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Thirumalai Chemicals, a leading manufacturer of industrial and speciality chemicals, saw a huge turnaround in net profits for the quarter ending June 2012. The company posted a net profit of Rs. 16.7 crore as against Rs. 1.5 crore in the same quarter a year ago. The company’s net profits were a mere Rs 79 lakh in the March 2012 quarter.
At an annual general meeting of the company held here in Mumbai, the top management addressed the shareholders on the issues plaguing the company. The shareholders applauded the board for the ‘risky’ move to ease out one of the promoter directors on grounds of poor company performance.
The board, on its part, defended the move citing difference of opinion. “There was a difference of opinion in the family. Also, we have had the same management for a long time which is why we decided to bring in a new CEO for a fresh perspective on the business,” said Dr. S. Rama Iyer, Chairman of Thirumalai Chemicals, addressing the shareholders.
The company has two plants — one in Ranipet in South India and another one in Malaysia. Both plants are currently working at full capacity informed the company management. “The Malaysian plant has been running at full capacity for the last two months and we are seeing operational profits there. By the end of this year, we expect revenue of close to Rs 150 crore from this plant,” said Mr D. R. Dhariwal, Chief Executive Officer, Thirumalai Chemicals.
He also added that the first quarter result was not a ‘flash in the pan’. “We are now producing products at lower costs. Our energy consumption has been brought down. We are also trying to reduce the time between production and delivery of the product by around 30-35 per cent,” said Mr Dhariwal. The time taken between production and delivery is 45 days, on an average, he said.
With borrowing costs moving up, the company also said that it is looking at reducing dependence on bank money and tightening working capital. “We have started insisting on cash on delivery. About 25 per cent of the money coming in is through this model now. By the end of the year, we hope to raise this to about 40 per cent. It may be a bit difficult but our efforts are on,” he added.
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