Published on March 5, 2014
CHAPTER I 1.1 INTRODUCTION Industry Profile–Growth–Public Sector Indian Fertilizer Industries–Private Sector Fertilizers Companies–Company Profile–Organizational Structure–Groups–Mission–Standards–Values– Expectations–Commitments 1.1.1 INDUSTRY PROFILE India is basically an agricultural country which economy depends largely upon its agrarian produce. Agricultural sphere contributes about 25% to the country‟s GDP. Indian fertilizer industry has a tremendous scope in and outside the country as it is one of the allied parts of agriculture. Today, Indian fertilizer industry is developing in terms of technology. Indian manufacturers are adopting advanced manufacturing process to prepare innovative new products for Indian agriculture. India has entitled as the third largest producer and exporter on nitrogenous fertilizer. Growth of Fertilizer Industry in India Fertilizer industry in India is meeting all the requirements of agricultural industry since the sale of its inception in 1906. The plant for fertilizers manufactures was set up in the same year in Ranipet Chennai. Then established the first two large-sized fertilizer plants one was the fertilizer and chemicals Travancore of India Ltd. (FACT) in Cochin, Kerala and the one was Fertilizer Corporation of India (FCI) in Sindri, Bihar. These two were established as pedestal fertilizers units to have self stuffiness in the production of food grains. Afterwards the industry gained impetus in its growth due to green revolution in late sixties followed by seventies and eighties when fertilizer industry witnessed an incredible boom in the production. The tremendous demand of fertilizers had led the country to invest huge in the public, corporative and in private sectors. 1
At present India has more than 57 large sized plants on fertilizers, manufacturing wide assortment of fertilizers including nitrogenous, phosphate, Ammonium Sulphate (AS), Calcium Ammonium Nitrate (CAN) urea, DAP and complex fertilizers. Apart from it, there are other 64 small and medium scale Indian manufacturers producing fertilizers. a) Here is the list of some public sector Indian fertilizer industries i. Madras Fertilizers Limited ii. National Fertilizers Limited iii. Hindustan Fertilizers Corporation Limited iv. Steel Authority Of India Limited v. Fertilizers & Chemicals Travancore Limited vi. Rashtriya Chemicals & Fertilizers Limited vii. Pradeep Phosphates Limited viii. Pyrits Phosphates & Chemicals Limited ix. Neyveli Lignite Corporation Limited b) Some of the major private sector fertilizers companies in India i. Balaji Fertilizers Private Limited ii. Ajay Farm-Chem Private Limited iii. Bharat Fertilizers Industries Limited iv. Gujarat Narmada Valley Fertilizers Co Limited v. Godavari Valley Fertilizer & Chemicals Limited vi. Gujarat State Fertilizers & Chemicals Limited vii. Maharashtra Agro Industrial Development Corporation The speedy growth in the fertilizers production is swaying the Indian manufacturers to transform into Indian exporters and helping them to create a long lasting impression on global consumers. 2
1.1.2 COMPANY PROFILE Madras fertilizers limited (MFL) incorporated in the year 1966 is a PSU under the administrative control of the department of fertilizer (DOF), Ministry of chemicals and fertilizers, government of India. MFL is engaged in the manufacture of Ammonia, Urea and Complex fertilizers (N:P & N:P:K) at Manali, Chennai. MFL is also engaged in manufacturing Bio-fertilizers and eco friendly Agro chemicals under the brand name ‟Vijay‟. . Fig 1.1 MFL is a public sector undertaking, under administrative control of the department of fertilizers, ministry of chemical & fertilizers. MFL has been serving the nation for the past 44 years since plant commissioning in 1971 and is proud to be part of green revolution. The Company Committed To, a. Meet needs of the farmers b. Production & promotion of balanced NPK fertilizers c. Production & promotion of new generation bio-fertilizers d. Marketing of eco-friendly neem pesticides e. Protection of environment & energy conservation f. Continual up gradation of technology and development of human resource MFL was incorporated on December 8, 1966 as a joint venture between GOI and AMOCO India incorporated of U.S.A (AMOCO) in accordance with the fertilizer formation agreement executed on 14-5-1966 with equity contributions of 51% and 49% respectively. 3
In accordance with the participation agreement between GOI, AMOCO and National Iranian Company (NIOC), an undertaking of Government of Iran, NIOC acquired 50% of the share holding of AMOCO in MFL on 22-11-1972. With this acquisition, share holding of AMOCO and NIOC were at 24.5% each, with the balance 51% being held by GOI. Subsequently, on 22-7-1985 the shareholding of AMOCO was proportionately purchased by GOI and NIOC. As a result, GOI and NIOC shareholding was revised to 67.55% and 32.45% respectively. Subsequent to the issue of rights, shares in 1994 for part-financing the project, the holding of GOI and NIOC stood at 69.78% and 30.22% respectively. MFL had an initial public offering of its shares in May 1997. After the allotment of shares to the public the shareholding pattern as follows Table:1.1 showing the share holding pattern Category No Of Shares (Mill) Percentage (%) GOI 9.59 59.50 NIOC 4.16 25.77 Others 2.38 14.73 Total 16.13 100 MFL is engaged in the manufacture of Ammonia, Urea, Complex fertilizers and Bio-fertilizers. MFL‟s activities include marketing of these fertilizers and trading in agro chemicals in accordance with the corporate objective. MFL has been striving to develop and maintain an organizational environment that motivates the individual, encourages personal initiative, innovative and creativity. 4
1.1.3 ORGANIZATIONAL STRUCTURE THE BOARD OF DIRECTORS Dr. I. VIJAYAKUMAR, IRS Chairman & Managing Director Madras Fertilizers Limited Manali, Chennai - 600068 Shri V K Subburaj, IAS Additional Secretary And Financial Advisor Department of Fertilizers Ministry of Chemicals & Fertilizers Government of India New Delhi - 110 001 Shri Satish Chandra, IAS Joint Secretary (P&A) And CVO Department of Fertilizers Ministry of Chemicals & Fertilizers Government of India New Delhi - 110 001 Mr. M Sagar Mathews Director - Technical Madras Fertilizers Limited Manali, Chennai - 600068 Mr. M H Ghodsi Director Naftiran Intertrade Co.Ltd. Tehran, Iran Mr. Mohammad Ali Ahmadi Director Naftiran Intertrade Co.Ltd. Tehran, Iran Mr. Ahmad Azmoodeh Director Naftiran Intertrade Co.Ltd. Tehran, Iran 5
1.1.4 DEPARTMENTS 1. Operation / Production 2. Technical Engineering Services 3. Marketing & Distribution 4. Finance & Accounts 5. Commercial 6. Corporate Services 7. Personal & Administration 8. Executive Director (vigilance) 1.1.5 MFL MISSION Our mission is to achieve all round excellence in the spheres of manufacture and marketing of chemical fertilizers, Bio-fertilizers, and Agrochemicals paving way for increased agricultural production and productivity, maximizing shareholders value and guarding interest of all stakeholders of the company. 1.1.6 MFL STANDARDS We have set upon ourselves the standards for all transactions with you. We undertake that in case of likely or inevitable delay, we shall promptly communicate the same to the party concerned. MFL VALUES We shall carry out our functions and duty with utmost Sincerity Speed Equity Integrity Transparency and Without any fear or favor. 6
MFL EXPECTATIONS We expect you to be reasonable and prompt in exercising your rights and obligations in all your transactions with the company without extending inducement of any kind and not raising any frivolous issues. 1.1.7 MFL COMMITMENTS They commit to Produce and distribute quality fertilizers conforming to the specifications. Timely distribution of our fertilizers to ensure consumer satisfaction. Continual up gradation of technology and development of human resources. Strict adherence to the prescribed safety, health and environmental protection standards. All officers who deal with the public will carry an Identity card. Provide every possible assistance to public by the Public Relations officers in the Registered Office, and by Regional Managers in our Regional Offices and Chief Resident Manager, New Delhi. The officers nominated would, besides, provide relevant information including procedures that may have to be followed by public in dealing with the company. Keep the Personal and Business information disclosed to us confidential. 7
CHAPTER II 2.1 PRODUCTION DEPARTMENT Plant– Product Profile–Chemical Fertilizers–Vijay Urea–Vijay Complexes (NPK)–Production, Imports, Consumption of Major Fertilizers– Bio-fertilizers –Forestry–Agro Chemicals –Neem Based– Plant Performance–Gas Conversion–Revamp–Post–Revamp–Process–Quality Policy– Swot Analysis 2.1.1 THE PLANT MFL consists of production plants, Ammonia, Urea in single streams and NPK in three streams, viz. NPK A Train, B Train and C Train. Utilities Plant is the service plant supplying treated water, cooling water, off-site steam, instrument air, captive power and emergency power. On November 1, 1971, MFL commenced commercial production of Ammonia, Urea and NPK complex. The feedstock for Ammonia is Naphtha and it is being supplied by the neighboring M/s Chennai Petroleum Corporation Limited (CPCL) . Fig 2.1 8
The original Ammonia / Urea Plants were of Chemico design with the daily rated capacity of 750 MT (2,47,500 MTPA) and 885 MT (2,92,000 MTPA) respectively. Initially there were only two trains to produce granulated complex fertilizers with a total installed capacity of 3,60,000 MTPA and in September 1976 one more NPK stream, namely C Train, was added raising the installed capacity to 5,40,000 MTPA, all by Hindustan Dorr Oliver. In 1991, the old Chemico converter of Ammonia Plant was replaced with the latest S 200 Radial Converter. 2.1.2 PRODUCT DETAILS Product Profile NPK (complex fertilizer) 17-17-17 is the prime product of MFL, which accounts for 90% of MFL‟s total, production for sale. The brand name given to these products is VIJAY. Chemical Fertilizers Urea NPK - Complex (17:17:17) (14:28:14) (19:19:19) (20:00:13) NK Mixture (20:00:10) Fig 2.2 MOP (Imported) DAP (Imported) VIJAY Urea VIJAY Urea with 46% Nitrogen is an economical Nitrogenous fertilizer suitable for all crops and all soil types. It can be used separately as a top dressing fertilizer or in combination with other fertilizers also. It is suitable for foliar application also. 9
VIJAY Complexes (NPK) VIJAY complexes are granulated fertilizers containing Nitrogen, Phosphorous and Potash. As the nutrients are present in balanced proportion, they are ideal for application as basal fertilizers to all the major crops. VIJAY 17:17:17, which was introduced in 1970, is our flagship product, which enjoys high farmer preference, on account of its excellent performance leading to bumper yields. It was the first balanced complex fertilizer to be introduced in Indian market, with all the three nutrients available in equal proportion. The nitrogen in VIJAY 17:17:17 is in Amide and Ammonia forms, making it ideally suited for early growth and vegetative phases of all crops. 2.1.3 PRODUCTION, IMPORTS, CONSUMPTION OF MAJOR FERTILIZERS The figures of production, imports and consumption of major fertilizers viz, Urea and NPK complexes in India for the years 2010-11 and 2011-12 are given below: Table:2.1 Production, Imports, Consumption (MT) PRODUCT UREA DAP NPK 2010-11 2011-12 2010-11 2011-12 2010-11 Production Imports Consumption Stock 2011-12 218.72 219.89 35.45 39.62 87.60 66.09 77.92 74.10 69.05 282.45 294.77 111.06 2.40 3.90 1.90 MoP 2010-11 2011-12 77.70 NIL NIL 9.80 36.72 63.57 39.85 107.87 97.49 109.14 38.91 29.92 2.91 14.08 10.30 9.87 1.70 10
Table:2.2 MFL Production of Urea /NP/NPK Fertilizers YEAR UREA NP/NPK 2008-09 4.05 - (Lakhs Million Tones) 2010-11 2011-12 4.79 4.87 0.36 2009-10 4.36 - Table:2.3 Production of Vijay Bio Fertilizers YEAR QUANTITY 2007-08 388.27 2008-09 461.69 2009-10 436.87 2010-11 452.64 (MT) 2011-12 480.65 Table:2.4 All India Product-Wise Demand Forecast For 2012-13 to 2015-16 (MT) PERIOD UREA DAP SSP MOP 2012-13 2013-14 2014-15 2015-16 313 326 338 348 115 121 126 131 38 40 41 43 54 57 61 64 COMPLEX FERTILIZERS 100 104 109 114 Bio-fertilizers Azospirillum (Paddy) Azospirillum (Other crops) Azospirillum (Plantation Crops) Rhizobium (Groundnut) Rhizobium (Pulses) Phospho Bacteria (All Crops) NP Bio Fig 2.3 (All Crops) 11
A healthy soil alone can utilize the applied chemical fertilizers efficiently and lead to high yields. The health of the soil is maintained by various factors, the most important being the soil microbes. Continuous cultivation results in microbial population being depleted. Inoculation of Bio-fertilizers in cultivated soil results in multiplication of the microbial population. MFL, with a view to maintain good health and fertility of the soil, introduced Bio-fertilizers under the brand name VIJAY BIO. VIJAY Bio-fertilizers come in two categories, viz., Nitrogen fixers and Phosphate Solublizers. The Bio-fertilizer range is wide and covers the requirements of all crops under all soil / climatic conditions. Forestry VIJAY Bio-fertilizers play a crucial role in restoring the forest cover of India, as Forest Departments of State Governments regularly use VIJAY Bio-fertilizers during raising of nurseries of forest trees. These saplings are subsequently planted on large scale in degraded areas to restore forest cover. Agro Chemicals - Neem based VIJAY Neem - 300 ppm VIJAY Neem - 1500 ppm Fig 2.4 MFL markets Neem based Pesticides, under the brand name VIJAY NEEM. Of late, biological and botanical pesticides have gained importance, as they are environment friendly and highly effective with negligible residual content in agricultural produce. Neem based products occupy an important place in botanical pesticides. VIJAY Neem is based on neem kernel extract and has a wide spectrum of activity against major pests, which infest both commercial and food crops. 12
VIJAY NEEM is presented in 300 ppm and 1500 ppm, in packing‟s of 100 ml to 20 litres, to suit the needs of all categories of farmers. VIJAY NEEM can be used as a 'Stand Alone' pesticide. The unique feature of VIJAY NEEM is that pests do not develop resistance to it. This enables farmers to repeatedly use the product with the same effectiveness for a long period of time. 2.1.4 PLANT PERFORMANCE The Company produced 4,86,750 MT of Urea as of March 4, 2012 which is 100% of installed Capacity. The previous record was 4,78,834 MT (98.4% cap) during the year 2010 -11. After a gap of about four years, production of Complex fertilizers could be started initially with NPKS 20-20-0-13 and thereafter could switch over to the Company‟s flagship product of NPK 17-17-17. NPK „C‟ Train was restarted after extensive refurbishment on February12, 2012. Thus, now two of three NPK Trains are available for production. Specific energy consumption of 10.369 Gcal/MT Ammonia and 7.517 Gcal/MT Urea achieved during the year 2011-12 are the second best achievements since inception. 2.1.5 GAS CONVERSION In order to comply with the directives of GOI, company has already initiated action for feedstock conversion from Naphtha to Natural Gas. The Basic Engineering & Design Package (BEDP) has been received and detailed engineering is in progress. The company‟s request for allocation of 1.54 MMSCMD of Natural Gas has been forwarded by Department of Fertilizers vide their letter NO.12012/24/2006-FFP dated 11.06.2010 to Ministry of Petroleum & Natural Gas. 13
Revamp The company, to extend the economic life of the plants by another 15 years and also envisaging improvement in energy consumption, undertook a major Revamp-cum-Modernization and Capacity Enhancement of its plants at a cost of Rs 600 Cr during 1993-1998. Production from the Revamped Plants commenced from March 3, 1998. Process License and Basic Engineering from M/s Haldor Topsoe, Denmark for Ammonia Plant and from M/s Urea Technologies Inc., U.S.A for Urea Plant was adopted with modern Distributed Control System (DCS). The enhanced production capacities are 1,050 MTPD for Ammonia (3,46,500 MTPA) and 1,475 MTPD for Urea (4,86,750 MTPD). With respect to NPK, Pipe-reactor with Process License & Basic Engineering from M/s Grande Parroise, France was incorporated in NPK B Train. By this and along with higher on-stream efficiency, the installed capacity was raised to 2,550 MTPD (8,40,000 MTPD). Post-revamp After overcoming initial teething troubles, the Ammonia & Urea Plants reached 87% and 83% capacity utilization levels in 1999-2000. To improve product quality and bring down product temperature before admitting into bagging streams, Prill Tower modification was carried out by Monsanto Enviro-Chem (MECSI), U.S.A. and a fluidized bed cooler Prills Cooling System (PCS) was put into service. Urea Plant achieved a record production of 4,86,750 MT in 2011-12 surpassing the previous best of 4,78,834 MT in 2010-11. Specific consumption of feedstock has also come down over the years after process stabilization. 14
2.1.6 PROCESS Ammonia Ammonia, a chemical compound of nitrogen and hydrogen is produced using naphtha, steam and air. Feedstock naphtha is the source for hydrogen and atmospheric air for nitrogen. Naphtha is de-sulphurised in two stages and the hydrocarbon is reformed together with steam and air to raw synthesis gas in the reforming section. The reforming section consists of Pre-reformer, Primary Reformer and Secondary Reformer. Air is introduced in the Secondary Reformer. Reformed gas containing H2, N2, CO and CO2 and minor amount of unreformed methane (CH4) is sent to the CO conversion section where CO is converted into CO2 in two steps in shift conversion units. CO2 is absorbed using Methyl Di-ethanol Amine (MDEA) in the CO2 removal section and sent to Urea Plant as one of the raw materials for Urea production. The remaining CO and CO2 from the process gas are converted to CH4 in the Methanator. The processed synthesis gas is compressed and sent to the catalytic converters (S 200 and S 50) where Ammonia is produced by the catalytic action. Synthesized Ammonia is separated and sent to Urea Plant as raw material and the remaining quantity is refrigerated and sent to cylindrical storage tanks. Urea Urea is produced by reacting Ammonia with Carbon-di-oxide (obtained from Ammonia Plant) in stainless steel lined reactors at 215-220 kg/cm2g pressure, using the technology of UTI‟s Total Heat Recycle Process. The high efficiency Reactor has a conversion of CO2 to Urea of about 76% per pass. After flashing and decomposition at medium pressure, an additional Carbon-di-oxide is injected into the Medium Pressure System followed by flashing and decomposition at low pressure and then concentration of urea solution at vacuum. Further concentration takes place at evaporators at the top of Prill Tower. 15
Here the hot Urea solution sprayed down in a 210” cylindrical concrete Prill Tower, counter current to a stream of cold air with a free fall height of prills for 170”. The Urea solidifies into small white Urea prills. The prills are then passed through a Fluidized Bed Cooler (Prills Cooling System) to reduce temperature and fines thereby improving the quality of the product. The entire off gas is absorbed in a bubble cap tray absorber and then recycled to the reactors. The chloride-free effluent is treated in a Hydrolyser Stripper and the contents are recycled fully. The treated water is used for demister washing. The product is sent through a system of conveyors and elevators to bagging streams. There it is bagged and shipped as Urea product. NPK There are 3 NPK trains that are identical except that in one we use the TVA Granulator while others have Blunger units in the fertilizer granulation section. The basic steps for NPK manufacture are: Reaction of liquid Ammonia and Phosphoric Acid to form slurry of mono and di ammonium phosphates in Pre-neutralizer in two trains (A & C Trains). In the other train (B Train) reaction is carried out in pipe cross reactor installed inside the granulator and dryer. Mixing of the slurry with other feed materials: Liquid Ammonia, Urea, Muriate of Potash, Filler and re cycled NPK granules. Solid raw materials are fed to the system through the modern J&N Weigh Feeders (with Programmable Logic Control device) which maintain accuracy according the set load. Mixing is done in the Granulator or Blunger units where the fertilizer granules are formed. Drying of the granulated material in a rotary dryer. Separation of granule produced by screening followed by cooling, coating & polishing of the granules and product bagging. MFL produces four grades of NPK fertilizers viz. 17-17-17, 19-19-19, 20-20-0 and DAP 18-46-0. 16
B&S One set three bagging streams for bagging Urea and another set of four streams for bagging products from NPK A and B Trains are provided in Bagging and Shipping Plant. A separate set of three bagging streams are available for bagging the complex fertilizer from NPK C Train. The bagging streams are maintained in humidity free atmosphere by dry Air System since NPK complex fertilizer is hygroscopic in nature. The Bagging System consists of a high precision machine (Jashubhai Richard Simon Ltd, Mumbai) with an accuracy of + or - 10gms from the set 50 kg per bag of fertilizer and an auto bagging mechanism. The bagged product is moved in conveyors for loading trucks or wagons to transport to various warehouses / dealers. 2.1.7 QUALITY POLICY UNDER ISO 9002 1. Commitment to manufacture quality fertilizers conforming to specification using standard new material. 2. Timely distribution of products ensuring consumer satisfaction. 3. Continual up gradation of technology, Development of Human resource and Improvement of Quality of Work life. 4. Strict adherence to national safety standards and environment friendly norms. 17
2.1.8 SWOT ANALYSIS Strength i. Technical competence of the organization ii. Fully committed and motivated employees iii. High inter-group and inter department co-ordination iv. Good knowledge of South India market with respect to agriculture Inputs Weakness i. Stringent Government policies ii. Availability of limited range of products iii. Strict adherence to the policies and procedures iv. Free market economy where public sector has to compete with private sector Opportunity i. Agricultural to be more open market oriented ii. Easier access to world‟s best technology iii. Higher focus on Productivity and efficiency in agriculture iv. Strategic alliance for marketing i. Increased competition ii. Overrun carrying cost iii. Switching over from seller market to buyer market iv. Delay in Government‟s efforts to bail out loss making v. Public Sector Undertaking Threats 18
CHAPTER III 3.1 HUMAN RESOURCE DEPARTMENT Overview– Recruitment– Training And Development– Performance Appraisal– Designation / Grade System– Man Power– Pay Scale–Personnel Department & Its Functions–Office Time– Personal Protective Equipment OVERVIEW This department is mainly responsible for the recruitment, selection, training, development, promotion, etc, all that is related to the employees. The department maintains all the details regarding its employees for their reference in future and as and whenever required. 3.1.1 RECRUITMENT The recruitment process started with Identification of vacancies to be filled up its is basically concerned with the identification of sources from where the personnel can be employed and motivating them to offer for the employment. As MFL is a GOI undertaking organization, it gives more importance in selection process of employees. By conducting Technical and non technical entrance exams and follow up of the next stages of interview itself selection process carried out in MFL. Recommendations of job are completely avoided and pure performance, knowledge and experience based employees are appointed here in MFL. It is process of searching for prospective employees, stimulation and encouraging them to apply for job in an organization. 3.1.2 TRAINING AND DEVELOPMENT Training in MFL is provided for trainers of both technical and non technical candidates. Efficient training is given to the trainers, so as to filter quality employees from them. Promotional based top management training also given to the executives of MFL. Here new employees for executives are rarely recruited, normally promotion based vacancy filling is followed. 19
3.1.3 PERFORMANCE APPRAISAL While on the job, performance reviews of every employee are done every quarter. The reviews are done with a view to helping the individual excel at his/her workplace. In case there are any training requirements, these are noted and acted upon in the coming quarter. Also, the goals and objectives for the employee are revised for the performance appraisal mechanism is carried out at MFL for promotional purpose. These are done so as to motivate the employee and improve his performance level. a) Establishment of performance standards with the employees. b) The goals are set mutually as per measurable standards. c) The actual performance is hence measured. d) After measuring of the actual performance, the same is compared with the standards set. e) The appraisal is then discussed with the employee. f) And finally, if need arises corrective action is initiated. For this purpose the corrective action is actually identified through brainstorming exercise initiated by the department heads .It is then measured as a tool to evaluate the past performances of the employees. Office Time Maintenance of records regarding the attendance in-times and out-times of every worker and staff. Attendance is being maintained by Bio-metric System for in and out timings. The machine records the respective data and it is transferred to the computer. If any employee fails to swipe his card details are entered into the records manually. Daily records of attendance, absenteeism and late coming are maintained and salary administration is stored accordingly. 20
3.1.4 Personnel department & its Functions: The personnel department covers mainly 3 areas. o Administration o Human Resource Development (HRD) o IR, Welfare & Legal 3.1.6 MAN POWER Table: 3.1 Administrative Man power in MFL CMD Administration P&A F&A MIS M&D Total Supervisory 7 16 30 7 156 216 Non-Supervisory 1 16 13 0 50 80 8 32 43 7 206 296 Total Table :3.2 Technical Man power in MFL GM Technical Prod Main Mat Mgt Tech Total Supervisory 3 146 78 11 32 270 Non-Supervisory 0 241 144 22 48 455 Total 3 387 222 33 80 725 21
3.1.5 Designation / Grade System UC- Chairman & Managing Director / Director E8 - Executive Director / General Manager E7 - Deputy General Manager E6 - Chief Manager E5 - Regional Manager / Manager / Plant Manager E4 - Additional Manager E3 - Deputy Manager E2 - Assistant Manager E1 - Senior officer / Senior Engineer E1 - E8 = Supervisors Grade 1-5 = Non-Supervisors 22
3.1.6 PAY SCALE Table: 3.3 Pay scale for Supervisors Grade PAY SCALE Designation Existing Revised 8,600-250-14,600 16,400-40,500 10,750-300-16,750 20,600-46,500 13,000-350-18,250 24,900-50,500 14,500-350-18,700 29,100-54,500 16,000-400-20,800 32,900-58,000 Sr. Officer / E-1 Sr. Engineer E-2 Asst. Manager Deputy Manager / E-3 General Suptdt. E-4 Addl. Manager / Dy Regl Manager/ General Suptdt. Plant Manager / E-5 Regional Manager / Manager E-6 Chief Manager 17,500-400-22,300 36,600-62,000 E-7 DGM / JGM 18,500-450-23,900 43,200-66,000 E-8 GM 20,500-500-26,500 51,300-73,000 E-9 Director Schedule 22,500-600-27,300 65,000-75,000 E-10 C M D Schedule 25,750-650-30,950 75,000-90,000 The Management proposes to introduce a new scale at E-0 Level with a pay range of Rs.12,600 - 32,500/-. 23
Table :3.4 Pay scale for Non-Supervisors Grade Existing Revised I 4,320-85-5,595 Rs.8,760-3%-(30) II 4,450-100-5,950 Rs.9,020-3%-(30) III 4,575-125-7,700 Rs.9,270-3%-(30) IV 4,850-145-8,475 Rs.9,830-3%-(30) V 5,200-160-9,200 Rs.10,540-3%-(30) VI - Rs.11,370-3%-(30) VII - Rs.12,000-3%-(30) 3.1.7 Personal Protective Equipment Head - Helmets Hair - Scalping Ear - Ear Plugs Eye - Goggles Face - Face Shields Hands - Hand Shields, Gloves Leg - Safety Shoes, Gum Boots Foot - Foot guards Dress - Overall Coat 24
CHAPTER IV 4.1 FINANCE DEPARTMENT Dividend–Risk Management–Collection of Old Dues–Public Deposit–Corporate Performance– Remuneration Committee–Audit Committee–Foreign Exchange Earnings and Outgo The Company‟s operations for the year ended with a profit of Rs. 111.99 Cr (Previous Year Rs.169.86 Cr). This is the highest ever operating profit made in any year since inception if extraordinary items (OTS benefit) is not taken into account. This could be possible mainly because of 100% capacity utilization of Urea achieved for the first time in the history of the Company. The total accumulated loss as of 31.3.2012 was brought down to Rs. 505.20 Cr from Rs. 617.19Cr. Table:4.1 Summary of Financial Results YEAR (Rs. Cr) 2011-1012 2010-2011 2207.77 1622.83 211.02 141.43 Interest 60.00 55.05 Depreciation 40.34 41.21 1.31 124.69 111.99 169.86 Turnover Profit Before Interest, Depreciation, DRE and Tax Extraordinary items(OTS benefit) Profit/(Loss)Before Tax - Provision for Tax Profit/(Loss)After Tax 111.99 25 169.86
4.1.1 RISK MANAGEMENT Major challenges that fertilizer industry is facing are increasingly volatile International market for fertilizers and raw materials, steep depreciation in rupee value, increasing prices of NPK fertilizers due to new NBS policy and rise in the working capital requirements of fertilizer firms in addition to the historical challenges associated with the rural markets. The Company has a well laid down Risk Management System with Risk Assessment & Risk Mitigation procedures to evolve suitable strategies for mitigating associated risks through better management practices and achieve corporate objectives. The identified potential risks such as Operational, Input, Utilities, Project Implementation, Business, Competition, Assets, Internal Control, Environmental, Financial, Human Resources, Legal, Regulatory, MIS and Market Risks and their impact on the Company‟s performance and Stakeholders‟ interest is assessed on continual manner. The reporting of Risk Assessment and Risk Mitigations under the policy is reviewed by the Audit Committee and the Board periodically. Collection of Old Dues An amount of Rs.37.10 lakhs has been collected from old dishonor cases and the Company is taking all out efforts to optimize the collection. 4.1.2 PUBLIC DEPOSIT The Company could not accept fresh deposits or renew the existing deposits during the year due to statutory restrictions. The un claimed deposits as of March 31,2012 is Rs. 1.85Cr. 26
Table:4.2 Corporate Performance Year Production (In MT) Sales (In MT) Imported DAP Turnover MOP (` Cr) (In MT) PAT (` Cr) Dividend % 2207.77 111.99 - Urea NPK Urea NPK 2011-2012 486,750 35,905 499,518 33,755 2010-2011 478,834 ---- 473,782 --- --- 1622.83 169.86 - 2009-2010 436,100 ---- 433,695 --- 6,909 1302.84 6.88 - 2008-2009 405,951 ---- 415,266 --- ---- 1123.59 145.38 - 2007-2008 440,499 35,165 431,637 35,184 ---- 1140.06 134.85 - 2006-2007 473,363 57,130 478,469 60,330 ---- 1210.66 114.78 - 2005-2006 368,500 208,193 385,965 204,871 798 1084.22 131.74 - 2004-2005 473,032 333,475 483,142 352,839 16,809 1286.22 58.39 - 2003-2004 387,678 428,612 413,959 515,273 15,565 1139.75 63.74 - 2002-2003 (11months) 362,176 351,979 352,102 418,014 27,334 1139.06 4.12 - 2001-2002 (13months) 325,964 636,196 300,639 632,879 46,019 1097.93 66.10 - 2000-2001 401,570 731,447 399,184 705,301 16,078 1404.81 29.76 - 1999-2000 (6months) 220,614 408,460 192,126 309,918 10,350 637.02 6.33 - 1998-99 (18months) 511,128 1,135,711 400,221 1,188,784 70,190 1,754.18 7.09 - 1997-98 63,711 458,650 52,758 405,855 203,000 546.77 55.35 - 1996-97 213,478 620,940 83,526 604,043 54,000 666.02 12.10 - 1995-96 278,600 724,140 78,384 735,393 51,000 686.32 21.07 - 1994-95 237,722 650,160 101,683 756,348 74,000 645.06 7.53 - 1993-94 172,723 483,660 103,015 514,869 100,000 476.62 58.49 - 1992-93 234,620 690,400 52,094 632,429 - 430.93 12.13 12.00% 1991-92 236,778 750,025 80,282 628,239 73,000 456.50 16.30 15.00% 1990-91 238,600 505,940 54,589 574,354 381,000 393.16 6.38 15.00% 27 ---
4.1.3 DIVIDEND Despite earning profit during the year, Company could not pay Dividend to the shareholders due to huge accumulated losses and negative net worth. 4.1.4 Remuneration Committee Being a Central Public Sector Undertaking, the Managerial Remunerations for the executives are fixed by the Government of India. Hence, the constitution of remuneration committee does not arise. 4.1.5 Audit Committee Five Audit Committee meetings were held during the financial year 2011-12 and the dates of Audit Committee meetings are: 20-05-11 29-07-11 19-10-11 30-01-12 4.1.6 Foreign Exchange Earnings and Outgo 2011-12 1. Activities relating to export NIL 2. Total Foreign Exchange used (` Cr) a) Raw Materials 176.34 b) Components & Spare Parts 24.45 c) Books & Periodicals / Travel 0.02 Total 200.81 3. Total Foreign Exchange earned NIL 28 28-03-12
Table:4.3 Performance Evaluation Criteria and Targets: MoU 2012-13 29
CHAPTER V 5.1 MARKETING DEPARTMENT Marketing Territories– Marketing Network– Regional Offices– Marketing Performance– Market Development And Agro–Service Programs– Product Placement– Global Scenario– Logistics– Consultancy–Inspection, Technical & Engineering Consultancy Services–Bio–Fertilizer Consultancy–Future Plans–Achievements–Environmental Awards Won By MFL –Energy Conservation Awards Won By MFL – Acts Governing The Company 5.1.1 Marketing Territories MFL markets its Fertilizers, Bio-fertilizers and Agrochemicals, under the brand name VIJAY, in the States of Tamilnadu, Andhra Pradesh, Karnataka, Kerala and the Union Territory of Pondicherry. MFL also imports Di-Ammonium Phosphate and Muriate of Potash. As a result of MFL‟s pioneering role in promoting use of complex fertilizers for balanced nutrient application in South India during the past 34 years, MFL products enjoy a distinct preference among farmers all over its marketing territory based on quality, compatibility with major crops and soil and services to farmers. 5.1.2 Marketing Network The field marketing activities are coordinated through a network of Regional Offices located in 11 strategic centers of the 5 Southern States, viz., Andhra Pradesh, Karnataka, Tamilnadu, Kerala and Pondicherry. MFL has a team of well experienced, dedicated and professionally qualified marketing officers, who market the VIJAY products thru well networked Dealers, numbering around 6500, Co-operative Marketing Federations of respective States, Agro Industries Corporations and other Institutions. Thus, MFL has well spread retail outlets encompassing private, co-operatives and Agro Kendras for wider reach and better market penetration of its products. 30
REGIONAL OFFICES Table :5.1 Showing Regional Offices Tamilnadu & Pondicherry Trichy Region Regional Manager Contact person Address Door No. 18, I Floor Alamelumangai Street, JeyaNagar,K.K.Nagar Post, LIC Colony,Trichy 620 021 0431-2352251 firstname.lastname@example.org Phone Email Contact person Address Contact person Address Phone email Madurai Region Regional Manager Phone Email Contact person Address Plot No.158 Anna Nagar (Upstairs) Near Karthik Hospital Madurai 625 020 0452-2535377 email@example.com Phone email Andhra Pradesh Contact person Address Phone Email Hyderabad Region Regional Manager 11-5-338, Red Hills Lakdi-ka-pul Hyderabad 500 004 040-23316155 firstname.lastname@example.org 31 Salem Region Regional Manager 115/1, Lakshman Nagar,, Azhagapuram, Salem 636 016. 0427-2443900 email@example.com Vellore Region Regional Manager 29, 1st Floor 7th East Main Road Gandhi Nagar Vellore 632 006 0416-2249569 firstname.lastname@example.org
Vijayawada Region Contact person Regional Manager Address Phone Email 56-5-8, Ramineni Street, Lakshmi Apartments, Flat No S 3, Patamata, Vijayawada 520 008 0866-2541064 email@example.com Contact person Address Phone email Kadapa Region Regional Manager H.No.2/258 1st Floor Balaji Nagar Kadapa 516 003 08562-244897 firstname.lastname@example.org Karnataka Contact person Address Phone Email Bangalore Region Regional Manager No.66 (I Floor), "OMKAR" 1st Block, 3rd Cross 4th Main, Banashankari 3rd StageBangalore 560 085 080-26423562 email@example.com Davanagere Region Contact person Regional Manager Address Phone Email Contact person Address 324/2, 1st Floor Srinivasa Complex 2nd Main Road Near Stadium P J Extension Davanagere 577 004 08192-256074 firstname.lastname@example.org Phone email Kerala Contact person Address Phone Email Cochin Region Regional Manager Flat No. A2 Bhaskar Apartments, Narayanan Asan Road, Ponnurunni, Vyttila Cochin 682 019 0484-2102279 email@example.com 32 Bellary Region Regional Manager SrilakshmiVenkateswara Nilaya,No 3, Word No.25., 2nd Cross, Shastry Nagar, Bellary 583 101 08392-268248 firstname.lastname@example.org
5.1.3 MARKETING PERFORMANCE During the year, company sold a total of 5.33 lakh MT of fertilizers compared to 4.74 lakh MT last year, which is 12.5% increase. The market share of Urea got increased from 8% to 9% in South India. Efforts for streamlining logistics operations continued this year also and 97% of the products were directly delivered to the dealers. Cash sales accounted for 99.7% of total sales.99.6% of the cheque realized within 7days. There has not been a single Bad Debt during this year also. Agrochemicals, Bio-fertilizers & Organic Manure In this year Rs.181.10 lakhs environment friendly neem based Agrochemicals were traded during the year as against Rs.142.01 lakhs during the last year, which is 27.5% higher. The Company sold 481 MT of Bio-fertilizers during the year as against 453 MT during last year which is 6% higher. The Company also sold 3,630 MT of Organic Manure based on Poultry Waste during the year in Tamil Nadu & Karnataka. Market Development and Agro-service Programs MFL's Marketing Personnel contacted 74,503 farmers during the year and educated them about soil health techniques and usage of Bio-fertilizers/Neem products. As a service to farming community, the Company collected 5,620 soil samples, analyzed and sent the nutrient recommendations for various crops to farmers during the year. Global Scenario The prices of major fertilizers such as Urea and Complex fertilizers like DAP, NPK and MoP and fertilizer inputs such as Ammonia, Sulphur, Rock Phosphate and Phosphoric Acid increased manifold which resulted in steep increase in prices of both indigenous as well as imported fertilizers. 33
5.1.4 Product Placement The most critical aspect of Marketing and Distribution is making available to the farmers, Right product at Right time and at Right place. Since fertilizer production is continuous and consumption is seasonal, product movement, storage and delivery assume great significance. In order to fulfill this onerous task, MFL has established a network of around 80 field warehouses utilizing the services of Central/State Warehousing Corporations and Private Warehouses. MFL also has the facility to deliver stocks from Plant gate to Farm gate, to ensure availability of fresh products to the farmers. Logistics The products are moved to these warehouses from MFL, both by Rail and Road. Movement through point-to-point Jumbo Rakes is resorted to on a 'need' basis, for reaching the products to distant locations at the shortest time. To facilitate immediate loading into wagons, MFL has its own railway siding at the Plant site. Movement of fertilizers is meticulously planned in close coordination with market requirements and production through the judicious mix of Road and Rail transport. 5.1.5 Consultancy MFL Inspection Team has well-qualified and experienced Mechanical Engineers. MFL Inspection Team has in-house facilities for carrying out condition monitoring of Process Plant Static Equipment, Pipelines and Rotating Equipment and Non-Destructive Testing Inspection, for our own requirements. Additionally, to share the experience gained, MFL Inspection Team is taking up third party services to other Fertilizer Plants, Refineries and Petrochemical Plants throughout India for the last 25 years. 34
The services offered by MFL are: Reformer Catalyst Tubes Ultrasonic Testing by Thro Transmission Technique Residual Magnetic Fields Survey and Demagnetization of High Speed Turbo Machines, and Deputation of Engineers for Shut Down inspection of Process Plant Equipments 5.1.6 Inspection, Technical & Engineering Consultancy Services Against a stiff global competition, MFL successfully bagged a Technical Management Contract from the State Fertilizer Manufacturing Corporation of Sri Lanka (SFMC). The three years contract was for Plant Operation, Training & Technical Services. The contract earned MFL US $ 3 million. MFL has a very capable team of Inspection Engineers, who have been regularly taking up assignments in various fertilizer and petrochemical plants in India. We also have team of Engineers, who can provide supervisory services during major Revamp/Modification work. Bio-fertilizer Consultancy MFL offers consultancy for setting up of Bio-fertilizer plants on Turn-key basis. Bio-fertilizer plant of National fertilizers Ltd at Indore was set up by MFL on Turn-key basis. In 1998, MFL under the sponsorship of FAO, Rome, deputed its expert as Consultant to Govt. of Ethiopia, to prepare a Project Report for the establishment of Bio-fertilizer Unit which was completed successfully. MFL has conducted several R & D Projects on Bio-fertilizers. 35
6.1.7 FUTURE PLANS Switching over to Liquefied Natural Gas (LNG) feed stock from naphtha MFL Plants are designed to use R-LNG as part of Revamping Project and hence switchover to R-LNG can be done with minimum capital expenditure in a short time. The quantity of LNG required for replacement of existing fuel is around 1.2 MMSCM per day. The fertilizers complex of MFL is presently using Naphtha for the process and fuel requirements of Ammonia Plant, FO in boilers, HSD in Captive Power Plants (Gas Turbine Generators and Diesel Gensets) and LPG for auxiliary firing in the Boilers, heaters and flares. Detailed in-house assessment of the changes required for the conversion has been carried out. Information from external sources, engineering consultants and supplier of boilers has been gathered and analyzed. 5.1.8 ACHIEVEMENTS MFL has a creditable record of success in production, energy conservation, promotional activities and as a responsible corporate citizen. MFL bagged the prestigious award from Fertilizer Association of India for “Outstanding performance in Production of Phosphatic Fertilizers” during 1991-92. Received the Best Farmers Service Award for 1992 instituted by Gandhi Gram Rural Institute, Tamil Nadu. Jawaharlal Nehru Memorial National Award for “Effective Implementation of Pollution Control” 1992-93 and 1993-94. Video Film on the use of Bio-fertilizers was judged as the best entry by the Fertilizer Association of India in 1993. In 1994-95 also another film on Bio-fertilizers was judged as the best entry for the second time. 36
Video Films on Paddy and Balanced Fertilizer Application were judged as the best entries for the year 1988 and 1994. A certificate of merit was awarded for the video film on Banana in 1991. MFL was conferred with Best Tax Payer Award for the year 1995-96. MFL received Official Language implementation Award for the year 2003-04. Environmental Awards won by MFL Table :5.2 Environmental Awards S No Year Name of Award 1 Jawaharlal Nehru Gold award for Best Environmental & Ecological Implementation 1992-93 2 J.N Gold award for best Environmental & Ecological Implementation 1993-94 3 J.N Gold award for Best Environmental & Ecological Implementation 1997-98 4 Lal Bahadur Sastri Memorial Gold Award for Best Environmental & Ecological Implementation 1998-99 5 Millenium National Award for Best Pollution Control Implementation Gold Award 2000 6 International Greenland Society Award for Excellent Environment & Ecological Implementation 2000-2001 7 Indira Gandhi Memorial National Award for Best Environmental & Ecological Implementation 2001-2002 37
Energy Conservation Awards won by MFL Table: 5.3 Energy Conservation Awards 1 II Prize in National Energy Conservation Award (instituted by ministry of Power) 1992-93 2 Best Energy Conservation Implementation Gold Award 1996-97 3 National Energy Conservation Award (instituted by ministry of Power) 1996-97 4 International Greenland Society National Award for Excellent Energy Conservation Implementation Gold Award 1999-2000 5 J.N. Best Energy Conservation Implementation Gold Award 2000-2001 5.1.9 Acts governing the company - Factories Act, 1948. - Workmen‟s compensation Act, 1948. - Employee Provident fund and miscellaneous provision Act, 1952. - Payment of Gratuity Act, 1972. - Maternity benefit Act,1961. - Industrial disputes Act, 1947. - Apprentices Act, 1961. - Equal remuneration Act, 1976. - Trade Union Act, 1926. 38
CHAPTER VI 6.1 CONCLUSION Thus the organisational structure process, functions and management activities of M/S Madras Fertilizers Limited (MFL) are discussed in this report. The Human Resource and Welfare Department has provided needed information and statistical data about the organisation‟s several departments and functional areas. From the past years statistics of MFL, it is been experiencing growth in production and management areas of the organisation. In MFL the employees are well treated by providing hygienic food for low cost and low cost transport facilities. The environment of the organisation is planted and maintained by recycled water. Smoke is liberated at a specific height so that it cannot affect the purity of the environment. The bio-hazardous waste is disposed in such a way to ensure the safety. The technical employees of MFL are provided medical facilities and safety equipments inside the production process. The management secures confidential and their business secrets by not allowing the outsiders to gain access to the Management Information System. MFL concentrates on satisfying the need of the farmers and providing quality fertilizers by research on chemical and bio-fertilizers. Several tests are made with the MFL products before marketing to the customers. VIJAY brand name has a vast reach among the farmers and still the brand captures the market with its highly competition global market. Still MFL sustain in the market with high production of fertilizers which has foreign investments and public shares. The Government of India has the control over MFL as it captures the majority shares. MFL Exports their products to several places in India and other countries through shipping and other transport facilities available. 39
ABBREVIATION MFL - Madras Fertilizers Limited DOF - Department of Fertilizer GOI - Government Of India NIOC - National Iranian Company NPK - Nitrogen, Phosphorous & Potash PCS - Prills Cooling System BEDP - Basic Engineering & Design Package DCS - Distributed Control System 40
REFERENCE www.madrasfert.nic.in www.economictimes.indiatimes.com/madras-fertilizers-ltd/directorsreport/companyid-4801.cms www.wikipedia.com Annual report of Madras Fertilizer Limited 41
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