Shaw Wallace Agrochem on the rebound

Shaw Wallace Agrochem has been rechristened SWAL Corporation as part of a restructuring move.

The fertilisers and pesticides company returned to the black in 2003-04 with a profit of Rs 1.61 crore, after posting a loss of Rs 3.71 crore in 2002-03.

The company plans to focus more on the pesticides business by revamping its product portfolio. The aim is to increase the bottomline by 300 per cent in 2004-05 through these measures as well as cost cuts. The joint president of Shaw Wallace & Company Ltd, who looks after the traditional business of the group, said the turnaround plan is based on improved productivity and cost reduction.

"We are carrying lesser inventory now so the working capital requirement is also going down. Capacity utilisation is also improving in our units in West Bengal and Maharashtra as sales is growing," he said.

According to him, the rationalisation of brand portfolio has lead to the elimination of low-margin products.

Some of SWAL's brands such as Starthene, Steramil and MIT have clocked double-digit growth in the current fiscal.

"We have already booked a net profit of Rs 2.52 crore in the first two quarters, which is higher than the profit for the whole of last fiscal. SWAL is likely to end up with a net profit of Rs 6 crore and a turnover of Rs 64-65 crore, a 15-20 per cent growth over last year," he said.

Commenting on the marketing strategy, Chowdhury said SWAL is now expanding into Punjab and Haryana, the wheat belts. SWAL has a strong presence in cotton and rice farming markets.

"We have added new brands in pesticides like Mono and Tara recently and would add few more," he said. Chowdhury said SWAL stands to benefit from the boom in contract farming and the policies of the Union government.