Some of these initiatives have started bearing fruit as the company managed to come back into the black after three successive years of losses.
The recently announced quarterly results too were encouraging, showing healthy bottomline growth. Nonetheless, this was against a low base, and the company's financial position is still far from healthy.
Operating margins are still minuscule at under five per cent. And this is precisely why Voltas is again looking at revamping its business operations.
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The idea now is to constitute itself into two distinct businesses, one of which would concentrate on growth through brand and product development, while the other business would cater to light and heavy infrastructure projects.
The management has also stated that it will now look at the unitary cooling products, pumps and projects, materials handling and textile machinery as substantial growth areas.
While increased investments in water supply schemes for power projects drove the business for the pumps and projects division last year, the company's focus on turnkey projects has also resulted in improving profitability significantly.
The material handling business didn't fare particularly well last year. But with the company having successfully launched a new series of forklift trucks, this division can be expected to do well this year.
Likewise, the textile machinery division too can improve performance on the back of increased demand from the spinning sector.
Coming to the unitary cooling products division, this has done well with the cost-reduction measures taken by the company beginning to pay off. With an increased operational capacity, Voltas is now saving over eight per cent per unit.
Besides, the refrigerator business will get a boost this year as a result of its tie-up with a multinational for large supply of refrigerators.
Hence, it is established that most of the company's identified growth areas are likely to prosper. Also, since the projects business has been sluggish, it is best for Voltas to be separated.
BOC India
The country's largest industrial gas manufacturing company, BOC India, has for the first time since 1992, registered a loss of over Rs 79 crore in the 18-month period ended March 2000. Alerted by this loss, the company has taken up some stringent measures to come out of this financial strain.
At present, the company has three strategic business groups -- industrial gases, healthcare products and plant & contracts.
The industrial gases division comprises mainly three major tonnage plants viz the Jamshedpur, Tarapur and Taljola plants.
With the Taljola running at near-full capacity at present, the company expects revenues in the range of Rs 35-40 crore from this plant alone.
The pruning of workforce through voluntary retirement schemes, too, will help. This has already resulted in an admirable reduction in employee costs compared with the 1992-93 levels. From around 15.2 per cent of the turnover in 1992-93, employee costs came down to just 8.3 per cent in 1999-2000.
Besides, the cylinder-filling facility at the Calcutta unit was modernised with the installation of a vertical palletised filling arrangement, leading to increased productivity at the unit.
The company also commissioned a modern compressing station at Ambattur in Tamil Nadu and also at Howrah in West Bengal with the vertical palletised filling facility.
The gases division secured a major contract for supply of cylinder gases to Reliance Petroleum for their 15 mt petroleum refinery near Jamnagar in Gujarat.
In healthcare, the company is the leader in anaesthesia, critical care, respiratory therapy, infant care and medical gas delivery systems.
Significantly, the division has been engaged in the marketing of anaesthesia-related equipment, which it procures from Ohmeda, the US-based healthcare division of BOC Group Plc.
However, this group has announced its intention to seek a purchaser for its global Ohmeda business on the belief that healthcare activities would have a better opportunity to develop further as part of a larger integrated healthcare business.
In light of this development, BOC India proposes to seek satisfactory divestiture of this business.
The 550-tonne per day air separation unit of Bhilai Steel Plant is under commissioning and the installation of the 1290-tpd air separation unit of Tata Steel has already commenced production.
The erection of the 1260-tpd plant contract awarded by Ispat Industries has already started.
BOC India has also done some restructuring of its debt burden to bring down interest costs from an average 16 per cent to 12 per cent per annum.
Further, it has planned to sell properties in Bangalore, Mumbai, Bihar and Delhi. The company expects around Rs 50-60 crore from the sale of these assets.
All these activities have already started to yield better results for the company. During the first quarter of the current fiscal, BOC India managed to reduce its losses to Rs 25 lakh from a loss of Rs 11 crore incurred during the same period of last fiscal.
This was despite a meagre 3.9 per cent increase in sales turnover to Rs 67.3 crore from Rs 64.8 crore in the same period last year.
(with contributions from Mobis Philipose and Amal Krishna Dey)