Minister of Industry and Commerce, Rishad Bathiudeen last week said the government has decided to foot Rs.7.5 billion pending bills of the state-owned retailer, which presently owes a total of Rs.10 billion to two banks and another Rs.3 billion to suppliers. Addressing a press conference, the Minister announced that KPMG Sri Lanka has been tasked to restructure the state FMCG giant Lanka Sathosa which aims to add another 50 outlets to its network this year.
“As a start, KPMG already advised the government on streamlining and regularising Lanka Sathosa administration. The government will foot Rs.7.5 billion pending bills of Lanka Sathosa and the newly revived Lanka Sathosa will be re-launched coming 7th July. This Rs.7.5 billion is an investment by the government to make it competitive in par with private supermarket chains of Sri Lanka,” the Minister explained.
Disclosing that goods to the value of Rs.1 billion and rice to the value of Rs.8 billion both un-saleable, are lying in Lanka Sathosa at this moment, the Minister further added that a sum of Rs.600 million had been ‘over-spent’ to computerize 80 shops and 16 stores.
“We now learn that it could have been completed with only Rs.300 million,” the Minister said.
According to Bathiudeen, President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, after discussions with the Finance Minister Ravi Karunanayake have decided to enlist the global consultancy firm KPMG to restructure it. KPMG is now tasked to find ways to sustain Lanka Sathosa in a profitable manner while giving the best market prices to Lankan consumers.
“Lanka Sathosa is the only national institution that informs the exact price of consumer goods to the Sri Lankan market, especially the rural areas. We don’t charge VAT from the public.
Lanka Sathosa sells the goods through 305 outlets across the country. This April Lanka Sathosa reported a monthly turnover of Rs.3.2 billion – a record in its recent sales history,” Lanka Sathosa Chairman, Kiran Atapattu said.