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Business  


 

Cargills to exploit opportunities in retail business
Launches first of 100 new outlets in Rajagiriya
By Santhush Fernando
Sri Lanka’s premier retail brand - Cargills sees more opportunity in the retail sector and in its bid to up its market share launched the first of its new 100 outlets in Rajagiriya, last Thursday.
“Modern trade accounts for only 15 percent of all grocery trade in Sri Lanka, of which Cargills contribute over half or 7.5 percent of all trade, so we see more potential in retail, value addition and processing industries,” Ranjit Page, Chief Executive Officer, Cargills Ceylon PLC, said.
He said that when he conceptualised Cargills Fod City no one wanted to invest as the margins were narrow and profits were long-term.

“With the opening of the North and East to business, we see a lot of opportunities for growth,” Page added.
Cargills Food City saw the launch of a 100 outlet expansion drive to cover all 25 districts of the country over the next few years. This declaration is being marked by the opening of its 140th Cargills outlet at Rajagiriya, on December 10, 2009. The Chief Guest on this momentous occasion was Harris Premaratne, Chief Executive Officer, Sampath Bank. The newly launched outlet is the first in the earmarked 100 Cargills Food City outlets, further extending the conveniences and affordability that the supermarket chain is reputed for. With this colossal investment pledge Cargills reaffirms its commitment to contribute towards the development of Sri Lanka

With over a century-and-a-half of existence, the holding company, Cargills Ceylon PLC, has earned a reputation as a responsible business entity committed to nation building. This strong sense of social responsibility has spurred Cargills Food City to be modelled on a sustainable platform that has developed backward integration to such a degree that it has benefited countless rural agricultural communities and entrepreneurs.

By encouraging product quality and offering competitive rates for produce, Cargills Food City has enhanced farmer productivity and set new benchmarks for the industry. Supporting them with technical inputs, training and facilitating credit, Cargills Food City has empowered rural communities and SMEs who, in turn, have rejuvenated the agricultural sector, infusing it with a sense of purpose and hope. These initiatives by Cargills Food City seek to bridge regional economic disparity, thereby bringing about equitable distribution of wealth.

The new Cargills Food City at Rajagiriya offers over 10,000 square feet of an ultra modern shopping experience for customers open from 8 am to 11 pm daily. Shoppers can expect the superior customer care that has come to be the hallmark of Cargills. The new outlet features a range of 10,000 products, a bakery, fresh vegetables and fish as well as a wide variety of high quality processed meat and much, much more. The shopping experience is heightened further with ample parking facilities to render shopping at Cargills Food City a pleasure not to be missed.

“The launch of our 140th outlet is all the more special because this outlet marks simultaneously the first of 100 more Cargills Food City outlets that will be set up in neighbourhoods across 25 districts in the coming years. This bold decision was taken as a result of our understanding of consumers and their need for greater convenience and affordability. Being the first retail network to initiate our own out-grower network, we are proud of our ability to give the highest possible price to farmers while providing nutritious high quality goods to the consumer at the most affordable prices. I am confident that the 100 new Cargills Food City outlets will create an agricultural revolution that will be the engine of growth for the nation. I am deeply grateful to Cargills Food City customers for their loyalty and look forward to their unstinted support over the next few years as Cargills Food City drives the transformation of the retail landscape in the country.”

The decision to add 100 more outlets has positive repercussions for the nation in its entirety, since 70% of the workforce employed in Cargills Food City outlets hails from rural Sri Lanka. More significantly, over 80% of its workforce is below the age of 25, creating much needed employment opportunities for the nation’s youth.
The next 100 outlets will continue the fine tradition of the retail chain to set benchmark for the lowest prices, while maintaining the highest standards of food safety and quality, and simultaneously ensuring price parity at all outlets, across all locations and districts.

 

Halving emissions by 2050 - Aviation brings its targets to Copenhagen
(COPENHAGEN) The International Air Transport Association (IATA) brought the aviation industry’s environmental goals to Copenhagen. Airlines, airports, air navigation service providers and manufacturers are calling for a global approach to reducing aviation emissions and are united in a commitment: to improve fuel efficiency by an average of 1.5% per year to 2020; to stabilise carbon emissions from 2020 with carbon-neutral growth; and to a net reduction in carbon emissions of 50% by 2050 compared to 2005.

“We are the only global industry coming to Copenhagen with a strong track record and a commitment to cut our emissions in half by 2050.These goals clearly show that the aviation industry is even ahead of its regulators in its approach to climate change,” said Giovanni Bisignani, IATA’s Director General and CEO, as he presented the industry position to the United Nations Framework Convention on Climate Change (UNFCCC) in Copenhagen.
Bisignani’s presentation was part of an official side meeting hosted by the International Civil Aviation Organisation (ICAO), the UN’s specialised agency for aviation. The Kyoto protocol gives ICAO the responsibility for aviation’s international emissions. Throughout ICAO’s 65-year history, it has worked with industry to create the global standards that governments around the world have implemented to ensure that aviation is safe, secure and efficient and environmentally responsible.

Bisignani urged governments to act. “The only way that we can meet our targets is by working in cooperation with governments through ICAO. I call on governments in Copenhagen to give ICAO a clear mandate to report back to COP-16 with a Global Sectoral Approach that will enable the aviation industry to deliver real results against concrete targets,” said Bisignani.
A Global Sectoral Approach, through ICAO, to manage aviation’s emissions will ensure a level playing field. The approach consists of three main elements:
n Full accounting for aviation’s emissions as a global industrial sector, not by state
n Global coordination of economic measures to ensure that aviation will not pay more than once for its emissions
n Access to global carbon markets
Accommodating the needs of developing nations
A Global Sectoral Approach through ICAO can accommodate the needs of developed and developing nations. “A good precedent is when ICAO tackled the tough issue of noise, working with the industry. We set global standards that accommodated the needs of developed and developing nations. Today air transport is 75% quieter than four decades ago. Working together in a similar way, we can meet our environmental challenges,” said Bisignani.

A strategy already delivering results
The aviation industry is already working towards its climate change goals through its four pillar strategy. The strategy focusses on investing in new technology, flying smarter, building efficient infrastructure, and taking advantage of positive economic measures.

“This united industry strategy is not just words. Shortening routes, spreading best practice in fuel management and using more efficient ways to land are among the measures that we are implementing to reduce emissions. Since 2004, our four pillar strategy has saved over 70 million tonnes of CO2. Last year aviation’s carbon footprint was just under 670 million tonnes of CO2. That will shrink by 7% this year—5% from the recession and 2% as a direct result of our strategy,” said Bisignani.

Looking forward, Bisignani highlighted the potential of sustainable biofuels. “A few years ago they were a dream. Today we can say that five airlines have tested them successfully. They are safe and they have the potential to reduce our carbon footprint by up to 80% over the lifecycle of the fuel. We expect certification by 2011 at the latest. We have been diligent with our homework. Now governments must create the right legal and fiscal frameworks to support their commercialization and distribution,” said Bisignani.

 

WiMAX to ensure Broadband for all
Launching the WiMAX Forum, Sri Lanka hopes to exploit WiMAX technology in a bid to ensure Broadband for all.
Sri Lanka has earmarked the ideal spectrum- 2.5GB and 30 MHz for WiMAX, which was the right globally harmonised spectrum, and has the capability to service nearly five to eight million customers.

This was revealed by Chairman of WiMAX Forum, C S Rao, speaking at a press conference held in conjunction with the e-ASiA Conference, who added that the spectrum allocated by Sri Lanka’s watchdog- Telecommunication Regulatory Commission (TRC) of Sri Lanka, would ensure an average of 4MBPS and a peak of 16MBPS.

“WiMAX (Worldwide Interoperability for Microwave Access) technology, has a capex (capital expenditure) of US $ 15, just one third the cost of comparable technology, but three times the speed,” Rao said.
Delivering the next generation in wireless technology, Intel in collaboration with the Information and Communication Technology Agency (ICTA) and TRCSL announced the launch of the WIMAX Forum at a media conference held at e-Asia 2009, addressing the theme “Broadband for all in Sri Lanka.”
The forum promotes the compatibility and interoperability of broadband wireless technology that is supported by Intel.

“There is considerable excitement about bringing WIMAX to Sri Lanka and a diverse and complete ecosystem ready to deliver with operators, infra vendors, silicon makers, and CPE vendors ready to offer their solutions. WIMAX is the best and most affordable Wireless Broadband technology for Sri Lanka. This is a very exciting time with WIMAX ready to help close the digital divide” said Navin Shenoy, General Manager, Intel, Asia-Pacific Region.

“Low cost devices are essential and part of the promise and capability of WIMAX. As these new networks are being deployed, we will work together as a community to bring the most innovative and the most cost conscious devices that meet the needs of the Sri Lankan people and the goals of governments and service providers.”
Priyantha Kariyapperuma, TRCSL Director General, explained that “WIMAX technology is an efficient tool to bridge the digital divide in Sri Lanka. In this year of English and IT declared by President Mahinda Rajapaksa, the focus is on driving access to information in order to open doors to wider economic and social development. The WiMAX Forum will address how to accelerate the introduction of this technology and capacitate consumer connectivity, and we thank Intel for its generous support in helping Sri Lanka stride towards this national objective.”

The Director General further stated that Regulatory Commission has allocated suitable radio spectrum in 3.4 GHz band for Fixed PSTN Operators for the deployment of WIMAX services in Sri Lanka. Accordingly Dialog Broadband Networks (Pvt) Ltd, Lanka Bell (Pvt) Ltd and Suntel (Pvt) Ltd. have commenced the WIMAX services and currently about 375 Base Stations have been commissioned by all three Operators through out the country.

The WIMAX broadband customer base is increasing quite steadily and at the moment there are about 12,000 corporate and residential customers in Sri Lanka, who can enjoy a data speed up to 4 Mbps. It was further said that action has been taken very recently to allocate radio spectrum in 2.3 GHz and 2.5 GHz bands for Data Operators for WIMAX services in Sri Lanka.

WIMAX technology is designed to enable pervasive, high-speed mobile Internet access to the widest array of devices including notebook PCs, handsets, smart phones, and consumer electronics such as gaming devices, cameras, camcorders and music players. As the fourth generation (4G) of wireless technology, WIMAX delivers low-cost, open networks and is the first all IP mobile Internet solution enabling efficient and scalable networks for data, video, and voice. As a major driver in the support and development of WiMAX, Intel has designed embedded WIMAX solutions for a variety of mobile devices supporting the future of high-speed broadband on-the-go. (SF)

 

Dubai events do not call for reassessment of state support in Asia Pacific-Fitch
Fitch Ratings has commented that whilst recent developments in Dubai have raised questions about state support for Dubai-based sovereign-owned entities, this will not result in a broader reassessment of how the agency assesses sovereign support, or the agency’s current expectations of support, when assigning Issuer Default Ratings for Sovereign-Owned Entities (“SOEs”) in the Asia Pacific. This approach reflects the application of Fitch’s Parent Subsidiary Linkage methodology dated June 19, 2007, which is available on the agency’s web-site.

In the agency’s view, Fitch’s methodology for factoring state support into the ratings of SOEs and the application of the methodology in Asia Pacific is appropriately conservative. For Fitch’s rated corporate entities with state linkage in Asia Pacific, Fitch has assigned limited benefit to rating levels to reflect state support.
In Asia Pacific, 29 percent of the 58 SOEs under coverage are rated on a standalone basis - with no benefit given for state linkage, while 23 percent of issuers receive a limited number of notches (typically one or two notches) up from the SOE’s standalone profile. Of the remainder, 14 percent are notched down (typically two to four notches) from the sovereign ratings, whereas 34 percent of the rated SOEs have their ratings equalised at the sovereign parent rating level.

The agency also notes that in its application of the methodology in Asia Pacific, full sovereign ownership has not and will not automatically mean equalisation of an entity’s ratings with that of the sovereign. Of the 23 fully-owned SOEs rated by Fitch, only 57 percent of the issuers’ ratings are equalised with those of the sovereign.
Where there is equalisation or where a top-down approach is taken, there tend to be strong strategic, legal or operational linkages with the sovereign as well as evidence of tangible support. All three of Fitch’s Asia-Pacific government-owned downstream oil and gas companies are rated on a top-down basis because of government intervention in pricing policy and very strong evidence of government financial support. For example, in the case of China Petroleum & Chemical Corporation (Sinopec, ‘A-’ /Stable), the company received subsidies from 2006 onwards to offset refining losses arising from retail price caps and alleviate its cash flow burden.
An upcoming report titled ‘Sovereign Ownership Impact on Corporate Ratings - Asia’ will provide further detailed analysis of how Fitch has factored state support into the ratings of SOEs in Asia Pacific.