Wholesale giant Sathosa returns to Lankan FMCG after 13 years

After a 13-year long hiatus, Sri Lanka’s State-controlled wholesale giant CWE has actively re-entered the domestic FMCG market on 10 April.  

The Cooperative Wholesale Establishment (CWE), the 1949-born Sri Lanka’s oldest State-owned corporation to be active even today after 67 years, unveiled its new northern wholesale hub in Vavuniya on 10 April.

“Today is a great day for our consumers. We are commemorating an important milestone in Sri Lanka’s wholesale business. That is, after 13 years, CWE under my Ministry is actively re-entering the country’s wholesale business starting today. Our aim is to give the best price and support the Lankan customers as per the vision of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe,” said Minister of Industry and Commerce Rishad Bathiudeen.

Bathiudeen was addressing the crowds that packed No. 390, Kandy Road, Vavuniya on 10 April despite the simmering heat to witness the launch of CWE’s first regional sales and distribution hub in in the country in recent times. 

CWE, the third largest holder of State lands in Sri Lanka after Ceylon Government Railways and the Food Commissioner’s Department, left its active wholesale market play back in 2003 and largely stayed away from the Lankan FMCG sector, till its 10 April re-entry. 

CWE gave birth to Sri Lanka’s national level, self-service supermarket culture in 1978 when the then Minister in charge Lalith Athulathmudali gave it the go-ahead to transform from the dull, cooperative style sales to self-serviced, supermarket style-shelf based sales.

CWE continued to grow and thereafter gave birth to many other entities that then left it – Sathosa Motors (now privatised), Lanka Milkfoods (now privatised), Sathosa Printers (now privatised), the Building Materials Corporation (BMC), State Trading Corporation (STC, under Bathiudeen), and Salusala (under Bathiudeen). Sri Lanka’s largest State-owned retail chain today, Lanka Sathosa, was the former retail arm of CWE, created by joint shareholding of CWE and the Treasury, as per the Memorandum of Articles. 

“CWE is being restructured and will have its own customer base as a result and former glory; that’s our aim. The next regional CWE hubs to be opened are in Badulla, Kurunegala, Colombo and Kandy. If necessary, CWE is ready to import FMCGs and essentials to stabilise prices and meet sudden market demands,” Bathiudeen revealed.

The Vavuniya CWE regional centre will distribute FMCGs to entire Northern Province and is already in talks with Milco Ltd. to clinch Milco’s sole distributorship to the province. 

“In addition to regular essential items, we are looking to seal an agreement with Milco at end of this month to become the sole agent for the north and we will start with around Rs. 5-10 million Milco distribution here,” said CWE Chairman Rizwan Hameem.

Hameem added: “We are also planning to purchase wholesale rice directly from the Paddy Marketing Board, sugar from Sugar Corporation and salt from Mantai Salt so that we can give the best wholesale prices. We are strict on wholesale quality; the slightest little inability to meet our quality requirements by suppliers will result in them being disqualified immediately.”

The two firms that still continue to operate under CWE today are the 100%-owned CWE Economic Centre Services (which handles security provision for Lanka Sathosa network) and CWE Construction & Engineering Services (100% owned). CWE’s present total employee strength is around 440. CWE Vavuniya commenced commercial activities last morning (11).