota.
 
“We also plan to visit Sigiriya, Nuwareliya and the Ella areas as well,”, one tourist said.
 
The tour was organised by a private travel promotion firm in Sri Lanka.

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Johanne Jayaratna to lead SLTDA

Minister of Tourism John Amaratunga has appointed Johanne Jayaratne as the Chairman of the Sri Lanka Tourism Development Authority (SLTDA), today (14).

Jayaratne had been serving as Managing Director of the Sri Lanka Tourism Promotion Board (SLTPB) Prior to his appointment at the SLTDA, Jayaratna was serving as the Managing Director of the Sri Lanka Tourism Promotion Bureau (SLTPB).

Jayaratna previously served as an Executive Director of the Airport and Aviation Authority of Sri Lanka. 

Jayaratna also served on the Tourism Advisory Board and was the Chairman of the AASL organising committees for the CHOGM, SAARC and IIFA conferences. During his tenure at AASL, Jayaratne actively collaborated with Sri Lanka Tourism in achieving the country’s tourism development strategies, and actively took part in promotional activities of the tourism industry.

He was immersed in tourism for several years during a brief spell at Walker Tours prior to emigrating to the USA to attend university and to obtain his pilot licenses.

He is a founding partner of a biometric company in Southern CA and led the organisation successfully as its CEO for many years. He also held a Board Director position at DCS America that provided identification solutions to public sector organisations worldwide and is the holder of international patents in biometric technologies that are used extensively at international airports worldwide.

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Sri Lanka resorts face uncertain future after attacks

The cancellations started before the dust had settled on the hotels and churches hit by suicide bombers in Sri Lanka as tourists and operators pressed the panic button.

Sanath Ukwatte, chairman of the colonial-era Mount Lavinia hotel in Colombo, said he lost about 30 per cent of his bookings within days of the Easter Sunday attacks that killed 253 people.

Many holidaymakers got the first plane out of Colombo after the blasts -- at least 40 foreigners were among the dead -- raising fears for a tourism industry that had managed to move on from the shadows of a decades-long civil war.

The United States, Britain, Australia, India and Israel have all warned their nationals against visiting, while the Netherlands is organising a special flight to evacuate hundreds of Dutch tourists.

On Friday, European travel giant TUI announced it had stopped taking bookings for the South Asian country.

And the crisis could get worse before it gets better for the island nation, whose palm-fringed beaches and mountain tea plantations were recently named the best place to visit in 2019 by the Lonely Planet guide.

Armed guards

Sri Lanka’s Finance Minister Mangala Samaraweera had hoped tourism would earn a record $5.0 billion this year, up from $4.4 billion in 2018. He thinks the attacks could now see the country lose up to one-third of that.

Tourism accounts for about five per cent of the economy, with Britain, India and China the main markets. Official figures show tourist arrivals in the first quarter of this year jumped 4.6 per cent to 740,600 from 2018.

But with armed guards now a fixture in some Colombo hotels and cancellations flooding in after the carnage unleashed by coordinated suicide attacks, Samaraweera must work out a rescue plan for establishments now facing ruin.

"We expect a 30 per cent drop in arrivals and that means a loss of about $1.5 billion in foreign exchange," he said on Friday.

Ruchir Desai, a senior investment analyst with Asia Frontier Capital in Hong Kong, said the next year will be a tough one for Sri Lanka.

"Given the scale of the attack I still think you would see a negative impact on the industry," Desai told AFP.

"It should recover," he added, "obviously it depends on the steps the government takes to improve stability."

Ukwatte, who is also president of the Hotels Association of Sri Lanka, hopes Sri Lanka can "bounce back".

Sri Lanka's tourism is heading into its low season, and Ukwatte believes if confidence can be restored by October or November, "then we will be able to revive the industry with European winter travellers."

Finance Minister Samaraweera highlighted how other countries hit by Islamic State-inspired attacks rebuilt their image and convinced tourists to come back.

"Typically, countries that suffer isolated IS-style attacks see tourism recovering within one-to-two years, as long as root causes are addressed and security measures taken are well communicated," the minister said.

He pointed to tourist industries in Belgium, France, Spain and Tunisia as countries which had all managed to bounce back after suffering indiscriminate terror attacks.

Bad message

Much will depend on how the government gets its message across, observers said.

Canadian adventure tourism promoter Wade Campbell criticised the government's communications after the attacks, particularly a top defence ministry official -- who has since resigned -- who said Sri Lankan hotels should have arranged their own security to avoid being hit.

Danger is "a perception thing," said Campbell, who is now looking at redirecting bookings to rival destinations like Nepal.

Italians Donatella Papi and her husband Maurizio Fantappie were on a 25-day holiday in eastern Sri Lanka when the bombers struck.

"My husband wanted to leave after the bombings, he suggested going to Thailand. But I wasn't too scared then, I thought it would settle down," said Papi.

"I think Sri Lanka tourism will fall -- we are very sad about it. This year is the anniversary of the end of the war -- it was supposed to be a celebration," she said.
"We have no regrets about staying on but we are very sad and worried -- for our safety and for Sri Lanka."

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Spa Ceylon opens 90th store in Moscow

Spa Ceylon – the world’s largest Ayurveda Wellness chain, reached their landmark 90th international location with the opening of their exclusive Wellness Boutique at the prestigious Evropeiskiy Shopping Mall located in the heart of the Russian Capital - Moscow. This follows the successful opening of the brand’s 1st Russian store in the resort city of Sochi earlier this year.

Speaking to media in Moscow, Shiwantha Dias, Managing Director Spa Ceylon stated that this prestigious opening was a significant milestone for the brand. “We plan to expand rapidly in Russia & to have around 10 branded stores in operation by end 2020, at locations earmarked across Moscow & major Russian cities such as St. Petersburg, Novosibirsk, Yekaterinburg, Nizhny, Novgorod & Kazan. We have also commenced online retailing via multiple digital channels in the country, very successfully catering also to the growing Russian demand forM-commerce” said Shiwantha.

Speaking to media at the opening, co-founder director Shalin Balasuriya explained “The continued growth of the international wellness market to over US$ 4.2 trillion signals a strong shift in consumer preferences towards wellness. Spa Ceylon occupies a unique lifestyle space where personal care meets wellness. Given its brand attributes of high-performance authentic formulations, Ayurveda origins, environmental activism and ethical sourcing, it will continue to resonate with the modern consumer to drive further growth. I have spent the past few days in Moscow meeting industry professionals, media & consumers that reviewed the range & am delighted by their overall response to Spa Ceylon, from packaging to product quality & functionality, giving us confidence that the store roll-out in Russia will be a great success.”

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Spa Ceylon’s rapid international growth continues in 2019 with the first quarter of the year seeing the addition of 7 international new locations, including openings in Galle Fort Sri Lanka, Kuala Lumpur Malaysia, Sochi Russia, Nagoya Japan, Bambalapitiya Sri Lanka, Shangri-La Hambantota & now Moscow Russia. Their immediate next five store openings are scheduled to be in Osaka Japan, Malé in the Maldivian capital & a second store in Sofia Bulgaria. Whilst a host of other new European openings are also being finalised across Europe, the brand envisages the opening of their landmark 100th store at a premium location in Western Europe.

Firmly entrenched in the global wellness market, Spa Ceylon was awarded the prestigious Asia’s Greatest Brands status, at the Asia’s Greatest Brands & Leaders Awards 2018, with the brand’s co-founders Shiwantha Dias & Shalin Balasuriya being honoured with Asia’s Greatest Business Leaders 2018 Awards.

The brand’s multi award winning product range was also adjudged the Best New Skincare Range 2018 for their Virgin Coconut Skin Care Range at UK’s DFNI Magazine Duty Free Selections. Their luxury Ayurveda spa service offering has also brought them international acclaim through more than 10 awards & multiple global category wins at the World Luxury Spa Awards over the past 4 years.

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The Spa Ceylon Story

 Founded in May 2009 by brothers Shiwantha Dias & Shalin Balasuriya, ‘Spa Ceylon’ has fast become a dynamic force in the global luxury wellness sector and has taken its Luxury Ayurveda brand to the world, with a global presence of more than 90 branded stores and spas situated in Ginza Tokyo, Osaka, Kyoto & Nagoya in Japan; Moscow & Sochi in Russia; Melbourne, Australia; Sofia, Bulgaria, Larnaca, Cyprus, Bucharest, Romania, Singapore; Seoul, South Korea; Kuala Lumpur, Malaysia; Istanbul, Turkey; Mumbai & Hyderabad in India; Karachi, Pakistan, the Maldives Islands & over 30 locations across Sri Lanka. The brand also operates in Kiev, Ukraine, across Switzerland & in the USA.
Spa Ceylon captures the romance of old Ceylon combined with ancient Ayurveda wisdom to create their range of majestic spa rituals and Royal spa formulae designed to soothe, calm and relax the body, mind and soul.

Spa Ceylon now produces over 500 all-natural Ayurveda inspired personal care, wellness, make-up & home aroma products. Their complete range comprises of prestige skin, body, bath, scalp & hair care preparations, oils, balms & potions, colour cosmetics, home aroma blends, candles, diffusers, incense, herbal infusions & gourmet teas, handmade stoneware, bath accessories & a range of tropical resort wear.

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Altaaqa Global Energy Services Wins Power Projects in Sri Lanka

Altaaqa Global Energy Services, a leading global provider of integrated energy solutions, has been awarded new contracts to supply 18 MW on two sites for six months by the Ceylon Electricity Board, a statement issued by the company said.

The power plants in Mahiyanganaya and Polonnaruwa, with capacities of 10 MW and 8 MW respectively at 33 KV, are to be delivered within 30 days.

“We are honoured by the trust that the Government of Sri Lanka has put in our capabilities to rapidly deliver an effective power solution,” said James Shepherd, CEO of Altaaqa Global. “We are pleased to be an integral part of the country’s initiatives to provide reliable power to its industries and domestic users.

Shepherd said that they are confident that these power plants will create a positive impact on the quality of power supply in the country and that they look forward to further investing in the Sri Lanka’s power sector through solar and hybrid solutions.

Majid Zahid, Group President, added, “This project provides us an excellent opportunity to demonstrate our commitment to making a difference to our clients, stakeholders and greater society. A continuous and dependable supply of electricity is vital to any rapidly growing country, thus we are thrilled to be playing a vital role in the growth and development of Sri Lanka’s economy.”

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