AIG must submit detailed plan before withdrawing, says IBSL Chairperson

AIG Insurance will not be allowed to withdraw from Sri Lanka until it submits a detailed plan of action of closure on issues that will apparently crop up after exiting, Insurance Board of Sri Lanka (IBSL) Chairperson Indrani Sugathadasa said.

She told the Business Times that the AIG should submit a written notice and an action plan including details of what they intend to do on general insurance policies issued to local customers since the commencement of their operations in the country, settlements of claims, payment of compensation and other dues to employees, etc . Ms. Sugathadasa revealed that AIG’s Regional Director had informed her verbally that the company is withdrawing from Sri Lanka when he met her on Wednesday. 

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State telecom operator has invested over Rs. 57 bln in past 7 years

Sri Lanka Telecom (SLT), the flagship national ICT solutions provider and the national backbone network (NBN) operator, said this week that Sri Lanka is heading towards achieving the country’s ICT objectives, to accelerate economic development.The company said in a statement that the overall investment the group has made throughout its entire 150 year span is enormous in terms of magnitude. Since 2007, SLT has invested in excess of Rs. 57 billion (US$485 million) to improve the country’s telecommunication infrastructure.

Lalith de Silva, Group CEO of SLT, expressing his views on these industry developments, said, “In line with the Government roadmap, we have invested heavily in establishing the NBN aimed at encouraging all operators to benefit through economies of scale. We believe in sharing communication and ICT infrastructure towards achieving the development goals of the country. From the inception, we have been sharing our infrastructure such as global connectivity, national backbone, towers, data centre, cloud services, coverage and building spaces as well as our ICT infrastructure under the wholesale business unit for other operators and service providers, ISPs, etc. whilst ensuring that the highest standards are met in terms of quality and reliability”.

SLT says it has already taken proactive steps to invest in a futuristic global connectivity option exceeding 24 Tera bits per second (24Tbps) bandwidth capability via the new cable system SEA ME WE 5, upgrading of the existing SEA ME WE 4 cable system with 100G technologies and expanding the terrestrial backbone network (National Fibre Optic Backbone Network) to bring gigantic capacity to users in Sri Lanka accessible for future focused data demands.

The statement said SLT has embarked on massive network modernisation and expansion projects. NBN supports sustainable national progress connecting all 329 Divisional Secretariats to strengthen connected government activities. 100% fibre optic coverage of electorates was achieved well within the NBN target date requirement and fibre optic network exceeds the NBN requirement of at least one point of interconnection per electorate. NBN facilitates high speed and uninterrupted backbone connectivity with highest redundancy across the country for all operators.
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Distilleries vying for stockbroking licence

By Duruthu Edirimuni Chandrasekera

Contrary to popular belief that stockbroking firms are in the doldrums, many Sri Lankan companies with deep pockets are eyeing broking licences, according to industry sources.

One such entity is the Distilleries Company of Sri Lanka (DCSL) who is said to be in negotiations with a high networth individual (HNWI) owning a stockbroking firm, sources close to DCSL told the Business Times.

“This HNWI is in talks with other conglomerates and entities as well, but DCSL is the frontrunner in the bid,” a source said. He said that this particular firm was set up four years ago as a joint venture between the HNWI and a foreign party, with the latter exiting Lankan operations by divesting its entire holding to the HNWI recently.

He added that a broking licence will complete DCSL’s financial sector portfolio, which is the reason why the Harry Jayawardena-controlled conglomerate is in talks with the HNWI.

“During boom times, like we saw in post-war years of 2009 and 2010, there was a lot of investor interest and all broking firms were making merry, which motivated the regulator to issue new licences. But now some broker firms, especially those which got licences four years ago have not been able to attract the expected portfolio investment and they are looking to sell their licences,” he said.

The CEO of a stockbroking firm agreed saying that many broking firms struggle to make profits and if hard times continue for long they may be out of business, but there will always be someone to buy them out. He said that some months ago an entity through its auditing firm had advertised to buy a stockbroking company, which proves this theory.

In the South Asia region, Sri Lanka has the lowest number of stockbroking firms vis-à-vis the population with a figure of just 0.5 million population per firm, whereas the figures for India, Bangladesh and Pakistan stand at 0.86 million, 1.14 million and 1.26 million, respectively, per broking firm, according to international statistics.

Stock broker seeks to sell some stakes

A large stock broking house which was on the market either for part or full divestment by the major shareholder since last year has renewed its efforts to sell two of its subsidiaries, according to stock market sources.

“The major shareholder, who is a foreign party, has given the mandate to sell these firms which have been shown to interested parties,” a source told the Business Times.

He said they are either looking to sell a part or full stake in the company and already have had discussions with some interested parties. He said the company’s asset management and the securities subsidiaries are on the market. “The sale of the asset management firm is currently being negotiated with a foreign party while the securities subsidiary is being negotiated with a local party,” he said. The source said they want to only retain their leisure arm. The company has interests in securities, finance and private equity which include tea, leisure, IT and digital entertainment.
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CEAT Plant To Reach 450,000 Tyres A Year

A milestone was achieved on Tuesday, June 10 in the manufacture of tyres in Sri Lanka with the official inauguration of a new hi-tech production facility for radial tyres for passenger cars and Sports Utility Vehicles (SUVs) at CEAT Kelani Holdings. The new plant is to expand its radial tyre building and curing capacity by 70 per cent to 450,000 tyres a year. Economic Development Minister Basil Rajapaksa led a team of government ministers to this milestone event. Since 2009, the CEAT Kelani joint venture has invested Rs. 2.5 billion in enhancing capacity, modernising its factory and setting up this new radial plant. Besides contributing to a substantial saving of foreign exchange, the new plant would also cater to CEAT Kelani’s exports of radial tyres from Sri Lanka. More than a third of current radial tyre production fromthe company’s production facility is exported.

Speaking at the event, CEAT Kelani Chairman Chanaka De Silva said the post-conflict resurgence of Sri Lanka has provided companies with a fresh incentive to grow, and CEAT Kelani has supported this process very tangibly, by investing in capacity expansion, and enhancing the range and quality of its products. “The new radial tyre production facility that has just been declared open is only part of this commitment,” he said.

Elaborating, N. C. Venugopal, Managing Director/CEO of CEAT Kelani Holdings said that the new technology acquisitions for the Radial plant include the latest Bead Apexing Machine, Cap Ply and Cap Strip Machine and improved tyre building machines and curing presses that will enable the company to produce a new grade of high performance radials in all sizes for high end cars.

The market leader in Sri Lanka in both the radial and commercial tyre segments, CEAT has accounted for nearly 50 per cent of the country’s tyre requirements since the second quarter of 2013-14, contributing to a massive saving of foreign exchange for Sri Lanka through import substitution. The brand currently has market shares of 55 per cent for tyres in the Truck/Light Truck category, 31 per cent in radials, 44 per cent in 3-Wheeler, 19 per cent in motorcycle and 73 per cent in the agricultural segments.

Of CEAT Kelani’s total monthly production of 1,450 tons, about 500 tons or a third is exported to markets in South Asia, the Middle East, the African continent and many other countries, and is finding international acceptance. A global tyre brand present in 110 countries and now headquartered in India, CEAT is an acronym that stands for Cavi Electrici Affini Torino, or Electrical Cables & Allied Products of Turin, with origins that date back to 1924 in Italy.
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