Transchem has also entered into a collaboration for technical know-how and supervision of its operations with Giorgio Foods for growing, cultivating and packaging of mushrooms. The tie-up with the US company could not have been better timed. With the US imposing a 168 per cent anti-dumping duty on mushroom exports from China (the largest exporter to the US), the focus has shiftedto India. Analysts tracking the sector say the US should source its entire requirement of mushrooms from India, which will give a shot in the arm of the Indian manufacturers reeling under heavy losses accumulated over the past two years.

Financially, the new fiscal has already ushered in a new era for Transchem. The firm has turned around in the first-quarter due to good export orders after being in the red for a long time. In FY 1999, Transchem managed to trim its losses to Rs 1.5 crore from Rs 4 crore in the previous fiscal. For the first four three months ended June 1999, Transchem has earned a net profit of Rs 30 lakh on a turnover of Rs 8.3 crore. Now, thanks to the marketing tieup with the US company, Transchem can hope to sustain its turnaround in the full-year ending March 2000. The company has a capacity to manufacture 4,200 tonnes of mushrooms per year, amounting to a turnover of Rs 32 crore.

The mushroom unit has, in the past, been a drag on the company's bottomline. When the unit startedproduction in 1996-97, it used glass jars for packing. However, soon the system in the West changed to tin packaging. This has resulted in heavy losses to the company. In the ensuing fiscal, came the US sanctions against India after the nuclear test and, as a result, the operations from this division became unviable. The management, at one point of time, planned to hive off this division completely. But, all that is about to change now and sources say Transchem plans to expand its mushroom production to meet the surge in demand from the US and add to its botomline.

Apart from the mushroom division, the company has an animal healthcare unit, which is slated to be in a bad shape. The unit, engaged in the manufacturing of veterinary and others drugs, is running at a loss and it is learnt that the company is scouting for a buyer for this division. Income from the third division -- pharmaceutical -- is what has kept the company going in all these years. The division produces the largest range of anthelminticsin India and abroad.