As part of the strategy, it aims to reduce its workforce by 1500 in an effort to grab more market share and become profitable over a three-year period. Highly placed company sources said the company had already reduced its workforce by about 2,700 last year through voluntary separation schemes (VSS), incurring an expenditure of Rs 56.43 crore.

The company intends to reduce the manpower to 3,00 from the present figure of 4,500, sources added. The company has three of its seven manufacturing units in calcutta the strategy, code-named `Stretch - 30' aims to improve productivity by 30 per cent with 30 per cent less cost within the next three year. It has already warned workers of Taratola and Paharpur factories that the units would be closed down ifthey did not not substantially raise their productivity. The two units together accounted for 75 per cent of the company's net loss of Rs 9.51 crore last fiscal, sources said.

The company had recorded a net profit of Rs 3.84 crore in 1997-98.

"We wish to reiterate that this is just the first step. A lot more needed to be done this year and in the coming year or two. While we do not see any major improvement in the economy in the immediate future, given the present political uncertainties in the country, we feel steps taken last year and plans for further restructuring will place the company in a better competitive situation," he said.

Top sources said only improved productivity at the factories, which have recently been modernised with an investment of Rs 30 crore, could make these Calcutta-based units viable. The manpower of the units have been reduced by 300 through VSS.

The management has initiated talks with the trade unions as well as the state government to find out a solution that could raisethe productivity level as it feels that the producvity could be improved up to eight times of the present level.

At Taratalla unit it manufacturers switchgear and rotating machines and energy metres are manufactured at Paharpur unit while Salt Lake unit is engaged in vacuum interrupters. Other units of the company are in Naini, Chennai and Coimbatore.

In the face of stiff competiton, there is no scope of making profit by selling the products with a premium, but just the reverse is happening in the market. All the companies are now selling these products even at a 50 per cent reduction of the printed price. So the only way to recover the margin is to produce more and hence productivity becomes so important for these units, they added.

Earlier, the company had planned to hive off its Paharpur and Taratalla units to concentrate on core-area operations but failed to do so for want of a suitable bidder.