The group has also decided to remove cross holdings and family members have given way to chief executive officers to focus on core businesses. Only two family members would be on the boards of each company.

The group chairman MV Subbiah told newsmen here on Wednesday that the group has recently made two key changes in its governance structure. At the group level, a new Murugappa corporate board has been constituted. This non-statutory board will work to improve governance standards, strategy formulation and to step up capabilities across the group. Strong HRF initiatives are being taken to rapidly build up competencies in it, marketing and brand management.

The five promoter members so far in executive charge of the business have relinquished operational command and have assumed group level responsibilities of business monitoring and functional excellence. The group chairman will focus on developing the group vision and strategy, excellence in corporate governance and external communication. Group finance function will be with a professional member of the group board, he added.

He said that the restructuring exercise has been initiated through a portfolio evaluation study with McKinsey & Company and focus on businesses with a relevant size and profitability outlook where the group has or can develop winning competencies. He said a Murugappa corporate board has been constituted to improve governance standards, strategy formulations and consists of three independent members, two of whom have already joined the board.

Subbiah said the holding company concept was not being thought of at the moment but it could be considered at a later stage.

He said registration formalities for an anti-feedant non-toxic neem pesticide was before the US Food and Drugs Administration and it was expected by this month. Trials for the anti-feedant pesticide have been successfully carried out in Australia, Germany and USA.

A Rs 16 crore plant plant to manufacture neem pesticide has been set up at Cuddalore in Tamil Nadu while an amount of Rs 15 crore has been spent on research alone during the past six years. Subbiah said once registration from FDA was through, exports on neem pesticide in the first year was likely to be around Rs 10 crore in the first year and Rs 25 crore in the next three years.

Following an agreement with the Andhra Pradesh government wastelands were being taken on long lease for cultivation of neem, he added. On entry into the insurance business, Subbiah said an MoU has already been signed with AXA, a leading French insurance company, and added, "We are ready to enter general or life insurance or both." Major projects taken up include raising production by 50 per cent at Coromandel Fertilisers to six lakh tonnes per annum and the setting up of an automated baggage handling plant at a cost of Rs 75 crore, Rs 15 crore gas-based power unit at Carborandum Universal and Rs 15 crore by Tube Investments for manufacturing doors for Santro and Maruti 800 cars and Rs 45 crore in a sugar factory in TN.