The Hindu : El Forge makes smart turnaround

Online edition of India's National Newspaper
Thursday, Dec 11, 2003

Business

Business

El Forge makes smart turnaround

By Our Staff Correspondent

CHENNAI DEC. 10. El Forge, a supplier of auto components, to major automobile companies, has wiped out its accumulated losses in the first half year ended September 30, 2003 and posted a profit of Rs. 28 lakhs as compared to a loss of Rs. 34 lakhs in the previous half year.

The management adopted various plans to turnaround the company, said K. V. Ramachandran, Managing Director, Addressing presspersons here today, he said the company downsized the workforce through VRS and significantly improved labour productivity. The company was under pressure due to the prolonged recession in the last few years that followed its expansion, Mr. Ramachandran said.

As a part of the restructuring exercise the company had rationalised its capital assets by relocating some of the units and consolidated the same by disposal of some of its idle assets. The company had decided to increase exports through value addition.

The Executive Chairman of El Forge, V. Srikanth, said the company's four forging units had an operational capacity of 14,200 tonnes, which would be increased to 21,000 tonnes in the next three years. El Forge was planning to invest Rs. 12 crores in these facilities in the next three-year period.

The company had registered a turnover of Rs. 22.25 crores for the half year ended September as compared to Rs. 16.28 crores in the corresponding period last year. The company had been able to increase its product range for both domestic and global markets. The export turnover constituted 22 per cent of sales during this period. The company has targeted $10 million exports over three years.

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