In the red just four years back, JCL is now engineering profits

Notwithstanding all the hurdles, JCL’s fortunes revived after the Ruias took over and the company achieved what attempts worth Rs 466 crore of restructuring by the government over the years could not — a profit.

“Many thought that we were going in for Jessop to make money by selling the land. Our detractors felt that we had no expertise in engineering, and would not be able to revive the company. We were not bothered about the criticism and were focused on the task at hand. We wanted to answer through the performance of the company, and with time we have given that answer,” said Pawan Kumar Ruia, chairman of the Ruia Group.

The biggest problem of JCL was an unplanned financial flow, and several operational discrepancies. “There are 24 gates at the Dum Dum factory and all of them used to remain open, which meant having to employ 24 security guards at least, apart from other malpractices like the smuggling out of material. After the new management took over, only four gates were kept open for entry and exit and all the others were locked,” says a mid-level manager who’s been around since the firm’s sarkari days.

Officials also point to the erstwhile managers of the company indulging in extravagant expenditures like excessive use of cars for travelling around. All this was brought under control after the Ruias stepped in. “Earlier, an entire day used to be wasted in paying salaries in cash to the employees at the factory. The Ruias decided to open no-frill salary accounts for the employees and give them ATM cards, thus saving man-days, and also ensuring that the workers do not waste their money,” says an official in the accounts department.

JCL got a much-needed boost with the incentives provided for railway wagon manufacturing in the Union Railway Budgets of 2005 and 2006. Measures such as the opening up of the wagon sector to private players, the “own-your- wagon” scheme, and the announcement of the Dedicated Freight Corridor, created the need for new designs in wagon manufacturing and JCL responded by producing high-load wagons with a capacity of 50 per cent faster transportation of goods.

The company has started manufacturing aluminium wagons, and wagons with improved axels. Wagon production increased 153 per cent in 2006-07. Joint Ventures have also been signed with Chinese and European companies for a new coach factory that has begun operating — only to make metro railway coaches.

The employees of JCL seem to have accepted the practices of the new management to be in their best interest, though initial hesitation had to be overcome. “We had our reservations about the new payment system, and also the fact that the number of canteens in the factory were reduced. Some workers who had worked in a particular section of the factory for years were transferred. But after the company’s performance improved and we started getting our salaries on time, we decided to cooperate with the management,” says Asit Sen, the secretary of the CITU-led workers’ union at the Jessop factory in Dum Dum. Workers are also happy that fresh recruitments have been done in a timely manner to fill vacancies that arose due to natural attrition.

“The biggest challenge was to change the mindset of the employees. They thought that the company was a sinking ship. The most significant step taken by the new management was to bring in an attitude of immediate decision-making and cut down the time that was earlier lost on futile negotiations,” says Ruia.

So now that it’s been turned around, what’s next for Jessop? “When we first took over the company in 2003, the aim was not to rush things, stop the leakages in the company and focus on getting orders with the existing product line. Now that we have done that, we are looking for research and development and evaluating what additional items to add to our product list,” he adds.

“From a turnover of Rs 100 crore, we are aiming to increase it to Rs 500 crore by 2010. The ensuing rail budget promises massive growth for the rail sector. We expect that after the budget, there would be a demand for modern coaches that can run on faster tracks, and that would give us a better idea about the kind of products that we can add to our product line,” says Ruia.

Also on the anvil: a marine park with ship-building and repair facilities as well as a power plant. Watch this space, or rather, keep track of this erstwhile PSU.