Bharat Pumps and Compressors Ltd. (BPCL), is a public sector undertaking under the control of Heavy Industries and Public Enterprises Ministry. The company is engaged in manufacturing and supply of heavy duty pumps and compressors and high pressure seamless and CNG gas cylinders. The company’s Managing Director AK Jain spoke to Gaurav Choudhury on a variety of issues. Excerpts:
Can you explain how the turnaround of BPCL came about?
BPCL was a sick company having suffered losses consistently since inception aggregating to Rs 175.29 crore. The net worth of the company as on 31 March, 2005 was negative at Rs 121.61 crore. At that time the company had a manpower of 1,244 employees, who had lost the zeal to work. The company was on the verge of being closed on account of losses since its inception in 1970 for about 35 years, till 2004-05.
The moment of pride and recognition for BPCL had arrived in 2005-06. The special efforts and corporate strategies put in place during the last quarter have yielded the much awaited turnaround in less than a year. It started following the fundamental concepts of excellence, with emphasis on participative management. BPCL achieved a net profit of Rs 1.82 crore during 2005-06 as against a loss of Rs 10.86 crore during the previous year 2004-05.
What were the steps taken to sustain the performance in the year 2006-07?
We took initiatives towards ‘execution excellence’, in areas like quality, cost, delivery and services. The company targeted to achieve a turnover of Rs 135 crore in 2006-07 and net profit of Rs 16.3 crore, however, with dedicated and missionary efforts, the performance has been historical and the turnover achieved is Rs 144 crore and net profit stood at Rs 19.13 crore — a growth of 53 per cent in turnover and 913 per cent in net profit.
What were the measures initiated for the turnaround?
The corporate philosophy to implement the approach of Total Quality Management (TQM) and Integrated Management System (IMS) in order to achieve and sustain a reputation for quality at a competitive cost in national and international markets for BPCL products and services through collective involvement of all was initiated. The short-term and long-term initiatives with respect to turnover, delivery commitment, market planning, measurement of productivity and gross margin through cost reduction, technology, etc. were undertaken and key personnel were made accountable for their implementation within the target date.
What is expected performance during the current year 2007-08?
The expected sales/production during current year shall be to the tune of Rs 185 crore. BPCL’s present order book stands at Rs 232 crore and estimated net profit after tax shall be approximately Rs 30 crore, i.e. a quantum jump in all the key performance areas is expected. Also, performance of BPC up to September 2007 has been the highest ever at a level of 76 crore.
According to you what has been the major enabler in this turnaround?
The major enablers for the turnaround have been the employees, customers who re-posed their confidence in our equipment and the government, which provided positive support for initiatives taken to achieve this performance.