Kolkata: The people of Kolkata have fond memories of Bengal Chemicals and Pharmaceuticals Ltd as a pioneer in the drug industry, but few know that it still exists.

It is little known that this company, which is now state-owned, has assets valued at Rs1,500 crore and that after decades of losses, it is quietly scripting a turnaround.

Its popular brands such as anti-flatulent syrup Aqua Ptychotis and Cantharidine hair oil are hard to come by. But when the company recently opened a small store at the ground floor of its central Kolkata head office, people started to troop in within days. The challenge now is to scale up marketing initiatives, says P.M. Chandraiah, the company’s managing director.

Started in 1892 by Prafulla Chandra Ray, a young scholar who taught chemistry at Presidency College (now University), Bengal Chemicals has a storied past.

Ray earned the trust of leading physicians of the time. Doctors such as Radha Govinda Kar and Nilratan Sircar—after whom medical colleges in Kolkata are named—backed Ray to start production of indigenous formulations to take on British drugs.

By the mid-1930s, the firm emerged as one of the most successful Indian enterprises with shareholders from across the country. Around the same time, it started to expand outside Kolkata.

Its 1.65-acre factory located in Mumbai’s Prabhadevi is now worth over Rs1,000 crore, says Chandraiah.

According to one account, its annual revenue in 1951 from three lines of business—chemicals, pharmaceuticals and floor cleaners—had swelled to Rs1.5 crore, or today’s equivalent of about Rs750 crore.

The journey since has largely been downhill. After years of losses, the Union government took control of the company in 1981. But the haemorrhaging continued and Bengal Chemicals was declared a sick firm in 1992.

Nationalization is a way to protect inefficiencies, says Dipankar Dasgupta, an economist who previously taught at Kolkata’s Indian Statistical Institute.

Over time, the company was transformed into a producer of low-margin generic drugs for captive consumption by the Union government.

When he took office as director (finance) in November 2014, the company had not had its annual accounts audited for three years, recalls Chandraiah.

Soon after he joined, it came to light that Bengal Chemicals had completely forgotten about a bank deposit of Rs10.76 crore. Not only were the receipts of the term deposits lost, the amount had disappeared even from the company’s books of accounts.

With “small tweaks" in working capital management, the company brought down input costs by 15-20%, says Chandraiah, who was elevated to the post of managing director earlier this year.

With the commissioning of an upgraded production facility, Bengal Chemicals almost doubled its operating revenue in 2015-16 to Rs88.19 crore. Losses have started to narrow.

Chandraiah has projected the current year’s operating revenue to rise to Rs110 crore, and to Rs200 crore by 2019-20. Each of the key formulations can be scaled up to generate Rs50-60 crore in annual revenue, according to Biplab Dasgupta, a marketing manager. But they need to be re-positioned, he says.

Bengal Chemicals’ products have remained almost unchanged from the time they were launched. But it cuts both ways. Product consistency helps build goodwill, but in the case of its Pheneol brand of floor cleaner, it generates only Rs15 crore in annual revenue in a market estimated at Rs5,000 crore because it is still sold in glass bottles. The market has been seized by rivals who sell their products in synthetic containers.