Kochi was for long home to Kerala’s engines of growth—its path-breaking PSUs and big private enterprises. The Hindu, in a series of stories, celebrates the old generation industrial units of Kochi to review their performance and report their challenges and plans for the future.
After India won independence, the Kerala government played a pioneering role in helping the State seize the lead in major industrial sectors. Many industries failed to capitalize on the good start. A few, with much struggle, retained their identity.
One such company that overcame testing times and emerged resilient in a competitive environment was the Angamaly-based Transformers and Electricals Kerala Limited (TELK).
The firm that designs, manufactures and supplies power transformers was established in 1963 by the State government in collaboration with Hitachi Limited, Japan.
Soon in 1977 TELK, which now manufactures extra high-voltage power transformers (up to 420 kV 315 MVA), became the first company to manufacture 400 kV transformers in India.
When the first 500 MW thermal unit in the country was set up by Tata Power at Trombay, the generator transformer for the unit was engineered and manufactured by TELK.
The company went through a purple patch and remained one of the prestigious manufacturing units in the State for several decades.
But, towards the end of the last century the company started making losses and its fortunes declined steadily. Later, TELK was referred to the Board for Industrial and Financial Reconstruction (BIFR).
The State government then came to its rescue and took the initiative to partner TELK with NTPC Limited to put the company on the road to revival. In June 2007, the government, NTPC Limited and TELK signed the Business Collaboration & Shareholders’ Agreement.
N. Ravindranath, the managing director of the company during the crucial years (2002 to 2005) after the declaration of BIFR, recalled that the decision to collaborate with NTPC, taken by former Industries Minister Elamaram Karim and former Principal Secretary John Mathai, turned out to be a game-changer.
“The company made losses consecutively from 1998-99 to 2001-02. With a Rs.60 crore turnover and a loss in excess of Rs.10 crore almost every year (losses were Rs.11.6 crore in 1998-99; Rs.18.87 crore in 1999-2000; Rs.15.9 crore in 2000-01; and Rs.6.08 crore in 2001-02), it was a herculean task to bring the company out of the red when I took over in April, 2002. Over a thousand highly skilled employees were on the payrolls. “The salary bill itself came to Rs.1.5 crore per month and there were few orders at hand. The restlessness was palpable, the situation was so tense and employees’ demonstrations were a frequent happening.”
The company appealed to BIFR to sanction a three-year period to adopt corrective measures. It was then that the wind-up order was kept in abeyance.
Soon the staff was redeployed with a view to improve productivity.
A referendum, held among employees on the issue of staff unions, effectively reduced the number of trade unions to three from more than six.
The revenue improved after an effective marketing strategy was adopted with the support of chairman Impichahammed.
An increase of about Rs.10 crore turnover every year was recorded.
Trade union leaders such as Chandran Pillai and P.J. Joy also played a supportive role.
The company made a profit of Rs.6.18 crore in 2002-03; the profits in subsequent years were Rs.6.33 crore (2003-04); Rs.6.09 crore (2004-05); and Rs.1.73 crore (2005-06).
The consortium of banks which was initially reluctant to lend money, relented once the turnover improved.
Road to revival
An order worth over Rs.100 crore for the Kakrapar power station was another turning point. Technology improvement, process upgradation and manpower restructuring made the revival a reality, said Mr. Ravindranath who left the company in April 2005.
Mr. Joy, a former MLA, said his union played a primary role in appealing against the BIFR order before the Delhi High Court, which stayed it.
The company’s revival could not have been initiated without the stay.
Cause for worry
He found fault with certain former top executives of the company who joined rival firms in the private sector.
He said the defections led to collusion among potential competitors who looked to put TELK in a disadvantageous position in competitive bidding for large orders.