The painting systems business has been sold to Soham Engineers, previously a vendor for Thermax Surface Coating. Last month, the company also got out of the bottling business by selling Thermax Culligan Water Technologies Ltd to Coca-Cola for Rs 3 crore. But it has retained the industrial water-treatment systems because, as Thermax managing director Prakash Kulkarni says, it has synergy with the company''s water and waste water solutions business.

Thermax, which had initiated a restructuring exercise in the face of losses and poor topline growth, has, since last two years, got out of a series of businesses which it found either non-core, or not adding to its growth or shareholder value. These included the transmitter business, electronic components, systems and software, lease financing, and fans, and involved dissolving joint ventures (Thermax Fuji Electric with Fuji Electric), entering into share swapping (for Thermax Software and Systems with Global Telesystems), and closing down unviable business (Thermax Electronics Ltd, where it had been scouting for a buyer over the last two years, and failed).

Boston Consulting Group was hired to obtain a third party expert insight into what had gone wrong with the company. The board of directors was dissolved subsequent to hiring the the consulting group. The revamping of the board, which earlier was heavy with executive directors, was one of the recommendations of the consulting group. In times of difficulty, it becomes difficult for internal directors to pinpoint the shortcomings and take tough decisions, says Thermax chairperson Anu Aga.

The other recommendation was divesting the company of all its non-core activities so as to focus on its core businesses of energy and environment, which the company has been implementing. "One of the observations of Boston Consulting Group was that each of our divisions was operating like silos, and not making use of the group synergy that we had," says Kulkarni.

Thermax acquired 100 per cent stake in M E Engineering Ltd., a UK-based company with expertise in design and project management in energy engineering, through the wholly-owned subsidiary, Thermax International. It also set up Thermax Inc., USA, to act as a front-end for all businesses in North and South America.

That the company is making a turnaround is evident from the fact that its turnover increased by 16 per cent to Rs 473 crore in 2000-01, despite a decline in the capital goods industry, which grew at a measly 1.4 per cent. It also showed an Rs 8 core operational profit as against an operational loss of Rs 21 crore the previous year.