On the brink of bankruptcy, Markfed is now debt free
: Emerging from the brink of bankruptcy, Punjab Markfed, a state-run cooperative organization, erased three decades of debt by increasing sales by launching new products, exporting to other countries and taking advantage of opportunities to generate income during Covid-19 restrictions.
Markfed, which was on the verge of bankruptcy in 2016-17, repaid all of its bank loans on March 31.
“It was under debt of Rs. 809 crores in 2017-18 and the banks were not giving us any loans even for working capital. However, thanks to the constant efforts of the staff, I am happy to share that as of March 31, 2022, Markfed has repaid all its outstanding bank loans and no longer has any debts with the banks,” said Varun Roojam, CEO of Markfed.
According to the data shared by the white paper submitted by the Punjab government in 2018, on 28th February 2017, the Punjab government gave a guarantee in the amount of ₹27782.77 crores, of which ₹7219.81 crores was outstanding, for its operations. Apart from that, Markfed also had to ₹1139.99 crores to financial institutions under loans (not secured by government guarantee).
Despite the debts, Markfed held on until 2010-11 but could not recover from losses from 2011-12. She suffered a loss amounting to ₹394.87 crore in the year 2015-16 and had accumulated losses amounting to ₹1654.25 crores as of March 31, 2016.
By innovating and launching new products, including accelerating sales during Covid-19 and exporting to foreign countries, Markfed has increased its turnover. He successfully secured the order to supply dry rations to aanganwadi centers in Punjab and increased his sales by Rs. 42 crore from a single order.
In addition to this, the government has made a provision that any ministry can directly procure any item up to Rs. 50 lakhs from Markfed without any bids. Nearly 20 departments and organizations use this facility to source quality items from Markfed.
“The increase in revenue, and the loss to profit in terms of sales, we managed to turn the tide and get out of the lending mess. Now we will increase sales even further,” he said, adding that the Sohna brand is doing remarkably well in terms of packaged foods and other similar items.
Roojam said that during the Covid-19 restrictions, Markfed not only maintained the food supply chain by providing door-to-door groceries, but also played a key role in providing livestock feed.
“In the next fiscal year, we will have a moolah as Markfed sets up an edible oil plant, doubles its animal feed production capacity and signs memorandums of understanding with several state governments to supply products. Sohna brand at their fair price stores,” Roojam said. .