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Business


Steep rise in demand for health insurance

Private healthcare becoming more affordable to people

By Indika Sakalasooriya
The demand for health insurance is soaring while insurance habit has tremendously increased people’s affordability of private medical care in the last few years, says a latest research report on the Sri Lankan hospital industry issued by the JB Securities Pvt. Ltd.

The rising income and education levels have increased the popularity of health insurance in the recent times. Many private hospital operators have confirmed seeing an increase in the number of consumers with health insurance cover providing them a source of increased revenue, the report points out.

According to the report, the largest contributor to the growth in health policies has come from the corporate insurance covers. For a relatively small some of Rs.7500 a consumer can obtain a health cover worth Rs.100, 000 for a year, it says,
As the report reveals, approximately 800,000 - 850, 000 policies were in force as at December 2006 with Ceylinco Insurance and Sri Lankan Insurance were leading the market for health insurance.

As the report further highlights, with rising income and increased use of insurance covers, the consumers’ ability and willingness to pay a fee for improved access and better quality care will increase.
Specialties such as Cardiology and Cancer treatment require large investments. However building hospitals to capitalize on such specialities could yield attractive returns, given the willingness to pay and the large volumes that could be expected, says the research report.

According to many insurance experts health insurance business still has major vacuum in Sri Lankan insurance industry. The reason for that is the complex nature of the product. According to them the insurance industry should work very closely with the medical professionals to further develop the product.

The government hospitals accounts for the bulk of the supply of health care in the country while the private sector too is now contributing in a significant way to finance a large portion of the total health expenditure in the country. As a result the private sector’s stake in healthcare is increasing and as at end 2005 total non-governmental financing accounted for 55 percent of the total expenditure on health, says the report.

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MAS Fabric Park opened

By Quintus Perera
The MAS Fabric Park (MFP), a joint venture of MAS Holdings and DOGI International Fabrics, Spain made history by offering a total solution for the apparel industry when President Mahinda Rajapaksa declared the South Asia’s first textile and apparel industrial park and warp knit facility in Thulhiriya on Friday.

MFP located in a 165 acre span of land in Thulhiriya is designed to attract textile, accessory and apparel manufacturers into Sri Lanka, to position the country’s apparel sector as a one-stop-shop for total solution in apparel industry.
President Rajapaksa after declare opening this giant facility said that as a government they are committed to bring the benefits of development like this giant venture to the people in the North and the East too and the measures they have taken to restore life in the east to normalcy are also important and necessary for the people of the North.

He complemented the MFP for this giant step in the apparel industry and said that garment industry has become the main export industry in the country registering annual earnings of US $ 3,000 million and it supplies one million people with direct and indirect employment.

Mahesh Amalean, Chairman, MAS Holdings said that this is the end of their journey which they started about 10 years ago in bringing the supply chain of the apparel industry to one location in Sri Lanka and they would now be able to support apparel manufacturing.

He said that they have been in the industry for the last 30 years and were able to gain reputation with some of the best apparel retailers and brands in the United States, Europe, and the United Kingdom with supplying products of world class.
He said that they manufacture products on very ethical conditions and conform to international labour standards and respect environment.

He said that their vision has been to make Sri Lanka an apparel sourcing hub. MSF is one of their contributions towards this vision while their partnership with DOGI will help supply the growing demand for warp knit in the region, in enhancing Sri Lanka’s competitiveness.

Timothy Speldewinde, Managing Director, MAS Fabrics said that after the Katunayake Airport was attacked the foreign customers stopped coming to Sri Lanka and in a desperate attempt they visited the customers in their countries and urged them to come to Sri Lanka and started a “Sri Lanka Road Show” showing that they could make Sri Lanka the total solution for the apparel industry.

Karel Schroder, CEO Dogi International Fabrics said that their joint partnership with MAS Holdings is one of the largest intimate apparel manufacturers in the Indian subcontinent, which consolidates their presence in Asia, reinforcing their global capacity and also enhancing their ability to satisfy the needs of the greatest brands in the world market.

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Cement shortage

Constructors ask for govt. monitoring

Short supply can hamper major development projects

By Indika Sakalasooriya
The construction industry has called for better government monitoring of supply of cement and pointed out that if the present cement shortage continues cement manufacturers and suppliers will ask for price revisions every three or four months’
The country is facing a serious crisis of a short supply of cement since the beginning of last week of September. The key reason the cement suppliers have cited is the delay in shipments from Indonesia due to the recent Tsunami.

“It is ridiculous to see that Sri Lankan cement manufacturers and suppliers completely rely only on Indonesia while there are other countries that export cement such as Malaysia and India” an officer attached to one of the leading construction companies in the country said.

Cement price as everyone knows is steadily increasing every three months by about Rs. 20.00-40.00 with the current price for a bag of cement being Rs. 690 and bulk cement price being Rs. 11,700 per metric ton..
“It is obvious that the continuance of short supply of cement will have a serious impact on the country’s major development projects as well as on the individual micro construction actives” he said.

He also added that slow down in construction activities will affect the livelihood of many people involved in the construction activities and in the related businesses while the spiraling effect of short supply is the price increase.
As the construction industry points out, the government has a responsibility of looking into the matters pertaining to the short supply as well as on the price issues.
Cement being a commodity under price monitoring, the Consumer Affairs Authority (CAA) should keep a control of the cement prices.

When the cement suppliers create a short supply situation and demand for a price increase, does the CAA analyze the total scenario objectively and give a fair decision to both the cement suppliers (importers & manufacturers) and consumers or they take decisions based only on the information provided by the cement suppliers being subject to political pressures, they questioned
However, Friday, it had been reported that the CAA had arrested six merchants who have sold cement for black market prices.

According to them,, in order to bring more objectivity into the Cement Supply Monitoring Mechanism, it may be meaningful if CAA set up a committee comprising of various stakeholders and members of relevant professional bodies in this respect. CAA also should continuously monitor the cement supply situation of the world market and armor with accurate information to face the price increasing demands of the cement suppliers.

Members of such a Monitoring Committee can be drawn from the representation from institutions: such as Ministry of Construction, Ministry of Policy Planning , Institution of Engineers, Contractors Association, Lanka Readymix Concrete Association, Sri Lanka Standards Institution, they say.

As they point out, the government also needs to encourage and facilitate the existing local cement manufacturing companies to increase their capacities. Government also needs to explore the possibility of recommencing the operations of KKS cement factory no sooner normalcy is established in the north.

Cement is a commodity, which has restrictions in its supply. Any cement before importation to the country needs to obtain the Sri Lanka Standards (SLS) certification, which is a long and time consuming process.
The responsibility of supplying the required quantity of cement to meet the country’s demand has to be met by six major existing suppliers. “It should also lure more investors to start bulk cement and bagging facilities to create fair competition, which would be beneficial to the people of this country” they say.

Only one company in Sri Lanka manufactures clinker required to produce cement and another company has clinker-grinding capacity. Four other companies import the balance requirement of cement in bulk form and small addition of direct bag cement imports are done by few other trading companies, The nation Economist learnt.

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Lanka hunts new oil reserves in the south

(AFP) - Sri Lanka is seeking international expertise to conduct seismic surveys off the southern tip of the island in a hunt for new oil deposits, a senior minister said Friday.
“Initial seismic surveys shows that there are prospects for oil deposits in the southern seas and we are calling for international tenders to conduct a two dimensional seismic survey,” Petroleum Minister A. H. M. Fowzie told AFP.
The survey is expected to cost about 6.5 million dollars, he said.
Sri Lanka has also sought international investors to explore oil off its northwestern shores.
Seismic surveys conducted by Norway’s TGS Nopec have shown that there was potential for oil and gas in the Cauvery basin off Mannar.
Officials estimate the basin to carry oil reserves in excess of one billion barrels.
Fowzie said over 40 foreign firms showed interest when the government shared data on three out of eight blocks earmarked for exploration, during roadshows held in London, Houston and Malaysia last month.
Successful bidders have to pay the Sri Lankan government a 10 percent royalty fee on oil produced and a 35 percent tax on profits in return for an eight-year license to prospect for oil, he said.

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Oil refinery in Trinco
Plans are being made to explore the possibility of setting up an oil refinery in Trincomalee by Lanka IOC, the subsidiary of the Indian Oil Corporation. While nothing formal has been established as yet, preliminary talks have been held with IOC. Lanka IOC in its annual report says they were interested in setting up this refinery after taking into account plans to increase the country’s domestic refining capacity. The annual demand for petroleum products is 4 million metric tons with the single existing refinery having a capacity of only 2 million metric tons per year. The subject minister said things such as the demand for extending appropriate fiscal incentives from the government sought by IOC for setting up the refinery need to be looked into.

Mihin in Delhi
Mihin Lanka opened an office in New Delhi earlier this week. Sri Lanka’s new national carrier, next to Sri Lankan Airlines is planning to fly to all the capitals of the SAARC countries in the near future. At present it flies to a few destinations in India as well as to Maldives Islands. The national carrier has now carried approximately 95,000 passengers since its inception.
Ours or yours
There are speculations that the ground operations of SriLankan Airlines would be handed over to the Civil Aviation Authority and 80% of catering contracts would be given to domestic companies, according to revisions of the agreement. Managed by Emirates, Sri Lankan Airlines’ agreement will expire in March 2008. Emirates had apparently asked the government whether the agreement would be extended or terminated.

Donation from Scarlett
Hollywood hottie Scarlett Johansson has donated ‘a large sum’ of her own money to a school in Sri Lanka. Johansson spent time with some aid workers from the international charity group Oxfam but admits that the highlight of her trip was spending time with some of the local children.

Lanka a top destination
The Head of the Federal Tourism Agency, Strzalkovskiy Vladimir Igorevich in Russia has rated Sri Lanka as one of the top destinations for Russian tourists. This was made known during an official meeting recently when the Deputy Minister of Tourism Faizer Musthapha met Igorevich in Moscow. Igorevich who heads the entire travel and tourism section in Russia pledged his support for what he described Sri Lanka a beautiful island. The Deputy Minister discussed various methods by which the Sri Lankan Tourism Industry could create maximum awareness among Russian travellers and increase the number of visitors from Russia.

Agro-Tourism
CIC Agri- Business has expressed hope to develop an Agro-Tourism site in Pelwehera. This is also part of CIC’s plans to make a name for Sri Lanka, also being carried out through new rice varieties to be promoted in France and Australia. Four varieties of new rice have been produced for the export market and a new Red Rice Basmati. Besides the newly developed Red Basmati, White Basmati, Premium Samba, Red Kekulu and White Nadu would be available for the export and local market. The Paddy will be purchased from the out growers on a forward agreement.

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