|
Rallis
hires 4 consultants to advise on turnaround
Papiya
De & Sambit Datta
Mumbai, Oct 17: In a bid to re-engineer the business
processes to turnaround the loss-making Rallis India, the
agro-chemical major of the Tata fold has hired four management
consultancies — Accenture, Renoir Consultancy, Eicher Consultancy
Services (ECS) and Tata Strategic Management Group (TSMG).
| ...to refer
subsidiary to BIFR in 30 days |
|
Papiya
De & Sambit Datta
|
Mumbai, Oct 17: The Tata Group-controlled
Rallis India, the largest agro-chemicals company in the
country, has decided to refer its Hyderabad-based subsidiary
Siris India to the Board of Industrial and Financial Reconstruction
(BIFR) within the next 30 days.
Siris had earlier announced suspension of work at its
production facility from June 2001 and had dispensed it
staff and labour force. The losses incurred by Siris had
completely eroded its networth and forced the board to
suspend operations. Siris had posted operational losses
of Rs 8.77 crore in 2000-2001, compared with losses of
Rs 3.58 crore in the previous fiscal.
The other loss-making Rallis subsidiaries like Ralchem,
Rallis Finance & Investments Co, Rallis Hybrid Seeds
and Rallis Farm Management Services were merged with the
parent company in April 2001. “The merger would enhance
operational synergies, help us eliminate competition,
enhance bargaining power and increase scope of sharing
resources which would lead to cost reduction,” Rallis
India CEO and executive director Mr Rajeev Dubey told
The Financial Express.
However, Siris India was not merged with Rallis. “This
is because it was not a fully-owned subsidiary then,”
Mr Dubey said.
The company was earlier considering several options for
its ailing subsidiary after buying out 16 per cent stake
from Abot Investment and Tata Investment in Siris for
a total of Rs 2.8 crore. The accumulated losses of over
Rs 13 crore will be integrated with the accounts of Rallis
for consolidation of accounts. |
Each of the consultancies has a separate
mandate to help streamline operations at various levels. Accenture,
for example, worked at the shopfloor to enhance productivity
and improve supply-chain management (SCM). Similarly, Renoir
was brought in specifically to strengthen sales and distribution
channels across India.
Eicher worked closely with the company on the organisational
restructuring model and also helped in human resources-related
activities. With its help the company has launched HR initiatives
like implementation of the performance management system,
communication systems, certain changes in management techniques
and models.
TSMG has been working with Rallis on the long term strategy
development. It has helped the company identify its core areas
ie pesticides and fertilisers and advised Rallis to focus
on the higher margin products.
The company is in the process of implementing the advice provided
by these consultancies. Accenture which had worked to improve
the SCM upto the sales depos has already completed its assignment,
but it will not be before a year that Rallis expects to see
the benefits translated on paper.
Rallis India CEO and executive director, Rajeev Dubey, told
The Financial Express, “A lot of emphasis is
given on various revenue-enhancing and cost reduction measures
concentrating on critical success factors and measures of
performance. With all these initiatives from the consultants
as well as the from the company itself, we are certainly on
the process of reducing working capital. “The company has
already registered substantial cash profits in the first two
quarters of this financial year.
The company was so long in the business as the agri-input
supplier. Now it is planning to move up the value chain and
position itself as a complete solutions provider to the final
consumer. “We are trying to figure out which part of the value
chain Rallis can enter into and create value for the farmers,
final consumers, and itself,” Mr Dubey said.
|
