The Biggest Turnaround – Bengal Chemicals

The Biggest Turnaround – Bengal Chemicals

Corporate world has seen many mergers and acquisitions, privatization, nationalization of companies and closures of the glorious ones. But turning a company making loss for more than 60 years into a profit making one within two financial years is applause worthy.

Here is a classic example of Bengal Chemicals & Pharmaceuticals Ltd – India’s very first pharma company that changed the dynamics of the corporate world.

This remarkable turnaround has taken place under the leadership of P M Chandraiah, a remarkable person himself, who started his career as a humble Typist-cum-Office boy with a leading organization’s showroom and now Managing Director of Bengal Chemicals & Pharmaceuticals Ltd whose achievement is highly applauded. (Read: The Man behind Bengal Chemical’s Turnaround)

Acharya Prafulla Chandra Ray Founder, Bengal Chemicals (1861-1944)
Acharya Prafulla Chandra Ray
Founder, Bengal Chemicals (1861-1944)

Bengal Chemicals & Pharmaceuticals Works (BCPW) was formed in 1901 with a meager capital of Rs. 700 by Acharya Prafulla Chandra Ray, an academician and scientist.

He obtained B. Sc and D. Sc from Edinburg University on a scholarship and started his career as Assistant Professor of Chemistry in Presidency College, Kolkata.

He can rightly be referred as the Father of Indian Pharmaceutical Industry. The company produced various products of British Pharmacopoeia standard and also brought out the country’s first anti snake venom drug.

BCPL’s Maniktal Factory Gate
BCPL’s Maniktala Factory Gate

Factory at Panihati, North 24 Paragans district
Factory at Panihati, North 24 Paragans district

Soon BCPW became the first Indian Company of its kind to manufacture quality Chemicals, Drugs, Pharmaceuticals and Home Products, employing indigenous technology, skill and raw materials for production of quality Drugs & Pharmaceuticals and Chemicals with indigenous technology to cater the needs of millions of common people, foster growth of Indian Industries, compete with imported goods and to become self-sufficient.

Bengal Chemicals struck a note famously for their household products, namely, Cantharidine Hair Oil, Aqua Ptychotis, Phenyl, Klin Toilet cleaners and naphthalene ball.

Cantharidine Hair Oil
P M Chandraiah, Managing Director
P M Chandraiah, Managing Director

As part of financial restructure, Chandraiah initiated a centralized system for all financial activities like Procurement, Accounting, Sales Collection, Payment, Bill Processing, Payroll, Stores System etc, which yielded in reduction of procurement costs and stopped financial leakages in the company.

According to Chandraiah, “First time in the history of the company, BCPL has reported a Net Profit of Rs.4.51 Cr. in 2016-17 against a Net Loss of Rs.37 Cr. reported in 2013-14.  Further, Company has reported a Gross Margin of Rs.24 Cr. in 2016-17 against a Gross Loss of Rs.20 Cr. reported in 2013-14.

Recent Sales Chart showing increased profits:

Particulars 2013-14 2016-17 % increase
Pharmaceuticals 5.49 54.09 985%
Home Products 9.97 26.28 264%
Industrial Chemicals 1.60 5.00 313%
Total 17.06 85.37

 

BCPL’s Home products like Cantharidine Hair Oil, Phenyl, Naphthalene balls which were once a household name, are being revived and as part of e-commerce marketing, the company has already tied-up with Bigbasket to sell the products.

Due to the improvement in Financial Discipline and improvement in transparency, first time in the history of the Company, BCPL has been awarded EXCELLENT MoU Rating for the year 2015-16 and also got EXCELLENT Corporate Governance Rating for the 2015-16 as well in 2016-17 by Dept. of Public Enterprises, Govt. of India.