value chain management process: akij poly fiber
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Akij Poly Fibre Industries Ltd.
Value Chain Management Process
Letter of Transmittal
28 March, 2011
Mr. Shawkat KamalCourse InstructorBusiness StrategyBRAC Business School
Sub: Submission of term paper.
Dear Sir,
It is our pleasure to submit the term paper on “Value Chain Management Process of Akij Poly Fibre Industries Limited” as a part of our course of Business Strategy (MGT 401).We enjoyed preparing this term paper, which help us to enrich our knowledge of the theoretical concept. We tried to reflect the practical operational aspects of the manufacturing industries, which is complementary to the theoretical lesson.We are very glad that you have given us the opportunity to prepare this term paper and gather some new and very important knowledge. We hope that this will meet the standard of your judgment.
Faithfully Yours,
Sabrina Safa (ID-07104087)Sharmila GuptaPartho Kumar Mohonta (ID- 08304103)
Acknowledgement
Our purpose of the report is to know the value chain process of Akij Poly fibre industries. For
these purpose we needed many resources to get the full information. We are a group of five
members and without the help of others it is not possible to make the report done. In every step
of this study, many individuals and institutional experts supported us. We respect them
wholeheartedly and gratitude them for their inspirational help.
At first we would like to respect our honourable Lecturer, Shawkat Kamal, BRAC Business
School, BRAC University for giving us the opportunity to learn about the value chain process,
specially the production process of Akij Poly fibre industries and also thankful for his continuous
help when we get any problem, he was always there. Second most importantly we also thankful
to the DGM of Marketing Mr. Jasim Uddin, Factory Manager- MR. Jahangir Hossain who gave
us the permission to visit the factory. Our special thanks to Assistant manager Mr. Mashudur
Rahman who gave his valuable time to let us know the whole production process of the factory.
At the end of our acknowledgements we want to give warmest thanks to our group members
without whom this team effort cannot be successful and end of the report each and everyone’s
work has been appreciated by all members.
Executive summary
Poly fibre industry is one of the most newly emerged sectors in Bangladesh. This sector has been
developed in our country depending on the cement industry. But, most of the time, it is
considered as a backward integration for our growing cement industry. The necessity for this
industry has been realized after 1990s from the time cement industry started to develop: before
1990 there was no poly fibre producing company in Bangladesh and then cement was imported
from China. In 1990, Poly Fibre industries first produced double-ply bags for cement processing
in which a craft paper was attached inside the bag for protecting the cement from moisture. But
double ply bag could not protect the cement from outside dust that much. To solve this problem
in 2003 Shah Cement first introduced the single-ply bag. But commercially Akij Poly Fibre
industries introduced it to the market. Now a days, demand for poly fibre bags are growing
rapidly with the market for cement especially in the developing countries. The main
specialization that makes the Akij Poly fibre bags better than the others is its outlook and shape.
Akij also don’t use fly ash that some other companies use. There is a dimension for the bag
where they strictly maintain strength, shape and color for the bag. For the operation of poly fibre
three basic elements are needed. The virgin material is considered as poly propylene which is
imported from UAE, Australia, Korea and also Dubai. This poly propylene is a by product of
petroleum. After that the second core material is used is calcium carbonate which is used for the
better strength of poly fibre.
The operation process has six steps. The first step is called Tapeline. The operation process
starts with making yarn by mixing the three materials- Poly Propylene, CaCO3 and Master
Beige. For the operation they bought a machine Star EX from the company Star lingers. In the
next part the tape bring into the Loom department, where the yarn sew through knitting machine.
Then the fabric comes out with a shape of tube. Thirdly, lamination is very important process for
protecting the cement from outside moisture and strengthens the bag. Lamination specially has
done with poly propylene and LDPE in coating machine. Fourthly, printing steps comes where
the factory use the printer named Dina flex which has been specialized for Flexo printing. Here
they use water base printing with low ink consumption. After that, in the fifth step every part of
the bag is attached in the machine of Roll slitter by giving hit of 650OC. finally in the sixth step it
is called Sack press. Here, the bags the taken into a bunble and then it s sent into the cement side
for pouring cement. The operation process is finished here.
After that we came to know about the competitors. There are so many competitors of Akij Poly
fibre in recent time. Many companies are starting produce Poly fibre bags for cement. The main
competitors of Akij Poly fibre industries are Shah Cement, Bengal group, Tiger Brands, Global
by Meghna group, MDC by Madina group and very recently Bashundhara group also starting
this business. After that comes the marketing and distribution process of the company. Akij Poly
Fibre Industries don’t have any specific distribution channel. They go directly to the buyers to
sell their product. They go to every potential buyer and show the advantages of their product by
showing samples. They mainly target the cement producing company in Bangladesh only. Akij
Poly Fibre Industries don’t do that much advertisement. They advertise their product through
their marketing people. The Marketing people go to the buyer directly and show their product.
They always try to give the best services to the customer. To ensure the service quality they call
their buyers by their own.
These are the total value chain process of Akij Ploy fibre. They are operating fully automated
factory which has both positive and negative side.
Table of Content
Chapter No. Chapter Name Page No.
01
02
03
04
05
06
01
Introductio
n
Poly fibre industry is one of the most newly emerged sectors in Bangladesh. This sector has been
developed in our country depending on the cement industry. But, most of the time, it is
considered as a backward integration for our growing cement industry. The necessity for this
industry has been realized after 1990s from the time cement industry started to develop: before
1990 there was no poly fibre producing company in Bangladesh. In 1990, Poly Fibre industries
first produced double-ply bags for cement processing in which a craft paper was attached inside
the bag for protecting the cement from moisture. But double ply bag could not protect the cement
from outside dust that much. To solve this problem in 2003 Shah Cement first introduced the
single-ply bag. But commercially Akij Poly Fibre industries introduced it to the market. Now a
days, demand for poly fibre bags are growing rapidly with the market for cement especially in
the developing countries.
Objectives
Our main purpose of preparing the report is to have some knowledge on poly fibre industry’s
total value chain process which is actually quite new for us. Moreover, we want to introduce
with:
The production process of poly fiber.
The ingredients or materials use to make this product.
The distribution & marketing strategy.
Methodology 02
Our main report is to know about the total value chain process of Akij poly fiber
industries and mostly the operation process because it emphasizes more on operation. For
these reason we collected data from various sources. First we collected primary data from
the head office of Akij Group, 73, Dilkusha C/A, Dhaka-1000 by an appointment with
Mr. SK Jasim Uddin who is DGM of marketing of Akij group on 22nd March. We went
there with a permission letter from BRAC University assigned by our course instructor
Mr. Shawkat Kamal and they approved it and we got permission to meet Mr. Zahangir
Hasan who is a factory manager of Akij Poly Fiber Industries and to visit the factory. We
got permission to visit the factory on 24th March, 2011 at 3:00 pm. On the assigned date
we all group members started from our BRAC University campus on a Micro Bus at 1:00
pm. We were a little late to start due to our makeup class. There were a huge traffic jam
and that’s why we were also late and on the way we took gas from CNG Station. That
time we had little snacks from a food corner beside the CNG station. However, it was not
that difficult for us to find out the location and the factory road was so good. After
reaching there we came to know that some days before our Prime Minister Mrs. Sheikh
Hasina inaugurated this road. Then at 3.30 we reached at the factory and there we signed
on the visitors book and sat on the cabin of Mr. Zahangir Hasan. Then we were served
snacks with Mojo cola and we waited. They delightfully offered lunch. We waited there
for about 30 minutes as the appointed persons were too busy. After taking snacks we met
Mr. Zahangir Hasan and Mr. Mashudur Rahman. Mr. Mashudur Rahman who is the
assistant manager gave us his valuable time and discussed the total value chain of Akij
Poly Fiber Ind. Ltd. and also answered our queries. From this discussion session we
collected our most of the information. After finishing the discussion we went to the
factory at 5 p.m with him. It took one and half hours to visit the whole factory. He was
that much energetic person because he showed us each and every step of the operation
with lots of patience to understand the whole process of production. After the visit we
03
had tea & biscuits, took some snaps in front of the factory and started for our home at
7:00 pm. And reached at home around 10 p.m. However, Mr. Zahangir was too busy and
he was not in his cabin and that’s why he could not give us time.
Besides our visit, Mr. Mashudur Rahman gave us other relevant information by e-mail
later on.
Limitation
We have faced the following limitations while preparing our report:
We cannot take pictures inside the production area due to some restrictions of the
company.
We have some problem in understanding some mechanical terms as we were not quite
acquainted with this industry.
Due to the company’s policy we can’t get some information regarding pricing and
other issues.
04
Company Overview
05
Akij Poly Fiber Ind. Ltd. is one of the sister concern of Akij Group. Akij Group has a family
oriented business founded by Late Sheikh Akij Uddin. As mentioned before, it is considered as
the backward integration for Akij Cement Ltd. Basically, Akij Group started in late 1940s with
Jute mills. Later on, its business segment started to increase and at present total business sector is
22 (twenty two) like Akij Jute Mills, Akij Bidi, Akij Food & Beverage, Akij Cement, Dhaka
Tobacco, Akij Textile and others. In the current year Akij group has launched another two
business sectors; they are- Akij Ceramics & Akij Melamine. There are about 100000 people
working in various sectors of Akij group.
Akij Poly Fiber Ind. Ltd. started its operation in 2009. It produces only single ply bags for Akij
Cement and above mentioned clients. It has only one factory situated in Nabiganj, Kadam Road,
Narayangong. The distribution & marketing activities also operated from its factory mainly.
06
Product profile
Akij Poly fibre Industries mainly produced the single-ply bag for cement. Single-ply Bag
produced with some specialization that helps to protect cement from outside moisture. Because,
outside moisture can hamper the cement. The main specialization that makes the Akij Poly fibre
bags better than the others is its outlook and shape. Akij also don’t use fly ash that some other
company use.
Dimension: Width- 390mm in the middle & 110mm in two sides.
Length- 610mm-630mm
Strength: Normally this type of regular single-ply bag can afford 4 to 4.5 kg normal weight
where Akij bag can afford 5.5 to 6.0 kg weight which elastration ability is 25 kg which has
extreme strength to resist in 10 to 15 hands of delivery to its ultimate user.
Elasticity: Standard elasticity of poly fibre maintained by AKIJ is 22-25 Newton.
Colour: Colours depend on the customer demand. But we found them to produce specially two
colours- golden & White.
Shape: Shape also depends on the customer demand. But they suggest the buyers about bag
shape according to their demand. But the specialization of Akij Poly Fibre Industries is
producing brick shape bag which is modern and good looking.
07
Price Comparison
The company has many competitors in market now and they maintain a high policy. For this
reason they do not reveal their price rate to anyone. But normally their price rate is between BDT
15- 18 per bag. Different company charges different prices and also charge low price so we can’t
get specific idea of their pricing, rather a range of price.
08
09
Procurement
For the operation of poly fibre three basic elements are needed. The virgin material is considered
as poly propylene which is imported from UAE, Australia, Korea and also Dubai. These poly
propylene is a by product of petroleum. In Saudi Arab, one of companies named SABIC is doing
the job of bringing these polypropylene from petroleum. They are involving almost 35 million
workers in operation and in processing of bringing these polypropylene. This polypropylene they
get from the upper level of petroleum. After that the second core material is used is calcium
carbonate which is used for the better strength of poly fiber and thirdly master beige which is
light brown element and is used for the color when color is needed.
At the time of coating, secondly LDP (Low Density Poly propylene) is used for better strength.
Raw Materials: Poly Propylene, CaCO3, Low Density Poly Ethylene (LDPE) and Master Beige
Yarn color.
10
11
Operation
Tape Line: The operation process starts with making yarn by mixing the three materials- Poly
Propylene, CaCO3 and Master Beige. For the operation they bought a machine Star EX from the
company Star lingers. This machine has 3 different compartments for yarning. First there is a
parameter is used to measure quantity of materials. After that through the tape line 3 materials is
mixed together through melting and a sheet is made. Then a blade is used to filter the dust and
after that it is put into cold water of 20 degree centigrade to make it stronger. After that it enters
to a well protected oven to make the sheet smooth and elastic by giving hit of 390 degree
centigrade. Then finally the yarn comes out in form of bobbin.
Loom: In the next part the tape bring into the loom department, where the yarn sew through
knitting machine. Then the fabric comes out with a shape of tube. Then the tube shape fabrics
cut into three different shapes in three different machine.
Lamination: Lamination is very important for protect the cement from outside moisture and
strengthen the bag. Lamination specially has done with poly propylene and LDPE in coating
machine. LDPE specially use pasting the bag to make the bag strong.
Printing: The name of the printer is Dinaflex 4 which specialized for flexo printing. They use
water base printing with low ink consumption. Firstly they paste the required design in a mold.
Then the mold put into a slender. Then the fabrics roll into the fabric roll. Then different parts of
the bags print differently. Then the fabric roll again into a fabric roll. The machine print through
Anilox roller which has 80 whole per cm thus the print can be done with high longevity. In the
12
Anilox roller there is ink chamber in which ink controlled by a bled. They use Doctor Grade Cut
ink, which make the printing colour from their competitors. After printing they do Corona
treatment to increase the longevity with 24000 voltages. There is a laser ray safety around the
machine. There are two cameras, one inside the printing machine and one outside the machine to
observe the machine works.
Roll Sliter: After printing the different parts of fabric start rolling in different slinder.
Ad*Star kon 60: In this stage all the different part join together through a machine. The
machine needs 650OC. There are 2 lines in the machine to join two sides of the bag. There are
five different parts join together. After joining all the parts together the machine make two
wholes in the entrance place. Here the finished bags come out from the machine.
Before making bundle of the finished product group of workers give the sill for date on the bags.
Sack Press: In this step workers make bundle of the finished bags. There are maximum 200
pieces of bags in a bundle.
Truck loading: The final steps is to load the truck with finished product.
13
14
.
Distribution
Akij Poly Fibre Industries don’t have any specific distribution channel. They go directly to the
buyers to sell their product. They go to every potential buyer and show the advantages of their
product by showing samples. If the buyers convinced to take product from them they can give
orders. To give the orders buyers have to pay the price first to ensure the order. After getting the
orders they start production. After completing the order they first clear VAT for all the finished
goods. Then they send the order to the ordered place at time.
Marketing process
Target Customer: They mainly target the cement producing company in Bangladesh only.
Before they sold their products to MTC, Bashundhara cement, Rubi Cement, Premier Cement
and their number of sold was 45lacs begs per month. But now they only sale their products to
Scan Cement, Crown Cement and Lafars Cement and now they sale about 30lacs bags per
months. But they have a plan to export the foreign customer in future.
Competitors: There are so many competitors of Akij Poly fibre in recent time. Many companies
are starting produce Poly fibre bags for cement with the huge demand for the fast growing
cement companies. The main competitors of Akij Poly fibre industries are Shah Cement, Bengal
group, Tiger Brands, Global by Meghna group, MDC by Madina group and very recently
Bashundhara group also starting this business.
Advertisement: Akij Poly Fibre Industries don’t do that much advertisement. They advertise
15
their product through their marketing people. The Marketing people go to the buyer directly and
show their product and describe its advantages and also describe how the product is better than
the others.
Services: They always try to give the best services to the customer. To ensure the service quality
they call their buyers by their own. They call the customers to know that are they satisfied with
their product or not, are they facing any problems. They also give after sales services directly
going the customers place.
16
17
Supporting Activities
Research & Development: Poly Fibre bags are something that actually doesn’t need any
special development. They just try to development in processing thus they can reduce wastage in
production and the breakdown at work.
Labour Management: In Akij Poly Fibre there are a total of 208 labours at present. Among
them 125 labours are permanent, 36 are non permanent 35 are daily labours and 12 labours are to
be appointed.
Working hour- Working hour is 8 hours per shift. There are 3 shifts a day.
Requirements
The labors working there must have to be 18 years and above.
The must be HSC passed.
Training- Akij Poly Fibre Industries arranges in house training for their labours.
General Administration:
As Akij Poly Fiber is very small business segment of Akij Group, it does not have any complex
hierarchy. On the top of the organization Akij Poly Fiber have chairman. Beneath chairman they
have a managing director. There are two directors who are working under the managing director.
Akij Poly Fiber is under supervision of a factory manager and one assistant Manager
(Production). The factory manager directly reports to the Managing Director. The HR of Akij
Poly Fiber is supervised by one Deputy Manager. Marketing activities is managed by the
Marketing & Sales department of Akij Cement. In this department, there is a Deputy General
Manager. However, distribution & logistics of Akij Poly Fiber is operated from the factory under
supervision of the factory manager. All accounts issues are handled by the accounts & finance
18
department of Akij Group under a small sub-department for Akij Cement & Poly Fiber.
Administration of Akij Poly Fibre Ind. Ltd.
Chairman(Mr. SK Nasir
Uddin)
Managing Director
(Mr. SK Bashir Uddin)
Director(Mr. SK Shamim
Uddin)
Director(Mr. SK Jamil
Uddin)
Deputy Manager, HR & Admin(Mr. SK Jafor
Uddin)
DGM, Marketing(Mr. SK Jasim
Uddin)
Factory Manager(Mr. Zahangir
Hasan)
Accounts Department
Asst. Production Manager
(Mr. Mashudur Rahman Khan)
19
Appendix
Process Diagram
Please see the next page
Printing
Input OutputFabric (Meter) with coating, Red/Blue ink, Thinner, Accelerator, Reterder etc.
Printed Fabric (Meter)
Loom
Input Output
Tape (In form of bobbin)
Fabric (Meter)
Tape Line
Input OutputPP,CaCo3 & Master Beige (Color)
Tape (In form of bobbin)
Lamination
Input Output
Fabric ( Meter) Fabric (Meter) with coating
Roll Slitter
Input OutputPrinted Fabric (Meter) for top/bottom/valve.
Roll (Pieces) for top/bottom/valve
AD*STAR KON 60
Input OutputPrinted Fabric (Meter) for body, top/bottom & valve
Finished Bag (Pieces)
20
From the bottom of the previous page
Sack Press
Input OutputFinished Bag (200 Pieces in a bundle)
Compressed Bundle
Truck Loading
21
SWOT Analysis
Strength
Good quality product
After sales service
Commercially first mover
Very good manufacturing plant (Automated machines)
Opportunity
Global Market
New comers in Bangladesh (Cement producing companies)
Weakness
Over price
Fully automated machines- so hard to find mechanical lickage if there is any problem.
Lack of efficient labor
Poor management/inefficient management
They have no well developed website
Ni advertisement and well developed marketing plan
Threat
Local competitors (Cement companies are coming with their own poly fibre plants)
Threat if latest technology
22
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