Haldia Petrochemicals Ltd has initiated employee-based expenditure control scheme to tide over its present liquidity crisis. "The savings from the exercise will be as high as Rs 95-100 crore in a full financial year," Soumen Das, the acting chief executive of the company said.
The expenditure control programme is being formulated and implemented through cross-functional employee action groups (EAGs) which draw in various specialists from different divisions. The cost control initiatives are being formulated on the basis of recommendations and inputs from teams in marketing, plant and administration. Substantial savings in transport and logistics costs have been achieved following the EAG suggestions.
"The company is not in a crisis mode and, in fact, the operations have become sustainable as a result of a wide range of initiatives undertaken across the board," said Das.
"However, the involvement of the EAGs has ensured that each employee is aware of the need to make the organisation as lean as possible," he added.
The EAGs are also monitoring a scheme on generation of ideas and suggestions from all employees. This is expected to lead to suggestions that could result in costs savings in areas such as environment management and processes. These are areas where the future savings are expected to come from.
"The idea is to make the company globally competitive through enhanced internal efficiencies and to attain standards laid down following operation-wise benchmarking with international leaders in the business," said Das. Besides basic operations in the petrochemical process stream and overall operations, specific cost heads are being benchmarked and targetted.
For example, the HPL plant buys steam and power from a Larsen & Toubro unit. These cost heads have been benchmarked against industries like steel besides petrochemical units. The idea is to adopt best practices even though the concepts may be from other industry sectors, said Das.
