REPORT ON ORGANISATIONAL STUDY AT FERTILISERS AND CHEMICALS TRAVANCORE Ltd. Vivek Menon (Reg. No: 85270050) Under the Guidance of Dr. Sarada S Reader Submitted in partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATION to the Cochin University of Science and technology School Of Management Studies Kochi-682022, Kerala, India Year-2008
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REPORT ON ORGANISATIONAL STUDY AT FERTILISERS AND CHEMICALS TRAVANCORE
Ltd.
Vivek Menon (Reg. No: 85270050)
Under the Guidance of Dr. Sarada S
Reader
Submitted in partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATION to the Cochin University of Science and technology
School Of Management Studies Kochi-682022, Kerala, India
Year-2008
CERTIFICATE
This is to certify that this REPORT ON ORGAINSATIONAL
STUDY AT FERTILISERS AND CHEMICALS TRAVANCORE
LTD. is a bonafide study of Vivek Menon of the third
Semester MBA student of School of Management Studies at
the Cochin University of Science and technology.
Place: Dr. Sarada. S
Date: Reader
DECLARATION
I Vivek Menon, third semester MBA student of school of
management studies at the Cochin university of science
and technology do hereby declare that this report on
ORGANISATIONAL STUDY AT FERTILISERS AND
CHEMICALS TRAVANCORE COCHIN Ltd. under the
guidance of Dr. Sarada. S, Reader, School of Management
Studies in partial fulfillment of the requirement for the
award of the degree of Master of business administration
is a bonafide study I have done in the organisation. I also
declare that this report has not been previously formed the
basis of award of any Degree, Diploma, Associate ship,
Fellowship or any other similar title of this or any other
university or institution.
Place:
Date: Vivek Menon
ACKNOWLEGEMENT
I would like to acknowledge my profound sense of gratitude to:
the Almighty for giving me strength and ability to successfully
complete the study and make this report on time
Dr. S Sarada, Reader, School of Management, Cochin
University of science and technology, my guide for this study,
who guided me with her valuable suggestion. She was a source
of inspiration for me to complete the study and make this
report on time and was instrumental in shaping this report.
Mr. John R Daniel, Chief Manager (Training) FACT, for his
guidance and support which he rendered throughout the study
and he was instrumental in shaping this report
this great institution of excellence which has encouraged me to
undertake such an organization study. I also extend my sincere
gratitude to our Director, Prof. (Dr.) Mary Joseph, of Schoolof Management Studies of the Cochin university of science
and technology.
to all employees of FACT for their kind cooperation for completion
of this work.
ABSTRACT
I underwent an organizational study at FACT to acquaint
myself with the business environment for a period of one
month from May 15, 2008 to June 14, 2008 as a part of the
MBA curriculum at the school of management studies of the
Cochin University of Science and Technology.
The study was conducted to understand the structure,
function and processes of various departments and their
interdependence. During the course of study I was able to
successfully interact with the employees of the organization.
They were happy to give me all possible information. They also
took me to the plants and worksites where I got the first hand
information about the organizational processes and its
functions.
The methodology consists of data collection through interview,
observation and literature review. The data collected from
different sources are classified, analyzed and interpreted.
Based on which an organizational structure, its functions and
various departments are identified. The various departmental
functions are clearly identified and their processes & activities
carried out are recorded. An in-depth analysis is made us to
understand the departmental process based on which a
process chart is prepared. The analysis further formed the
basis for identifying the departmental interdependence. The
study further revealed some of the challenges faced by the
departments. The study helped us to obtain an exact picture of
FACT based on which, a slot analysis is done. Finally, with the
help of latest statistics available from the organization, the
present trend and current scenario of FACT is clearly revealed.
LIST OF CHART, TABLES AND FIGURES
Chart
Chart No. Particulars Page No:
1 Organizational chart 20
2 Organizational chart of Finance department 21
3 Organizational chart of Materials department 29
4 Raw Material procurement process 31
5 Equipment and spares procurement process 33
6 Process flow in stores department 36
7 Process flow in traffic department 40
8 Organizational chart of production department 42
9 Production process 43
10 Organizational chart of market department 47
11 Process chart of market department 51
12 Organizational chart of quality control department 55
13 Organizational chart of R & D department 59
14 Organizational chart of fire & safety department 64
15 Organizational chart of computer division 68
16 Organizational chart of HR division 70
17 Organizational chart of training division 78
18 Training process chart 79
19 Organizational chart of vigilance department 82
20 Vigilance department process flow 83
21 Organizational chart of company secretariat 85
Tables
Table No. Particulars Page No:
1 Performance at NSE 10
2 Distribution of shareholdings 11
3 Brief picture of FACT 12
4 Milestone of FACT 15
5 Products of FACT 45
6 Areas and regions of distribution 50
7 Marketing operations 51
8 Sales turnover 54
9 Expenditure on R & D 62
10 Welfare scheme 72
11 Division wise staff strength 76
Diagrams
Diagram No. Particulars Page No:
1 Process flow in computer department 68
2 Interdependence of department 86
CONTENTS
Topic Page No:
Certificate from organization i
Certificate from guide ii
Declaration iii
Acknowledgement iv
Abstract v
List of figures, tables and chart vi
Chapter No:
1. About the study 1
2. History of FACT 3
3. About FACT 8
4. Functional departments
4.1. Finance department 21
4.2. Materials department 29
4.3. Production department 42
4.4. Marketing department 47
4.5. Quality control department 55
4.6. R & D department 58
4.7. Fire & Safety department 63
4.8. Computer service department 67
4.9. Human resource department 70
4.10.Training department 77
4.11.Vigilance department 82
4.12.Company secretariat 85
5. Functional interdependence of departments 86
6. Corporate social responsibility 89
7. Environment analysis 91
8. SLOT analysis 94
Conclusion 96
Bibliography
Chapter 1
About the study
1
1. OBJECTIVE OF THE STUDY The organizational study was carried out at FACT Ltd. Udyogamandalam to
achieve the following specific objectives:-
1.1. To understand the organizational framework & it’s functioning.
1.2. To gain knowledge about different departments of the organization and
the functions.
1.3. To study the interdependence of different departments.
1.4. To make a SLOT analysis of the organization
2. METHODOLOGY OF THE STUDY 2.1. Observation
By observing the general surrounding, the functional process,
interactions of employees etc.
Work site and plants were visited were the actual process of production
and activities of various department were seen and understood. 2.2. Data collection
2.2.1. Direct method
Through Interview & discussion
We interacted with the employees and understood the work and
responsibility carried by each of them. This helped us to
understand the various department and their functions clearly.
Further discussion with them revealed some key functions and
process carried by each department and the departmental
link and Ethernet LAN (Local Area Network) at department level. A
corporate Intranet on Windows NT platform provides e-mail access to
officers, besides hosting web pages containing daily updates of key
production and financial figures. Major applications are on INGRES
platform and being migrated to Oracle 8.
The On-line Integrated Information System (OIIS) that links all the
functional areas of the enterprise had been jointly developed and
implemented by M/s Tata Consultancy Services and CSC. The integrated
system, which runs on Oracle-8i database platform optimizes business
processes of the enterprise and provides information for decision-making.
Main modules of Online Integrated Information System (OIIS) are
finance, human resource, production, traffic/logistics, Maintenance,
Materials, Marketing and sales. Major software systems in the organization
are developed and maintained in-house by the skilled workforce at CSC.
6. ENVISAGED ACTIVITIES 1. Upgradation of WAN and LAN through OFC (optical fibre cable) by
2009
2. Web based connectivity for OIIS across various depots
3. Real time information transfer across depots to head office
7. CHALLENGES OF COMPUTER DEPARTMENT 7.1. Alarming rate of employee turnover
7.2. The online integrated system is not web based at present. Hence there
is no online connectivity with depot.
1. HUMAN RESOURCE DEPARTMENT
2. GENERAL INFORMATION Human resource management is one of the most complex and challenging
fields of endeavor. It is considered to be the most expensive and important
resource of every organization. In FACT the scope of Human Resource
Department is very vast.
3. OBJECTIVE OF HR DEPARTMENT 3.1. To maintain the optimum manpower required to sustain the growth of
Organization.
3.2. To motivate & manage human resource and train them to ensure their
personal and organizational development.
4. ORGANISATIONAL CHART OF HR DEPARTMENT
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Chart no: 15
CM (IR)
CM (Est.)
GM (HR)
CMD (F.A.C.T)
CM (Trg)
CM (Welfare)
CM (Legal)
CE (Ind. Eng.)
Mgr (Public Relation)
DGM (Admin)
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5. FUNCTIONS OF HR DEPARTMENT 1. Organizational human resource planning & development
2. Retirement & selection
3. Wage & Salary administration
4. Employee records maintaining
5. Performance appraisal
6. Welfare programme
7. Job evaluation
8. Handling employee grievances
9. Handling the legal issues within & outside the Organization
6. PROCESS OF HR DEPARTMENT The human resource department has 3 blocks which are:
1. Establishment
2. Industrial relation
3. Welfare
6.1. Establishment Section The main functions are:
1. Recruitment & selection
2. Transfer, rotation and placement of employees in consultation with
divisional heads
3. Wage and salary administration
4. Performance Appraisal
5. Retrenchment
6.2. Industrial Relation Industrial relation operates only within the Organization. The Inter-
organizational relation is handled by the corporate cadre. 60 to 70 % of
management time is lost in resolving IR issues. Therefore the H.R
department is of paramount importance.
The main functions are:
1. Communication between management and trade unions
2. Grievance handling
3. Settlement of dispute
4. Handling disciplinary action
5. Safeguarding Employee rights
6. Career related issues like promotion, transfer & rotation
7. Resolving daily petty issues
6.3. Welfare Welfare schemes can be divided into Statutory, Agreement, Voluntary and
Incentives
The main objective of welfare measures is to maintain healthy working
environment and raise the standards of living of employees which create
harmony to the society and finally to the organization. FACT has always
maintained very healthy welfare measures.
Statutory scheme Agreement scheme
1. Employee’s state insurance 2. Provident fund and miscellaneous
provisions act, 1952-exempted scheme in FACT-FACT employees provident fund trust.
3. Payment of gratuity Act, 1972 4. Kerala labour welfare fund board
rules, 1975 5. Industrial employment (standing
orders) Act 1946 6. Factories Act, 1948-Covers
(Health, safety, welfare)
1. Family relief fund 2. Superannuation benefit fund 3. Family pension scheme of company 4. Retirement benefit fund 5. Employee’s welfare fund 6. Transport subsidy 7. Local travel expenditure 8. Subsidized bus service facility 9. Special vehicle loan 10. Uniform & footwear 11. Leave travel concession 12. Evening snacks 13. Children’s education allowance 14. Interest subsidy 15. Free tea-twice a shift 16. Production incentives 17. Leave & holidays
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Voluntary Scheme Incentives scheme
Table No: 10
1. Contributory health scheme 2. Group personnel accident insurance scheme 3. Aid towards funeral expenses 4. EX-gratia payment for accident deaths 5. Gratuity payment-company scheme 6. Vehicle loan 7. Work clothes 8. Rain coats & Umbrellas 9. Free milk supply 10. Supply of coconut oil, soaps, and towel 11. Conveyance allowance for physically
handicapped 12. Special Tiffin for fire and safety personnel 13. Laundering of special clothes 14. Sports & Recreation 15. Lalith kala Kendra 16. Fact employee’s consumer cooperative
society 17. Fact employees housing cooperative society 18. School facilities 19. Company accommodation
1. Incentives for employees acquiring higher qualification while service
2. Incentives to promote Hindi 3. Incentive to promote family
planning 4. FACT merit award 5. FACT service award 6. Attendance bonus 7. Suggestion scheme 8. Incentive for blood donation 9. Incentives to promote sports &
players 10. Merit scholarship scheme for
employee’s children
7. INDUSTRIAL ENGINEERING
The main objective of this section is to make effective utilization of the
manpower resources and restructure it for the benefit of the organization.
The main functions are:
1. Manpower planning that compose of Manpower audit & Forecast
future requirements
2. Custodian of manpower inventory
3. Work study
a. Removing system bottlenecks
b. Production incentive etc.
4. Maintenance scheduling
5. Work environment study
6. Employee problem analysis
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8. ADMINISTRATION WING The wing is headed by DGM and maintains orderliness in internal affairs
of the department. The main functions are:
1. Checking the performance of each department
2. Consolidating the reports of different HR sections
3. Act as a linking chain between different sections
4. Office and admin work of HR department
9. LEGAL SECTION The department looks after the Legal affairs of the organization. It is
entrusted with the duty of handling cases within and outside the
organization in which the company is involved.
10. SOME KEY INFORMATION
10.1. RECRIUTMENT POLICY
The Recruitment policy is done as per prescribed recruitment specification
with proper authority appointed by B.O.D. The following are the sources of
recruitment.
1. Confirmed employees within the division or company
2. Employment exchange as per provisions of Employment Exchange Act
3. Employees on deputation from Govt. of India
4. Casual labours who were initially taken after employment exchange
5. Transfer from public sector undertakings
6. Apprentices who completed training in FACT
7. Dependents of deceased employees who died in service
8. External source
10.2. PERFORMANCE APPRAISAL
Performance Appraisal in FACT started in 1962. In 1984, the system was
further revised to include potential assessment, assessment of training
needs and performance counseling.
75
The main functions are: 1. Self Appraisal for all management employees
2. Reporting and receiving officers specified for each level of appraisal
3. Assessment by the Assessment Committee
4. Grading on the basis of assessment
5. Communication of final rating to employees formally
6. Provision for appeal by employees formally
10.3. WORKERS PARTICIPATION IN MANAGEMENT
FACT is one of the pioneer industrial undertakings, which initiated action
to promote worker participation in management. Even as early as 1959,
when FACT had only one division, the idea of having the active association
of employees in various aspects of productive operations in true
participative spirit, creating a climate of involvement and commitment in
order to motivate the work force to enable the work force to contribute
their best to the sustained growth and prosperity of the organization was
in the mind of management. It was with this idea that a Joint Council,
Shop Council and Joint Labour Management Action Groups were formed.
11. MANPOWER OF FACT
As part of cost reduction measures, from 1998 onwards FACT reduced its
employee strength. FACT had more than 9000 employees earlier, but it is
now reduced to less than 4000 employees by the successful
implementation of VRS. FACT has several divisions, which all together
consist of 3817 employees now. The following table shows the division
wise employee strength of FACT during April - 2008
Division wise Staff Strength - April -2008
Non managerial Managerial Total
Division Strength Avg.
age
Strength Avg.age Strength Avg.age
HO 116 47 209 49 325 49
UD 994 46 294 49 1288 47
CD 828 50 310 52 1138 50
PD 466 45 204 47 670 46
FEDO 28 48 71 49 99 49
FEW 23 50 22 50 45 50
Marketing 145 49 107 48 252 49
Total 2600 47 1217 49 3817 48
Table No: 11
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TRAINING DEPARTMENT
1. GENERAL INFORMATION
The training and development activities of the company have been
centralized with effect from April 2004. With this arrangement, the
management development centre (MDC), the training centres of Cochin
division, Udyogamandal division and Petrochemical division have been
centralized into one department called FACT Training Centre.
Centralization was effected with a view to:
1.1. Utilize all resources efficiently and to ensure more productivity
1.2. Identify the training needs of all employees based on a uniform
approach and imparting required training
Training Centre of FACT has started job-oriented courses in Fire & Safety
Engineering. New courses in Heavy Equipment operation & maintenance,
Welding technology and Process Plant operation are being organized. These
courses are planned to be offered in association with Governmental
agencies and statutory bodies. The objective is to convert the training
centre in to a “Skill Development Academy” with a view to provide facilities
for skills development and making educated youth employable.
2. OBJECTIVES OF TRAINING 2.1. To identify training needs of the employees as a whole on the basis of
uniform criteria
2.2. To impart required training, which equip the employees consisting of
officers and workers of the company with knowledge and skill,
required for improved performance
2.3. To meet training needs with specific reference to ISO 9001:2000 and
ISO 14001:2004 standard requirements
2.4. To maintain a database of training details and development activities
3. ORGANISATIONAL CHART OF TRAINING DEPARTMENT
CM (Training)
Mgr (TRG)
Officer (TRG)
Instructors
Staffs
Chart no: 16
4. FUNCTIONS OF TRAINING DEPARTMENT Training Centre is involved in four broad functions:
1. Training officers and workers of the company as a whole in identified
areas
2. Meeting the obligation of Apprentice Act 1961/1973
3. Facilitating post qualification training, in plant training and project
work to students
4. Facility for employees to attend external training programmes
5. TRAINING PROCESS 5.1. Identification of training needs, trainees & programmes
5.1.1. Department-wise identification of people to be trained
5.1.2. Suggestion of programmes by department head
5.1.3. Final selection of programmes by training department
5.1.4. Preparing detailed programme schedule by training department
78
The training activity plan prepared is generally for a period of three years
i.e. one cycle. During the period, the plan may however be revised. At least
7 different programmes are conducted in a cycle.
Identifying People to be trained
Prepare Training plans
Facilities Methods
Identification of training need
Measure and analyze Results
Impart Training
Trainers Programmes
Validate Evaluate
Identifying the training Programmes
Feedback
Chart no: 17
79
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5.2. After the training plan is prepared, the programmes, facilities, method of
conducting and trainers are identified. Non-technical training programmes
are conducted in FACT Training hall at the Training Centre.
5.3. Imparting training In FACT, there are two methods of training for employees. The method of
training is decided on the basis of requirements.
5.3.1. On the job training
This is specific to the job and concentrates on imparting knowledge and
skill to the concerned employee. Induction training include introduction of
an employee to the organization and job by giving him all the possible
information about organization’s culture, climate, objectives, policies,
practices, products etc. In job instruction training, necessary instructions
about the job are given by the concerned superiors. Instruction manual is
also supplied for the same and it helps the employees to deal with work
conditions. Job rotation is another on the job training in which an
employee made to move from one job to another at certain intervals. Job
rotation in FACT is intradepartmental, interdepartmental and inter-
divisional. Intra-departmental job rotation is done within the departments
so that all employees are exposed to different functions carried out in their
departments. Workers employed to different plants are rotated among the
plants at periodical intervals. These rotations give skill and knowledge to
the employees in different jobs.
5.3.2. Off the job training
This method is employed to impart knowledge and skills in the employees
in general areas which enable them to perform the job better. The main
objective of this programme is personality development such as leadership
quality, communication skills, attitude change etc. These methods consist
of lectures, conference, group discussions, case studies, role playing and
transactional analysis. Off the job training is carried out with the help of
81
internal or external faculty on the basis of their availability and suitability.
Examples of programmes conducted by internal faculty are fire fighting
training, employee development programme, fire and industrial hygiene,
safety etc. Some of the external organizations which provide training
programme in FACT include National Productivity Council, Confederation
of Indian Industries, National Safety Council and Regional Labour
Institute. Some of the technical programmes conducted are innovative
approach in industrial pollution control, instrumentation and energy
conservation of boiler operations and maintenance of bearings.
Apart from the training conducted at training centre for the employees &
students there are external training conducted for the corporate cadre
managers i.e. for chief Managers and above. External training programs
are mostly conducted outside FACT.
5.4. Feedback
The important aspect of training is feedback since it checks the validity
and effectiveness of training. Feedback is usually obtained department
wise from the department heads, prepared by the immediate supervisors of
the trained employee. The change in work behavior or general behavior
forms the feedback.
6. CHALLENGES TO TRAINING
6.1. Improper feedback
6.2. Improper selection of employees from the various departments
6.3. Limited time available due to the pressure of production targets
VIGILANCE DEPARTMENT
1. GENERAL INFORMATION
Vigilance is an integral part of the management function. The department
is a statutory requirement for all public sector companies. The Department
in FACT is headed by a chief vigilance officer (CVO).The incumbent CVO is
an IPS or IAS officer. He or she possesses the status rank and perquisite of
a functional director. Under him/her there are two Chief Managers from
vigilance department posted at FACT head office at Udyogamandal.
2. OBJECTIVE
To act as a policeman and deter fraud or any unscrupulous activity in the
organization and to punish such activity when takes place, thereby,
creating an environment of mutual trust and fair play in the organization.
3. ORGANISATIONAL CHART OF VIGILANCE DEPARTMENT
Chart no: 18
The CVO has the power of dual reporting either to the CMD or directly to
CVC of Govt. of India.
CVO (FACT)
Chief Manager
DY Chief Manager
Inspector
82
4. FUNCTIONS OF VIGILANCE DEPARTMENT
4.1. Acting on complaints
4.2. Inspecting high value files
4.3. Maintaining transparency and accountability of jobs
4.4. Department-wise monitoring of frauds and malpractices
5. PROCESS FLOW CHART
Chart no: 19
Vigilance Notice boards have been installed in all the offices all over the
company displaying the address and telephone numbers of the CMD, CVO,
and CVC. These authorities can be approached on complaints of
corruption. They can be accessed by e-mail also.
Start here Start here
Dept-Wise monitoring for frauds and malpractices
83
5.1. Acting on complaints
Anonymous and pseudonymous complaints are not taken cognizance of
survey of employees suspected of indulging in corruption is undertaken
YES
NO
Take action
Inspecting high value files
Fraud Detected
Receipts of complaints
Suspicious Actions
Acting on complaints
84
and on getting reliable information their names are included in the agreed
list for keeping a close vigil on their activities.
5.2. Suspicious action of employees
The names of employees who are charge sheeted in the court in a
corruption case or have been punished or likely to be punished in
departmental proceedings on charges of corruption and irregularities are
included in the list of officers of doubtful integrity. Both the lists are sent
to the CBI for keeping a watch on the activities of listed employees.
Employees are also monitored if suspicious actions are detected.
5.3. Inspecting High value files
Some of the high value files are:
1. Files of high financial importance such as Budgeting and payroll
2. Susceptible Files: E.g. Stores accounting.
3. Files of importance. E.g. Raw material procurement, traffic of
materials
4. Adherence to policies: Transfer, promotion, awards, incentives given
to employees
5. New projects & development related activities
5.4. Actions taken
The cases of fraud charged against a department or an employee is
circulated throughout all departments which act as a deterrence to
malpractices for fear of being caught.
If the case involves above Rs. 25 lakh, then the case is handed over to the
CBI. The CBI can also take over the case from the department if
paramount importance has been attached to the case. An employee is
suspended from service during the period of trial and if found guilty from
the court of law, then he or she is terminated from service considering the
gravity of the case.
COMPANY SECRETARIAT
1. GENERAL INFORMATION Company secretariat is a statutory requirement for all companies having
more than Rs. 2 Crores worth assets.
2. OBJECTIVE To carry out the company affairs as directed by the Board of Directors and
to act as a link between B.O.D and the company.
3. ORGANISATIONAL CHART OF COMPANY SECRETARIAT
Chart no: 20
CMD (FACT)
Company Secretary
Officer
Staffs
Asst. Secretary
4. FUNCTIONS 4.1. To act as the principal officer of the company
4.2. Carries out Board Director’s instructions
4.3. Public information officer complying with Right To Information
Act(RTI Act)
4.4. Compliance or adherence to the legal requirement of the organization
4.5. Supervision of share transfer/depository agents
85
Chapter 5
Functional Interdependence of Departments
86
Computer Centre
R & D Quality Check
Vigilance
FUNCTIONAL INTERDEPENDENCE OF DEPARTMENTS
Diagram No: 2
HUMAN RESOURCE MANAGEMENT
Fire & Safety
87
1. Finance & Materials Finance department procures fund for production and accounts for it.
With these funds materials are brought. During purchase the company
has to enter into contract, give letter of credit and other necessary
documents, which is done by the finance department. The traffic section of
the materials department helps the finance department in rising of fund by
providing a link in production and marketing its products. Finance
department plays a major role in vendor development by opening the bids
and deciding the feasibility of vendors.
2. Marketing, Materials and finance Marketing department sells the goods and raises the fund required by the
finance department. Materials department transports the goods for the
marketing department.
3. Finance and Production
Production targets are made on the basis of finance budget which checks
the economical feasibility of the plan and finance budget cannot prepared
without knowing the production plan.
4. R & D and production R & D researches new technology for decreasing the production cost, and
further by its manufacture of Biofertilizers.
5. Quality, Marketing and R & D Quality preserves the customers delight by ensuring the quality of goods
sold. R & D counter checks the quality. R & D further goes to the depots
and check the products whether it reaches the market safely with quality.
6. H.R
H.R department ensures the development of human resource and its
productive utilization by directing it in the right channel.
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7. Computer service centre The department enhances inter-departmental and intra-departmental flow
of information and speedy data processing. Data access is controlled
within and between departments. Constant updating is done to catch up
with the modern developments.
8. Fire & Safety It operates all over the organization to ensure its safety and quickly
responds to emergency cases.
All departments are interdependent and interrelated to each other for their
functioning. One department cannot operate without the absence of the
other. The performance of the company depends on the interdepartmental
functioning rather than the department wise functioning.
Chapter 6
Corporate Social Responsibility
89
CORPORATE SOCIAL RESPONSIBILITY
Some of the measures taken by FACT as a part of its Corporate Social
Responsibility are:
1. Dealer Network
The dealer network plays a very crucial role in marketing of fertilizer in the
country. In most cases dealer, not only gives the fertilizer but also imparts
substantial knowledge and information on the use of fertilizer and
improved agricultural practices.
2. Community Awareness
Community awareness programs on safety, pollution control measure in
plants, onsite emergency plan and so forth are being carried out through
the public relations department.
3. Social welfare The company has implemented the reservation policy of the government of
India for scheduled castes and scheduled tribes as well as for the other
backwards classes. It is presently employing 1855 SC/ST/OBC employees,
and has been actively implementing the special recruitment drive for the
employment of SC and ST. Consequent to this drive; the company has
been implementing the directives of the government of India on reservation
for other backward classes.
4. Hospitals
There are two full-fledged hospitals, one each at Udyogamandal complex
and Ambalamedu respectively. These hospitals provide both inpatient and
outpatient treatment to the company employees who are members of the
contributory health scheme. The hospitals also extend their service to
those who are not members.
90
5. School Schools are established both at Udyogamandal complex and at
Ambalamedu. Schools provide free education to the children of company
employees and on payment basis to children of neighboring public sector
employees and for general public. The curriculum ranges from ICSE, Plus
2 and SSLC.
Chapter 7
Environmental Analysis
91
Environment Analysis
1. INTERNATIONAL SCENARIO Around 95 percent of the fertilizer produced in the world is used for farm
crop. Fertilizers include both natural and artificial substances that
increase the productivity of agricultural land. It is clear that the rapidly
growing population of the world will increasingly depend on commercial
fertilizers for its food and fiber.
The world’s leading fertilizer producers are the Soviet Union and United
States. Other leading producers are China, Canada, France and India. The
world’s leading producer of phosphate rocks is the United States. The
Soviet Union and Morocco has the largest resources phosphate rock. The
largest deposits of potassium chloride, the major source of potassium
fertilizer, occur in Canada and Soviet Union. The fertilizer industry of the
United States is organized into separate segments for producing and
marketing Nitrogen, Phosphate or Potash intermediaries and products.
Some European countries are following the elemental system, N and K and
it is likely that rest of the world will adopt this system.
2. NATIONAL SCENARIO
India is one of the world’s largest producers and consumer of both
phosphorous and nitrogenous fertilizers. The pesticide in the country is
also among the fast growing sector in the world. There are around 25
chemical fertilizers used in the country at present.
The total fertilizer capacity in India is 12.02 million tonnes in nutrient
terms, and consumption was is 13.05 million tones. Roughly a sum of
Rs.130 million has been the total investment in this industry.
The problem of the industry is the seasonal demand for its product and
large working capital requirements. The Govt. of India has implemented
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and commissioned major fertilizer projects in 1998-1999 and invested
4122.02 crores. They will add 9.75 lacks of DAR (Di-ammonium phosphate
and one lack tones of NP).It is unfortunate that fertilizer industry has been
a victim in the recent past under the controlled piercing subsidy regime of
the Government.
1. Government is contemplating complete decontrol in phased manner by
2006-07.
2. Quantitative restrictions on fertilizer imports have been removed since
April 1, 2001.
3. The implication of present policy environment for fertilizer sector in
India is not promising. There are possibilities that domestic
production and consumption of fertilizers may decline.
4. The policy considerations which are likely to be implemented may
result in making the domestic production of fertilizers unviable.
5. At present there is no demand-supply gap in urea.
6. A switch over in feed stock from naphtha to LNG for urea is envisaged
depending on its availability and price.
7. High energy cost does not permit further expansion in urea capacity
within the country. Joint ventures abroad are likely to be developed.
8. For phosphate and potash also, joint ventures abroad are likely to be
developed as there is no potential reserve within the country.
3. STATE SCENARIO
Kerala has high degree of land use and cropping intensity. The state’s
agricultural productivity is decreasing year by year. The production and
cultivation of rice is decreasing and the farmers are concentrating on
commercial crops like rubber and coconut. Due to the decrease in the
cultivation of rice, the consumption of nitrate and potash has come down.
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Kerala has one of the lowest consumption of fertilizer in the country per
hectare of land area. FACT has the major market share in Kerala. To gain
the market share FACT is planning to increase its marketing programs in
several areas of the Kerala state.
4. COMPETITORS OF FACT
SPIC- Southern Petrol Industrial Chemicals (Products-Urea, di-
Ammonium Phosphate and intermediaries)
MFL- Madras Fertilizer Ltd. (products-NPK 17:17:17 and variants Vijay