The Zuari-Chambal group expects to turn around the loss-making Paradeep Phosphates Ltd, which it acquired last Friday, in three years.
"From the forth year onwards, we should break even and make money," Zuari Industries managing director H S Bawa said.
Paradeep Phosphates had accumulated losses worth Rs 431.50 crore on its books as on March 31, 2001. During the current financial year, the company is expected to report further losses of around Rs 120 crore.
Last week, Zuari Maroc Phosphates, a joint venture between Zuari Industries and Maroc Phosphore of Morocco, had successfully bid for the government's 74 per cent stake in Paradeep Phosphates for Rs 151.70 crore.
Maroc Phosphore is a fully owned subsidiary of OCP of Morocco. Paradeep Phosphates owes money to OCP on account of supply of rock phosphate.
When asked if repaying OVP will be a priority for the company, Bawa said: "OCP is also a stakeholder in Paradeep Phosphates now. The company will repay its debts as it earns."
Bawa also disclosed that there are plans to invest Rs 50-100 crore in raising Paradeep Phosphate's DAP (di-ammonium phosphate) production capacity from the existing 720,000 tpa to over a million tpa within the next 12-18 months.
"This, with Zuari Industries' capacity of 700,000 tpa and the 200,000 tpa that Chambal Fertilizers & Chemicals markets every year, will make us the largest player in the DAP market in the country," Bawa said.
At present, the Abhey Oswal-promoted Oswal Fertilizers & Chemicals is the largest producer of DAP in the country with a capacity of 170,000 tpa. Its plant is also based at Paradeep in Orissa.
On the turnaround strategy for Paradeep Phosphates, Bawa said that the focus will be on people management.
"People are our main assets, be it our employees or our dealers. We want to make sure that the morale of the people is raised. We have handled our people very well with the result that there is hardly any attrition rate in the group," he said.
"We need to put the systems and procedures of the Zuari-Chambal group in place for marketing, finance and production at Paradeep Phosphates. There are a lot of synergies between our existing business and Paradeep Phosphates," he added.
Bawa also said that there was no proposal at the moment to downsize the workforce of Paradeep Phosphates. As on September 30, 2001, the company employed 1,150 regular employees and another 1,600 contract workers.
