COOPFED;A SUCCESS STORY OF CONSUMER COOPERATIVES IN SRI LANKA

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1 COOPFED;A SUCCESS STORY OF CONSUMER COOPERATIVES IN SRI LANKA D.S.K. Pathirana General Manager / Chief Executive Sri Lanka Consumer Cooperative Societies Federation. Amongst the successful stories of consumer cooperatives in the Asia-Pacific region, the story of Sri Lanka Consumer Cooperative Societies Federation popularly known as COOPFED is quite notable. The bond which it has developed with the consumers in a cooperative spirit shows the strength of the cooperative concept. Sri Lanka Consumer Cooperative Societies Federation is one of main essential goods and services supplier in Sri Lanka since the year Its main purpose is to import, procure and supply the consumer requirements / food items of the member multi- purpose cooperative societies through out Sri Lanka so that the consumers can purchase these items at fair and reasonable prices. In the recent years, COOPFED has adapted quite well to the demands of the competitive economy. In order to cope up with the pressures of market economy, COOPFED is well aware to protect the interests of the consumers. It now directly deals with the consumers for whom this is a big benefit. COOPFED has opened its 13 th coop city super market in the island State. The Government as well as the top management of COOPFED have identified the Super Market project as most important for the consumers and they hope to open eight new super markets in this year. COOPFED is all geared to improve the cooperative knowledge of cooperators. In this regard it has established the training centre named Consumer Cooperative Management Training Institute. This centre is improving the cooperative knowledge of the cooperators and enhancing

2 their professional skills. COOPFED is a successful business project for all the cooperators as it provides social benefits to all. The ICA members and the other cooperators in the world should come and visit the cooperative super market project and see the successful working of the COOPFED training centre. The cooperative movement is one of main balancing factors of the economy in Sri Lanka. The history of the cooperative movement in Sri Lanka can be traced back to 1904 when the Agriculture Credit Society in Manikinna was started. The first cooperative society was established as Co-operative Credit Society under the Co-operative Society Act No. 07 of Since 1911 the cooperative sector in Sri Lanka has played a major role at various stages, and there have been changes in its organizational structure with relevant legislations. Before 1983, cooperative societies were registered under the Cooperative Societies Act No and this was again amended in 1983 and later in 1992 as the Cooperative Societies (Amended) Act No. 11 of 1992.The management structure of the cooperative societies has been established under the Cooperative Employees Act No. 12 of 1972, and this was amended as Cooperative Employees (Amended) Act No. 51 of The cooperative societies have been organized as multipurpose societies. As Sri Lanka is a developing country of the third world nation the activities of the cooperative sector in Sri Lanka have been closely linked up with the daily life of the majority of the population over half a century. The cooperative organizations are actively engaged in a variety of activities related to economic, social and political significance. They are involved in distribution of consumer goods, supply of essential consumer services, supply of agricultural inputs, promotion and marketing activities in the fields of agriculture, fisheries & industry, as well as mobilization and allocation of savings in the rural areas with the mutual assistance of the Cooperative Rural Bank.

3 Under the present set up COOPFED is engaged in development and promotion of the consumer cooperatives through improving consumer cooperative performance in Sri Lanka so as to help the members at the grass root level. The ultimate objective is to increase members income and ensure their active participation in cooperative business ventures The Sri Lanka Consumer Cooperative Societies Federation Ltd was registered on 15 September 1989 as the apex Federation of the Consumer Cooperative Movement in Sri Lanka and it commenced its business operations on 7 March The need for an organization at the centre to assist the consumer cooperative societies was felt and the Cooperative Federation was established with the contribution of the state. Its main purpose has been to look after the consumer needs of the member multi- purpose cooperative Societies throughout Sri Lanka. The COOPFED has gone further by setting up and opening self-service shops in the urban and rural areas as well as opening up welfare shops in the government offices and schools. All multi-purpose Cooperative Societies operating through out Sri Lanka shall be members of the Cooperative Federation. The value of one share is SLR 25,000.00, and all the members are entitled to take one share of the share capital. At present 270 multi- purpose cooperative Societies have taken membership as active members of Cooperative Federation. Sri Lanka Consumer Cooperative Societies Federation has several business tasks like wholesale business, retail sale, air ticketing section, production and packaging unit, etc. The Cooperative Federation is an active member of the International Cooperative Alliance since 1995 and it is having strong international cooperative relations with the various cooperative organizations around the world like ICA,ICA- AP,CICTAB,ANGKASA,JCCU,ESCOLA,NISPED[Israel],etc. Fair Price Super Market Each & every kind of consumer items available including garden fresh vegetables, fruits, dal, rice, sugar, dry fish items, fish & chicken, grocery items, etc., are available at various shops like Colombo Coop City Super Market,

4 Polgolla Fair Price Super Market, Paranthan Coop City Super Market, Panadura Coop City Super Market, Piliyandala Coop City Super Market, etc. According to Establishment Code of Sri Lanka Consumer Cooperative Societies Federation, super markets should have both individual records as well as final accounts. Due to the difficulties in the traditional accounting system, a computerized accounting system has been introduced which has been very beneficial. COOPFED super markets are running as a Super Market Network and this network is controlled by the commercial department at the head office. Due to this it can have regular information related to live stock updates, daily turnover, purchasing and money balance, etc. This network is directly connected with the head office s accounting department. Because of that, Individual final reports and overall final reports are made by the accounting department on monthly as well as annual basis. Many of the super markets are running on customer self service method. They can select goods based on their needs. The employees are trained in issues related to customer care and safety of goods. The visual camera system is a big support mechanism for the smooth functioning

5 of the super markets. Visual updates on daily basis are recorded in main saver computer in the super market and again these updates are recorded by main office also. The daily customer service, customer needs, customer behavior, goods security and employee behavior are well monitored. There has been no credit sale by the super markets as the emphasis has been on cash sale only. Before five years, primary cooperative sale shops had credit sale. As a result of that, the number of creditors was quite high. Therefore Sri Lanka Consumer Cooperative Societies Federation took a decision to stop credit sales. According to this decision, COOPFED started using electronic cards such as various credit cards, debit cards, visa cards and other money transferring electronic bank cards.

6 The cooperative super market system is mainly controlled by the General Manager and he is the chief executive person as well as top responsible person. All the issues related to functioning of the super markets are discussed with the executive board and board of directors by the chief executive. Daily updates of super markets are received and there is quick decision making by the top management. The Supervisors are appointed for each super market. The appointed persons report all issues, customer requirements and market variances to the commercial department. The Sri Lanka consumer cooperative societies federation has a super market main store in head office and it has five regional super market stores. The super markets requirements, like consumer goods items are distributed from stores using federation s transport system. For special days and events, the Federation is involved in marketing promotions. These promotions are mainly handled by the commercial department and there is annual promotion named as GAMIN GAMATA DORIN DORATA. The COOPFED staff with mobile sale vehicles go around the island for mobile sale. Not only that, COOPFED organizes short term business promotions for special goods and new consumer items but the advertisement marketing system is avoided in this case. The country has strong belief in cooperative consumer system and due to this there is direct government support which is not in the case of the private sector. In future, the Federation expects to develop the super market system for

7 successful business diversification. Without diversification, the cooperatives can not face market competition and can not protect our consumers permanently. In this regards, Sri Lanka consumer cooperative societies federation is always trying to look after the customer needs. Sri Lanka Consumer Cooperative Societies Federation has identified many areas for developing the super markets. One crucial area is related to training and development of staff. The training institute has been established for conducting training programmes. These are short-term training programmes, field visits, full time courses and international training programmes. The Consumer Cooperative Management Training Institute The main objective of Consumer Cooperative Management Training Institute is to utilize the human resources in a very constructive and productive manner so that their knowledge, skills and aptitude are rewarded on merit basis. The Federation has started an Education Unit named Consumer Cooperative Management Training Institute. All cooperators can now develop their consumer cooperative knowledge, computer knowledge, English knowledge, as well as Human Resource Management Skills. The Institute runs various courses like Certificate Course of Computer, Certificate Course in Professional English, Certificate Course of Super Market Management, Diploma Course of Human Resource Management, Certificate Course of Consumer Cooperative Management, etc. The 1st one day workshop on Achieving Business Objectives by Improving Customer Relationship was successfully conducted by the Institute recently. 50 employees participated in the one day course from 25th members of Multi Purpose Cooperative Societies in Colombo district and Kalutara district.