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The Cabinet has approved a further grant of Rs.91 million to the Voluntary Retirement Schme(VRS) for Lanka Salusala employees, in addition to the earlier approved Rs.159 million, making the total government contribution Rs.250 towards this scheme.

The Cabinet paper proposed by Commerce and Consumer Affairs Minister Ravi Karunanayake was a part of the strategies for the revival of Salusala which will enable the administration to prune the staff by 75 percent. It would save the institution Rs.11 million to be allocated as the monthly salary bill and enable it to utilise that money on the promotion of Salusala into a commercially viable venture.

Salusala Chairman Fazal Hameed said that 860 employees out of the total 1,361 had so far applied for the VRS. It has been estimated that a workforce of 350 to 400 would be sufficient to man Salusala Ltd. and its subsidiary Salusala Emporium.

He said the retirement benefit package would be calculated on the basis of the basic salary and the number of years service. The company was running at a loss since 1994 and last year's budgeted loss amounted to Rs.98 million. It also services Rs.342 million worth bank overdrafts and incurs further Rs.184 million debts to its suppliers.

Salusala was started in 1967 as a public limited liability company and was subsequently converted into a public corporation in 1971. Later, it was made a limited liability company in 1991 once again.

Salusala's line of business includes operating 23 retail shops throughout the country and supplying textiles and clothing materials to Government institutions and the armed forces.

The company also operates five powerlooms, three garment factories and three handloom factories.

The restructuring plan proposed under the guidance of Minister Karunanayake includes upgrading of the existing retail shops to a state-of-the-art dress-mart chain named Salusala Connexion" where the first was opened recently in Kandy as a separate outlet within the main Salusala shop.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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