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EU calls for ‘time horizon’ on Sri Lanka import ban

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by Sanath Nanayakkare

Sri Lanka should give a ‘horizon’ to its businesses and potential investors as to until when the import ban will be in place, Denis Chaibi, ambassador/ Delegation of the European Union to Sri Lanka and Maldives said at the official launch of the Sri Lanka Trade Information Portal (SLTIP), held at Shangri La Colombo recently.

The 4-year EU funded project worth EUR 8 million supports local SMEs’ export competitiveness in regional and EU markets as well as value addition in sectors with high potential for economic growth and development.

Excerpts from ambassador Chaibi’s speech:

“This project is a good indication of our overall relationship which is characterised by engagement, respect and results. This project sends three powerful messages. The first one is about the importance of the EU market to Sri Lanka and vice versa. The EU is the second export market for Sri Lanka just after the US”.

“If you take the EU’s trade figures with Sri Lanka in 2019 and if you add services and the EU tourists who came to the island – hopefully who will return soon – you can see the importance of the EU”.

“Further the return of GSP in 2017 was a significant development that led to more than a quarter’s increase of exports from Sri Lanka to the EU. It’s not only the biggest market in terms of quantity. But it’s also an important market in terms of quality”.

“I have been in Sri Lanka a bit more than a year and the thing that strikes me every day is the quality of Sri Lankan products. If you compare the cinnamon, it’s the best in the world. Sri Lankan coconut is the best in the world. Jack fruit is the best in the world. Tea is the best in the world. Who appreciates the best in the world products more than Europeans? Who has the refinement that Sri Lanka has which is only found in civilizations. The Europeans are ready to pay a premium for all these products. Perhaps the South Americans will pay a bit more for Sri Lankan cinnamon, but at the end of the day those who buy the most refined Sri Lankan products are mostly Europeans. We are not only a quantitative market but a qualitative market with a huge potential for the future. The best way for Sri Lanka is to increase its product-quality, and quality is where Europe will be there as a very happy customer.”

“But we are a very demanding market. We have a lot of barriers and those have to do with qualitative standards. In the future, I can imagine that Sri Lankans will want to sell directly to Europeans through online websites. When Sri Lanka exports to Europe, it is ready to export to anywhere else in the world because the European standards are high. We are a demanding market but we are happy to be a good market for Sri Lanka because Sri Lankan products are the best.”

“My second message is that markets and trade is not a one-way street. We have full consideration for the public finances situation in Sri Lanka We fully understand the measures that have been introduced to safeguard public finances and especially the foreign exchange reserves of Sri Lanka.”

“But we need three things. We need recognition notification in the horizon. We need recognition that there is an import ban. And sometimes we are told that there is no import ban but just impediment for the banks to pay in foreign currencies, but these payments are linked to products, so we have to recognize that they are trade restrictions. And then on that recognition, we can quantify that to the WTO and work together in the international organisation that is precisely set up to deal with this kind of issues.”

“I think Sri Lanka would benefit tremendously from giving a horizon to its businesses and potential investors as to until when the measures will be in place so that people can prepare and also can invest in Sri Lanka.”

“That is important if we want to attract foreign direct investments to Sri Lanka. We need to have certainty and we need to be able to export [raw materials].Who would invest in Sri Lanka not knowing if he or she will be able to export because they know that the trade restrictions may attract some reaction. So, in order to attract foreign direct investments, we have to give a horizon on the trade restrictions. We say this in full respect of whatever the Sri Lankan government decides.”

“My third point is; if you look at this project of EU-Sri Lanka Trade Related Assistance, it is in full respect of the government’s priorities. We don’t have an agenda. We are not a military super power. We are a standards super power, and a lifestyle superpower. We live very well in Europe and we live very well for many reasons. But when it comes to aid and support what we do is follow the priorities of the government. Before we take policy decisions and priorities we always look at the manifesto. I was at the Sri Lanka National Day events and its manifesto specifically dealt with agriculture. Agriculture is the sector that we have favoured in our last budget cycle. So from 2014 to 2020, we have invested more than half of the EU aid in the development of rural Sri Lanka. We have spent almost EUR 100 million in that sector. This shows that we are following priorities of the government and that’s why we are supporting this project so that we in Europe can enjoy more of the best Sri Lankan products and Sri Lankan exporters can create more added value by collaborating with Europeans.”



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Business

‘JAT posts stellar Q2 – doubles PBT and commences manufacturing in Bangladesh’

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JAT Holdings PLC has posted exceptional financial performance for Q2 of FY 2022/23. During the Quarter, the Group also achieved a major milestone, delivering on its key IPO promise, by inaugurating its own end-to-end state-of-the art manufacturing facility in Bangladesh. Simultaneously, JAT Holdings PLC also recorded its highest-ever revenue for Q2 in history, doubling its profit before tax, compared with the corresponding period in the year prior.

Accordingly, JAT Holdings PLC noted a YTD revenue growth of 40% during the period, concurrently managing to increase gross profit margins amidst the most challenging economic environment in its history, clearly demonstrating the Group’s strategic and fiscal prowess.

Gross Profit margins grew during the period under review amidst a deepening economic crisis, material scarcity in global markets and foreign exchange outflow restrictions. The Group’s strategy of purchasing raw materials in bulk and maintaining adequate stocks for at least 6 months at all times, allowed the enterprise to benefit from economies of scale, while JAT Holdings’ prudent and effective waste management efforts helped to improve productivity and efficiency. As a result, operating profit also recorded a healthy growth of 111% during the period under review, supported by cost management efforts, which helped manage input cost inflation and foreign exchange volatility. Profit Before Tax (PBT) and Profit After Tax (PAT) also sustained their recovery momentum, while showing sharp rises in the quarter under review, contrasted with the corresponding period in the previous year.

Commenting on the business momentum, CEO Nishal Ferdinando said, “Supported by our new manufacturing facility in Bangladesh and expert manoeuvring in the Sri Lankan market amidst the toughest business environment we have endured to date, we are pleased to present rock solid financial performance to our investors, and exceptional value to all other stakeholders. Leveraging our excellent relationships with suppliers, we have secured raw materials and shored up our stocks to be able to meet upcoming seasonal demand. The capital raised at the IPO has enabled us to keep borrowing costs to a minimum amidst a tighter monetary environment, which has delivered a positive boost to our bottom line. We intend to move forward with the present momentum and continue to deliver exceptional performance during the remainder of FY 2022/23.”

The Group’s WHITE by JAT range of brilliant white paints grew rapidly, driven by a unique hybrid marketing strategy. Commencement of manufacturing in Bangladesh, coupled with the opening of JAT Holdings PLC’s R&D Centre, another fulfilment of an IPO pledge, helped to drive business momentum during the quarter

Discussing the Group’s strategy and future plans, Founder and Managing Director Aelian Gunawardene added, “Just over a year on from our IPO, I’m pleased to communicate to investors that we have fulfilled the pledges made in our prospectus. We have completed and commissioned our ultramodern end-to-end manufacturing and warehousing facility in Bangladesh, located strategically in close proximity to seaports and our key markets in that country, Dhaka and Chittagong. Our Research and Development Centre is now operational, staffed by teams of experts who will help us to engineer better, cleaner and more efficient products in the future. I am also very pleased to state that the Group as a whole has come together to look after our people amidst the present crises, providing relief allowances and other benefits to help cushion the blow. We are excited about the future and look forward to growing and defending our position as Sri Lanka’s market leader for wood coatings and an emerging giant in the region.”

Since its founding in 1993, JAT Holdings has established itself as a market leader in Sri Lanka for wood coatings and as one of the country’s most promising conglomerates. This is further attested to by accolades such as being ranked amongst Sri Lanka’s ‘Top 100 Most Respected Companies’ by LMD for four years consecutively and also ranking among the ‘Top 20 Conglomerate Brands’ by Brand Finance.

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Business

Bourse driven along positive trajectory by Expolanka and Lanka IOC

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By Hiran H.Senewiratne

CSE trading activities were positive yesterday at the beginning and mid- day shares edged up driven by Expolanka and Lanka IOC, market analysts said.

After margin calls selling pressure reduced in the market and the neutralization of macro- economic conditions created positive sentiment for the stock market, analysts said.

Analysts said that the market was driven by Expolanka and Lanka IOC on positive sentiment. Last Friday, Expolanka pushed -up the market following the announcement of its expansion plans. The market generated a turnover of Rs 1.1 billion in its first hour of trade, compared to a daily average of Rs 1.2 billion. The Expolanka share price appreciated by Rs 19 or 12 per cent. Its share price shot up to Rs 182.25 from Rs 163.25 at the end of trading.

Amid these developments both indices moved upwards. The All- Share Price Index (ASPI) gained by 161 points, while Sri Lanka’s most liquid index grew by 101 points. Turnover stood at Rs 2.45 billion with two crossings. Those crossings were reported in Lankem Development, which crossed 1.4 million shares to the tune of Rs 41 million, its shares traded at Rs 29.30 and Lanka IOC 120,000 shares crossed for Rs 22.2 million and its shares traded at Rs 185.

In the retail market top seven companies that mainly contributed to the turnover were Expolanka Holdings Rs 1.12 billion (6.3 million shares traded), Lanka-IOC Rs 336 million (1.7 million shares traded), Browns Investments Rs 193 million (33 million shares traded), ACL Cables Rs 86.2 million (1.1 million shares traded), First Capital Holdings Rs 67.5 million (3.4 million shares traded), LOLC Holdings Rs 61.1 million (168,000 shares traded) and Lankem Development Rs 32 million (1.1 million shares traded). During the day 77.1 million share volumes changed hands in 20000 transactions.

The country’s manufacturing and services sectors contracted in October as per the Purchasing Managers Index (PMI) compiled by the Central Bank.

The Manufacturing PMI saw a decline of 4.2 index points in comparison to September driven by decreases recorded in all the sub-indices. The Services PMI gained by 3.3 index points due to the declines observed in new businesses, employment and backlog of work.

Nevertheless, business activities and expectations for activity continued their increasing momentum during the month.

Yesterday the Central Bank- announced US dollar buying rate was Rs 360.29 and the selling rate Rs 371.29.

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Business

ComBank introduces digital receipts for CRM & ATM withdrawals

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The Commercial Bank of Ceylon has introduced digital receipts for ATM transactions, another green banking initiative that is not only environment friendly, but enhances convenience to customers, cuts down on transaction charges and reduces paper wastage.

The Bank has announced that the Bank’s Credit Card or Debit Card holders who use its extensive network of Cash Recycler Machines (CRMs) or Automated Teller Machines (ATMs) island wide for cash withdrawals will be issued a digital receipt instead of a printed physical receipt, via a Short Message Service (SMS) delivered to the customer’s registered mobile number with Commercial Bank.

The SMS will include a link to view the digital version of the receipt which can also be downloaded on to the computer or mobile device in PDF format for future reference, the Bank said. Customers who use digital receipts will be exempt from the Rs 5 charge levied for paper receipts on each CRM and ATM withdrawal.

Commenting on the introduction of the Digital receipts service for CRM and ATM transactions, Commercial Bank’s Deputy General Manager – Marketing, Hasrath Munasinghe said: “While encouraging paperless transactions and fostering environmental consciousness among customers, digital receipts also tackle the problem of littering.”

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