The Nation Sunday Print Edition - page 17

Complimentary with The Nation Sunday, October 20, 2013 8 pages
Azhar Razak
In the wake of the ‘Tea Hub’ concept not
gaining much acceptance by the govern-
ment authorities, the Tea Exporters As-
sociation (TEA) is to present a fresh set of
proposals soon, this time for the formation
of a Strategic Business Unit (SBU) in Ham-
bantota, a top official told
The Nation Gain
last week.
According to the TEA Chairman Ro-
han Fernando, the new proposals would
entail the setting up of a total value addi-
tion center for tea in the Southern region
which would provide the required space
for exporters to compete with any other
top brands in the market by not having too
many restrictions placed on the SBU.
Fernando made these comments when
queried as to why the Association had not
highlighted its persistent calls made in the
past for the liberalization of selected tea
imports into the country at its 14th Annual
General Meeting held last week
“We will be handing over a separate tea
export strategy soon after the Budget 2014
which will be aimed towards the realiza-
tion of the tea export target of US $5 billion
by the year 2020,” Fernando pointed out.
Acknowledging that liberalized tea im-
ports will be part of the new strategy to be
presented, Fernando, however, advocated
that there should be certain controls on
quality of imports coming into the SBU.
“It is too early to comment on the finer
details of the strategy. But we will an-
nounce it soon,” the TEA Chief said add-
ing that the Association had meanwhile
handed over its proposals for Budget 2014
to the President at the AGM.
In the past, Sri Lanka’s tea industry
has been divided over plans to boost
earnings by importing cheaper leaves
for blending and re-export, over fears the
changes could water down the ‘Pure Cey-
lon’ brand. Exporters within the industry
proclaim that through liberalization, the
exports of value-added teas can be maxi-
mized given the provision of cheaper or-
thodox teas used for blending which will
enable exporters to reduce the FOB price
of their teas.
>>> Continued on page 3
Shelving ‘Tea Hub’
TEA
to moot
SBU
proposal
Rohan Fernando
Crystal Koelmeyer
Sri Lanka’s energy requirements are projected to
increase at an annual rate of 1.9% through 2035 with
primary demand rising from 9.9 Mtoe in 2010 to 20.3
Mtoe in 2035, growing at an annual rate of 2.9% in
a Business as Usual (BAU) scenario, a recent study
by the Asian Development Bank (ADB) pointed out.
According to a report titled ‘Outlook for Asia and the
Pacific 2013’ released last week with this growth, the
country’s energy demand per capita will reach 0.88 toe
per person, compared with 0.47 toe in 2010.
“By energy type, driven by demand from the
transport sector, the share of oil will surpass that of
non commercial biomass, accounting for 42.9%, the
largest share, of Sri Lanka’s primary energy demand
in 2035. Coal is expected to experience the fastest
growth, at a rate of 18.7%. This is driven by the com-
missioning of several coal-fired power plants that are
under construction,” the report identified.
The ADB findings were based on projections that
Sri Lanka’s GDP is set to increase at an annual rate
of 4.5% with GDP more than tripling from $26.5 billion
(constant 2000 $) in 2010 to $79.6 billion in 2035 and
Sri Lanka’s population increasing at a moderate pace
of 0.4% reaching 23.1 million in 2035 from 20.8 million
in 2010.
However, the report noted that in the alternative
case, Sri Lanka’s primary energy demand will increase
at an annual rate of 2.3% through 2035, reaching 17.5
Mtoe in 2035, about 14% lower than in the BAU case.
“Without domestic production, all the country’s fossil
fuel demand relies on import. Sri Lanka’s high reliance
on oil for power generation makes the country vulner-
able to international oil fluctuations,” the report pointed
out adding that since viable alternatives such as coal,
crude oil, natural gases and fossil fuels are not pro-
duced domestically, having to depend on imports is yet
another challenge facing the power sector.
>>> Continued on page 3
LOLC Leisure Ltd, in which Browns Investments
Plc holds a 30% stake is presently awaiting approval
for the two proposed boutique hotels in the Maturata
Plantations Ltd and Pussellawa Plantations Ltd, the
2013 Annual Report of Brown & Company PLC has
stated.
LOLC Leisure Ltd is the managing company for
Palm Gardens, Riverina, Tropical Villas and Eden.
“Palm Gardens, Riverina and Tropical Villas were
demolished during the recent financial year to com-
mence the building of a 400 room 5-star hotel in
the combined property that will be managed by an
international brand once in operation. Stage 2 of the
development plan is to commence the building of
residential condominiums on the same property,” the
Annual Report stated.
Meanwhile, the report noted Eden Resort & Spa,
with no interruptions to its operations, is currently un-
dergoing a refurbishment plan which started towards
the end of the financial year.
“Dickwella Resort & Spa which was acquired two
years ago has been in operation throughout the fi-
nancial year but is expected to undergo a major re-
furbishment in the next two years.
“The building of the hotel in Kosgoda is progress-
ing according to plan,” the report pointed out adding,
however, that the company is awaiting approval to
expand the proposed 150 rooms to 172 rooms in this
newest 5-star hotel.
“The company is also currently negotiating with an
international brand to manage the operations after
the planned soft opening next year,” the Brown An-
nual Report disclosed.
A 67-room property in Dambulla was acquired post
balance sheet by BI. The brand new hotel Green
Paradise Agro Eco Hotel, which was commissioned
about a year ago, consists of villas and is situated in
close proximity to the cultural triangle.
Sri Lanka’s leisure industry has seen growth over
the past three years with tourist arrivals to the coun-
try increasing 17.5% in 2012 from the 855,975 to
1,005,605 visitors in 2011. The number is expected
to rise in the coming years with a target of 2.5 million
visitors expected in 2016.
James Packer has been invited
to address a meeting of key busi-
ness leaders in Sri Lanka next
month, as his company Crown
confirmed it was in detailed talks
to develop a five-star resort in the
country’s capital Colombo.
In a statement to the Austra-
lian Securities Exchange, Crown
said last week the total project
cost to the joint venture would
be approximately $US400 million
($419.6 million), adding that the
project was subject to final agree-
ment between joint venture par-
ties and other approvals.
Crown said the Sri Lanka’s par-
liament and board of investment
are considering whether to grant
investment approvals for the
project, with the parliament due
to debate the issue next week.
Packer began lobbying the Sri
Lankan Government as early
as February to get approval for
the integrated resort. He is ex-
pected to use an address to Com-
monwealth Business Council
meeting, taking place alongside
CHOGM in Colombo on Novem-
ber 12 to 14, to further promote
the advantages the project would
bring to the country.
The casino operator said
Crown Sri Lanka would have
approximately 450 rooms and
suites, dining and entertain-
ment offerings, conference and
event spaces, gaming areas and
retail outlets.
In his first comments on the
heavily-anticipated development,
Packer said the country had
“huge tourism potential”.
>>> Continued on page 3
Rate cut will help
exporters - TKS
With global demand expected to be subdued,
last week’s policy rate cut by the Central Bank of
Sri Lanka will be a stimulus to exporters through
lower borrowing costs and a more favorable ex-
change rate, analysts at a stockbroking firm com-
mented. The Central Bank of Sri Lanka (CBSL)
last week announced a further 50 basis points
(bps) policy rate cut. Accordingly, the Repurchase
Rate (REPO) is at 6.5% and the Reverse Repur-
chase Rate (Reverse REPO) at 8.5%. This is the
second policy rate cut for the year 2013 where the
former was a 50 bps cut in May 2013.
“This policy rate cut came as a surprise for us
and we believe it is partly due to the slower reaction
of market interest rates to the previous two policy
rate cuts and to increase the aggregate demand in
the economy to reach the expected targets,” the
research team at TKS Securities said issuing an
Economic Update.
They noted that further slower than expected
growth forecasts for advanced economies and
uncertainty arising from the delay in announcing
tapering of the quantitative easing (QE) by the US
Federal Reserve, coupled with the current political
deadlock experienced by the United States also
might have prompted the rate cut.
“However, it is interesting to watch the reaction
in the market interest rates to this policy action and
we believe now that the government is reverting
to other sources of borrowing (USD750.0 million
through NSB bond issue) will reduce the crowding
out effect. Thereby we believe the interest rates
would react at a faster pace this time,” analysts
predicted. Meanwhile, the CBSL had earlier said
it believed that there is space to further relax the
monetary stance to enable the country to reach
a growth target of over 7.0% by end 2013 on the
background of single digit inflation, healthy gross
official reserves of USD7.0 billion (equal to 4.5
months of imports).
Crown details Colombo casino plans
James Packer, who made a visit to Sri Lanka last
week in discussion with Minister of Investment
Promotion, Lakshman Yapa Abeywardena
Energy demand to
double by 2035 - ADB
Duty free shopping facilities at Sri Lanka’s Mattala
airport may open within two weeks, a top official said.
The duty free concession has been given to Dufry, a
Swiss-based company which is working with Sri Lanka’s
Perpetual Holdings.
“The company is building the shops,” head of Airport
andAviation Services of Sri Lanka Prasanna Wickrama-
suriya said.
“I expect the shops could be opened in about two
weeks.”
The lack of duty free facilities in Mattala has been
cited as a key drawback in persuading Sri Lanka’s expa-
triate worker population to use the second international
airport. Expat worker accumulate duty free credits the
longer they stay out and cannot use them unless they
disembark at the main international airport in Katunyake
airport at the moment.
Dufry said in August that it signed a master conces-
sionaire agreement to run all airside duty free space in
Mattala. It expected to have 1,000 square feet of space
divided between arrival and departure sections.
It will have liquor, tobacco, perfumes, cosmetics and
confectionaries at both levels. The firm said it will work
with other Sri Lankan partners to provide electronics, lo-
cal souvenirs and convenience items to travelers.
(LBO)
Duty free shops at MRIA soon
Boutique hotels in plantations
As the days get closer to the most looked forward event in Sri Lanka’s calendar, the Commonwealth Heads of Government Meeting to be
held in about three weeks, concrete blocks once paved on sidewalks along the Baseline Road in Dematagoda are being fast replaced with
bricks, giving the busy street a facelift. Here a worker seen laying bricks along the pavement braving the rainy weather perhaps to keep
up to his deadline
(Pic by Ravindra Dharmathilake)
Brick sidewalks before CHOGM…
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