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Restructuring puts Camlin back on track

We went through hard times for five years and have now arrived at a stage of robust profit, says Dandekar, reports Lalatendu Mishra.

business Updated: Apr 09, 2007 01:34 IST

In 1931, Digambar Dandekar, a nationalist and founder of Camlin Ltd, set up Dandekar & Co to manufacture Horse branded ink power and tablets as an alternative to British made inks flooding the market. That was during the Swadeshi movement when India was rejecting British goods.

In 2006, Digambar’s son Dilip Dandekar, Camlin’s CMD, tied up with British art colouring giant ColArt to market six of the latter’s globally renowned brands in India and to produce canvas and canvas frames. This is the time of globalisation when consumers want the best.

That’s how Camlin, bogged by high operating cost and depleting profits, responded to changing times. In the last 76 years, the company that started from the living quarters of senior Dandekar in Girgaum, has diversified itself to face the competition in the post liberalisation period.

When globalisation set in, the company known for its Camel logo, had factories at Andheri, Tarapur, Taloja and Jammu employing over 1,100 people. With cheap products flooding the market from domestic and foreign competitors, the only choice before Camlin was to cut cost and improve bottom line.

“We had to restructure. We stopped making pharma products and demerged fine chemicals division to a separate company Camlin Fine Chemicals Ltd. We sold our Andheri unit for Rs 46 crore to pay for VRS and retire high cost debt,” said Dilip Dandekar, CMD of Camlin and Camlin Fine Chemicals.

“We went through hard times for five years and have now arrived at a stage of robust profit. Our balance sheet would suit further funding requirements,” he added.

Camlin, whose growth flattened due to unviable operations had Rs 4.5 crore profit in 2003 and this turned to net loss of Rs 5 crore in 2005. The loss was little less than two crore in 2006. The company went into difficulty in maintaining high cost operations, paying suppliers, servicing high cost debt and funding ad campaigns.

“During this difficult time, we did lot of planning and took hard decisions. Manpower was reduced by 500, shifted operations from Mumbai. Camlin will close FY 2007 with a turnover of Rs 181 crore while Camlin Fine Chemicals with exports to 38 countries has reported turnover of Rs 65 crore,” Dandekar added.