Always On A Limb

After serving 18 years, he landed into a PSU in 2008, and held the position of a finance head. But it looked a bit bleak, and required future planning, and assimilation of financial strength before going full throttle. CMA Atul Rustagi quickly summarizes the initial sad history of Artificial Limbs Manufacturing Corporation of India (ALIMCO), which started operations in 1976, and could not sustain even the salaries. It resorted to loans for more than two decades and, in 1998-99, the accumulated losses peaked at Rs 50 crore. The corporation was in deep financial distress. A dynamic CMD, Jagmohan Uppal started manufacturing wheel chairs and tricycles in 2001. Overburdened by unpaid interest, and penalties, the cash flow dried drastically after 2004. Yet again, the company struggled, and even the pay-scale revision in 2007 was delayed.

When he joined ALIMCO, the annual revenue was almost Rs 56 crore in 2008-2009, with a minor surplus of just over Rs 4 crore. The net worth was a negative Rs 11.53 crore, and grant-in-aid was just over Rs 20 crore. The regular manpower strength was 456. “The challenge to propel it into the next leap was enormous. We needed to keep pace with consistent growth, and foray into the non-grant-based business, following the principles of marginal costing and scales – revenues should constantly pass the breakeven sales year after year. The stakeholders appreciated the concerns, as we continued to improve performances, and recouped the accumulated losses in 2011-12,” says Rustagi.

Even as he confronted personal challenges in the form of cervical dystonia, he assiduously prepared for the next phase of growth. In 2011, the Social Justice & Empowerment Ministry formed a group to present recommendations to the Planning Commission for twelfth five-year plan. He represented ALIMCO, and found the atmosphere to be quite belligerent. Most NGOs wanted the company to shut down. Against the tide, Rustagi demanded a grand sum of Rs 200 crore to modernize ALIMCO, which shocked everyone, including the members on his side. It was an ambitious, audacious, and risky move. It was also brave. “To my surprise, the Chairman of the Committee gave a patient hearing, and asked us to submit a business plan the next day,” he reminisces.

With his experiences in the auto sector, and rehabilitation segment, Rustagi prepared projections on how the Rs 200 crore would enhance capacities, and increase returns on investment. One of the crucial ingredients in the plan was the use of modern technology. The Committee agreed. Thus began the dream­—journey of a modernized ALIMCO. Based on critical inputs from Deloitte, the Cabinet approved the conversion of debts into equity, and the Standing Finance Committee gave the green signal for a modernization plan worth Rs 338 crore, of which the company would invest Rs 138 crore from internal accruals. In October 2020, Rustagi was designated as CFO.

The modernization commenced from 2016 with deep involvement of Shri D.R.Sarin - past CMD, Shri Praveen Kumar- CMD, Project Team and CFO, and despite COVID, saw the light of the day on 2022. It entailed the creation of the following infrastructure:

New Unit in Ujjain

Construction of seven work centers with a R&D building

Modernized limb fitting center, and high-end prosthesis shop

Development of infrastructure at the Kanpur plant

Automated storage retrieval system

CNC vertical milling machines, CNC machining center, CNC lathes and other computer numerically controlled machines

Robotic welding

Conveyorized assembly lines

CAD/CAM facilities

Latest and Modern inspection tools and apparatus

The deliverables were defined. Capacity increased by two-and-a-half times, and product quality was world-class. Production lines could make multi-variants and multi-coloured products as per the customers’ requirements. The operations were environment-friendly, with zero discharges of effluents, and electricity through solar panels. Effective use of ERP-SAP streamlined the operations, inculcated efficient processes, cut down costs, and reduced timelines to delivery that led to customer satisfaction. Stakeholders seemed satisfied due to prompt order executions on the buyers’ side, and prompt payments that led to vendors’ delight on the suppliers’ side.

“My experience in financial and non-financial roles helped me to become a business partner to the CEO. Possessing a strong understanding of the company’s business, I was able to give sound advice to the team. People in the organization fell back on me for guidance even in personal matters and, thus, started accepting me as their leader,” feels CMA Rustagi. This changed the complexion of the company, and energized its mindset. For example, ALIMCO is ready for Industry 4.0, as the plant at the headquarter is automated with state-of-art facilities. It has nine Guinness World Records in assistive technology.

The process to imbibe technologies, via global players, is on. “We are in discussion with 17 companies for transfer of technology, which will enable us to invest and facilitate Make-in-India initiative,” says CMA Rustagi. In addition, workers are regularly re-skilled to use the newer technologies. The motto for re-training is: “Train the employees to make them employable to the world, and make the work environment so user-friendly that these employees do not seek any outside employment.” ALIMCO is committed to provide 90% of the surplus for Capex, and at least 3% for R&D. In 2023-24, it hopes to achieve an annual turnover of Rs 600 crore, with a net worth of Rs 700 crore.

However, this is the beginning of yet another ambitious and audacious phase in the professional life of CMA Rustagi. He wants to achieve an annual turnover of Rs 1,000 crore in the next two years. The new improved products will sell not only in India, but in overseas markets. NITI Aayog, which visited ALIMCO’s Kanpur factory, desires to make it a “global hub for assistive aids for G20 countries.” Recently, an Egyptian delegation, which visited the factory, expressed the intention to build a similar one in Cairo. ALIMCO is migrating from Camp-Mode Delivery to distributing aids in the Limb Fitting Centers, which will be known as “Pradhan Mantri Divyasha Kendra.” With 46 PMDKs this year, the target is to open One ALIMCO center every 100 km. Now, this is what visionary leaders do – enunciate stretched targets.