How India’s oldest pharma company smelt success after 6 decades
It’s history in all senses of the word. Set up as an individual initiative in a laboratory in 1892 by the ‘father of Indian chemistry’ Acharya Prafulla Chandra Ray, and regarded the country’s first pharma company, Bengal Chemicals and Pharmaceuticals Ltd has recorded profits for 2016-17 for the first time after more than six decades.
“By this turnaround, (BCPL) has created history. I do not know of any other company that posted profits after making losses for more than six decades. We are encouraged, ready to expand operations and hope to take the profit to about Rs 30 crore in another five years,” said P M Chandraiah, managing director and director (finance) of the company.
According to unaudited results, the company recorded an operating profit of Rs 4 crore in 2016-2017. The bottomline in 2013-14 carried a loss of Rs 36.55, in 2013-14 Rs 17.32 crore and in 2015-16 a loss of Rs 9.13 crore.
BCPL sells its home utility products (phenyl, naphthalene, perfume, floor cleaner etc) to the government and in the open market. The medical products, however, are sold only to government hospitals. They are set to start commercial operations in injectibles from May. They are also tying up with e-commerce agencies for home delivery of their non-medical products.
The company has considerable real estate assets including a building in Prabhadevi, Mumbai which is conservatively valued in excess of Rs 1,000 crore.
Posting profits for the first time after a gap of more than 60 years is certainly a record of sorts, but the employees of the company -- now a central PSU -- are not sure whether to celebrate it. The news arrived at a time when the ministry of chemicals and fertilisers is planning disinvestment.
Whatever the mood among the employees, Bengal Chemicals embodies a significant piece of history. It was set up by Ray with a view to fostering a spirit of entrepreneurship among the youths of Bengal, and not to hanker after jobs from the foreign rulers.
After obtaining a DSc degree from Edinburgh University in 1887, Ray started teaching chemistry at Presidency College. By 1892, with a capital of about Rs 700, he had started Bengal Chemical Works, and presented its herbal products before the Indian Medical Congress’ 1893 session held in Kolkata.
By 1901, Ray transformed his initiative into Bengal Chemicals and Pharmaceutical Works Pvt Ltd, with a capital of Rs 2 lakh.
According to Ray’s own accounts, he would immerse himself in orders and supply-related works as soon as he returned home from the college. “The migration from my college laboratory to the pharmacy laboratory was to me a recreation and a change of occupation… the very idea of locally manufacturing pharmaceutical preparation, which hitherto had to be imported, acted like a tonic.” He never took any salary from the company.
By 1908, it had made its mark in Bengal’s industrial sphere and John Cumming wrote in the ‘Review of the Industrial Position and Prospects in Bengal’ that the ‘enterprise shows signs of resourcefulness and business capacity, which should be an object lesson to capitalists of this province’.
Spartan in lifestyle and a swadeshi at heart, Ray never lost the focus on creating employment for Indian youth. Under his stewardship, Bengal Chemicals grew fast. From having its first and second factories in Kolkata’s Maniktala in 1905 and the northern suburbs of Panihati in 1920, it set up a third factory in Mumbai in 1938.
However, it started struggling following Ray’s death in 1942. Though Bengal Chemicals set up its fourth plant in Kanpur in 1949, the company started making losses since the early 1950s and never recovered.
Chandraiah, in his bid to make the turnaround successful, told the employees the stories of Ray’s dedication and hardship to inspire them to give their best in a show of homage to the iconic personality.
“I kept telling everyone that this was a shame that P C Ray’s dream institution was doing so poorly. The majority of the workers responded positively while we had to act tough on a section of them. We blocked financial leakages, centralised the system, made biometric attendance mandatory and installed CCTV cameras to enforce discipline, and optimally used space to earn more from property rents,” Chandraiah, who joined the company in 2013 and led the turnaround, said.
However, the ministry representative attending the board meeting on Wednesday at its headquarters in Kolkata had no word of hope for its management and employees who managed to increase the total income from Rs 36.63 crore in 2013-2014 to Rs 111 crore in Rs 2016-17.
“We got no assurance about putting the disinvestment plan on hold. We, however, tried our best in presenting a roadmap showing how we are going to significantly increase profit,” a senior management staff told HT.
The Centre took over Bengal Chemicals in 1981.
The decline of the company has largely been attributed to poor management and work culture among the employees. “It is purely because of the historic importance that it was not sold out. Otherwise, the strength of permanent workers has come down to 320 (there are another 100 casual workers), whereas it employed more than 2,000 at one time,” a senior member of its management said.
That Ray’s legacy needed to be cherished for ages was stressed by Professor F. G. Donnan of the University College of Science, London, and way back in 1931, when, on the occasion of Ray’s 70th birth anniversary, he wrote, “Though devoted to the cause of pure science, he has never been unpractical dreamer in the clouds. But he has never asked much for himself, living always a life of Spartan simplicity and frugality — Saint Francis of Indian Science. I hope that future ages will cherish his name as one band of self-denying and devoted men who received and handed on the flame that once burnt so brightly in India, the search for truth and hidden mysteries of things.”
Europe continues to cherish the legacy of Ray. In 2011, on the occasion of Ray’s 150th birth anniversary, Royal Society of Chemistry dedicated its coveted Chemical Landmark plaque to Ray, the first non-European to be conferred the honour.