• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Santanu Sanyal

Mr C. Venkataramana, CMD, Nalco.

VISAKHAPATNAM, June 30

TO most people he is just the `burra saheb' of a profit-making public sector company; to a select few others, he's known as a wizard in foreign exchange treasury operations.

Not only have his skills in this area helped his company book a huge profit from a single deal, they have found him a place in a high-powered RBI committee on foreign exchange.

But Mr C. Venkataramana, Chairman and Managing Director of National Aluminium Company (Nalco), prefers to maintain a low profile. On his accomplishments as a foreign exchange juggler, he told Business Line: "What I've done is not something new or unique; a lot of people engaged in foreign exchange operations also do the same thing. But then, to be successful, one needs to have courage and conviction which, I believe, I have.''

A chartered accountant by profession, he developed interest in foreign exchange transactions many years ago while at Kudremukh Iron Ore Company, where he was responsible for the company's import and export finance.

In June 1998, Mr Venkataramana, then Director (Finance) in Nalco, switched a portion of the company's dollar holding in New York into yen keeping in view the repayment to be made later in regard to the yen loan raised by the company.

The switch helped Nalco book a profit of Rs 42 crore. (In 1998-99, Nalco posted a net profit of Rs 248.25 crore on a turnover of Rs 1,506.65 crore.)

This was possible because of the gradual appreciation of the yen vis-a-vis the dollar, which he foresaw.

"I had been closely monitoring the movement of various foreign currencies for four years prior to striking the deal.''

But then, Mr Venkataramana's bid to firm up the deal was not smooth. The Nalco board was initially sceptic. "But the then CMD backed me.''

The approvals of the RBI and the Ministries concerned - Mines and Finance Ministries - had to be obtained. It was not easy to convince them but he succeeded. "A few senior officials in the Ministry of Mines stood by me.''

When all the approvals were obtained, Mr Venkataramana asked State Bank of India for rates, which became available immediately. The deal was clinched and the profit booked.

"The board meeting was on and I went out of the meeting for some time to see that the deal was through.''

The same year, the RBI constituted a high-powered committee under the then Deputy Governor, Dr Y.V. Reddy, to prepare a report on foreign exchange management by PSUs and Mr Venkataramana was inducted into it.

Despite initial success, the Nalco CMD has refrained from making such deals subsequently.

Firstly, the proper opportunities were not easy to come by. Also, since Nalco is a state-owned enterprise, he had to be very cautious and careful about undertaking such operations on a regular basis.

For the same reason, he has never encouraged the idea of creating a separate cell within the company for undertaking forex treasury operations.

In 2002, however, Nalco booked about Rs 2.5 crore profit from another deal - forward sale of the dollar. (In 2002-03, the company's turnover was Rs 2,739 crore and net profit Rs 521 crore.)

With the appreciation of the rupee vis-a-vis the dollar, the country's imports would now become cheaper and exports dearer.

"As the CMD of a company where more than 50 per cent of the turnover is accounted for by exports, I do not feel comfortable in the current situation.''

According to him, Nalco's performance in the current fiscal would be substantially better than last year.

This would be possible because the expansion work currently in progress in some of the plants would be over with the benefit of the expanded capacity becoming available and the opening up of new markets.

He estimates the current year's production of alumina at 15.7 lakh tonnes compared to last year's 14.81 lakh tonnes and of metals at 2.9 lakh tonnes (2.45 lakh tonnes).

However, Mr Venkataramana's only concern is the uncertainty surrounding the LME price. "I want the current price of aluminium at $1,400 per tonne to continue throughout the year.''

Article E-Mail :: Comment :: Syndication

Stories in this Section
Ranbaxy gets USFDA nod AIDS drug

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line