Archives

By Ravi Ladduwahetty

Sri Lanka's public sector consumer products giant - the Cooperative Wholesale Establishment (CWE), aims to raise over Rs. One billion with a restructuring program of the ownership and management of the retail operations of its 152 countrywide outlets and 40 wholesale establishments which is expected to take place early next year.

CWE Chairman Nahil Wijesuriya told the Daily News in an interview yesterday that the institution will be restructured in a manner where all the divisions will be made individual profit centres under a holding company- Sathosa Ltd, through which the retailing of the institutions will be carried out in collaboration with the multinational private sector supermarket chain, in an attempt to make the institution available for efficient private sector management with prospects of a dramatic turnaround.

He said that this multinational company will be made to participate in the equity of this new limited liability company on a profit-sharing basis in addition to the initial payment of over Rs. one billion that they will have to pay for the already countrywide established network and the goodwill that is associated with it.

Mr. Wijesuriya also said that the aim of the restructuring program is aimed at a typical joint venture partnership where the partner also takes a part of the debt and the assets while participating in the commercial operations.

CWE Deputy Chairman Lal Wickrematunga told the Daily News yesterday that the proposed restructuring program is currently being done in collaboration with the Treasury and also the globally reputed firm of Chartered Accountants- Ernst and Young.

The process will involve the Public Enterprises Reforms Commission (PERC) inviting Expressions of Interest from interested parties which will be published in the international media.

A large number of companies is very interested and global supermarket giant TESCO in the UK has been one of them. We have to get the best deal for the company and the Government by this, but we are cautiously optimistic, he said.

Asked to comment on employee redundancies, Mr. Wickrematunga said that the total labour strength was in the region of 5,600 and it has been decided to retire all personnel over 55 which will reduce the excess by a further 1,500. The rest will be absorbed into the different ventures that the CWE will be floating separate subsidiaries which will be limited liability companies which will be for export, wholesale trading and other allied businesses such as shipping as well."

Commenting on the losses, he said that the CWE's losses of Rs. 1.3 billion have already been reduced to Rs. 600 million. The ultimate aim is to restructure it in a manner where it will be a profit sharing exercise, he said.

Meanwhile, the CWE yesterday launched a branded low cost milk packet in the market where a 400 gram packet is marketed at Rs. 99.50. This is the low priced quality product and we are just testing the market with this product, Wickrematunga said.

The CWE has entered into a contract with the Maliban Group for the supply for the product which has been done on a credit basis and there are no investment commitments there. It is the Maliban Group which has drawn from the advantage of the reduced prices of milk in the world market

Maliban packets the product and sells it to us so that we could market the product directly, he said. 

News | Business | Features | Editorial | Security
Politics | World | Letters | Sports | Obituaries |

Produced by Lake House
Copyright 2001 The Associated Newspapers of Ceylon Ltd.
Comments and suggestions to :Web Manager