|
|
|
| Sunday, 8 January 2006 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
Lak Sathosa
begins operations
by Gamini Warushamana The Government has intervened again in the retail market through a new arm called Lak Sathosa (LS). The Co-operative Wholesale Establishment (CWE), a statutory body will hold 55% of the shares of Lak Sathosa and the balance 45% shares will be held by the Treasury. Commercial operations of Lak Sathosa have been designed by the Postgraduate Institute of Management (PIM) of the University of Sri Jayewardenepura. At the outset Lak Sathosa will sell 15 essential consumer items at prices lower than the open market. The pricing policy of Lak Sathosa is cost plus 1% profit, said the Chairman of Lak Sathosa Nihal Jayawardana. The authorised capital of the new venture is Rs. 200 million and Jayawardana said that this will be increased with the realisation of CWE assets such as warehouses into the new venture and subsequent increase of government funding. Jayawardana said that the government expects a reduction in the prices of several essential consumer items specially imported products after Lak Sathosa starts operations. Lak Sathosa will import these items as well as purchase agro products from local farmers. Lak Sathosa will target lower and middle income groups and the new venture will also open supermarkets in the main cities. Jayawardana said that even a Lak Sathosa supermarket will be a familiar place for the masses. In addition to the import and retail trade the new venture will enter the export trade. Initially, betel exports to Pakistan will be started and some other products to regional destinations are also under consideration. The new venture will be a consumer and farmer friendly institution catering to the people's needs. The first sales outlet of the Lak Sathosa was opened on December 21, in Negombo and the second outlet will be opened on January 12 at Ratmalana. Under the first phase 12 Lak Sathosa outlets will be opened soon. The Ministry of Trade, Commerce and Consumer Affairs will open 30 outlets and supermarkets before the Sinhala and Hindu new year in April. Sathosa, a strong retail arm of the government was sold by the previous UNP government in 2003 to International Grocers Alliance. However, the privatised Sathosa failed. As a result the government lost control over the retail market and consumers said that private traders and cartels increased the price of essential goods in the absence of a government presence in the market. Sathosa also played a important role in purchasing agricultural products. There was agitation from the public to reopen Sathosa or start a new
venture. |
|
| News | Business | Features
| Editorial | Security
| Produced by Lake House |
