India's first pharma firm Bengal Chemicals makes profit after six decades

Firm cites centralised control for turnaround, says sourcing costs pared, financial leakages stopped

Bengal Chemicals & Pharmaceuticals Ltd, founded by the Father of Indian Chemistry Acharya Prafulla Chandra Ray, on Wednesday reported a net profit of Rs 4 crore in 2016-17, the first profit in six decades.

The first pharmaceutical company established in India, which was running in profits till 1940s, posted a net loss of Rs 9.13 crore in 2015-16. It is however looking to clock a net profit Rs 10 crore in the current financial year.

"We made a net profit of Rs 4 crore in 2016-17 and are looking at a minimum Rs 10crore of net profit in 2017-18," said company's Managing Director and Director (Finance) P M Chandraiah.

He said the firm, which has its legacy since Swadeshi movement days,would be able to touch "a turnover of Rs 200-300 crore" and a "net profit of Rs 30 crore" in the next five years.

"The turnaround was because of bringing centralised control systems in the company's activities which resulted in a better performance," Chandraiah said.

The central public sector unit reduced procurement costs, and stopped financial leakages in the company.

"This has resulted in a reduction in direct costs to 48 per cent of gross sales in 2016-17 from 76 per cent in 2013-14," he said.

According to him, the company which has four manufacturing plants -- one each in Mumbai and Kanpur and two in Kolkata -- is set to commence commercial production of injectable products from May this year and planned to start tonic products soon. The injectable segment has the potential to garner Rs 50 crore of reveue in one year, he said.

"We are in the process to commence online sales and for which, we have already identified the partner," he said.

The Bengal-based company with 320 employees has about Rs 215 crore of loans outstanding with accrued interest to central government.

"We have urged the government to reduce the interest rate at par with the market rates," he said, adding that the company repaid Rs 13 crore of bank loans and remaining bank loan of Rs 13 crore is expected to be repaid by December this year.

On the proposed disinvestment, he said: "No clarity has not been emerged. We have put our presentation. Our results show it has emerged as a turnaround company", adding that accumulated losses will be phased out over the years.

The iconic pharmaceuticals company which was founded in 1901, was nationalised in 1981 and later sent to BIFR in 1992 following mounting losses.