Kapruka says Partner Central project undershoots budget by Rs. 110.7 m

Kapruka Holdings PLC yesterday said that its IPO-funded Partner Central e-commerce project was completed well below budget, leaving Rs. 110.7 million unutilised and proposes reallocating the excess funds to working capital, citing in-house development efficiencies, and will seek shareholder approval for the change.

The company said that one of the principal objectives of its December 2021 Rs. 505 million IPO was the launch of the Kapruka Partner Central platform, a digital marketplace designed to support established brick-and-mortar merchants in Sri Lanka.

The platform was intended to connect buyers and sellers through a unified marketplace, offer multiple fulfilment options including Fulfilment by Kapruka aligned with the Amazon ‘FBA’ model, and provide an integrated end-to-end solution covering storage, pick-and-pack operations, island-wide delivery, returns, exchanges, and customer service.

According to the Prospectus, a sum of Rs. 200 million was allocated from IPO proceeds for the recruitment of technical staff, account managers and marketing teams, the design and development of the web application software, and awareness campaigns and seller-acquisition initiatives.

The company noted that the project was to be executed through Kapruka E-commerce Ltd., a wholly owned subsidiary, without related-party involvement, and that development was scheduled to run from the second quarter of 2022 to the second quarter of 2024.

The Prospectus also disclosed several risks associated with the project, including rapid technological changes, evolving consumer buying behaviour, potential returns arising from low-quality third-party products, commission pressures from sellers, and import restrictions affecting product availability.

It further cautioned that delays in investing the allocated funds could impact revenue generation from new customer acquisitions, although the company said such risks were considered manageable given its experience in implementing technology-driven platforms.

However, Kapruka Holdings said the Kapruka Partner Central Project had now been successfully completed at a total cost of Rs. 89.3 million, significantly below the originally budgeted amount of Rs. 200 million. It attributed the lower-than-expected cost primarily to complete in-house development of the Partner Central System, internal execution of software development work, and optimised staffing and marketing strategies utilising existing internal resources.

The principal cost components incurred included Rs. 8.4 million for Partner Central system development, Rs. 7.5 million for system enhancements, Rs. 8.2 million for the installation of a warehouse rack system, Rs. 13.2 million for the Partner Central launch ceremony, Rs. 22 million for the Partner Central rebranding initiative, and Rs. 30 million for vehicle purchases to support Partner Central operations. As a result, the unused balance from the funds originally allocated to this objective amounted to Rs. 110.7 million.

Reviewing the original objectives disclosed in the Prospectus, the Board noted that the Partner Central platform was fully developed in-house by Kapruka Techroot personnel at a cost of approximately Rs. 15.9 million, eliminating the need for additional external recruitment funded by IPO proceeds.

While a Project Manager was recruited to oversee the initiative, the company said IPO funds were not utilised for this purpose, and all marketing activities were carried out entirely by existing in-house teams.

The company added that the platform launch was supported through newspaper articles, website content, and social media channels, all executed using internal resources.

Rebranding initiatives were undertaken to support the marketplace model, while any promotional discounts were managed under the rebranding program without specific utilisation of IPO funds. Ongoing promotional activities continue to be funded through the company’s general marketing budgets.

The Board said it was of the view that the unutilised balance did not arise from over-budgeting at the planning stage, but rather from operational efficiencies, effective utilisation of internal resources, strategic cost management, and optimisation of existing staff and budgets.

In this context, Kapruka Holdings said its Board of Directors had proposed that the unutilised IPO balance of Rs. 110.7 be reallocated towards the company’s working capital requirements. The proposed reallocation is expected to strengthen the balance sheet, support ongoing financial stability, and facilitate operational continuity and future growth initiatives. Any utilisation of these funds will be subject to prior approval of the Board.

The company said it would seek shareholder approval for the proposed variation in the application of IPO proceeds at a forthcoming Extraordinary General Meeting.

The company’s share closed yesterday unchanged at Rs. 11. The net asset value per share was reported at Rs. 4.88 as at end-September 2025 on a 20% public float. Founder Dulith Herath holds an 80% stake in the company.

Aviation sector registers strong growth in 2025

The country’s aviation sector has recorded a marked recovery and expansion during the first 11 months of 2025, with international passenger traffic, aircraft movements, and tourist arrivals all posting double-digit growth compared to the same period last year, according to a statement issued by the Ports and Civil Aviation Ministry.

The Ministry said that from January to November 2025, international passenger movements reached 9.23 million, reflecting a 15.20% increase over the corresponding period in 2024. The growth highlights the continued rebound in air travel demand, driven by improving connectivity, rising tourist inflows, and renewed confidence in Sri Lanka as a travel and business destination.

International aircraft movements also showed a strong upward trend, with 58,454 movements recorded during the period under review. This represents a 14.64% increase compared to the same 11-month period last year, indicating expanded airline operations and higher flight frequencies into and out of the country.

Tourism-linked air arrivals recorded particularly robust growth, with around 2.1 million tourists arriving by air between January and November 2025. This marks a 16.73% increase year-on-year (YoY) and underlines the aviation sector’s critical role in supporting the broader recovery of the tourism industry, which has emerged as a key driver of foreign exchange earnings.

The Ministry attributed the sector’s improved performance to renewed policy focus following the appointment of the new Government, noting that special attention has been directed towards addressing longstanding challenges in the aviation industry.

It said the progress achieved reflects coordinated efforts under the guidance of the responsible Ministers, supported by the commitment of sector management and employees.

According to the Ministry, the combined improvements in passenger volumes, aircraft movements, and tourist arrivals signal the early stages of a renaissance in Sri Lanka’s aviation sector, positioning it to play a stronger role in economic growth, trade facilitation, and tourism expansion in the period ahead.

CCPI remains steady in December

Headline inflation, as measured by the year-on-year (YoY) change in the Colombo Consumer Price Index (CCPI), remained steady in December 2025 for the second consecutive month.

Inflation returned to positive territory in August and continued its upward trend for the next two months.

The Central Bank of Sri Lanka (CBSL) yesterday said headline inflation YoY remained steady at 2.1% in December 2025, unchanged from November and October. However, inflation was up from 1.5% in September and 1.2% in August, in line with the CBSL’s near-term projections. The CBSL has an annual 5% inflation target.

Food inflation YoY was unchanged at 3% in December, the same as November, down from 3.5% in October, but up from 2.9% in September and 2% in August, while non-food inflation YoY increased to 1.8% from 1.7% in November, 1.4% in October, 0.7% in September, and 0.8% in August.

On a month-on-month basis, the CCPI reported a notable increase of 1.26% in December, after having decreased by 0.23% in November.

The Food category contributed 1.25 percentage points to this increase, reflecting the supply-side disruptions caused by the adverse weather conditions, while the Non-Food category contributed marginally by 0.01 percentage points, the CBSL said.

The CBSL said core inflation YoY, which reflects the underlying inflation trends in the economy, edged up to 2.7% in December, up from 2.4% in November, 2.2% in October, and 2% in September 2025.

Inflation projections made at the monetary policy round in November 2025 indicate a gradual acceleration of inflation towards the target of 5% in the period ahead, with the support of appropriate policies, the CBSL said.

‘However’, it added, ‘the anticipated path could be altered by possible price changes due to the impact of the recent cyclone-related disruptions, as its full impact is still being assessed and is yet to be incorporated into inflation projections of the CBSL.’

WCIC Women Entrepreneur Awards 2025 to be unveiled on 13 Jan.

The Women’s Chamber of Industry and Commerce (WCIC) will host its annual flagship event, WCIC Prathibhabhisheka – Women Entrepreneur Awards 2025, on 13 January 2025 at the Colombo Hilton.

One of the most highly anticipated events on the women-entrepreneurship calendar, the awards celebrate and recognise outstanding women entrepreneurs from Sri Lanka and the SAARC region for their significant contributions to economic growth and development.

WCIC Chairperson Gayani De Alwis said: ‘We are now in the final days leading up to the event that women entrepreneurs eagerly look forward to each year. Once again, we have seen impressive participation. The evaluation process assesses vision, direction, performance, achievements, and overall contribution during the 2024/25 period. In keeping with WCIC’s regional outlook, we also recognise exceptional women entrepreneurs from the SAARC region. The 2025 awards mark the fourth edition in the new format, which encourages strategic thinking, sound financial practices, strong governance, and the promotion of women-owned and women-led businesses.’

Organising Committee, Co-Chairs Nilani Seneviratne and Tusitha Kumarakulasingam said: ‘We are putting the final touches to what promises to be another exceptional event-both in terms of the calibre of winners being showcased and the overall delivery. We are proud to lead this national initiative that honours women entrepreneurs across Sri Lanka and the SAARC region. This year’s program has attracted a diverse range of businesses-from start-ups and micro enterprises to small, medium, and large organisations-representing all nine provinces. Gold, Silver, and Bronze awards will be presented in each category for performance during 2024/25, along with a ‘Best of the Province’ award recognising the most outstanding entrepreneur from each province.’

The event will also feature a series of special awards, including: Young Woman Entrepreneur, Most Outstanding Start-Up, Woman of Courage, Most Outstanding Export-Oriented Entrepreneur – Product and Services, Best of the SAARC Region

Digital Entrepreneur, Most Innovative Entrepreneur, and Social Entrepreneur.

The highlight of the evening will be the announcement of ‘The Woman Entrepreneur of the Year – 2025.’

WCIC Prathibhabhisheka – Women Entrepreneur Awards 2025 is supported by an esteemed group of partners: Platinum Partner: AIA Insurance, Diamond and Banking Partner: DFCC ALOKA, Gold Partners: McLarens Group, Unilever Arunallla, Silver Partners: Hayleys PLC, Maliban, Bronze Partners: Impra Teas, Macbertan, Print and Digital Media Partner: Wijeya Newspapers Ltd., Creative Partner: Triad, Knowledge Partner: Ernst and Young and Hospitality Partner: Colombo Hilton.

Our rotten pillars, politicians and bureaucrats

In a good part of the island, violent winds and gushing waters left a scene of utter destruction. Bridges were blown away, roads damaged, buildings brought down, rail lines swept aside, houses destroyed and much of the farmland left in ruins. Many a family have lost a dear one while many more are left destitute. A poor nation sees its hopes and aspirations receding further into the horizon.

We are inclined to see the earth as bountiful, custom-made for human needs. Occasionally we are given a sobering reminder that an evolved primate, undeniably versatile as he is, is yet a tiny creature in the larger scheme of things. A creature who has entered the stage only recently relative to other species of much longer histories on earth, but whose activities have impacted the planet like no other. Nature is indifferent to the tragicomedy enacted on her stage. Natural calamities hit virtually every country in the world

His capabilities have enabled man to assault our life sustaining earth with a savagery no other creature can match. As their numbers multiply, humans continually claim more land, jungles are cleared, other animals inhabiting the earth are pushed into small reservations to live only as a tourist attraction, resources are tapped relentlessly, water is polluted and the globe is dangerously heated.

Man will reap the whirlwind for what he sows

After the 2004 tsunami we on this island were told that living near the shoreline was not wise. Now we learn that living above a certain elevation can be injurious to your well-being as well. Thus restricted, the twenty something million humans in Sri Lanka must make their homes in the balance part of the land. What a relief that we have toy homes in the form of condominiums now!

Travelling on our congested roads, in an uncomfortable bus, you might begin to think that Sri Lanka is a large country. It takes so many hours to get from one point to another! But unlike light years, we should not measure distances on our island based on time. Sri Lanka is small; in fact, the size of a few large Australian farms added together; then that is a truly large country.

Not only the size of their land, in many other ways too there are noticeable differences between various peoples. Obvious differences in their physical features apart, people’s attitudes, habits, customs, beliefs and values vary considerably. So goes their social, economic and even intellectual performance. Clearly, certain nations will get the trophy for attaining ‘developed country’ status for their capacities for establishing large and complex economic processes and most importantly, the high living standards they have provided for their citizens.

Having deep pockets, resources and capabilities, the developed countries cope with the occasional natural disaster much better than other countries. What is only a temporary inconvenience to a rich and powerful nation becomes a crippling blow to a poor nation.

The baffling question is why some nations remain poor and weak, while others march ahead. If it is the size, limited resources or the hot climate, there are several countries which have overcome these disadvantages, Singapore being a striking example.

In the case of Sri Lanka, we had an early start, having gained Independence more than seventy years ago. Many of Asia’s shining stars became self-governing only decades later. Relative to the Asian dynamos, lack of distinction is what stands out in our performance this lengthy period. We are a slow-growing economy. In terms of Gross Domestic Product or Per Capita Income we are among the underachievers. There are no great expectations among the young today, especially the more cosmopolitan; before the Western embassies they line up in their thousands looking for a better life.

Why a nation performs in a particular way is a complex matter. The answer would necessarily be an amalgam; history, culture, outlook, attitudes, values, skill and energy levels of that people; even their language could play a role. Egypt of ancient was formidable, Egypt now is a different story. Performing to the requirements of the modern world is another celestial sphere altogether, the methods and mind-set of the high priests of a Pharo will not deliver in the 21st Century.

A nation like ours could find the findings of an objective performance appraisal, unflattering

We like to consider ourselves an agricultural country, claiming a history going back centuries. Both Israel and Netherlands are substantially smaller than Sri Lanka in size. Yet, they are agricultural powerhouses, huge exporters of fruits and vegetables. In our cultivations, tea, rubber, even rice, the per acre yield is below global standards. In industrial products it is only the most basic things we manufacture, value adding is minimal. Where human hands must intervene, our weaknesses show.

Trapped in an endless karmic web, the average Sri Lankan can do little about his human condition. It is to the political leaders, the high bureaucrats and the business community that a nation looks for leadership.

Here, we look in vain!

Politicians

If an alternate history were to be imagined, we cannot resist the hypothesis that had men of a different timbre held our leadership roles since Independence, it would have made all the difference to the country.

Sri Lankans have been electing their representatives even from before Independence. The vote could be the only common factor between advanced democracies and us. Despite this evident freedom to choose the leaders through the ballot, a few families, perhaps four, have dominated the country’s power structure in the preceding seventy years: the Senanayake, Bandaranayake, Jayawardena and Rajapakse’s. In addition to these families, many electorates also have a history of family dominance, perhaps families of a lesser order. Reducing the base even further, nearly all of them are from one or two Colombo schools, declared by the locals to be elite.

It is not as if Sri Lanka is a success story or a great achiever. In truth it is the opposite, a mediocrity and a slowcoach. Either the nation is woefully deficit in leadership skills, or, by some miraculous process all leadership DNA has been gifted to these handful of families and the old boys of these schools. Karma works in mysterious ways!

The world sees the joke but is too polite to call it!

Of course, the blatancy of family dominance is obscured by the crisis of the moment and if there is none, one could be created. A time of crisis is not the moment to conduct analysis of the prevailing power structure. These families realise the game is fixed in their favour, so resort to guises and ruses to obscure the truth. The basic method of dominance is by having a stranglehold on the party leadership, in Sri Lanka, in all but name, a limited liability company of the leading family. In a two-party system, sooner or later, the pendulum will swing their way. When it does, the leader of the winning party is declared a mastermind in the political game.

Invariably, the common narrative is made use of to elevate the founding family member to near celestial heights, liberator, visionary, patriot or even genius. The pathetic state of the country is not explained. A people of doubtful maturity are further confused and confounded.

Periodically, various family members alight on the stage with a new slogan, righteousness, vision, corruption fighter, moderniser and liberator. All surveys point to a country abysmally deficient in these virtues, a laggard among the Asian success stories, yet the next family member will come up with another catchy slogan.

After the recent cyclone and the ensuing flooding an idea was mooted by interested parties that old politicians with ‘experience’, although completely rejected by the voter, must be brought in to handle the crisis. Repeatedly rejected by the voter, they continue to cast around for an opportunity to jump on the national stage. No example was given of their virtuoso handling of a disaster in the past. As we understand Sri Lanka has been hit by every conceivable calamity, natural as well as man-made. There was no masterful avoidance of any disaster or a sterling rehabilitation after the event. The country performed as it always has, ineptly. Every disaster left us waiting abjectly for aid and sympathy from the world. Obtaining a foreign loan became an achievement, a matter of pride.

The family based political power structure is an anachronism. In the early years our voters had no idea of the inherent corruption in the system. Imagining their leaders to be well meaning and capable, they participated in the electoral process with gusto. However, their lives today are not as insular as before. Many Sri Lankans now have travelled overseas, there is the television bringing the world to their sitting rooms, there is the internet, they can compare as well as contrast. Their eyes have opened, their expectations widened.

In recent years reality has bitten hard. People’s illusions have turned to disillusionment. The one desperate demand at the watershed ‘aragalaya’ was ‘system change’.

Bureaucracy

Seventy years is sufficient time for us to appraise the performance capabilities of the bureaucracy the nation has brought forth, their inherent attitudes and skills when placed as administrators. The administrative structure is now manned entirely by products of our post-independence education system (many of the higher bureaucrats proudly boast of further education and training overseas on account of the taxpayers of those countries). In the feudal era, high office devolved based on birth and caste. There was no proper yardstick to measure their competence. Their officiousness, corruption or tardiness mattered not; only the king’s goodwill mattered. As a result, they oppressed the people and toadied the king.

In modern times we live in a very competitive world. How well we educate our children, how our health services perform, how good our infrastructure is, how productive our industries are, how honest our systems are; these measurable factors are compared with other countries and development happens based on our relative performance. We can lull ourselves with a faulty assessment of our capabilities, ignore the evident limitations of the personnel, and even deny glaring realities.

Nevertheless, the truth is in our face, a mediocre country lurching from crisis to crisis.

Almost everything about us, the policies, structures, institutions and even the laws can ultimately be traced back to the political establishment and the high bureaucracy. It is they who conceived of and adopted them. Any institution is defined by its workforce, the individual personalities manning it. Without exception every public institution in Sri Lanka has been abused as well as diminished, standing presently only as a masquerade of what they were meant to be.

There are similar institutions in Singapore. They work very differently. The personnel matter, they could make an institution great or diminish it.

When there is a natural disaster we run around like headless chickens, crying and mourning, pleading for help.

We do not realise the inevitability of the tragedies that hit us, for seventy years we have sowed the winds..

CBSL shuts Public Debt Dept. as debt management shifts to Finance Ministry

The Central Bank of Sri Lanka (CBSL) yesterday announced the closure of its Public Debt Department (PDD) and the transfer of the LankaSecure Division of the PDD to the Payments and Settlements Department (PSD), with effect from today.

The move follows the establishment of the Public Debt Management Office (PDMO) within the Finance, Planning and Economic Development Ministry, under the Public Debt Management Act, No. 33 of 2024.

The CBSL said the PDMO, which was set up in December 2024, became fully operational in December 2025 and has assumed full responsibility for debt management functions previously carried out by the PDD.

Pan Asia Bank puts digital power in every palm

Pan Asia Bank Chief Digital Officer Pradeepan Sivalingam in this interview shares key insights to the Bank’s initiative titled ‘Digital Power in Every Palm’ and on-going digital transformation thrust.

Q: What does ‘Digital Power in Every Palm’ mean in practical terms for customers across Sri Lanka?

A: ‘For us, ‘Digital Power in Every Palm’ is not a slogan; it is a commitment. It means placing meaningful financial capability into the hands of customers, regardless of where they live or how tech-savvy they are. Practically, it translates into simple, secure, and reliable access to core financial services: payments, savings, credit, and support directly through a mobile device, without friction or dependency on physical presence. Our focus is on simplicity, relevance, and trust: making digital intuitive enough that customers feel confident, not overwhelmed. Ultimately, true digital power is when customers feel in control of their financial lives, anytime and anywhere, and trust that their bank is working silently in the background to make that possible.’

Q: How would you define digital transformation in the context of banking today? Has that definition evolved?

A: ‘Digital transformation in banking today goes far beyond moving services online or automating processes. It is about rethinking how a bank creates value by embedding digital technologies, data, and customer-centric design into every layer of the organisation. A few years ago, transformation largely meant digitisation: mobile apps, internet banking, and back-office automation. That definition has evolved. Today, it is about using data, AI, and intelligent platforms to personalise experiences, improve decision-making, and build agility across the enterprise. Importantly, digital transformation now also encompasses cybersecurity, resilience, and responsible innovation. It is no longer about speed alone, but about building secure, sustainable, and customer-driven growth.’

Q: What have been the most impactful digital initiatives implemented so far? Have they met your initial objectives?

A: ‘Three initiatives stand out as having delivered meaningful impact, each aligned to improving customer experience, increasing transaction volumes, and enhancing operational efficiency. First, we implemented an end-to-end digital onboarding journey, in partnership with Linear Six, reducing account opening and channel registration turnaround time to under ten minutes. This significantly improved accessibility and first-time customer experience. Second, we deployed Cash Recycling Machines (CRMs) across our branch network, extending 24/7 banking access while reducing branch-level cash handling. This initiative has increased transaction volumes, improved customer convenience, and delivered measurable cost efficiencies. Third, we developed an in-house, award-winning Customer 360 platform, Falcon Eye, which provides a unified view of customer relationships across the bank. This has strengthened insight-led decision-making and improved responsiveness across business lines. Each of these initiatives has met or exceeded its intended objectives, reinforcing digital adoption while delivering tangible value to both customers and the bank.’

Q: How do you balance innovation with compliance in a heavily regulated environment like banking?

A: ‘Innovation, for us, always begins with solving a real customer pain point. Compliance, however, is non-negotiable. When innovation and regulation appear to be in tension, we take a collaborative approach engaging openly with regulators, clarifying interpretations, and working together to identify compliant pathways forward. The objective is never to bypass regulation, but to innovate responsibly within it. We strongly believe that well-governed innovation ultimately strengthens trust and trust is the foundation of digital banking.’

Q: What strategic priorities will guide the next phase of Pan Asia Bank’s digital transformation?

A: ‘Our next phase of digital transformation is guided by three priorities: personalisation, partnerships, and protection. First, we will deepen personalisation using data and AI, not to overwhelm customers, but to make every interaction more relevant. For example, customers will receive credit or product offers aligned to their behaviour, needs, and financial personality, rather than broad-based messaging. Second, we will strengthen partnerships and ecosystems, collaborating with fintech’s, technology providers, and regulators to co-create solutions that scale faster and reach customers more efficiently. In today’s environment, collaboration is essential to innovation. Third, as digital adoption accelerates, cybersecurity and data privacy remain paramount. Every initiative will be designed with security embedded by design, safeguarding customer trust at every touchpoint. Taken together, this phase is about delivering intelligent, personalised banking experiences while maintaining uncompromising standards of security and trust; ensuring digital growth that is both innovative and responsible.’

Over Rs. 370 m valued narcotics, 71 persons arrested by Coast Guard in 2025

During the year 2025, the Sri Lanka Coast Guard (SLCG), with the assistance of other stakeholders, has taken into custody illegal narcotics worth over Rs. 370 million along with 71 suspects.

The SLCG has been collaborating closely with the Sri Lanka Navy, Police, Police Narcotics Bureau, State Intelligence Service, and the Police Special Task Force (STF), sharing information during anti-drug operations.

As a result, significant quantities of illegal narcotics were seized, including over 5 kilograms of ICE (crystal methamphetamine), over 710 kilograms of Kerala cannabis, over 205 kilograms of local cannabis, more than 2 kilograms of Hashish, 970 pregabalin capsules, 5,054 Madana Modaka, 2,933 foreign cigarettes, and over 9,800 kilograms of Kendu leaves.

In addition, 60,794 packets/bottles of agricultural chemicals that were attempted to be illegally brought into the country via sea routes were also seized.

During these operations, 19 local boats were taken into custody, and 71 suspects connected to these smuggling activities were arrested and handed over to relevant authorities for legal proceedings.