After being a loss-making enterprise for nearly seven decades, the Central government-owned Bengal Chemicals and Pharmaceuticals Ltd (BCPL), recently scripted a turnaround. The century-old pharma company is now dreaming of becoming a Mini Ratna company in the next five years.

BCPL’s Managing Director and Director-Finance, Pilla Marri Chandraiah, has already charted a roadmap to increase the company’s turnover from the current ₹78 crore to ₹500 crore in five years. He expects net profit to grow from ₹10 crore to ₹100 crore – a 10-fold jump.


BCPL was started by ‘Acharya’ Prafulla Chandra Ray in his two-storey residence in north Kolkata, in 1901. BCPL aimed to bring about self-reliance in medicine and home products.

After Ray’s demise, the company’s fortunes slipped and BCPL recorded its last profit in the early 1950s. Since then it has been in the red. Suffering from continuous losses and persistent labour problems, the company was nationalised in 1980.

Things began to change in 2014 when Chandraiah took charge as the company’s Director-Finance(he was promoted to Managing Director in 2016). A huge restructuring of production sales and marketing, as well as administration, led the company to profits. In 2016-17, the company reported a net profit of ₹4.51 crore. Profits rose to ₹10.06 crore in 2017-18. In the first quarter of this fiscal, the company was in the black with a net profit of ₹5.12 crore.

The company estimates a turnover of ₹105 crore in 2018-19, with net profit being in the ₹15-20 crore range.

The vision and strategy

It was the ‘Vision and Strategy Plan’ that was brought out in June 2016 that set a target of a ₹200-crore turnover by 2023-24, and becoming a ₹500-crore business entity by 2025-26.

Chandraiah later advanced the target, and BCPL is now eyeing a ₹500 crore turnover in five years. He expects the turnover of the pharmaceutical division to increase eight-fold from the prevailing ₹50 crore to ₹400 crore. The turnover of the home products division, which is now barely ₹28 crore, should increase nearly four-fold to ₹100 crore.

In order to revive the company’s fortunes, Chandraiah has attempted to streamline BCPL’s finance, and reduce its administrative costs. A new ‘injectable and capsule’ business has also been initiated, paving the way for direct sales to stores.

The injectable section began producing antibiotic injections in January 2018 in the newly-constructed Maniktala lab. The business has generated revenues of ₹8-10 crore in the current fiscal. The capsule business is witnessing robust growth and is expected to earn ₹20 crore in 2018-19.

BCPL plans to restart production of its life-saving, anti-snake venom serum by 2020. Bengal Chemicals was first Indian company to produce the serum but it was later stopped.

The company is also reviving the sales of brands such as Phenol, Aqua Ptychotis, and Cantharidin. Explaining the potential of the products, Chandraiah said BCPL was the first company to bring out the phenol-branded floor cleaner. However, the negligence of the last many decades saw the company’s sales in the segment restricted to barely ₹18 crore in a ₹6,000-crore industry.

In order to enhance the brand image and ensure product availability, the company plans to open two new direct company outlets — branded Bengal Chemicals Retail Store — in Kolkata and Mumbai, in this fiscal. Bengal Chemicals already has three retail stores in Kolkata.

The company has tied up with Big Basket to tap online sales prospects.

The turnaround

The company’s turnaround has been a bumpy ride Chandraiah’s first task was to reinvigorate the employees. It began with the stoppage of cash transactions and the opening of more than 220 salary accounts, amid much resistance.

In order to motivate the employees, he began organising birthday and retirement day celebrations.

Issue of appreciation letters for extraordinary work done by employees became a norm. The practice of paying full dues to retiring employees on their last day in office was initiated. The annual appraisal of employees was brought in to ensure transparency. CCTVs were installed in the corporate office, factories and depots.

A special effort was initiated to stabilise the finances. Despite several attempts at revival and rehabilitation, the company’s performance didn’t improve.

In 1992, Bengal Chemicals was referred to the Board for Industrial and Financial Reconstruction (BIFR). There were serious lapses in finalising annual accounts and the cost audit reports for years. As annual returns had not been filed, the Ministry of Corporate Affairs had put the company and its directors in the lists of “Defaulting Company” and “Defaulting Directors” for 15 years.

“After ceaselessly working for six months with my finance team, all the backlog accounts were cleared,” Chandraiah said.

“From the day I took charge as managing director, on June 1, 2016, my priority was to make it a profit-making company and initiated purchase, billings, accounts, collection, payments including wages and salaries, all in centralised manner,” he said.

The company has a negative net worth of ₹92 crore due to years of losses. Chandraiah expects BCPL to be a positive net worth company by 2022 so that employee wages can be revised.

The writer is a freelance journalist