According to Godrej Foods executive director Mr MP Pusalkar: "We have done away with C&Fs and have appointed consignment agents who will be dedicated to take care of the inventory position. On the other hand, C&Fs only store the stock and do not manage inventory." The company earlier had over twenty C&F agents - one per state. The number of distributors is around 800. The company has, however, retained one C&F agent in Delhi, as per the area's requirement.

Moreover, the company has decided to de-focus certain areas geographically in order to make optimum use of the areas it is strong in. "We will focus on the western, southern and northern regions of the country where our products command a better equity, even though we have a national presence," says Mr Pusalkar.

The objective is to cut unnecessary waste in the distribution system. Godrej Foods operates mainly in the businesses of edible oils and fruit drinks with brands like Godrej Sunflower, Cooklite and Jumpin. "Edible oils is a low margin business, which is why it was important for the company to change the distribution set up," explains Mr Pusalkar.

It was also critical for Godrej Foods - which is currently reeling under losses and is undergoing a restructuring exercise to turnaround - to curtail the mounting inventory levels. "Inventories, which had touched 20-25 days in the past, have now stabilised at around 6-7 days,"

adds Mr Pusalkar. Godrej Foods reported a net loss of Rs 10 crore during the three-month period ended December 31, 2000, against a net profit of Rs 67 lakh in the corresponding quarter last year. Sales during the period dropped drastically to Rs 29.01 crore from Rs 109.02 crore. Kotak Mahindra Capital is advising Godrej Foods on the restructuring.

...may eBank with ICICI
Godrej Foods is exploring the option of initiating eBanking with ICICI. As per this new concept, the company can have an immediate access to credit that has been deposited by their consignment agents. According to Godrej Foods executive director Mr Mohan Pusalkar: "ICICI has appro-ached us to enter into an eBanking initiative. We found the concept interesting and are planning to implement it after convincing our consignment agents that it will benefit the company as a whole." eBanking can enable the company to obtain credit on the same day as it is deposited. This will enable the company to efficiently manage cash and reduce the credit accruals. This will also benefit the company so far as the working capital requirement is concerned.