An antithesis to the Communist critique of disinvestment in central PSUs is the turnaround story of Lagan Jute Machinery Company Limited, now known as the Lagan Engineering Company Limited. A perennially loss-incurring venture, its fortunes were revived after management control was transferred to a Kolkata-based private player, Murlidhar Ratanlal Exports Limited (MREL).

A company established in 1955 by James Mackie and Sons of Ireland, it was taken over by the government in 1978 owing to huge losses. In 1987, the company became a fully owned subsidiary of Bharat Bhari Udyog Nigam Limited (BBUNL) but when even that failed to turnaround the company, 74 per cent stake and management control were finally divested by the Centre to MREL in June 2000.

From a net worth of Rs 5 crore as on March 31, 1998 (which was also the turnover of the company), the net worth of the company now stands at Rs 8.19 crore. Under government control, the company registered an all-time high loss of Rs 1.04 crore in 1997-98, and continued to make losses after that — until the divestment.

After MREL stepped in, the company made a profit for the first time in six years: Rs 5.06 lakh for the year 2001-02. For the last financial year, net profit stood at Rs 64.87 lakh. The company has had a sustained Compound Annual Growth Rate (CAGR) of 10.33 per cent in terms of sales over the last five years.

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