Interview with Dr. Parakrama Dissanayake, Deputy Chairman and Managing Director Aitken Spence PLC
By Lynn Ockersz
A priority for the Sri Lankan economy is to gain monetary, financial and fiscal stability and to gradually implement policy changes rather than to expect swift changes overnight, especially for key export industries that bring forex earnings into the country. Going forward, a concerted effort should be made to improve our ranking on the Ease of Doing Business and the Logistics Performance Index (LPI). What matters in the short term is to manage investor perception of business confidence, Deputy Chairman and Managing Director, Aitken Spence PLC Dr. Parakrama Dissanayake told The Island Financial Review in the course of an interview.
The Aitken Spence Group has performed remarkably well in the 1st Quarter of this year. What are the main keys to your success?
Aitken Spence PLC made an impressive comeback in the first quarter by recording a 145% increase in Profit Before Tax (PBT) and it was driven by the non-tourism companies of the Group that includes maritime and freight logistics, renewable energy, elevator agency, money transfer services, printing and packaging, plantations, apparel, insurance and maritime education and management. The diversification of business and our international presence in eight countries, has been a main contributing factor to achieve a compelling performance amidst many setbacks particularly impacting the tourism sector.
From the onset, we have demonstrated purposeful leadership through team effort, we have relied on our collective knowledge, innovation and insight which has helped us to navigate and will continue to rise above this tumultuous environment.
Going forward, what would you recommend as the main ways in which the Sri Lankan economy could be revived?
A priority for the Sri Lankan economy is to regain the monetary, financial, fiscal stability and gradually implementing policy changes than expecting swift changes overnight especially for key export industries that bring forex earnings into the country.
In addition, to expand our export products and services. When we look at the past two decades, we notice that Sri Lanka has a low growth of exports and lack of export-oriented investment, particularly FDI when compared to other countries in the region. We must reduce red-tape, build our infrastructure, innovativeness and make crucial technology transitions as these will determine our ability to compete with other countries in the region. The success of this will also depend on proper educational and training efforts.
A concerted effort should be made to improve our ranking on Ease of Doing Business and the Logistics Performance Index (LPI). What matters in the short term is to manage investor perception on business confidence.
From a private sectors perspective, Aitken Spence is embracing business transformation and upgrading skills of our employees to better equip them for the future.
What is the current status of your palm oil sector? Have the issues surrounding this sector been cleared up?
The issues remain unresolved. We are confident that the Government will find a pragmatic solution.
What are the keys to the success of your Strategic Investments sector?
The key success has been our strategy to cautiously diversify and balance investments to be less dependent on one or few businesses which has proven to be successful especially when facing the ongoing pandemic.
Our significant investments in renewable energy which were recent additions to the portfolio has been a key success to the Group’s strategic investments sector. We introduced Sri Lanka’s first waste to energy plant that was launched this year. This project came about with a sustainable solution to the waste management problem which is a complex and long-running issue in the Colombo city. Further investments were made this year to expand our portfolio in hydropower and in line with the collective efforts of the Government and the private sector to produce clean energy sustainably.
The printing arm of Aitken Spence was the first green printing facility in South Asia and continues to raise the benchmark in the industry.
Moreover, the plantations segment provided a substantial boost to the Group’s strategic investments sector by recording its highest ever profit from inception due to its balanced portfolio of diversification. The segment commenced commercial production of four varieties of berries under the brand “Berry Much”. Another first in Sri Lanka to cultivate and market the full range of berries. The plantations segment also entered into a shareholder agreement with SIM Leisure Group to develop and operate a world-class ESCAPE adventure theme park.
What would be your main priorities in your Tourism Sector once a degree of normality has been established in the country?
To improve resilience in Sri Lanka Tourism, priority should be given to urgent matters such as working towards a recovery plan and better coordinated efforts between all stakeholders to achieve this common goal. With this in mind, a main priority for us is to ensure that our employees across four countries in the Group’s tourism sector have completed the inoculation (both doses) and even those indirectly linked to the industry. This is critical and one of the ways to restore traveller confidence.
We are also revisiting our product offerings in line with the changing thinking pattern of international tourists centred on their safety and well-being. We will focus on a more differentiated, experiential product offering and direct engagement for customers as compared to the traditional accommodation offering. In this business transformation process, we are embracing technology that captures customer needs that would further elevate customer experience and support destination Sri Lanka.
With our hotels presence not just in Sri Lanka but in the Maldives, Oman and India; we will continue to strengthen our operations in those countries and look for greater opportunities. Our hotels in the Maldives did relatively well and has certainly cushioned the blow on the Group’s tourism sector.
We are also concerned with sustaining the trained human resources within the tourism industry as with the current situation many are moving out of the industry and new entrants to the industry have substantially dropped. When the situation has improved, our concerted efforts would be to attract people into the tourism industry.
‘Dollar reserves in SL plummet drastically, putting the economy in jeopardy‘
By Steve A. Morrell
Sri Lanka’s dollar reserves have declined from $ 7.15 billion in 2019 to $ 2.8 billion currently. The President conceded economic failures although reasons for such failure were not explained, chairman, National Chamber of Industries (CNCI) Canisius Fernando said.
Fernando added recently at a forum: “Forex reserves are insufficient to expedite payment of import bills. More so that cost incurred on container traffic for imports and or exports was on a rising spiral. In comparison to cost of container shipping recorded at $ 2,800 earlier, it is now $ 12,000, indicating a rise in multiples of 250.
“Additionally, the Generalized System of Preferences (GSP +) affecting our trade with EU countries, placed Sri Lanka’s reputation at a risk, meaning that countries could veer away from Sri Lanka prompted by a possible inability to honor our trade commitments. The clear example being trade with the US. Rather than await goods and services transactions with Sri Lanka, that could invariably take three months, US economists and their trade sector opted to transact trade with countries in close proximity to US shores.
“Dearth of container traffic and rising cost for on- loading and off- loading of cargo seriously affect trade imbalances. Consequently, the credit worthiness of the Sri Lankan economy is affected, which in turn seriously affects the GDP.
“Worker wages which were static because of trade shut- downs caused demands for increased wages. Wage demands of Rs 1,500 from employees became a major phenomenon in most sectors. The question at issue was the hypothetical position of business establishments of about 4000 employees demanding increased wages. This would cause closure of those companies resulting in unemployment.
“The proverbial domino effect of such repercussions would cause further chaos in the economy.
“There was no proper policy in most sectors. Suspension of the import of fertilizer and consequent confusion would, in the short run, result in famine and food shortages. Already this was evident in the public panic caused by having to stand in line to purchase essentials. That the crisis is upon us and the question of a quick solution is not feasible in the current context of the economy.
“Foreign investors are lured by the possibility of cheap labour in Sri Lanka to establish their businesses here, but in this instance too, this is only a hypothetical situation but not the reality.”
Supuni Products gives back by way of welfare initiative, helps to uplift the needy patients with chronic illnesses
Supuni Products first started in 2016 when the business proprietor, Supuni Lakmalie along with her husband only had Rs. 150 as investment. With that small amount, they purchased kollu (lentils) and kurakkan and ground them using a grindstone. This was the beginning for them and today, Supuni Products is a booming enterprise that specializes in ground spices and cereal, operating from the town of Nildandahinna, Walapane. Their products are of very high quality and 100% natural and consists of 15 different spice and cereal products including chilli, coriander, turmeric, pepper, curry powder, kurakkan, lentil (kollu) etc.
In 2018, Supuni Products received the opportunity to supply kurakkan flour and cereal to be included into the Poshana Malla, which is a nutrition package prepared for pregnant women, instigated by the government. The success of their business was such that they were able to gain an equity of over Rs. Four million during the past three years.
As part of a welfare initiative, they have also pledged to allocate one rupee for every kilogram of product sold, towards supporting patients with financial difficulties and require emergency surgery and for those with chronic diseases. While having had to run a business in the confines of their own home, the grant offering they received from the enterprise project allowed them to complete construction work of their new factory. She now hopes to expand the business, improve their supply chain, and create new employment opportunities.
Dialog Enterprise offers Dell Technologies Cloud IaaS in Sri Lanka
Dialog Enterprise, the corporate solutions arm of Dialog Axiata PLC, is working with Dell Technologies Cloud Solution Provider (CSP) in Sri Lanka to offer Dell Technologies Cloud Infrastructure-as-a-Service (IaaS) solutions to customers to innovate and scale rapidly, reduce costs and increase performance of business-critical infrastructure.
“Together, with our combined forces, we bring the only hybrid multi-cloud partnership in the country, giving access to private clouds as well as to our existing public cloud, and for on-premises infrastructure, robustly powered by Dell Technologies and VMWare. Envisioning a one-stop multiservice solution for all enterprise requirements, we strive continuously to keep to the changing landscape strengthening the cloud play in the arena,” said Navin Pieris, the Vice President – Enterprise Business and Large Enterprise Sales, Dialog Axiata PLC.
Rather than making capital investments in hardware, storage and servers to maintain them, enterprises can harness and scale IaaS resources when needed, paying only for infrastructure services they consume. Mitigating and allowing for any threat of data loss, the cloud partnership also offers cyber recovery as a service with a guaranteed uptime of 99.95%, end-to-end management of data centers and 24×7 support with zero operational burden on the customer. Ensuring the same standardization, self-service, automation and analytics capabilities that exist in the public cloud, the partnership facilitates secure private clouds for customers along with servers, storage and customized enterprise, private and/or public cloud solutions as required by enterprises.
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