It has identified four core businesses - boilers and heaters, water and waste management, chemicals and absorption cooling. "For the remaining business we are either trying to reshape them or find the best owners," Thermax chairperson Anu Aga said on Friday while addressing the company's 19th AGM.

The ongoing restructuring exercise is unlikely to show results this year. Mr Aga said, "Nothing dramatic could be expected during 2000-2001 but we will be delighted if operationally we can break even." "Even if we do everything internally, if the capital goods industry in the country does not look up, we will be hit," Mr Aga cautioned.

Poor performance by the company was attributed to the lull in greenfield projects. Many of the cogen orders could not be executed as these projects failed to take off for want of financial closures. Sales have declined and income for the company came from the treasury operations. This led the company to undertake the restructuring programme.

Thermax has already closed down the JV with Fuji and divested from Thermax Systems & Software, which was into software development. Thermax Systems has been sold to Global Tele Systems on a share-swap arrangement. It will receive one lakh shares of Global following the approval from Global's shareholders. Global will be operating from Thermax Systems' existing facilities till January 2002. Thermax has been looking for a buyer for Thermax Electronics for over a year and will be exiting from this venture.

As regards the prospects for Thermax Culligan Water Technologies, another joint venture that is not doing well, the company is looking at options seriously. Last year, this venture lost Rs 8 crore. If an offer is made for a buyout, it could be considered. Few more companies will come under the block depending on the restructuring programme and recommendations of the Boston Consulting Group.

To improve the company's bottomlines, the BCG has recommended improving price realisation, co-ordinated sourcing, reviewing the design parameters with a view to achieve targeted cost, better management of working capital and better utilisation of fixed costs across divisions.

The company's structure has been changed. Under the earlier structure, divisions were working in isolation and divisional heads were reporting to the executive director. The company has now set up an executive council comprising the managing director, heads of the four core divisions along with a few functional heads. Process teams would work across the businesses to improve business processes such as supplier coordination and customer service. During 1999-2000, Thermax's revenues declined by 1.9 per cent from Rs 507.63 crore to Rs 498.07 crore. Net profits came done by 15 per cent to Rs 32.3 crore from previous year's Rs 38.3 crore.

Company exits from industrial fans business
Thermax Ltd has exited from the industrial fans business, which has been taken over by Universal Fans India Pvt Ltd (UFL). Universal MD Fredrick Miranda said his company was taking over the fan division of Thermax at a cost of Rs 1.25 crore and 5 per cent of royalty to be paid for five years.

Universal will be taking over the machinery, drawings and designs but the workforce stays back with Thermax. "Thermax has committed a business of Rs 4 crore per annum to Universal," Miranda said. Universal is hoping to increase its market share from around 3-4 per cent to around 15 to 20 per cent in three to four years time. The industrial fans market, which is worth around Rs 200 to Rs 225 crore. Thermax's fan division had a turnover of Rs 12 crore during 1998-99.