In conversation, Kallol Dutta, CMD, Andrew Yule group
Ajay Singh | July 17, 2012
When Kallol Dutta took over as chairman cum managing director of the Andrew Yule group, the public sector unit’s accumulated loss was around Rs 432 crore. In the headquarters and at other units run by the group, there was palpable despondency and dejection. Dutta, an engineering graduate from Kharagpur and a quintessential Bengali who loves football more than any other game, made an exemplary attempt to revive the group. And he succeeded. In a candid interview with Ajay Singh, he recounts the story of turning around a PSU which was almost written off as a history.
You have an illustrious past but a very turbulent present and an uncertain future. How do you reconcile the three while making plans for your company?
In my experience, the past does not help you. Nostalgia has no meaning if you do not perform in the present. I have heard stories about the illustrious past of the Andrew Yule group. For instance, we still have one of the best canteens among the PSUs. Our dining table was regarded by the elite of Kolkata as the best in the city. But how does it matter if the company is underperforming and incurring losses? You see, Bengalis have a tendency to indulge in the past. And I have consciously shunned this habit of indulging myself in the memories of the golden old days. When I took over the company in 2007, I applied Andrew Yule’s motto of “strength and courage” in making plans for the future. I got unstinted support from the government in my endeavour.
Can you explain how this turnaround fructified? There are so many sick PSUs but they have failed to revive their fortunes even after the government’s intervention.
I am not the right person to answer for other PSUs. But so far as Andrew Yule is concerned, I applied the new tools of management to run the company. And I decided to make use of the resources to the hilt to make the group self-sustainable. In fact, the story begins in 2007 when the BIFR (Board for Industrial and Financial Reconstruction) prepared a package of Rs 205 crore to bail the company out of its chronic sickness. We decided to use this opportunity to turn it around. The government also came out to our help by giving non-cash support in terms of writing off penal interest and reducing the accumulated losses.
What exactly were your plans to restore the group’s financial health?
We prepared a three-part package which encompassed financial, business and organisational restructuring of the group. The government helped us in financial restructuring by writing down equity and reducing its share price from Rs 10 to Rs2. This entailed a reduction in accumulated losses. Then penal interest on our loans was written off. This was followed by business restructuring under which we hived off the engineering and electrical division and three companies – DPSE, Phoenix Yule and Tide Water Oil – as independent profit-making units. In fact, DPSE and Phoenix Yule were disinvested subsequently to keep focus on core business. It generated enough funds to pay off our liability. Once this was achieved, we deferred our plan to divest Tide Water Oil Company which is now doing very well. Its turnover is expected to touch around Rs 1,000 crore this year with '90 crore as profit. Then we also shelved the plan to hive off the electrical and engineering division which has a great potential.
Every company has a core business but you seem to be diversified in many unrelated sectors. What is your core sector now?
As of now, the tea industry is our core sector as it contributes 60 percent of our business. But, you see, tea has a limited potential, like agriculture, given the constraints of land. Then if you tend to lose money in tea, there is no end to it. As a commercial enterprise, the electrical and engineering division has a great potential. We have given a plan for restructuring and strengthening this division which is yet to be approved by the government. In fact, you will be surprised to know that the group has very high skills in manufacturing industrial fans, transformers and other equipment for electricity generation and distribution. We can strengthen this and build a great fortune.
But this seems a diversion from your core area. Would you not suffer on account of your late entry into the area and presence of competitors who are far better equipped?
No, this used to be our area of expertise. In fact, Andrew Yule was much ahead of time when it launched water purifiers in the early 1980s. At that point, the idea did not find adequate acceptance. But now it has become a craze. We have the required wherewithal and expertise to come up with innovative ideas on water purifiers and air purifiers. In fact, we have to work a lot on winning over customers’ confidence which is essential in the successful running of any enterprise. I know that this is easier said than done. Our chronic sickness over the years had cost us consumers’ confidence.
You are talking about consumers’ confidence, profitability and marketing strategies. Normally PSUs are not known for following the kind of management principles practiced in commercial enterprises. Don’t you face trouble in your endeavour?
No. Instead I am getting help from all quarters. Whatever we have gained in these three years can be attributed to the application of most modern tools of management. We have aggressively launched our marketing strategies. We worked on our human resources in a big way. We tried to right-size our strength and offered VRS (voluntary retirement scheme). Performers were identified and given incentives. All this contributed to building up a confidence.
Didn’t you face trouble in right-sizing given the image of West Bengal as a state where the corporate sector is often held to ransom by trade unions?
No, I did not face any problem. In fact, once you make people understand the reality, your plan gets approval. Far from being impeded by the unions, I got immense cooperation from them to carry out my plan to turn the group around.
This sounds quite strange given the impression about trade unions in the state often taking aggressive, stubborn irrational positions?
But this is true. I have never faced any problem.
How did you overcome the problems of red-tape which often impedes the growth of the PSUs?
I have always found bureaucracy helpful in taking the revival plan forward. But for the helpful approach of the government, the revival of a PSU is an impossible dream. I have found people in the government quite receptive to the ideas which will help revive the group. Whatever rough patches we face at the top level, we never allow this to percolate downward to dampen the spirit of people. That is the main reason we are able to see the light at the end of the tunnel.
India is determined to “set an example” for the rest of the word in the post-pandemic economic revival, prime minister Narendra Modi has said, underling the need to become self-reliant. “There is also a widespread debate on how the economies of various countries, including
Close to 48 lakh migrant labourers have been able to reach home from the cities they were working in, as the Indian Railways have run a total of 3,543 “Sharmik Special” trains from May 1. Following the home ministry order regarding the movement by special trains of migrant worker
Before the novel coronavirus hit it, Mumbai about 10-12 lakh labourers from elsewhere had made it their home. The figure for the state of Maharashtra was another 18-20 lakh. As the pandemic spread and the Maximum City emerged as the worst-hit place in India, all economic activities came to an end, and with
For the rest of the world, it is not easy to understand China when it comes to politics or economics. Under pressure from the international community, it has accepted to open the country for a “comprehensive” probe into the origin of the deadly coronavirus. But it is not clear whether the Asian
Even as humanitarian support is pouring in to help distressed migrants amid Covid-19 pandemic and the lockdown, civil society organizations and NGOs are working for sanitation of community toilets which have become breeding source of virus infection. Every community toilet has 20 seats. Each
India, completing about two months of lockdown to protect against the spread of the Novel Coronavirus, has made good use of the time to improve health infrastructure, the government has said. Countering media reports “about some decisions of the government regarding the lockdown implem