Sri Lanka to retain public ownership of Lanka Sathosa


Sri Lanka promptly shot down raging claims that the government owned Lanka Sathosa chain is to be sold to a diversified conglomerate in the country.

“Though we usually do not bother about such social media propaganda, since a leading company is also mentioned, I am highlighting the truth here today” stressed the Minister of Industry and Commerce Rishad Bathiudeen on 24 May in Colombo. Minister Bathiudeen was addressing the award night of Lanka Sathosa-Hemas joint promotion campaign called “Sathosata Enna Car Eken Yanna”, a marketing initiative partnered by Lanka Sathosa, the country’s largest state owned FMCG retail chain operating under his Ministry.

“Lanka Sathosa is the largest state owned retail network. We are striving to develop it to be in par with other well-known supermarket chains in the country. Lanka Sathosa at one time was operating to serve the needs of the management and the top officials’ in charge of it but today, we are moving to make it to become competitive” said Minister Bathiudeen and added: “After I took over Lanka Sathosa, we worked hard to correct these issues. The number of branches that was at 300 when I took over, now stands at 377. By December this year, we are increasing this to 500 sales outlets. I even removed the Lanka Sathosa’s personnel recruitment procedure from it and handed it over to the consultancy firm KPMG who recruited qualified personnel to run it. We did not influence KPMG’s recruitments. Our main aim is customer satisfaction, not profits, and then to expand the network and help consumers get all the essential items at the best price from these outlets, as per the directive of President Maithripala Sirisena. Recently, we have outsourced Lanka Sathosa distribution logistics to Hemas. After a study by KPMG, it was identified that Lanka Sathosa’s distribution logistics, among other issues, to be a bottleneck hampering the progress of the institution and KPMG recommended us to outsource it. We called open tenders and one of the bidders, Hemas, won it having fulfilled the criteria. Thereafter I did not myself decide to award the tender to Hemas but I asked permission from the Cabinet of Ministers and received the go-ahead to outsource distribution logistics to Hemas. Almost all such Lanka Sathosa procurements were finally chosen by me, are only based on the Cabinet nod. However, in the last few days someone was spreading rumours through social media saying “Rishad sold Lanka Sathosa to Hemas” which is a totally false allegation. Though we usually do not bother about such social media propaganda, since a leading company is also mentioned, I am highlighting the truth here today. As Lanka Sathosa expands to 500 outlet strong network and another 8000 franchise shops will be enlisted in future and we have no choice but to sell all the essential items with the same price-tag across all outlets in the country, the importance outsourcing Lanka Sathosa distribution logistics will become clearer to everyone. In fact, outsourcing distribution logistics has reduced Lanka Sathosa’s logistics burden.”

Since taking over of Lanka Sathosa by Minister Bathiudeen he continuously insisted that Lanka Sathosa chain would not be privatised but it would be developed using Public Private Partnerships. Lanka Sathosa’s annual sales turnover has now increased to Rs 30 billion. Almost 93% of its expenditure in 2016 was spent for capital development projects. Lanka Sathosa plans to open 8000 franchise outlets with SME businesses in the coming year while expanding its present 377 branch network to 500 by end-2017.

(Media Release)

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