Oct 09, 2015 (LBO) – Sri Lanka’s state owned retail chain Lanka Sathosa aims to get support to revive from Singapore as the retail chain is making continues losses, ministry of industry and commerce said in a release.
Lanka Sathosa owned more than 310 outlets around the island.
“We are restructuring LAKSATHOSA and are still experiencing monthly losses,” Rishad Bathiudeen, minister of industry and commerce was quoted as saying in the release.
In 2014, Singapore became the fourth in exporting products and services to Sri Lanka representing 6.6 percent of Sri Lanka’s total imports.
Sri Lanka imports petroleum oils, milk & creams, fertilizers, iron, steel and plastics from Singapore at around 1.2 billion dollars.
“I recommend you to follow Singapore’s NTUC Fairprice Co-operative model for LAKSATHOSA. NTUC Fairprice is Singapore’s largest retailer with multiple retail formats,” Chandra Das, High Commissioner of Singapore and the former Member of Parliament of Singapore from Chong Boon was quoted saying.
“I see that SATHOSA too is basically a cooperative model. I was NTUC Chairman for 33 years therefore I can see that it’s a good model you can adopt. We have made NTUC Fairprice shops world-class. NTUC Fairprice competes on a ‘patronage rebate and a 10 percent lower price than comparable popular brands’ model of retail, which brought it a revenue of 2.2 billion dollars in 2014.”
“NTUC Fairprice belongs to workers and trade unions and NTUC profits are given back to Singaporeans who buy its shares.”
“I notice that there is no central warehouse for LAKSATHOSA! You need to establish central logistics,”
Das had asked to send a study team from Sathosa to Singapore for a NTUC Fairprice training.
“We’ll do this for Sri Lanka. Singapore is pleased to support LAKSATHOSA.” He added.
Since it was founded by the labour movement in 1973, NTUC Fairprice today sells more than 2000 house-brand products across 120 outlets in Singapore serving more than 400,000 shoppers daily.
However in June the industry and commerce ministry said the Lanka Sathosa, will be given a 7.5 billion rupee bail out from the treasury and audit firm KPMG has been appointed to look into ways of re-structuring it.
“The Finance Minister Ravi Karunanayake had agreed to give 7.5 billion rupees from the treasury to keep the firm out of trouble,” Rishard Bathiudeen, Minister of Trade and Commerce said in June.
“Lanka Sathosa owes 10 billion rupees to two state banks and three billion rupees to suppliers and we are facing problems to keep it profitable,”
“KPMG is expected to find ways to sustain Lanka Sathosa in a profitable manner.”