Laksala rebounds with Rs 700 m revenue

*Makes Rs 73 million profit for past year

*Flagship store in Colombo Museum

Shirajiv Sirimane

Laksala Handicraft Emporium which was a rundown institution being a burden to the Government Treasury has made a remarkable turnaround and have made a profit Rs. 73 million last year. The state institution hopes to end this calendar year with a earning of Rs. 700 million and a profit of Rs 93 million.

Chairman Laksala, Anil Koswatte said that with tourism booming and the new branches being opened they are targeting a revenue in excess of Rs. 2 billion by 2016.

Laksala Chairman Anil Koswatte at the Thunmulla showroom.

We also have plans to open in other countries and may look at a franchise. He said that they had already got inquiries from Canada and other European countries. Koswatte said that they would be opening their flagship store in the Colombo Museum end of the month and they had invested nearly Rs. 150 million for that. He also said that they invested a further Rs. 16 million to purchase land to have a craft center in Galle area.

With the objective of popularizing and promoting the Sri Lankan handicrafts industry both locally and globally, Laksala was inaugurated in 1964 by the then Prime Minister Sirimavo Bandaranaike with an investment of Rs. 2.5 million and the building in Fort.

Recalling the past he said that during the last three decades Laksala went through many hardships and financial setbacks due to numerous reasons and was often referred to as an under-performing entity. By the year 2008 Laksala was considered as an inactive government organization and with the intervention of the then minister of small Industries and self-employment, Laksala was restructured through a cabinet paper in December 2008, to be an entity that was limited for marketing activities.

However, since Laksala continued to operate as a loss making organization, through a special gazette notification dated May 2009, initiated under the direction of the President, Laksala was placed under the guidance of Strategic Enterprise Management Agency (SEMA) for restructuring and re-modification.

Prior to the restructuring process, many suppliers and craftsmen left the supply chain as a result of the numerous financial hardships they had to bear due to the under-performance of Laksala. However, as a result of its restructuring process and the Divi Neguma programme Laksala has managed to entice them to join hands with the operation again and has continuously ensured their financial stability.

This helped to turn around Laksala and very soon we will also start paying tax to the government.

In the Annual Report of the Finance Ministry for the year 2012 positive observations are made on Laksala’s performance after its restructuring process. The report has stated Laksala as a recognized business entity among the state sector and has positioned Laksala in the 33rd position among the profitable government owned organizations.

During the time the restructuring process commenced, there were only 800 suppliers registered with Laksala. Now as a result of the dynamic reformation process, there are more that 5000 artisans, craftsmen and suppliers registered with Laksala from across the Island. All these suppliers get paid immediately or within 14 days of supplying goods to Laksala, depending on their contract guidelines. Laksala has also taken upon itself to educate and guide these suppliers on new product development under the forward vision of Laksala, the supplier base will be increased upto 15,000 in the next few years.

In the Annual Report of the Finance Ministry for the year 2012 positive observations are made on Laksala’s performance after its restructuring process. The report has stated Laksala as a recognized business entity among the state sector and has positioned Laksala in the 33rd position among the profitable government owned organizations.