'The new year, a challenge for business’
With the year coming to a close and a few more days for the new year,
the business community expressed mixed sentiments about the past year
and the year ahead. Some corporate and Chamber heads were pleased with
the growth in business given the political stability and business
Chevron Lubricant Lanka PLC, Managing Director and CEO Kishu Gomes
said that 2014 was a fairly good year though there was no phenomenal
growth in the lubricant business and added that there was economic
predictability during the year than in 2013. He said that he was
optimistic about 2015 and added that more would depend on the political
and macro economic stability in the country.
The global economic scenario has a mixed outlook with certain
countries emerging strong from the economic crisis and showing enormous
potential for trade and investment while the Middle East and Russia are
grappling to survive with the slump in oil prices and sanctions.
Russia is going into recession with the drastic drop in oil prices
and US and Western sanctions. The Rouble has been devalued against the
dollar and the Russian banks have raised key interest rates to boost the
National Chamber of Commerce of Sri Lanka, Deputy President Sujeeva
Samaraweera said that ending the 30-year battle against terrorism
resulted in a peaceful situation in the country and a conducive
environment for business activity. Infrastructure development such as
ports, airport and roadways is an impetus for economic growth.
He said that the government has affirmed a series of benefits to SME
entrepreneurs and large-scale businesses through the 2015 Budget. The
cost reduction in power and fuel in the coming year will be help reduce
production and overhead costs.
Reduction of interest rates and the business-friendly banking
transformation will encourage entrepreneurs to venture into new ventures
and expand businesses.
“The wage increase in 2015 will result in increasing disposable
income which in turn will help maintain a stable cash flow in the
Therefore, 2015 will be a productive year for the business community.
As many foreign companies are exploring the possibility of investing
in Sri Lanka in 2015 we expect a considerable increase in FDIs,
Heladive Group Chairman Rohan Fernando said that 2014 was a year full
of challenges for the tea industry and in particular the tea export
sector. The auction prices in Colombo declined in line with the world
supply and demand which applies to all commodities.
However, Sri Lanka will finish the year as the best performing tea
auction centre in the world having recorded an annual average price much
higher than all other auction centres.
On the other hand, the biggest markets for Ceylon tea, the Russian
Federation countries, Iran and Syria suffered direct and indirect trade
sanctions imposed by the US and western countries. Sri Lanka's exports
to these countries amount to 30% of total tea exports by volume.
Russia, due to the falling prices in crude oil devalued its currency
on a regular basis and from a ROE of 30 Roubles to a US dollar at the
beginning of the year to 70 Roubles by the second week of December.
Iran too suffered with oil income declining and severe trade
sanctions being imposed via the blacklisting of all banking institutions
in the country. The situation in Syria is far worse with supply chains
and financial transactions badly disrupted due to the ongoing war.
"Two thousand and fifteen does not look too good with falling tea
prices and trading conditions not improving in the global market place.
This will be another challenging year for Sri Lanka where cheaper teas
from other producing countries will compete for market share.
On the other hand, an opportunity will arise to enter the top end
market hitherto occupied by Western brands, now being curtailed entry
into Russia in a tit-for-tat action. It will be prudent to deploy the
promotion and marketing funds collected from tea exporters for over the
past three years in these countries for Ceylon tea brand to carve out a
niche market,” Fernando said.
Industrial Development Board (IDB) Chairman Nawaz Rajabdeen said that
the IDB has identified a large number of potential entrepreneurs from
the North and the East through its regional programs. Two thousand and
fifteen will be a positive year as the IDB has provided state-of-the-art
technology and local and foreign exposure to entrepreneurs to showcase
their products and be competitive in the global market, he said.
The Industrial Development Board has facilitated the SME sector and
worked in all 25 districts to create new micro and small industries
through the regional development unit.
More than 345 new industrial units were set up in the country with
the support of Enterprise Promotion Officers.
The industries were identified through the availability of raw
materials and proper training was extended with marketing support.
Technical training was imparted to over 960 industrial units to increase
productivity and compete with imported products.
Over 600 self-employment projects were created in a few districts
under the livelihood program of the IDB. Over 12,000 new entrepreneurs
were given assistance to develop new technology with the market research
being conducted by the IDB.
Over 80 industrialists were provided assistance to visit the
International Machinery fair in India and China to find advanced
technology and new machinery to upgrade industries.
Under the village development program and the self-employment sector
for women entrepreneurs over 90 people were provided interest free loans
of Rs 250,000 by the Regional Development Bank.
This year, the IDB had an accelerated program to restructure the
industrial sectors to increase productivity, packaging, branding for the
local market competing with substandard imported products.