Rallis India Limited has announced a turnaround in its results for June Quarter 2001. Sales during the quarter are Rs.194.06 crores (Rs.221.57 crores in corresponding period last year), but Operating Profits have shown dramatic improvement to Rs. 11.93 crores (Rs. 4.66 crores last year same quarter). There is a significant improvement in operating margin to 6.15 % (2% last year). Further, the Company has slashed interest costs sharply to Rs.7.19 crores (Rs.15.61 crores last year). As a result of the improvement in operating margins and the sharp reduction in interest costs, the profit before extra-ordinary items and tax is positive at Rs.0.94 crores compared to a loss of Rs.15.06 crores last year. Adding extra-ordinary profit arising out of the profit on the sale of Pharmaceutical business the PBT is Rs.20.64 crores against a loss of Rs.15.06 crores last year.

The Company has taken five key strategic initiatives to significantly improve its performance.

Supply chain Management

With the objective of achieving significant cost savings in the areas of Purchase, Manufacturing and Logistics, the Company began major initiatives aimed at putting in place, systems to improve productivity, better the quality, reduce waste / losses, implement Regional / Area Profit Centre approach. The net gains from this exercise are expected to begin flowing in this year itself.

Sales and Market Management

The Company has also taken steps to design appropriate systems to reduce debtor days, optimize price mechanisms and discounts, improve efficiencies of sales and promotion processes and establish methods for direct contact with retailers and customers. This will lead to enhanced sales and cost reduction in forthcoming months and beyond.

New Product Development and Introduction

To ensure a continuous flow of ideas for new products and services from the marketplace into the Company’s R&D and to reduce cycle time for new product introductions, the Company is implementing a process called ‘Innogate’. Innogate captures all creative, potentially revenue-generating ideas from its employees and customers, systematically evaluates these ideas and leads them into an ‘Innovation Funnel’, the Company’s New Product Development System. Eventually, by means of a systematic, time bound work flow, the products move towards registration and launch in the shortest possible time.

Financial restructuring initiatives

The Company is working towards restructuring its capital and debt through sale of non-performing assets, internal accruals and working capital compression.

Human Resources Initiatives

The Company undertook an Employee Separation Scheme during the course of the year, which resulted in a reduction in workforce by about 200 people. This was in addition to the movement of the employees of the Pharma division to Shreya.

All these measures are beginning to yield results, and Rallis is emerging as a more focused, agri inputs Company.