chapter profile - shodhgangashodhganga.inflibnet.ac.in/bitstream/10603/8688/15/15_chapter...
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CHAPTER PROFILE
This is to understand the backdrop of sugar manufacturing units
located in the state of Andhra Pradesh. As the study is with a specific
reference to the four sugar manufacturing units in the two potential
districts of the state, this chapter gives a comprehensive focus on the
location, genesis, operational, organizational, financial and human
resource aspects of the respective units under study for a better insight.
SUGAR MANUFACTURING UNITS IN KRISHNA DISTRICT
UNIT-1: THE KCP SUGARS LIMITED. [
HISTORY OF THE COMPANY
Late Shri. Adusumilli Gopalakrishnaiah, who hailed from
Gudivada, is pioneer in setting up the Cooperative sugar factory of 600
TCD as early as in 1936 in Vuyyuru under cooperative sector. But Late
Shri. Velagapudi Rama Krishna .,ICS, a top bureaucrat and civil servant
had conceived the idea of promoting agro based industries, when he is
Director of Industries, Madras state. By virtue of his position as Director
of Industries, he had exposure to the industrial sector which prompted
him to take over the sugar industry on 03.07. 1941, at Vuyyuru which is
not doing well. The sugar factory is of 600 TCD and it is christened as
The KCP Ltd. He is source of inspiration to many entrepreneurs to set up
sugar industries in Andhra Pradesh. Some of them are Andhra Sugars,
Sarwaraya Sugars and Deccan Sugars. The KCP Ltd never looked back
from the year 1941 and gradually by stages it had expanded to 7500
TCD which is the present capacity. The KCP Ltd., consequent to
diversified operations has, over the years become a conglomerate with
multi-locational and multi product units, each the size of an independent
company. The company has envisaged plans to set up different projects
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which required focused attention and substantial resources. Therefore it
has been decided to reorganize the company The KCP Ltd., into two
companies. With this objective a new company, under the name and
style of the KCP Sugar and Industries Corporation Ltd., has been
incorporated in the year 1996 with the following units 1). Sugar Units at
Vuyyuru and Lakshmipuram 2). Co-Gen unit at Vuyyuru and
Lakshmipuram 3). R&D, Distillery, Co2, Bio fertilizers and Calcium
located plant at Vuyyuru. 4). Workshop Unit at Tada.
ENTREPRENEUR’S PROFILE
Late Shri. V.M. Rao a visionary had taken over the reigns of the
KCP Sugar and Industries Corporation Ltd., as the first Chairman and
Managing Director. He is instrumental in revamping the company with
his foresight by introducing technological innovations and right sizing
the man power for increasing the production and productivity in the
organization. He took several bold steps to start allied products like Bio-
Products, Acetic Acid and several other projects viz. Co-Gen, Calcium
Lactate, Bio-Fertilizers, Ethanol and Mycorrhiza.
The legacy of late Shri.V.Ramakrishna and Late Shri.V.M. Rao is
being arduously continued by Smt. Irm Guard Velapudi V.M. Rao
Managing Director and Smt. Kiran Rao. Executive Director. Smt. Kiran
Rao is an ardent lover of nature and animal lover who propagates the
compassion and care with which one has to take care and preserve the
ecology which is passed on as a gift to the future generations. She is
successful woman entrepreneur having started her own business
enterprises before taking over stewardship of the company as executive
director. Shri. Vinod Sethi Chairman is with his vast experience is
making endeavor to take KCP Sugars into multi dimensional
conglomerate with the objective Growth with a purpose. the KCP Sugar
and Industries Corporation Ltd., is all through with their continued
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unrelenting efforts of all the three stewards to excel the predominant and
eminent position enjoyed over years among share holders and business
associates.
[
IMPORTANT EVENTS OF COMPANY
In 1995 The company is incorporated and the manufacturing
operations are considered only for One day. 1996-The 'Scheme of
Arrangement' entered between the Company and 'The KCP Ltd' was
approved by the Hon'ble High Court of Madras vide their order dated 18th
March, whereby the following units of 'The KCP Limited' stands
transferred and vested in the company from the Effective Date viz.,1st
April. One equity share in the Company of `10/- each credited as fully
paid up for every two equity shares of ` 10/- each fully paid up held by
such members in The K.C.P. Ltd., and all the Shareholders in The K.C.P.
Ltd., will be issued share certificates in the Company. On completion of
the related formalities, the said shares of the company will be listed on
the Chennai and Hyderabad Stock Exchanges.
Shri. V.M. Rao, Chief Promoter Director of the Company has been
appointed as the Chairman and Managing Director for a period of five
years from 2nd April, 1996 to 1st April, 2001 on a remuneration which is
within the limits of Schedule II of the Companies Act, 1956. The
Company is setting up a Bio technology Institute at Vuyyuru for
increasing the yield in sugarcane. The first Directors of the Company
Shri. V.M. Rao, Smt. V.P. Durgamba and Smt. Rajeswary Ramakrishnan
retire at the ensuing Annual General Meeting in terms of Article 119 of
the Articles of Association of the Company and being. Eligible offer them
for reappointment. In 1997The Board of Directors also wishes to inform
that the Company has entered into separate Memorandum of
Understanding with Central Electronics Engineering Research Institute
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(CEERI), Pilani, Indian Institute of Science, Bangalore and National
Remote Sensing Agency, Hyderabad for various R & D activities.
The Company issued/allotted the shares pursuant to the Scheme
of Arrangement approved by the Hon'ble High Court of Madras on 18th
August 1996 and share certificates are being issued to the Shareholders
who have surrendered the old certificates to 'The KCP Ltd'. The fully
owned Subsidiary 'The Eimco-KCP Ltd' was awarded 'ISO 9001' in
February, by Lloyds Registrar Quality Assurance for design, manufacture
and service of chemical process equipment covering solid liquid
separation technology.
During the period under review, the Company has introduced
'Voluntary Retirement Scheme' at Vuyyuru and 50 employees have opted
for the same as on 31.03.97, towards which an amount of ` 55.61 lakhs
has been expended by the Company.
The Industrial relations, though quite congenial is affected on
account of a strike called by a section of the workers on 27th March,
which ended on 6th April, '97. The strike did not disrupt manufacturing
operations as the Company is able to effectively maintain the same level
of production with Support from the loyal employees. In 1999 The
Company is exploring various avenues for venturing into downstream by
products and further consolidation in the acetic acid and alcohol units.
During the year under review, the Company has promoted a
Subsidiary Company, KCP Sugars Agricultural Research Farms Private
Limited, primarily aimed at extensively carrying out research and
development programmes on sugarcane and other agricultural produce.
In 2000 Ms. V. R. Durgamba, Director has resigned and Ms. Irmgard
Velagapudi has been co-opted as a director on the board. The Equity
Share Capital of the Company stood at ` 12, 89, 30,160 and the Reserves
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and Surplus stood at ` 61, 05, 68,115/- as at 31st March. The Company
has completed the installation of the high pressure boilers and
automation of some of the processes at both the Units. In the coming
year, expansion in the capacity of acetic acid unit from 3300 tpd to
12500 tpd; setting up of a new industrial alcohol plant of 10000 kl, in
addition to setting up of1 MW power plant from biogas are expected to be
completed.
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Chart No. 5.1 : Organization Chart – The KCP Sugars and Industrial Corporation Ltd.
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ORGANISATIONAL STRUCTURE OF THE KCP SUGARS & IC LTD.
An organisation is something, which affects everyone especially in
the industrialized, urbanized society of today. In the words of Money and
Return Organisation is the form of every human association for the
attainment of a common purpose. Organisations whether big or small
private or public are the only instruments available to overcome the
biological and psychological limitations. Individual create various types of
strategies to fulfill their needs and to achieve their goals. Sound
organizational structure permits optimum use of technical and human
resources through specialization. Right persons are placed at right
position on the basis of their knowledge and experience. It develops
people by creating appropriate training and promotional productivity
opportunities. According to Richard II Hall, organizations increase
productivity through better understanding of human behaviors in an
organizational setting. The KCP sugars and IC Ltd., organization is
divided into the following departments’ i.e., Agriculture department,
Human resource and development department, Engineering department,
Process department, Finance department, Civil department, Transport
department, Electrical department, Computers department, Sales
department and Purchase department.
INDUSTRIAL CHEMICALS / COGENERATION / OTHER UNITS
Vuyyuru Distillery Unit produced 35.94 lakh litres during the
year ended 31.03.2010 as against 64.03 lakh litres during the previous
financial year. As against this, they said unit sold 28.63 lakh litres
valued at ` 9.29 crores during the year under review as against 48.05
lakh litres valued at ` 12.40 crores during the previous year. The Bio-
fertilizer unit at Vuyyuru sold about 1.59 lakh Qtls valued at ` 2.99
crores as against 1.59 lakh qtls valued at ` 3.50 crores during the
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previous year. Efforts are on to increase the quantum of sales in the
coming years. Cogeneration Unit at Vuyyuru produced 25,174 MW of
power during the financial year under review as against 14,605 MW in
the previous year, and the Lakshmipuram Unit produced 3,653 MW of
power as against 3,113MW in the previous year. In all, total export of
electrical energy was 11,479 MW resulting in a turnover of ` 3.25 crores
as against 994 MW at a turnover of ` 0.29 crores during the previous
year. The Carbondioxide and Calcium Lactate plants together
contributed ` 0.95 crores towards its turnover of the Company as against
a turnover of ` 0.96 crores during the previous year.
TABLE-5.1: HUMAN RESOURCE STRENGTH OF THE KCP SUGARS AND IC LTD., AS ON 31.03.2010
(Figures in no’s) S.NO Category(grade) Permanent Seasonal Trainees Contract
App. Daily App.
Daily total
1
2
3
4
5
6
7
8
9
10
11
12
13
Officers
Supervisors-A
Supervisors-B
Supervisors-C
Clerk-A
Clerk-B
Clerk-C
Highly skilled
Skilled-A
Skilled-B
Semi-skilled
Un-skilled
Trainees and App
25(100.0)
26(100.0)
15(88.23)
20(76.92)
10(90.90)
42(67.74)
15(45.45)
17(89.47)
80(95.23)
82(73.21)
133(67.17)
55(36.91) -
- -
2(11.76)
6(23.07)
1(9.0)
20(32.25)
18(54.54)
2(10.52)
4(4.76)
30(26.78)
65(32.82)
77(51.67) -
- - - - - - - - - - - -
150(56.39)
- - - - - - - - - - - -
42(15.78)
- - - - - - - - - - -
17(11.40)
74(27.81)
25(100.0) (2.43)
26(100.0) (2.52)
17(100.0) (1.65)
26(100.0) (2.52)
11(100.0) (1.07)
62(100.0) (6.03)
33(100.0) (3.21)
19(100.0) (1.84)
84(100.0) (8.17)
112(100.0) (10.89)
198(100.0) (19.26)
149(100.0) (14.49)
266(100.0) (25.87)
Total 520(50.58) 225(21.88) 150(14.59) 42(4.08) 91(8.85) 1028(100.0) Note: Figures in the brackets indicate the percentages to respective total. Source: Office Records of the KCP Sugars and IC Ltd.
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HUMAN RESOURCES
The Company has 1028 employees including non-seasonal
employees at the sugar units as on 31.03.2010. The Company ensures
high standards of safety for its employees and periodically conducts
meetings to minimize operational hazards. The Company believes that
people are the key to success and hence the human resources function
pro-actively develops innovative and business focused methods to
attract, motivate, develop and retain talented, competitive manpower
sourcest as can be viewed from table-5.1.
PERSONNEL AND INDUSTRIAL RELATIONS
The Employee relations scenario continued to be harmonious and
congenial. Acknowledging this, your Company has been awarded for
outstanding efforts in maintaining cordial Industrial Relations and
Labour Welfare by Government of Andhra Pradesh.
CORPORATE OBJECTIVE
a) To become the preferred employer of personnel by offering highest
quality of work life in the industry
b) To be the most outstanding supplier in the industry by meeting
customer expectations
c) To be first among locations in the company in ‘earnings per
employee’ ratio in the industry during the present decade.
d) To achieve at least 10% growth every year in turn over, profits and
value addition.
e) Implement measures to ensure minimum losses, maximum quality
and parameters be achieved.
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f) The company committed to make continuous efforts to upgrade
our manufacturing techniques, continually improve effectiveness of
our quality management system and enhance performance of
employees by providing need based training and motivating them
to work as a team.
CHART-5.2: PROCESS OF PRODUCTI0N
Source: Office Records of the KCP Sugars and Industries Corporation Ltd.
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SUGAR MANUFACTURING PROCESS
Procurement of Sugarcane from the registered areas through Zonal
Offices. Weighment of Sugarcane in the Weigh Bridge. Feeding of
sugarcane in the Cane Carrier. Preparation of Sugarcane into fine fibers
through leveler units. Feeding of prepared Sugarcane into the mills.
Extraction of 72% of Juice from the prepared Sugarcane in the first mill.
Juice Imbibitions to extract maximum juice in the remaining Fibers.
Juice is taken for boiling purpose. Excess bagasse is sold. The Juice
extracted from the Mills is measured. Treating of Juice in the Juice
heaters. Addition of liquid lime and sulphur-di-oxide in juice Sulphitor.
Separation of Clear Juice and muddy juice in the clarifier. Clear Juice is
sent for evaporation in the semi-kestners and Evaporators. Extraction of
juice from muddy residue through Vacuum Filters. The extraction juice
is reduced into Syrup after evaporation of water particles Addition of
Sulphur-di-oxide to the syrup in order to improve the colour of the sugar.
Syrup is sent to pans for massecuite boiling. Production of massecuites
by adding of various types of molasses and syrup. Preparation of A, B &
C massecuite. A massecuite is improved from B massecuite. B
massecuite is improved from C massecuite. Separation of C massecuite
into C Seed and Final Molasses in the centrifugals. Separation of B
massecuite into B heavy and B Seed in the centrifugals. Separation of A
massecuite into Whiter Crystal sugar and a heavy and a light in the
Centrifugals. The White crystal sugar is dried in the Sugar Hoppers.
White crystal sugar is graded in the Graders. The non-uniform size sugar
is sent for melting. Graded White Crystal Sugar is sent for weighment
and bagging. Graded White Crystal Sugar is sent to sugar godown for
stacking. Sale of sugar is based on the allotment given by the
Government of India.
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TABLE-5.2: PRODUCTS PRODUCED BY THE KCP SUGARS AND IC LIMITED.
Station Name of the product Units Installed capacity
Vuyyuru unit
Lakshmipuram unit
Sugar
Molasses-by product
Industrial alcohol /anhydrous alcohol
Bio fertilizer
Electrical power
Incidental co-
generation power plant
Sugar
Electrical power Incidental co-
generation power plant
Qtls
MT’s
BL per day
Qtls
Kwh
Qtls
Kwh
7,500
(tonnes of cane crushed per day)
50,000
15MW
4,000
5MW
Source: Office Records of the KCP Sugars and IC Ltd.
PRODUCT MIX OF THE COMPANY
Table-5.2 presents the different products produced by the KCP
Sugars and IC Ltd., sugar is the main product and remaining is by
products. Consequent to the commitment made by the Company to the
farmers in supporting them to produce profitable crop, the Company has
worked on promoting bio-fertilizer, organic manure, Micxorrhiza, etc. The
following bio-fertilizers are produced and made available to the farmers:
Nitrogen fixing bio-fertilizers, Azospirillu, Azotobacter Phosphate, Bio-
fertilizer Bacillus, Megaterium Mycorrhiza-VAM (Versculor Arbinsular
Solubilizing Mycorrhiza), Aqua Bio-fertilizer, Nitrosomonas and
Nitrobachor for Aqua culture, Bio control Agents for Pest Control,
Trichogramma chiloris, Chilocorus nigritus.
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SUGAR PLANTS
Vuyyuru
This sugar unit is established at Vuyyuru in the year 1941 with a
crushing capacity of 600 TCD. The present crushing capacity is 8500
TCD and this is one of the largest sugar factories in the country and also
one among the most modern. A State of Art Technology is being
continuously tried and incorporated in the plant.
There is a Distillery plant at Vuyyuru Sugar Factory with a capacity
of 50 KLPD, upgraded from 25 KLPD. The plant has been designed to
produce bio-ethanol to fall in line with the government’s policy and to
meet the target to reduce the import of crude oil and save foreign
exchange. The sugar unit at Vuyyuru has a cogeneration plant also to
produce 15 MW of power per day.
Lakshmipuram
This Unit is one among the most modern plants with a crushing
capacity of 4500 TCD. It has a Cogeneration power plant with 5 MW
capacities, which has been in operation since January 2006.
PROGRAMME OF EXPANSION
The KCP sugars & IC ltd., had taken up steps for technology up
graduation for improvement of productivity and equality of sugar factory
at Vuyyuru. By 1932-41, the cane area is 1880 acres with a production
of 39.25 tonnes of cane. The higher realization per acre from sugar cane
crop greatly motivated the extension in 1951 from 800 TCD to 1,200
TCD, utilized almost the entire quantity of sugarcane and this was
further raised to 2,500 TCD in 1956, all within a span of six years. The
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sugarcane area increased to over 11,000 acres and the factory utilized
3.23lakh tonnes of cane in 1956-57. The cultivators readily increased the
area under sugarcane crop with every successive expansion, since per
acre income is better than alternative crop.
In 1969-70, the sugar factory through another substantial
expansion of 3,750 tonnes of cane crushing capacity per day to utilize
4.98 lakh tones of cane per season from then on by various
improvements of the plant and machinery, in the year 2010, capacity of
crane crushing was doubled as 8500 TCD. The factory has been rapidly
increasing its annual capacity. The annual average growth rate of cane
crushing from 1941 to 2010 was 3.48 per cent.
TABLE-5.3:- ZONE WISE NUMBER OF VILLAGES AND ACRES
Source: Agriculture department, the KCP Sugar & IC Ltd.
Zone No. of villages No. of acres
1 29(17.0) 2748.45(10.87)
2 31(18.23) 4113.50(16.28)
3 27(15.88) 3081.64(12.19)
4 11(6.47) 3762.30(14.89)
5 19(11.1) 5635.23(22.30)
6 14(8.23) 2713.53(10.74)
7 39(22.94) 3210.61(12.70)
Total 170(100.0) 25265.26(100.0)
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TRANSPORTATION OF SUGARCANE
Previously, the sugarcane used to the transported mainly by carts.
But, now due to a large area of nearly 60 miles radius, most of the cane
is being transported by lorries and tractors. The communication
channels are mainly between Vijayawada and Machilipatnam. This
factory installed crushes capacity is 7500 TCD. Total land under
sugarcane cultivation is 25265.26 acres and this is divided into 7 zones.
The factory used 0.34 lakh tonnes of cane in the year 1941, 2.12
lakh tonnes in 1952 and afterwards it increased to 10 lakh tonnes per
annum. Sugarcane is supplied from nearly 171 villages with radius of 50
Kms, of the factory that almost of the total per cent of sugarcane
supplied to the factory comes from 74 villages which are situated
between 11 to 20 Kms. This indicates that the factory has dependable
source of supply at the relatively close range as can be viewed from
table 5.3.
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TABLE-5.4: SEASON WISE CANE CRUSHED, SUGAR BAGGED AND RECOVERY OF THE KCP SUGARS & IC LTD.,
DURING 2000-01 TO 2009-10
Year Cane crushed (lakhs MTLS)
Annual growth rate
Sugar production
(lakhs QTLS)
Annual growth rate
Sugar recovery
(%) 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 CARG
6,09,355 6,88,821 9,74,932 10,14,597 9,97,945 10,72,145 12,21,209 8,46,674 5,38,686 4,89,522
-2.16
- 13.04 41.53 4.06 -1.64 7.43 13.90 -30.66 -36.37 -9.12
6,31,820 7,22,284 9,81030
10,60,812 11,44,442 11,97,470 13,19,880 9,19,000 5,62,758 4,64,936
-3.02
- 14.31 35.82 8.13 7.88 4.63 10.22 -30.37 -38.76 -17.38
10.38 10.48 10.07 10.47 11.46 11.15 10.83 10.85 10.45 9.50
Source: Annual Reports and Office Records of the KCP Sugar & IC Limited.
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TABLE-5.5: PROFIT PERFORMANCE OF THE KCP SUGARS & IC LTD., DURING 2000-01 TO 2009-10
(` in lakh)
Year Sales
Net profit after taxes(` in lakh)
Annual Growth
Rate
Net profit margin( %)
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
CARG
3140.48
39821.32
36376.12
25035.49
31049.48
40714.44
39724.59
30997.71
25035.49
30155.72
-0.48
4075.21
2547.01
1847.09
2034.75
4,065.21
5711.04
2355.05
7109.68
1132.73
2374.48
-8.57
-
-37.34
-27.48
-43.97
99.78
40.48
-58.00
201.89
-84.06
109.62
13.25
6.39
5.07
8.12
13.09
14.02
5.92
22.93
4.52
7.87
Source: Annual Reports and Office Records of the KCP sugars & IC Ltd.
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OPERATIONS OF THE KCP SUGARS & IC LTD.
The operational scenario of the KCP sugars & IC Ltd., during 2000-
01 to 2009-10 is presented in table-5.4. It is evident from the table that
the cane crushed which was 6, 09,355 lakh MTLS during 2000-01
reached the peak of 12,21,209 lakh MLTS during 2006-07 stood at
4,89,522 lakh MLTS during 2009-10. The annual growth rate of cane
crushed is very high during 2002-03, is 41.53 per cent and in the year
2009-10 is -9.12 per cent. Compound annual rate of growth during last
ten years was -2.16 per cent. The production of sugar which is 6, 31,820
lakh QTLS during 2000-01, also reached the height of 13, 19,880 during
2006-07 QTLS and stood at 4, 64,936 QTLS during 2009-10. The annual
growth rate of sugar production among the last ten years the present
year during 2009-10 is -17.38 per cent. High at 10.44 per cent during
2002-03, least at –38.76 per cent during 2008-09. The compound annual
rate of growth from the last ten years of sugar production is -3.02 per
cent. The sugar recovery during the period under review maintained,
more or less, at a consistent rate. The recovery rate ranged between
10.38 per cent (2000-01) and 9.50 per cent (2009-10). This table reveals
that there are fluctuations in the sugarcane crushing from year to year.
The major reason is that since, it is an agricultural product the climatic
conditions drastically affect the yield.
The recovery percentage of sugar is stable during this period. The
production trend of sugar is extremely irregular. Thus the performance
in terms of area, cane crushed in recovery percentage has shown a
steady improvement.
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PROFIT PERFORMANCE OF THE KCP SUGARS & IC LTD.
Table 5.5 reveals the profit performance of the KCP sugars & IC
Ltd., interms of sales and NPAT during 2000-01 to 2009-10. It shows the
sales, net profit after taxes. Regarding the sales, company maintain
consistently during the last ten years, during 2000-01 sales is `
31040.48 lakh. Highest sales during the period are ` 40714.44 lakh
during 2005-06, the present year sales is ` 30155.72 lakh. The
compound annual rate of growth is -0.48 per cent. During 2005-06 net
profit after taxes is high at ` 5711.04 lakh, stood at 2374.48 during
2009-10, compound annual growth rate is of net profit after taxes is -
8.57 per cent. Net profit margin is fluctuations the year by year, during
2005-06, ` 14.02 lakh is highest net margin, present year is ` 7.87 lakh.
TABLE-5.6:-FINANCIAL PFRFORMANCE OF THE KCP SUGARS & IC LTD., DURING 2000-01 TO 2009-10
(` in lakh)
Year Share capital Reserves& Surplus
Profit after Tax
Dividend %
2000-01 1133.85 6772.82 1368.16 25 2001-02 1133.85 5384.94 340.19 25 2002-03 1133.85 4962.81 -422.13 -- 2003-04 1133.85 6554.81 1911.78 25 2004-05 1133.85 9012.45 4065.21 100 2005-06 1133.85 12784.19 5711.04 150 2006-07 1133.85 14475.97 2355.05 50 2007-08 1133.85 14342.19 710968. 50 2008-09 1133.85 14546.49 1132.73 70 2009-10 1133.85 15925.95 2374.48 75
Source: Annual Reports and Office Records of the KCP sugars & IC Ltd.
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FINANCIAL PROFILE
The achievements of the company can be judged from its financial
performance, it can be seen in the table-5.6. The company is with an
equity share capital of ` 7 lakh in 1943. By 2009-10 its share capital is
` 1133.85 lakh and Reserves and Surplus stood at ` 15925.95 lakh. The
contribution of the company to the exchequer by way of central and state
excise duties collected on Sugar, Alcohol etc., Dividends are maintained
at a level of 50% for the past 5 years.
The factory contributes to the exchequer by paying different taxes
like excise duty, purchase tax and income tax. The amount is more or
less 20% of total sales of the firm. This implies that the firm helps in
national development. Excise duty is the primary income source of the
Indian government. It implies that the sugar industry is essential for the
smooth running of Indian Economy.
TABLE-5.7: YEAR-WISE CRUSHING CAPACITY OF KCP SUGARS & IC LTD., DURING 1941-2010
YEAR Licensed/Installed Crushing capacity per day
1941 800 TCD 1951 1200 TCD 1956 2500 TCD 1969 3750 TCD 1977 6000 TCD 2003 6000 TCD 2004 7500 TCD 2008 7500 TCD 2009 7500 TCD 2010 8500 TCD
CARG (1941-2010) 3.48 per cent.
Note: TCD= Tonnes Crushed per Day Source: Annual reports of the KCP Sugar & IC Ltd.
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YEAR-WISE CRUSHING CAPACITY
Table 5.7 presents the year-wise crushing capacity of the KCP
sugars & IC Ltd., at initially 1941 the crushing capacity per day is only
800 tonnes this is tremendously increased to 8500 tonnes per day in the
year 2010 with the compound annual rate of growth 3.48 per cent. This
indicates the progress of the company particularly in crushing capacity.
WELFARE FACILITIES
Free Medical Aid provided to both permanent and seasonal
employees and their dependents in the company's dispensary. All the
employees and their spouses have been covered under Group Medical
policy, Management pays the premium, which may cost around ` 13 lakh
per year. Group personal accident policy introduced and covers all the
employees and accordingly to the company bares part of the medical
expenses and to meet the salary of insured person during the period of
hospitalization in the event of accident while on duty or outside the
factory premises, and consequent treatment in the hospital. Group
Insurance scheme is live for employee's deposit linked insurance scheme
with accident benefit to an extent of ` 25,000/- Loan facilities are being
provided to the non-management staff. ` 1000/- and ` 1500/- to the
Management staff for rather higher studies and who have completed the
course with in the stipulated time they said loan will be waived off. Two
pairs of uniform, one pair of shoes and two pairs of socks provided to all
the employees once in a year. Birthday greetings are being presented to
all the employees on their Birthdays Marriage gift cheque worth of ` 5,
000/- will be presented to the employees and ` 2000/- in case of
employee's children. A lump sum amount of ` 25000/- given to the
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Permanent employees and ` 1500/- to seasonal employees as festival
advance. June/July every year to meet their children's education
allowances and the same will be recovered in 8 installments on free of
interest. Free accommodation is offered to almost all the employees in
the company's Quarters. Employees who underwent Vasectomy
operation are granted for 6 days leave as special case. Free supply of 20
electrical units who residing in 'D' type quarters, 24 hours of water
supply and provision of power generator during power cutting time in the
colony. Cable connection has been provided for 450 quarters. Sports and
Games are conducting on the eve of Independence Day celebrations every
year to the employees, spouses and their children separately and
mementos will be presented on Independence Day. Mutual aided Thrift
society is also being organized and employees are assisted by giving
loans up to ` 50,000/- to Non-Seasonal employees and ` 15,000/- to
seasonal employees with 9% of interest.
The company having a canteen with all facilities provided to
employees. About 700 persons are benefited on subsidized rates as
detailed below. Tiffin and Tea are being supplied to the work spots and
also providing at canteen in the stall. The management is present in on
Wristwatch, Dhoti and Angavastram to the employee and a Saree with
blouse piece to his spouse along with one kg. of Sweets on founder's day
i.e. on 4th March. Every year 15 Scholarships cash award ` 10,000/- are
being awarded to meritorious students of our employees children who are
selected for professionals courses. Employee who retires from service on
attaining the age of 60 years are being presenting ` 10,000/- each as
Retirement benefit to permanent employees and ` 5,000/- to Seasonal
employees (minimum service is 20 years) Pension will be giving ` 200/-
p.m. to the non seasonal and ` 100/- p.m. to seasonal employees.
Employee who died during the service ` 20, 000/- paid to his dependent
as Death benevolent fund and ` 10, 000/- to the dependents seasonal
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employees and ` 2, 500/- as funeral expenses. Elementary and High
School Education is provided to the children of employees. Beautiful
buildings are constructed. Free education will be provided to all the
students joined in the school and the school is maintained by the
company. Computers are installed in the school for 8th to 10th class
students of our school and house wiring vocational training also
imparted to the students. Group Gratuity Scheme under LIC is being
provided to cover risk of the life of our employees. In case of death,
Gratuity is being paid to the dependent for the balance period of service
(till the retirement age) also. The Management has kind enough paying
an exgratia ` 6,000/- instead of Bonus, as all the employees are not
entitled to get the Bonus as per Bonus Act.
RESEARCH AND DEVELOPMENT
To maintain the quality and competitiveness in technology in-
house Research and development is started by the KCP Sugars and
Industries Corporation Limited early in 1970. This is manned by
qualified and experience engineers and technologists. Recently a few
projects like ‘Crop-Weather Relationship in Cane’, Application of
computer technology in the development and procurement procedures in
the cane cultivation has been taken up under Research and Development
project.
SUGAR CANE RESEARCH
The Company has been investing substantially in cane research to
ensure sustainable and profitable crop for better recovery. The Company
has a few sugar cane research farms established and monitored to
facilitate the farmers looking for solutions in sugar cane farming,
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measures to deal with pest disease, good seeds, quality inputs and
technical advice, resulting in profitable and sustained sugarcane
farming.
The company works closely with the farmers of our command area
on a day-to-day basis, to identify the problems of sugar cane cultivation
and the requirements of farmers and provide them with necessary feed
back to solve their problems in order to enhance the profitability. It also
provides necessary inputs such as soil analysis, fertilizer
recommendation, clean seed material, plant protection, etc. It is
monitoring the crops along with farmers at various stages of its growth
and advises them as and when necessary.
The company has gone for re-charging the tube wells to ensure
sufficient of Water Table to manage in a draught situation and advised
'drip irrigation' to affordable farmers. It also takes care of crop sensors
and provides free high quality healthy planting material to farmers to
ensure healthy productive crop.
FUTURE PLANS OF THE KCP SUGARS & IC LTD.
a) To identify new technologies whenever it is possible and makes use
of the same for improved results.
b) In view of the cute shortage of agricultural labour the following
measures are explored to partially mechanize the cane cultivation.
c) Induce farmers to use power tiller drawn planters and mini tractor
drawn implements.
d) Identifying and developing suitable sugarcane harvester calydaying
the soil conditions and land holdings of our command arise.
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e) In-depth study is in progress in distillery division to adopt new
technologies for improving the yield and reduce the discharge of
spent wash.
f) Identifying value-added products from the by-products and to
promote renewable energy from adjustrial waste.
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UNIT-2: THE DELTA SUGARS LIMITED
HISTORICAL BACKGROUND
Sree Hanuman Co-operative sugars Ltd., located at Hanuman
Junction is registered on 30-09-1972 and the installed capacity of the
factory are crushing per day 1250 TCD. As on March 1991, enrolled
members in the society are 6,334. Hanuman Junction Co-operative
Sugar Mills that is laid off in September 2001 is taken over and revived
in November 2001 by Delta sugars Ltd. It is an example of the
implications of revival of closed state level public enterprises through
privatization for varied stakeholders of enterprise reform programme in
Andhra Pradesh. Contrary to the fears of a section of the society about
the moves of privatization of sugar factories, transformation of
Hanuman Junction Co-operative Sugar Mills into the Delta Sugars Ltd.,
reveals a different reality. Perceptions of the workers, cane farmers and
Sugar enterprises in the area demand attention to appreciate the nature
of implications of privatization programme.
Cross-section of the society in the sugarcane belt of Hanuman
Junction Co-operative Sugar Mills views privatization with hope and
expectations for a brighter future. However, there are issues that need
to be resolved to address apprehensions and conflicts of the pre
privatization tangle. A closer look at the ground realities makes one
believe that post privatization scenario after another crushing season is
likely to present a different picture more in favor of the transition as by
then the pending issues of pre and post privation would be resolved
meaningfully. Issues that require attention include payment of job
severance compensation for the workforce that is not absorbed by the
new management, capacity building of the surplus labor force and
resolution of the payment of long standing arrears to the farmers.
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In September 2001, the Government of Andhra Pradesh privatized
the sugar factory and running by the private management i.e., M/s
Delta Sugars Limited, Hanuman junction. The factory registered under
Companies Act 1956. The present capacity of the plant is enhanced to
3000 MT per day. There are 150 villages in the area of operation of the
factory from where it has enrolled the members. These villages are
extended into 9 mandals. The total land holding of the members is
about 6529 acres and the average holding of the members of each
members work out to 4.8%. About 90% of the area hold by the members
is quiet for cane cultivation. As per by law no.33, it is obligatory on the
part of the member to supply cane 25 MTs. During each crushing
season but due to lack of proper irrigation facilities, lack of
remuneration price to cane, riots are not showing such interest to grow
cane. So to make the cane cultivation economical, the company has to
provide good seeds. Material incentives for early maturing, high yielding
and better varieties and to make cane cultivation viable to farmers. To
achieve this object, developing seed nurseries and providing pesticides
etc., to farmers is essential.
ENTRENEUR’S PROFILE
The Chairman of the Delta Sugars Ltd., Dr.Gokaraju Ganga
Raju is the son of illustrious Late Sri G.Ranga Raju, Former Chairman
of Tirumala Tirupathi Devasthanam and Former MLA and is a
Pharmacy Graduate and an approved Chemist by A.P.Drug Control
Administration, Hyderabad. Medicina Administrative Institute, Srilanka
awarded him with Doctorate. He has promoted "Chemiloids" in 1976
and it is grown as 'Laila Group of Companies'. He has made his entry
into Financial Sector by establishing Laila Finance Limited. He acquired
Delta sugars Limited in the year 2001 and turned it into a profit making
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company in a short span of time. He started a College of Technology at
Miyapur, Hyderabad viz., Gokaraju Rangaraju Institute of Engineering
& Technology and a Jr.College at Aswaraopet, Khammam, which is a
Tribal Area. He is the Vice Chairman of Alluri Sitarama Raju Academy
of Medical Sciences, Eluru; External Expert of Academic Council of
Andhra Loyola College, Vijayawada; Member of Governing Body of Maris
Stella College, Vijayawada. Expert Member of Academic Council of
Montewsori Mahila Kalasala, Vijayawada. President of Andhra Cricket
Association and Secretary to Krishna Dist. Cricket Association and is
holding important positions in various Associations, Foundations,
committees etc.
Managing Director, Sri G.V.K. Ranga Raju (Eldest son of Dr.
Ganga Raju) is a Bachelor of Engineering (Chemical)
from Andhra University, Visakhapatnam. He is also a Director in Laila
Aquatech Limited., Laila Finance Limited., Laila Credits Pvt. Ltd.,
Ramaraju Fish Farms Pvt. Ltd., and Nagarjuna Food Products Pvt.
Ltd., Laila Infotech Ltd., Partner in Laila Impex, Laila International,
Chemiloids, Herbex and Plantex. He is Vice President of Gokaraju
Educational Society which runs premier institutions like Gokaraju
Rangaraju Institute of Engineering and Technology and Gokaraju
College of Pharmacy at Hyderabad.
Sri G.Rama Raju (Younger son of Dr. Ganga Raju) is a M. S
(Pharmacy) from USA. He is also actively involved in the management
of ASRAM Medical College at Eluru (WG Dt. AP). He is also a Director
in Laila Aquatech Limited., Laila Finance Limited., Laila Credits Pvt.
Ltd., Ramaraju Fish Farms Pvt. Ltd., and Nagarjuna Food Products
Pvt Ltd., Laila InfoTech Ltd., Partner in Laila Impex, Laila
International, Chemiloids, Herbex and Plantex. He is Secretary
of Gokaraju Educational Society which runs premier institutions
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like Gokaraju Rangaraju Institute of Engineering and Technology
and Gokaraju College of Pharmacy at Hyderabad.
VISION AND MISSION
The Delta sugars limited, is committed to satisfy their customers,
for the products they develop and supply. The Delta sugars Ltd is
committed to actively promote the safety, health and well being of all its
personnel. Delta sugars Ltd will ensure that these aspects are inbuilt
and become integral part of its operations and strategic planning.
The Delta sugars Ltd also is committed to make available
necessary funds, resources and any such means required to
implement the occupational health, safety and welfare (OHS & W)
policy and commits to ensure, (a). A safe work culture that minimizes
the risk of injury or illness to its personnel. (b). Adequate facilities at
work places, and (c). Regular training, instructions and information to
all its personnel on OHS & W.
LOCATION
Sree Hanuman Co-operative Sugar Ltd is located in Seri
Narasanna palem village, Bapulapadu Mandal, Krishna District, A.P.,
beside National High Way 5 which is about 42 kms away from
Vijayawada and 4 kms away from Hanuman Junction. The Head Office
is on the factory site, the main railway station is Nuzvid, which is at a
distance of 6 kms from the factory site, and the main railway station is
Vijayawada. The main raw material of the sugar factory is sugarcane.
The sugar production area of the organization is very vast. There are
260 villages in the area of operation of the factory. The 260 villages are
extended into 16 mandals. Lorries, bullock carts and tractors transport
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sugarcane and other materials. There are two major towns, Vijayawada
at a distance of 42 kms and Eluru at a distance of 23 kms from the
factory. Factory is connected to these two towns by railway as well as
roadways. The factory has nearest marketing facility at Vijayawada
which is one of the biggest centers in South India. It offers a wide
market for sale of sugar and other by-products. There are three sugar
factories in the immediate neighborhood these include 1) The KCP & IC
limited, Vuyyuru, which is at a distance of 40 KMS. 2) The West
Godavari Co-op sugar, Bhimadole that is at a distance of 43 KMS. 3)
The KCP Sugar & IC Ltd., challapalli at a distance of 65 KMS.
SIZE AND OVERVIEW OF THE UNIT
The crushing capacity of the plant is initially 1250 tonnes per
day. This plant is gravity flow type. The white mass will flow by gravity
pumps and avoided as the crystal ligers are placed in the first floor
along with the evaporator, pans in second floor. The present capacity of
the plant has extended to 3000 MT tonnes per day.
During the year under review, the Management had taken steps
to replace the existing machinery in the sugar units as a part of
modernizing the existing plant and machinery, and to adhere to the
changing technological changes with the internal generation of funds.
Implementing various productivity improvement programmes for
sugarcane cultivation. Extending various inputs to the farmers for
purchase of fertilizers, seeds and other necessary materials and also
extended load facilities to farmers to establish drip irrigation. Adopting
of different extension methods to inculcate cane cultivation among
small farmers.
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CHART-5.3: ORGANSIATION CHART –THE DELTA SUGARS LTD.
AGRICUTURE HUMAN RESOURCE & SERVICES
PROCESS ELECTRCIVIL. FINANCE
GL STORES MYCOR
CO2 R&D AND C L P
ENGINEERING
DISPENSARY
PERSONNEL &WELFARE CANE YARD
BIOTEC
TIME OFFICE TRANSPORT SECURITY SERVICE
COMPUTER DISTILLARY PURCHASE SUGAR SALES HYD.VJA. OFFICE ETHANOL
CANE OFFICER SUGAR LAB
CHAIRMAN AND MANAGING
BOARD OF DIRECTOR
EXECUTIVE DIRECTOR
GENERAL MANAGER
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ORGANIZATION AND MANAGEMENT
The organization has five departments. The Departmental Heads
are accountable to managing director who co-ordinate all the activities
of the departments. He is accountable to chairman and board of
directors. The departments of organization functioning these following
departments are as follows Administrative Department, Accounts
Department, Engineering Department, Agriculture Department,
Manufacturing Department.
1) Administrative Department
The Administrative Officer is the Head of this Department. He is
responsible to the Managing Director for his department activities. The
Duties of the departments are as follows, Purchasing, Inventory control,
Sales of sugar and molasses, Personal activities, Security and other
general matters. The administrative Officer directs, motivates the
subordinates and controlling the above mentioned activities. The
following personnel assist administrative officers are Office manager,
Purchase Manager, Store Keeper, Sugar Godown In-charge and Security
Officer.
2) Accounts Department
Chief Account’s officer is the Head of this department. He is
responsible to the Managing Director for the maintenance of the accounts
of all divisions of the company and his duty involves the preparation of
balance sheets and correspondence with the investors, merchants, banks
and financial institutions. This department maintains three account
ledgers such as Cane Accounts, Store Accounts and General Accounts.
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3) Engineering Department
Chief Engineer is the Head of this Department. He formulates the
techniques of cutting and crushing sugarcane, suiting top the
machinery and equipment. He makes the recommendations regarding
planning of engineering section, such as rehabilitation and
modernization. He has to supervise, plan schedule maintenance work
with the assistance.
4) Agricultural Department
Chief Agricultural Officer is the Head of this department. The
main function of this department is the procurement and development
of sugarcane. Chief Agricultural officer estimates the sugarcane supply
of each season. These estimates are useful to the organization for
preparing the budgets. Deputy Chief Agricultural Officer, Assistant
Agricultural Officer and Field men are assisting Chief Agricultural
officer
5) Manufacturing Department
The actual sugar production starts from the manufacturing
department. The manufacturing department is to see the good quality of
the sugar production. Chief chemist is the head of this department,
responsible for the overall operation of sugar manufacturing of the
factory from juice to final sagging sugar. He has to constantly endeavor
to minimize sugar losses and process and has to institute revise and
check chemical control methods. Deputy Chief Chemist, Manufacturing
Chemist, Lab and Bench Chemist are assisting the Chief Chemist
The Board has unfettered and complete access to any information
within the company and to any employee to the company. At meeting of
the Board, it welcomes the presence of managers who can provide
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additional insights into the items being discussed. The information
regularly supplied to the board includes like annual operating plans
and budgets, capital budgets update, quarterly results of the company
and its operating divisions in comparison with the budgets, Minutes of
the meeting of the board, audit committees as well as the abstracts of
the circular resolutions passed, general notices of interests of directors,
materially important litigations, show cause notices, demands,
prosecution and penalty notices, Fatal or serious accidents or
dangerous occurrences any material effluent or pollution problems, Any
material default in financial obligations to any by the company or
substantially non-payment for goods sold by the company, significant
labour problems and proposed solutions, sale, lease, transfer of
material nature of investments, subsidiaries, assets, which is not in the
normal course of business.
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TABLE-5.8: HUMAN RESOURCE STRENGTH OF THE DELTA SUGARS LTD., AS ON 31.03.2010
(Figures in no’s)
S.NO Category(grade) Permanent Seasonal Consolidate salaried
Daily App.
Daily total
1 2 3 4 5 6 7 8 9
10
11
12
13
Officers
Supervisors-A
Supervisors-B
Supervisors-C
Clerk-A
Clerk-B
Clerk-C
Highly skilled
Skilled-A
Skilled-B
Semi-skilled
Un-skilled
Trainees and App
4(100.0)
5(100.0)
2(100.0)
3(37.5)
2(66.66)
7(36.84)
4(21.05)
5(100.0)
14(73.68)
16(51.61)
26(41.26)
12(23.07) -
- - -
5(62.5)
1(33.33)
12(63.15)
15(78.94) -
5(26.31)
15(48.38)
37(58.73)
40(76.92) -
- - - - - - - - - - - -
70(41.17)
- - - - - - - - - - - -
100(58.82)
4(100.0) (1.00)
5(100.0) (1.25)
2(100.0) (0.50)
8(100.0) (2.00)
3(100.0) (0.75)
19(100.0) (4.75)
19(100.0) (4.75)
5(100.0) (1.25)
19(100.0) (4.75)
31(100.0) (7.75)
63(100.0) (15.75)
52(100.0) (13.00)
170(100.0) (42.50)
Total 100(25.0) 130(32.5) 70(17.5) 100(25.0) 400(100.0)
Note: Figures in the brackets indicate the percentages to respective total.
Source: Office Records of the Delta Sugars Ltd.
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HUMAN RESOURCE STRENGTH
Human resource strength of the Delta Sugars Limited is
presented in the table-5.8. It is evident from the table total employees of
the company are 400. They are categorized into four types, they are
Permanent Employees, Seasonal Employees, Consolidate salaried
Employees and Daily wage workers. Employment exchange is the major
source of recruitment to the Delta Sugars Ltd., personnel department
deals with this the recruitment will takes places through various steps
such as selection, interviews and appointments.
Among these Permanent employees are 25 per cent (100) of the
total. Seasonal employees are 32.5 per cent (130), Consolidate salaried
employees are 17.5 per cent and daily wage workers are 25 per cent.
The total incurred amount for the employees in respect of salaries and
allowances is ` 220.9 lakhs during the year 2005-06. Both permanent
and seasonal employees got 12% provident fund from their salary and
12% from management. Every year company gives 8.33% salary as
bonus. The employees are provided with earned, casual and special
leaves. Every employee works 8 hours in the company according to their
allotted shifts.
POLICIES WITH RESPECT TO EMPLOYEES
Delta Sugars limited has focused on the development of human
resources and pooling of intellectual capital to attain increased
productivity and maximize profitability. Allocation of limited human
resources has been carefully planned to meet the needs of new
dynamics of management and minimize cost of production. The
management cadre at the Delta Sugars Limited consists of a few but
rich experienced personnel in their fields.
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The employees of Delta Sugars Limited are a working group team
of self-motivated and motivating individuals. They carry out their
respective jobs with a vision and missionary zeal. The employees
perceive the goals of the company as their personal goals and spare no
efforts in accomplishing the tasks assigned to them.
Sugar Industry being a seasonal industry has different staff
strength during season and off-season Delta Sugars limited is one of a
sugar unit in India, which is not over-staffed in spite of political
pressures and other constraints.
1). Training programmes and Management development programmes
are conducted to educate the employees and to enable them to
discharge their duties with panache and aplomb.
2). Shop floor training is imparted to workers to hone their skill.
3). Workshops are conducted for the benefit of employees to educate
them on preventive maintenance. Services of experts are
summoned to help and educate to the workers.
4). Employees are continuously guided about industrial safety and
safe industrial practice.
5). The employees are encouraged to participate in suggestion
scheme is in operation, which enable the employees to frankly
and fearlessly put-forth their suggestions for overall improvement
of the performance.
6). The strengths and weaknesses of each employee are critically
evaluated to ensure that the right peg is in right hole. Career
planning and job enrichment of each employee is an ongoing
activity in Delta sugars Limited.
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FACILITIES TO THE EMPLOYEES
The Delta Sugars Limited has evolved its own employee’s policy,
briefly described as under to its workers and staff to obtain the
qualitative performance in an un-interrupted way 1). Issuing of festival
advances to workers to meet their expenditure. 2). Creating the
provisions for leave encashment and gratuity to the entire employee’s.
3). Providing uniform to create an identity of the Company employee’s.
4). Supplying safety shoes in adherence to the safety norms and to
create a safety environment for the employee’s. 5). Issuing of timely
increments to the workers.
The company believes that the quality of its employees is the key
to its success in the long run and is committed to provide necessary
Human Resource development and training opportunities to equip them
with skill, enables them to adapt to contemporary technological
advancements.
None of the employees is in receipt of remuneration during the
year under review, in excess of the limits prescribed under Section
217(2A) of the Companies Act, 1956 and as amended and therefore the
particular required to be furnished under Companies Rules, 1975, are
nil.
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TABLE-5.9: OPERATIONS OF THE DELTA SUGARS LTD., 2001-01 TO 2009-10
Year Cane crushed (lakh MTLS)
Annual growth
rate
Sugar production (lakh QTLS)
Annual growth rate
Sugar recovery
(%) 2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
CARG
16513
189456
220449
295831
300965
283634
350019
285617
143590
138033
23.65
-
14.73
16.35
34.19
1.73
-5.75
23.40
-18.39
-49.72
-3.87
279347
294368
309832
328173
350321
307436
335554
277202
137847
123450
-7.8
-
5.37
5.25
5.91
6.74
-12.24
-9.14
-17.38
-50.27
10.44
10.24
10.15
10.49
10.34
10.37
10.18
10.12
9.89
9.60
8.94
Source: Annual Reports and Office Records of the Delta Sugar Limited.
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TABLE-5.10: SALES PERFORMANCE OF THE DELTA SUGARS LIMITED., DURING 20001-02 TO 2009-10.
Year Revenue from sales(lakh)
2000-2001 4837.01
2001-2002 4902.06
2002-2003 4731.05
2003-2004 5042.18
2004-2005 5462.32
2005-2006 5941.58
2006-2007 5502.47
2007-2008 5255.10
2008-2009 5210.10
2009-2010 5124.02
Source: Office Records of the Delta Sugars Limited.
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TABLE-5.11: FINANCIAL PERFORMANCE OF THE DELTA SUGARS LIMITED., DURING 2000-01 TO 2009-10.
YEAR Total income (in lakh)
Annual growth
rate
Expenditure (in lakh)
Annual growth
rate
Net Profit (in lakh)
Ratio of Expenditure
to total income
Ratio of Net Profit
to total income
2000-2001
7340
-
3670.12
-
350.49
49.98
4.77
2001-2002
6689.32
-8.86
3127.36
-14.79
332.68
46.75
4.97
2002-2003
6839.01
2.24
2896.18
-7.38
380.92
42.34
5.56
2003-2004
5976.26
-1.26
4326.42
49.37
190.12
72.39
3.18
2004-2005
7032.53
17.67
3670.29
-15.16
395.18
52.19
5.16
2005-2006
7258.40
3.21
3560.92
-2.99
335.29
49.05
4.61
2006-2007
5561.89
-23.37
4527.24
27.13
337.71
81.39
6.07
2007-2008
16995.77
205.5
5239.55
15.73
11.40
0.82
0.06
2008-2009
6564.02
-61.37
5536.58
5.66
23.70
84.34
0.36
2009-2010
5872.53
-10.53
4273.27
-22.81
179.73
72.76
3.06
CARG
-4.14
3.71
-11.72
Source: Office Records of the Delta Sugars Limited.
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OPERATIONS OF THE DELTA SUGARS LIMITED.
The operational scenario of the Delta Sugars Ltd, during 2000-01
to 2009-10 is presented in table-5.9. It is evident from the table that the
cane crushed which is 16513 lakh MTLS during 2000-01 reached the
peak of 350019 lakh MLTS during 2006-07 stood at 138033 lakh MLTS
during 2009-10. The annual growth rate of cane crushed is very high
during 2003-04, is 34.19 per cent, and in the year 2009-10 is -3.87 per
cent. Compound annual rate of growth during last ten years was 23.65
per cent. The production of sugar which is 279347 lakh QTLS during
2000-01, also reached the height of 350321 QTLS during 2004-05 and
stood at 123450 QTLS during 2009-10. The annual growth rate of sugar
production during the last ten years the present year during 2009-10 is
high at 10.44 per cent, least at -50.27 per cent during 2008-09. It is
observed that the cane crushed and sugar production by the factory
increased at a growth rate of 23.65 per cent and -7.8 per cent during
the decade under reference. The sugar recovery during the period under
review maintained, more or less, at a consistent rate. The recovery rate
ranged between 10.24 per cent (2000-01) and 8.94 per cent (2009-10).
The above table reveals that there are fluctuations in the
sugarcane crushing from year to year. The major reasons in the climatic
conditions are more effected in yielding of sugarcane. The recovery is
decreasing from 10.24 per cent to 8.94 Per cent during under study. It
implies whether required to install modernized machineries and
installed computerization in different areas of production process.
SALES PERFORMANCE
The sales performance of the Delta Sugars Limited in terms of
sales revenue shown above table-5.10 and can be seen the sales
revenue is increased from ` 5941.58 lakh to ` 4837.01 lakh there by
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recording during the five years under the study. Although the company
has made note worthy progress in terms of sales revenue, much more
improvement is designed in view of the seasonal nature of the
industries and growing competition in the market.
FINANCIAL PERFORMANCE
The financial performance for the Delta Sugars Ltd, in terms of
total income, expenditure, and net profit are exhibited table-5.11. It can
be observed that the total revenue of the organization has decreased from
` 7340.39 lakh in 2000-2001 to ` 5872.53 lakh in 2009-2010. Annual
growth rate of total income in the year 2009-10 is -10.53 per cent,
Similarly the expenditure has gone up from ` 3670.12 lakh in 2000-2001
to ` 4273.27 lakh 2009-2010 with some fluctuations, annual growth rate
of expenditure from 2009-10 is -22.81 per cent. The net profit made by
the organization fluctuated between 337.71 lakh (2006-07) and 11.40
lakh (2007-08), and 179.73 lakh during 2009-10. the table shows the
ratio of expenditure to total income and ratio of net profit to total income
during the ten years period, the ratio of expenditure to total income
during increased from 49.98 per cent (2000-01), to 72.76 per cent
during 2009-10. Ratio of profit to total income fluctuation during the
years i.e. 4.77 per cent during 2000-01 and 3.06 per cent during 2009-
10. In the five years period the compound annual rate of growth indicate
- 4.14 per cent of total income, 3.71 per cent of expenditure, and -11.72
per cent. Net profit to the ten year period indicating the volatile financial
position of the organization. This may be attributed to higher growth of
components of revenue like the sales price of sugar and allied products.
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SUGAR MANUFACTURING UNITS IN WEST GODAVARI DISTRICT UNIT-3: THE ANDHRA SUGARS LTD
INTRODUCTION
The Andhra sugars limited is established on the 11th August, 1947
by two cousins who are farmers in Tanuku. This company produces a
number of products using locally available renewable resource to
produce value added products and generating employment to 4,500
people and 15,000 farming families and helped in boosting the rural
economy of the region. This is, perhaps, the only industrial group in
India that has its plants, head quarters and management allocated in
rural and farming region.
Mr.P.S.R.V.K. Ranga Rao is the founder chairman of the Andhra
Sugars Limited., who shared in the shaping of the company and making
it into what it is today. The natural phenomenon of Tanuku and Dr.
Mullapudi Harischandra Prasad’s enterprising spirit sowed the idea of
industrialization. The idea of rooting an agricultural industry here
crystallized into a small sugar factory 63 years ago.
The Andhra Sugars Limited., is incorporated initially with an
industrial license for cane crushing of 600 tonnes per day. First crushing
in the factory is started in the year 1962. Gradually, the capacity of the
sugar plant is increased to 5,000 tonnes per day. The Andhra Sugars
Ltd., is the first factory to introduce diffusion centrifugal machines. In
order to utilize the by-product of the sugar factory, i.e., molasses, the
Andhra Sugars Ltd., started a distillery in the year 1962, for the
manufacturing of industrial alcohol. For further utilizing the industrial
alcohol, acetic anhydride/acetic acid plant is established in the same
year, i.e., 1962, and Ethyl Alcohol plant is commissioned in the year
1965.
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Acetic anhydride/acetic acid are manufacturing simultaneously
and this process is only one of its kind in the country. The acetic
anhydride/acetic acid plant is supplied by a Swedish firm for the
manufacture of acetic anhydride and acetic acid to Messers Southern
Hydro Carbons Limited., Udamapet, Tamilnadu, and Messers, Hindustan
Organic Chemicals Limited (a government of India undertaking),
Rasayani, Maharashtra. Recently, the company has supplied a 10 tonnes
per day capacity acetic acid (from ethyl alcohol) plant on turnkey basis
to Sanjeevani Sahakar Karkhana Limited, Kopargaon, Maharashtra,
which has won the customers’ appreciation for design, workmanship and
performance.
LOCATION OF ANDHRA SUGARS
Tanuku Location
This is a sugar and organic chemical production operation,
commencing production at Tanuku in 1952 at the sugar mill with a
crushing capacity of 600 tonnes of cane per day, which has expanded to
crushing capacity of 5,000 tonnes per day to day. To utilize the molasses
from the sugar plant, a distillery is set up to produce industrial alcohol.
This is followed by the setting up of the acetic acid, acetic anhydride and
ethyl acetate plant that used alcohol as its raw material. In addition to
these products, Aspirin, Unsymmetrical Dimethyl Hydrazine and
Monomethyl Hydrazine are also produced at the Tanuku location.
Kovvur Location
This is an inorganic chemical production operation, commenced
production at this location with the setting up of a sulphuric acid-
superphosphate plant in 1960. Then came the caustic soda and caustic
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potash plants. Utilizing by-products from these plants, hydrochloric acid,
chloro sulphuric acid and alum are produced in addition to providing
chlorine to many industries.
Guntur Location
This is an operation producing products based on vegetable oils.
Operations at this location commenced with the processing of cotton
seed, sun flower seed, rice bran and oil seed cakes. The top quality oil is
refined and marketed in consumer packs and the non-edible is
hydrogenated for industrial use. The de-oiled cakes and bran is partly
used to produce livestock and fish feed and the rest is being exported.
The Company has set up a wind farm at Ramagiri in the Anathapur
District of Andhra Pradesh state to produce 2 MW electricity and is
licensed to set up an additional 8M W capacity. It is in the process of
setting up of another sugar mill with a crushing capacity of 2,500 tonnes
of cane per day at a location 80 km from Tanuku and a caustic soda
plant of 100 tonnes per day capacity is also setting up an R and D centre
for tissue culture and sugarcane breeding for the multiplication and
development of highly productive sugarcane lines. Taduvai location, this
is 2,500 TCD sugar plant is commissioned in 1997. Saggonda location,
this is 100 TCD caustic soda plant is commissioned in 1997, and
Bhimadole location is manufacturing unit.
Subsidiaries
The Andhra farm chemicals corporation limited located at kovvur
produces hydrazine making use of the chlorine gas and caustic soda
available from the caustic soda plant and JOCIL limited at dokiparru 15
km from Guntur. It is soap manufacturing and stearic acid plant.
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ASSOCIATE COMPANIES
Sree Akkamamaba textiles limited., are sculled up on 8th April
1954 for the production of various types of yarn for the weaving industry.
This commenced production within an installed capacity of 8,000
spindles and has expanded to a 50,000 spindles capacity producing
cotton blended and synthetic fiber yarns. The Andhra petrochemicals
limited., is promoted for the production of 30,000 tonnes per annum of
oxo-alcohols at Visakhapatnam, with technical collaboration from M/s.
Davy McKee of London, using the latest LP oxo process technology,
designed to produce 2-Ethyl Hexanol or Butanols.
MANAGEMENT
Dr. Mullapudi Harischandra Prasad, one of the founders, a
renowned industrialist and philanthropist, heads the company as
chairman and managing director. He is ably assisted by four whole-time
directors. Dr B.B.Ramaiah, (ex- Commerce Minister, Govt. of India) is the
managing director (tech.). Joint Managing Directors are Sri P.
Narendranath Chowdary, Sri M. Narendranath, and Sri M. Thimmaraja,
and Executive director is Sri P. Achuta Ramayya, and Sri P.S.R.V.K
Ranga Rao
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CHART-NO.5.4: ORGANISATION CHART-THE ANDHRA SUGARS LTD.
CHAIRMAN &MANAGING DIRECTOR
Executive Director
Chief executive G.M(Cane) D.C.M(F&A) D.G.M
Purchase Transport GH GenSt Dy Manager Cane Manager Cane I/c I/c I/c I/c (F&A) Acct
Clerk Sr Mnager Yard Ao Inch sup
Managers ACSDO Clerk Cane Exam Unid Banta FM ( Diy Banta)
Clerk Mech Cooks Clerks Boys Drivers Boys Cleaner Boys Public Rela&Liason
Mol&
Est Inchg MO H T K Security Welfare
Clerk Comp T K Welfare Sr off (EDP) Clerk Sr Programmer
L W O
Trainee Progranner
SystAsst/Asst Prog
D E O’s
P O
F M Tr
T r
G.M. (Factories)
Manager Chief Manager Dist Engg Engineer (Coger) Ma
Sr Engr Sr Engg J E Sr Engg Sr Engg Dy Manager (p) Asst Mngr A .E A.E Sup (Elec) (Inst) Asst Manager (p) (QC) A
JE JE Workmen AE AE Sr. Mfg.Chem. Lab Chem.
Sup. Sup Tr/App JE JE Mfg.Chem TraineesChemis
Clerk/DM Clerk workmen Sup Asst. Lab Boys
Workmen Workwomen Sr.Engg Workmen Tr/.App Civil Tr/App
Sugar sales I/C P.S. to Tracer Maistry
Sales
Clerks
Tr Tr Banta
CE Desp
Steno Tel opr Clerk
D.G.M (Elec)
Tr/.App
Clerk Tr/App
D.G.M.(Process)
Mfg.Chem Tr/App
H.panMan
Pan Incharge Ad
Workmen A G M
Tr/App
Officer
AAO
Clerks
D C M
Mol&Begassee Sales clerk
G.
(Tech)
Staff&
workers Workers
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TABLE-5.12: HUMAN RESOURCE STRENGTH OF THE ANDHR SUGARS LTD., AS ON 31.03.2010. (Figures in no’s)
Product
Permanent No’s
Temporary No’s
Trainees No’s
Daily wage No’s
Apprentices No’s
Total No’s
Sugar Alcohol Acetic acid Acetic anhydride Ethyl acetate Chlorine Sulphuric acid Superphosphate Sulphuric acid Acid Total
400(46.51)
250(71.02)
117(86.02)
43(87.75)
36(26.47)
50(98.03)
169(100.0)
280(62.22)
5(100.0)
4(66.66)
1354(61.15)
6(0.69)
19(5.39) - - - - -
4(0.88) - -
29(1.30)
14(1.62)
30(8.52)
7(5.14)
2(4.08)
33(24.26)
1(1.96) -
40(8.88) -
2(33.33)
129(5.82)
420(48.83)
53(15.05)
12(8.82)
4(8.16)
67(49.26) - -
126(28.00) - -
682(30.80)
20(2.32) - - - - - - - - -
20(1.35)
860 (100.0) (38.14)
352(100.0) (15.89)
136(100.0) (6.14)
49(100.0) (2.21)
136(100.0)
(6.14) 51(100.0)
(2.30) 169(100.0)
(7.63) 450(100.0)
(20.32) 5(100.0) (0.22)
6(100.0) (0.27)
2214(100.0) (100.0)
Note: Figures in the brackets indicate the percentages to respective total.
Source: Office Records of the Andhra sugars Ltd.
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HUMAN RESOURCE STRENGTH
The manpower strength in the initial year only 505. The figure as
on 31.03. 2010 is 2,214 including seasonal staff. Table 5.12, indicates
the manpower consists of different categories viz. permanent, temporary,
trainees, daily-wages and apprentices. Table reveals major share of
employees are permanent 61.15 per cent (1354), 30.80 per cent are daily
wage employees. In the manufacturing of sulphuric acid product plant all
the employees are permanent.38.14 per cent (860) of employees are only
working at sugar production section. This is major share against the
total employees.
SOCIAL RESPONSIBILITY AND SOCIAL COMMITMENT
As a form of social responsibility, the Andhra sugars Ltd., have
provided a number of facilities to the general public. Some of them are
1. Under Dr. Mullapudi Venkatarayudu Memorial Education Trust,
Polytechnic College has been established with hostel, library and
playground facilities.
2. Dr. Mullapudi Venkatarayudu Memorial Medical Trust has been
established at Tanuku, which is fully equipped large, hospital with
200 beds.
3. Rangaraya Medical College was established in Kakinada. The
company has provided a number of facilities to the workmen and
staff members. Some of them are:
a) Workers and staff members are conveniently housed with all
amenities found in the quarters allotted to them. Nearly 300
families are provided housing facilities in the quarters
constructed at the Tanuku unit itself.
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b) A school named Mullapudi Thimmaraju primary and secondary
school within the colony at Tanuku has been started and
successfully running in imparting the basic education to the
young ones.
c) A large library housed in Sri Rangaraya memorial club provides
leisurely pastime for the employees. The club facilitates the men
to engage in outdoor as well as indoor games.
d) Medical aid is given both at Tanuku and at Kovvur.
Dispensaries have been built and are headed by qualified
doctors to treat ailing employees and their dependents.
e) Canteen inside the factories both at Tanuku and Kovvur serves
the needs of the employees.
f) Grocery and consumer articles for the employees are sold
through the venkatarayapuram co-operative stores Limited., a
post office is also housed within the colony at Tanuku.
The Andhra sugars Ltd., is dedicated to the betterment of the rural
area around them. Health and education are vital for the improvement of
the quality of human life. To achieve this, help is provided in setting up a
Medical College to produce doctors needed to man the rural health care
system and followed this by helping in setting up a modern hospital for
providing gynecological, obstetric, opthmologic, dental, orthopedic and
cardiac care. To help in improving education in the area helped in setting
up and operating two high schools and polytechnic college. Help is being
given to set up a modern library and cultural centre that will have a
1,000 seated indoor auditorium and an outdoor auditorium.
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TABLE-5.13: PRODUCT MIX OF THE ANDHRA SUGARS LTD. Product Used for producing
Sugar food Industrial alcohol Acetic acid Acetic anhydride Ethyl acetate Caustic soda (lye, solid, flakes) Chlorine Sulphuric acid Superphosphate Chlorosulphuric acid Unsymmetrical dimethy1 Hydrazine(UDMH)
Acetic acid, acetic anhydride, ethyl acetate, PVC, polyethylene, arrack. Cellulose, acetate, acetanilide, dyes leather tanning, acetate salts, pharmaceuticals. Cellulose acetate, aspirin, dyes, perfumes. Ace to acetic ester, solvents, paints dehydrating and cleansing, agents. Drugs, chemicals, and galvanizing chemicals. Paper, chemicals, drugs, disinfectants and pesticides. Chemicals and superphosphate Fertilizers Drugs, dyes, pesticides Rocket propellant
Note: The Company’s Pilot plant for manufacturing unsymmetrical dimity hydrazine. (UDMH) is set up at Tanuku.
Source: Office Records of the Andhra sugars Ltd.
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THE PRODUCT MIX OF ANDHRA SUGARS
The main product of the unit is sugar which is manufactured at a
5,000 TCD capacity at the plant. The product mix of the company
includes 28 items. The company is engaged in the manufacture and sale
of sugar, organic and inorganic chemicals, non-conventional power,
caustic soda, etc. molasses is a by-product from sugar, which is the raw
material for company’s alcohol plant located at Tanuku which produces
industrial alcohol. The distillery runs on the more economical continuous
process, which produces 30 kl per day of industrial alcohol is the raw
material for the ethanol (absolute alcohol), acetic acid, acetic anhydride
and ethyl acetate. Bagasse which is the residue at the sugar plants after
extraction of juice in the production of sugar is being used for co-
generation as viewed from Table 5.13.
Sugar which is the major item of the production and sales of the
unit constitutes more than 40 per cent of the total value of the company
sales. Caustic soda and chlorine assumes a dominant share in the total
sales value. Sugar being the dominant product and the prospects appear
to be encouraging the company always initiates steps to crush greater
quantity of cane in every season. The company’s initiatives in this regard
include necessary assistance to the farmers by granting incentives and
subsidies for encouraging them to grow better quality of cane large
quantities. The management opines that, despite the significant role of
sugar industry are exposed to cyclical risks and variations. Variations in
natural factors and policies of the government are the stumbling blocks
for the prosperity of this industry. It is opined that the industry is still to
be fully liberalized because it regulates the cane price and dispatches of
sugar. The product mix of the company includes ethanol on a limited
scale. In the coming year, ethanol production in the country will receive
impetus as the government of India proposes to come out with a policy to
make mandatory the blending of ethanol with petrol.
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TABLE-5.14: PRODUCTS PRODUCED BY THE ANDHRA SUGARS LIMITED.
Station
Name of the product Installed capacity
Tanuku Kovvur CC(a subsidiary) Guntur C 12(a subsidiary)
Sugar Industrial Alcohol Acetic Acid Acetic Anhydride Ethyl Acetate butyl Acetate Carbondioxed Aspirin Unsymmetrical Dimethy Hydrazine Organic derivatives of hydrazine or of hydroxyl Amine Sulphuric Acid Superphosphate Caustic potash Caustic potash (membrane cell process) Hydrochloric Acid Chlorosuphonic Acid Chlorine Oleum Hydrazine Hydrate Processing oil seed Processing rice bran and oil seed cakes Vegetable oil refinery Vegetable oil hydrogen ration Fatly Acids Glycerin Soap
5000 MT cane/Day 99000 KL/Annum 1080 MT/Annum 720 MT/Annum 1268 MT/Annum 1268MT/Annum 5000 MT/Annum 1000 MT/Annum 90 MT/Annum 250 MT/Annum 45000 MT/Annum 66000 MT/Annum 2500 MT/Annum 16500 MT/Annum 6600 MT/Annum 20000 MT/Annum 9900 MT/Annum 6600MT/Annum 300 MT/Annum 45000 MT/Annum 63000 MT/Annum 18000 MT/Annum 6600 MT/Annum 37500 MT/Annum 1800 MT/Annum 10000 MT/Annum
Source: Office Records of the Andhra Sugars Ltd.
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UNSYMMETRICAL DIMETHY HYDRAZINE (UDMH) PILOT PLANT
The Indian space research organization (ISRO) had approached the
Andhra sugars limited to produce one tonne (UDMH) on trail basis. For
this purpose, a pilot plant is set up and is successfully commissioned in
the September 1985. Already about 250 Kgs. Of UDMH via chloramines
route has been produced in the plant. The technological innovation is the
key to a nation’s industrial growth today.
Four basic raw materials are required for manufacturing UDMH.
The Andhra sugars limited produces two of them viz. caustic soda and
chlorine. The remaining two acids, are also available indigenously, and
Andhra sugars limited buys them for their respective manufacturers. In
the world, besides India, only the USA, and USSR and France,
manufacture UDMH for use as a rocket propellant. In fact, ISRO had
entrusted the indigenous development of UDMH to Andhra sugars
limited because of its rich experience in the developing and implementing
world class technologies most effectively. The development of the UDMH
project is sponsored by ISRO with basic known-how support and
technical assistance. The pilot plant, however, is designed, fabricated
and commissioned entirely by the various departments of the Andhra
sugars limited.
The philosophy of the company has been articulated as the
utilization of its by-products to produce other quality products at
reasonable cost. The company has its operations at six in the state of
Andhra Pradesh in the southern India producing 25 different products as
can be viewed from table 5.14.
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TABLE-5.15: OPERATIONS OF THE ANDHRA SUGARS LTD., DURING 2000-01 TO 2009-10
Year Cane crushed
(lakh MTLS)
Annual growth
rate
Sugar production (lakh QTLS)
Annual growth
rate
Sugar recovery
(%)
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
CARG
917330
944589
1141111
817514
433111
473869
602182
500923
202193
129400
-17.7
-
2.97
20.80
-28.35
-47.02
9.41
27.07
-16.81
-59.63
-36.00
1035218
1040878
1307680
925005
495340
513548
632776
536842
206636
116340
-19.6
-
0.54
25.63
-29.26
-46.45
3.67
23.21
-15.16
-61.50
-43.69
11.25
11.02
11.52
11.37
11.46
10.84
10.61
10.64
10.22
8.99
Source: Annual Reports and Office Records of the Andhra Sugars Ltd,
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TABLE-5.16: FINANCIAL PERFORMANCE OF THE ANDHRA SUGARS LTD., DURING 2000-01 TO 2009-10
(` in lakh)
Year Turnover/sales Net profit after taxes
Annual growth rate
Net profit margin
2000-01 45801.89 4380.49 - 9.56
2001-02 40361.21 4537.65 3.58 11.24
2002-03 45376.80 5046.72 11.21 11.12
2003-04 50421.62 5894.62 16.80 11.69
2004-05 45778.88 4362.94 25.98 9.53
2005-06 54177.80 6031.37 38.24 11.13
2006-07 63181.05 6414.76 6.35 10.15
2007-08 1538.09 4258.43 -33.61 8.26
2008-09 62330.14 4527.57 6.32 7.26
2009-10 58203.08 6675.65 47.44 11.46
CARG 4.08 7.34
Source: Annual Reports and Office Records of the Andhra Sugars Ltd.
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OPERATIONS OF THE ANDHRA SUGARS LTD
The operations of the Andhra sugars ltd., in terms of the cane
crushed, the sugar produced and the recovery rate for the decade ending
with 2009-10 are presented in table-5.15. As evident from the table cane
crushed and the sugar production was 917330 lakh MTLS and 1035218
lakh QTLS respectively during the 2000-01. The cane crushed increased
to 2, 02,194 MTLS during 2008-09, and stood at 129400 MTLS during
2009-10. The production of sugar experienced an increase to 206636
MTLS (2008-09) and stood at 11,634 MTLS by 2009-10. During the
decade under review, the cane crushed and sugar production by the
factory recorded annual growth rate of during 2009-10 is -36.00 per
cent and-43.69 per cent respectively and the last ten years compound
annual rate growth for cane crushed is -17.7 per cent, and sugar
production is -19.6 per cent.
Coming to the recovery rate, consistency has been observed over
the years under reference. It is clear from the fact the recovery which is
11.25 per cent during 2000-01, through experienced a decline to 10.22
per cent during 2008-09, turned out in the later years and stood at 8.83
per cent during 2009-10. It is observed, over the years under review, the
recovery rate of Andhra sugars ranged between 8.83 per cent (2009-10)
and 11.26 per cent (1994-95).
FINANCIAL PERFORMANCE
Table-5.16 reveals the profit performance of the Andhra sugars
ltd., during 2000-01 to 2009-10. It shows the sales, net profit after taxes.
Regarding the sales, company maintain consistently during the last ten
years, during 2000-01 sales was 45801.89 lakh. Highest sales during the
period are 63181.05 lakh during 2006-07, the present year during 2009-
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10 sales is 58203 lakh. The compound annual rate of growth is 4.08 per
cent. During 2000-01 net profit after taxes is ` 4380.49 lakhs and stood
high at ` 6675.65 lakh during 2009-10. Compound annual growth rate
of net profit after taxes is 7.34 per cent. Net profit margin experienced
fluctuations the year by year and during 2009-10 it is ` 11.46 lakh is
highest net margin over the years the net profit margin of Andhra sugars
ranged between ` 7.26 lakh (2008-09) and ` 11.46 lakh (2009-10).
RESEARCH AND DEVELOPMENT
Through process developmental work at the Andhra sugars Ltd.,
started from the year of its inception, a formal research and development
department was established in 1980 and is given recognition by the
Department of Science and Technology, Government of India. Through
the work carried out in the laboratory, the company could improve
continuously the quality and yields of the various products being
produced by it. In addition, it has developed the technology for the
manufacture of chlorosulphonic acid and aspirin and successfully
established
Commercial plants for its production. Recently it has also
developed the technology for the manufacture of Un-Symmetrical
Dimethyl Hydrazine (UDMH) and Monomethyl Hydrazine (MMH) with
basis process know-how obtained from Vikram Sarabhai Space Centre
(VSSC), Trivandrum. In sugarcane Development Division due to
concentrated efforts of R & D staff, it could improve upon the recovery by
introducing high yielding, rich varieties of cane in the area. The company
is screening the varieties to locate pest and disease resistant varieties in
collaboration with sugarcane breeding research institute, Coimbatore. It
stood first in the state during the last six consecutive seasons in the
matter of recovery percentage. The continuous R & D activities of the
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company have facilitated in optimizing production and process efficiency,
exploring new markets for the existing products, increased capacity
utilization of plants and improved sugar recovery.
The salaries for the employees are fixed as per the guidelines and
directions of the All India Wage Boards. Other benefits are provided as
per the bipartite settlement under the industrial Disputes ACT of 1948.
Benefits are given voluntarily by the organization. Statutory benefits are
extended under various enactments like, Employees’ Provident Fund Act
of 1952, Employees state insurance Act of 1948, Payment of Gratuity Act
of 1972, Payment of Bonus Act of 1965, Factories Act of 1948, etc.
ACHIEVEMENTS
The Andhra Sugars Ltd., is committed to its shareholders and also
other stakeholders The company uninterruptedly paid dividends on
equity shares since 1954-55 and has issued bonus shares to share
holders in the years 1970, 1974, 1982, 1991 and 1993 in the ratio of 4:5,
3:5, 3:5, 1:1, and 1:1 respectively. In fact 92.17 per cent of the exiting
shares are bonus shares the company earned for its shareholders. It has
the distinction of developing in-house R and D facility process
technologies for its chlorouphonic acid aspirin, UDMH and MMH plants
and considerably improving upon the process technology for acetic acid
and acetic anhydride plant.
It is the only sugar plant in the country that successfully operates
the diffusion system in sugar production and has the distinction of
participating in the indigenous development and production of fuels for
the Indian space programme. The fuel produced by the company is used
in India’s first indigenously built multipurpose satellite-the INSAT–IIA
and the PSLV-D2. The company has been awarded the national award for
Energy Conservation in the chlor-alkali industry for 1991-92, instituted
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215
by the Indian institute of marketing and management. It is perhaps bring
the only Indian industrial group to have its head quarters and
management located in rural area, which is dedicated to the development
of rural India.
Originally this plant was supplied by a Swedish firm for the
manufacture of acetic anhydride and acetic acid in the ratio of 40:60.
The company has incorporated various improvements and developed the
process to manufacture acetic anhydride and acetic acid in the ratio of
58:42, acetic anhydrides being the more valuable product. The company
has the credit of transferring this process know-how to M/s. Southern
Hydro Carbons Ltd., Udamalpet, Tamilnadu and to M/s. Hindustan
organic chemicals Ltd., (A Govt. of India undertaking ), Rasayni,
Maharashtra. The company also supplied acetic acid plant on a tunkey
basis to M/s. Sanjeevani Sahakari Shankar Karkahana, kopargaon in
Maharashtra, and has won their appreciation for the design,
workmanship and performance of the plant.
SPREADING IN THE HORIZON
The sugar industry is undergoing expansion endeavours for
diversification. Under the diversification programme, it has to supply
fertilizers to the local sugarcane growers and the farmers. A sulfuric acid
superphosphate plant is established in the year 1961 at Kovvur
enhancing the manufacturing potential of the Andhra Sugars Ltd.,
sprouting into a group. The company established caustic soda plant in
the year 1966 for the manufacture of rayon grade caustic soda, chlorine
and hydrochloride acid. The company has fabricated hydrochloric acid
plant for making hydrochloric acid from sniff gas the capacity of caustic
soda plant is increased to 14 tonnes per day and the commercial
production is started from 26-09-1980. The company installed caustic
potash and alum plants at their Kovvur units. Meanwhile, they have
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developed the technology for the manufacture of chlorosulphuric acid
established at Kovvur based on their own technology. The capacity of the
plant was increased from 5,000 T.P.A to 10,000 T.P.A with effect from
27-03-1982.
The company holds the industrials license for manufacture of
chemical plant equipment, boiling house equipment and De Smet
Andhra sugarcane Diffusers. The Andhra sugars Ltd., has the credit of
supplying one diffuser each to M/s. Doodhganaga Yedganga Sahakari
Shaker Kharkhana Ltd., Bidri, Maharashtra and diffuser to M/s. the
Etikoppaka, A.P. and one diffuser is installed in this company itself.
ASPIRIN PLANT
The Andhra Sugars Ltd., is the first Indian company who have
developed its own technology for the manufacture of aspirin, as analgesic
drug and successfully established a plant for its commercial, production
with a capacity of 500 Mts per annum and the present capacity is 1,000
Mts per annum. Out of the main raw materials used in the manufacture
of aspirin, the company is manufacturing caustic soda, sulphuric acid,
carbon dioxide gas and acetic anhydride. The company needs to procure
only phenol from outside, which is available indigenously. The company’s
product is considered to be the best in the market.
Further the company had installed another chemical plant at
Saggonda Polavaram, for the manufacture of caustic soda, HCL, and
Chlorine. The Company started the production of sodium hypochlorite
and hydrogen gas at this unit. The licensed and installed capacities of
these plants are 33,000, 10,000, 3,300 and 50 metric tonnes per annum
respectively. The company started another sugar unit at Taduvai in
jangareddy gudem mandal with a capacity of 2,000 mt/day. The present
installed capacity is 2,500 mt/day. The company stood first in the state
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of Andhra Pradesh for recording highest recovery of 11.25 per cent
during 2001-02 seasons.
WIND POWER PROJECT
Wind power project, with a capacity of two mega watts is started in
the year 1994 and it is running successfully. The initial investment for
this project is ` 10crores. This is located at Ramagiri in Ananthapur
District.
In addition, the company has developed the technology for the
manufacture of chlorosulphuric acid and aspirin successfully and
established commercial plants for their production. The company has
developed the technology for the manufacture of UDMH and MMH with
the basic process know-how obtained from Vikram Sarabhai Space
Centre (VSSC), Trivandrum.
DISTILLERY PLANT AT THE ANDHRA SUGARS LTD
Tanuku is the complex of the Andhra sugars Ltd., distillery and the
waste water generated from alcohol. Distillery is treated in an effluent
treatment plant before disposal. The effluent treatment plant is a
multistage treatment plant. The technology of M/s. Bacardi Corporation,
U.S.A (recipient of Environment production Award in U.S.A. during 1983
for the development of best technology) is obtained through. Reva plant
and it is commissioned successfully in 1987 and is operating smoothly
since then, about 14 acres of land is procured for this project and the
total capital cost is approximately ` 1.59 lakh.
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DIVERSIFICATION PROGRAMME
Under an ambitious diversification programme for supplying
fertilizers to local sugarcane growers and farmers, a sulphuric
acid/superphosphate plant is established in the year 1961. The
superphosphate is entirely fabricated and erected by the company at
much less cost. The company also established a caustic soda plant in the
year 1966 for the manufacturing of caustic soda, chlorine and
hydrochloric acid. Under an expansion project for the caustic soda plant
and to manufacture caustic soda from hydrochloric acid sniffs, the
capacity is eventually expanded to 140 tonnes per day and the
commercial production started from 26-09-1980. The company is also
holding industrial licenses for the manufacture of chemical plant
equipment, boiling house equipments and De-Smet Andhra sugarcane
diffusers.
The company is the first Indian company to develop its own
technology, which is second to none in the international scene and has
successfully commissioned an aspirin plant of a capacity of 500 tonnes
per annum. The company has received a letter-of-intent for the
expansion of the Aspirin plant capacity from 500 to 1,000 tonnes per
annum and the project is under implementation.
Under the diversification programme meant to supply fertilizers to
the local sugarcane growers and the farmers, a sulphuric
acid/superphosphate plant was established for manufacturing caustic
soda, chlorine and hydrochloric acid. In the expansion project of caustic
soda from 30 to 100 tonnes per day, it has fabricated one of the biggest
brine clarifier of 25 meters diameter with FRP lining and made number of
innovations in the caustic soda unit such as burning hydrogen gas
instead of furnace old and utilizing the waste gas in making caustic soda
flakes. It has fabricated hydrochloric acid plant for making hydrochloric
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acid from sniff gas. The capacity of the caustic soda plant is increased to
140 tonnes per day and the commercial production was started from
26-09-1980. The company has installed caustic potash and alum plants
near Kovvur units. Meanwhile, it has developed its own technology for
the manufacturing the same is established at Kovvur the capacity of
chlorosulphonic acid plant is increased from 5,000 TPA to 10,000 TPA
with effect from 27-02-1982. The company holding industrial license for
manufacture of chemical plant equipment, boiling house equipment and
De smet Andhra sugarcane diffusers. The diffusers, which work on
percolation type, are manufactured as per the designs given by M/s. N.V.
Extraction’s De-Smet S.A.Antwerp, Belgium.
Towards the national efforts on energy saving and efficient
utilization of available coal and other inferior grades of fuels, the Andhra
sugars Ltd., launched a programme for the conservation and effective
use of coal by introducing the “Fluidized Bed Boiler’’. Thereby the Andhra
sugars Ltd., is able to save 600 to 700 tonnes of per month, affecting
substantial energy saving.
The company has established efficient treatment plant at Tanuku
in the year 1987 with technical known-how from M/s. Bacardi
Corporation, U.S.A., (who have received environmental protection award
in U.S.A., during the year 1983 for the development of best technology).
In the process of efficient treatment, methane rich bio-gas is generated,
which is being used as fuel from this non-conventional source of energy
in boilers. In following a global course to procure machinery with the
view to establish a factory quickly and economically, Dr Mullapudi
Harischandra Prasad had the privilege to be accompanied by late V.
Rama Krishna, a pioneering veteran in the sugar industry of Andhra
Pradesh. Shortly, thereafter the foundation stone is laid for the factory
which has grown today into an industrial complex.
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It has developed under the esteemed guidance and leadership of
late Dr. Mullapudi Harischandra Prasad, founder director and chairman
& managing director. In the year 1952 the erection of the factory is
completed with the first crush of sugarcane and since then the
progressive growth is triggered on. Initially, an industrial license for a
cane crush of 600 tonnes per day was obtained. The company obtained a
recovery of 9.22 per cent and it is first to introduce diffusion system and
continuous centrifugal machinery in the sugar industry.
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UNIT-4: THE JEYPORE SUGARS LIMITED.
HISTORY OF THE COMPANY
The Jeypore Sugar Ltd., was incorporated as a Public Limited
Company on 29th July 1936 under the India Companies Act. 1913 and
was the first company to be registered in the then newly formed province
of Odisha. The company started a sugar unit at Rayagada, Koraput
District, Odisha with an initial capacity of 150 TCD and subsequently
expanded to 450 TCD. The company diversified into various other
activities like manufacture of industrial alcohol, Indian made foreign
liquor and ferro manganese. In the course of expansion of the company,
a separate sugar unit was established at Nagaram in Guntur District of
Andhra Pradesh. In 1958. Due to non-availability of sugar cane the unit
is shifted to chagallu, West Godavari district in Andhra Pradesh in 1961
with an installed capacity of 850 TCD in the year 1960-61 and having
licensed capacity of 1250 TCD. At present the company’s installed
capacity and crushing capacity is at about 8500 TCD.
ENTREPRENEUR’S PROFILE
The Founder Chairman Late Velagapudi Ramakrishna born on
March 4th, 1896 in the village of Bellamvaripalem village in Guntur
District. He is graduated in Andhra Pradesh and went to U.K, he
appeared for ICS and got selection. He was married to Durgamba, and
got one daughter and two sons. All children’s of Velagapudi Ramakrishna
have become successful industrialists and their names are well known to
all industrialists throughout India and abroad.
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He worked in various positions in State Government and Central
Government as under Secretary, Collector and District Magistrate, Divan
of Jeypore Estate and finally Director of Industries, Secretary to the
Indian Government. Chairman for National Tribunal, Advisor to
Industries Department, Development Commissioner and Ex. Officio
Secretary for the Madras State Government, in the year 1945. He
voluntarily resigned from the Government service in 1947 and has taken
over the administration of businesses.
Now the managing director of this organization is Smt Rajeswari
Rama Krishna. She is born in 1928, is the daughter of the great late Sri
Velagapudi Rama Krishna. She graduated from queen Mary’s college in
1945. The Jeypore sugar Ltd., has taken big strides under her
stewardship and today the company has become the biggest sugar unit
in Andhra Pradesh which manufactures sugar, ferro-manganese, alcohol,
starch. She is closely associated with KCP, Madras Aluminum Co Ltd.,
Eimco-KCP fuller (Krishna industrial corporation) Rama Krishna
industries (private) limited, V.R Textiles limited and Coimbatore institute
of technology (C.I.T., Coimbatore) and sandwich polytechnic.
SOCIAL REACH
Smt Rajeswari Rama Krishna has donated about fifty lakhs
including land in her father’s name in his birth place, Guntur for a co-
educational College and is actively participating in its functioning. She is
the president of Sri.V.Ramakrishna Memorial College, Nagaram, which
has become a model rural institution in the country today. She has put
up the V. Ramesh krishnan Junior College in Chagallu. She has also
donated liberally for the Engineering wing in the C.R.Reddy College,
Eluru. She is the chief local donor for the Men’s College, Women’s College
and Eye Hospital at Nidadavole which caters to hundreds of villages in
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west Godavari. This hospital named as Rajeswary Ramakrishnan Lions
Eye Hospital.
ACCOMPLISHMENTS
Smt Rajeswari Rama Krishna has been very active in Rotary in
Coimbatore for several years in the 50’s and 60’s. In 1957 she led a
group of 27 Rotarian’s to Srilanka on a highly successful goodwill
mission. She is also very active in guild of services, Red Cross and other
social service organization but she gradually gave up other activities and
devoted her time for the growth of industries. She is the recipient of the
Pride of Asia International Award and Global Medal for being a leading
lady industrialist in a world dominated by men at Singapore on 11-01-
1992 and she received the award from FICCI in 1995-1996 for
“Outstanding Woman Entrepreneur.
INFRASTRUCTURAL FACILITIES WITH COMMUNICATIONS, WATER,
POWER ETC
As has been explained earlier, it is a growing concern having all
facilities. It is situated on the road from Nidadavole to pangidi at distance
of 10 km from Nidadavole Railway Station on Chennai-Howrah trunk
road and two kilometers from Chennai to Calcutta National Highway
(NH-5) from pangidi. Abundant ground water is available for the purpose
of drinking as well as processing.
The company approached the sugar directorate for loan to develop
irrigation facilities to the growers by digging bore wells and installing
pumps sets. The loan has been sanctioned and after completion of the
formalities, the project of irrigation development will be implemented to
bring in additional area under sugarcane cultivation. Regarding power
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and fuel, any sugar factory generates its own power using its own by-
product bagasse as fuel. The ONGC, Krishna-Godavari basin is laying a
gas pipeline to distribute natural gas to the industries (the gas obtained
in the Krishna-Godavari basin) and in case the gas is available, the
abundant surplus bagasse can be spared to the paper industry which
has shortage of raw material.
It is a well known fact that sugar industry generates direct and
indirect employment in rural areas. As this is growing concern, the
increase in direct employment is not proportion to the expanded capacity
in view of the technological developments in sugar manufacturing
equipment. But there is enormous potential for increase in direct
employment in agriculture and other services. Economy of scales as
indicate above, there is economy in labour cost and there will be benefit
in saving power and fuel on account of increased capacity and improved
technology. The investment cost per tonnes of installed annual capacity
is considerably less than that of a new unit. The incidence of fixed cost
per unit of production will be less. Thus, there will be substantial
reduction in the cost of production of the finished product. This can be
seen from the financial projections.
The capital structure of the Jeypore Sugars Ltd., is very
conservative consisting of a paid up capacity of ` 4.5 crores with well
accumulated reserves and surplus of ` 25.4 crores. Thus, the capital
reserve ratio stands at 1:5:6. This shows the financial strength of the
company with accumulated internal resources. But the debt component
of the capital structure is ` 85.4 crores. Thus, the debt equity ratio is
2.9:1 which appears to be ideal. The total assets of the company stands
at `125.1 crores of which the fixed assets are ` 111.7 crores. Thus, the
net fixed assets to total assets ratio stands at 89.3 per cent.
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The company is providing financial assistance for repairs and
maintenance of roads and culverts for transporting the cane from
different villages to our factory with 65% contribution from factory funds.
AGRONOMIC-TECHNIQUES TO IMPROVE YIELDS
The company is increasing the per acre yield by taking-up
improved agronomic techniques like gap filling with single bud seedlings
both in plant and ratoon crop, earthing up operation, sugarcane trash
mulching and wider spacing plantation etc.
BIOLOGICAL CONTROL LABORATORY
The company is installed a bio-control lab in our factory premises
for mass production of Trichogramma sp., which is utilized in control of
ESB, INB in sugarcane crop. They have spent `15.00 lakhs for installing
the bio-control lab, they are supplying Tricho-cards for 5000 acres in our
factory area, on 40% subsidy to the cane growers.
MECHANIZATION OF CANE CULTIVATION
The company is encouraging the farmers to take up mechanization
in cane cultivation by introducing suitable implements for soil
preparation, inter-cultivation implements like power welders/tillers,
earthing up implements, chemicals and fertilizer distribution implements
and mechanical harvesting machines etc. by giving incentives for
utilizing the implements and supplying the suitable implements on
subsidy basis through the company in the interested cane growers.
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GENERAL INFORMATION OF THE MILL WITH ITS OPERATIONAL
AREA
The Government of Andhra Pradesh under Sugarcane Act 1961
has allotted 156 Revenue Villages in 13 Mandals of West Godavari and
Sitanagaram mandal of East Godavari district. The soils in the factory
area are sandy loam, alluvial, heavy clay and red loam soils. They are
quite suitable for sugarcane cultivation. In all the area most of the soils
are having drainage facilities, but in some patches water stagnation
during floods is the problem. The total cultivable area in the factory zone
is 1,16,897 hectares out of an area of hectares is under cultivation of
crops like paddy, tobacco, Chillies, Banana, Oil palm and vegitables. The
irrigated area is 91,301 hectares under bore wells and canals. The
ground water potentiality in the factory zone is very good and is being
recharged by good rainfall during the last three months. The average
sugarcane yield in the factory zone is 30 tonnes. The cane availability
during 2010-11 season is expected to be 9.0 lakh tonnes. Against the
crushing capacity of 8500 TCD.
RAW MATERIAL
The factory zone consists of the villages having the total of 9,000
hectares under cane. Ever since the factory established in 1962, the
management has taken on its head developing cultivation of one among
most of the villages in the zone by providing necessary incentives by way
of price, subsidized supplies of fertilizers, pesticides, the disseminating
improved and modern agricultural practices and technology apart from
introducing new varieties, propagating and supply of seed at free of cost
or at subsidized rates. With the benevolent and pragmatic policies
adopted steadily and more land has been brought under sugarcane
cultivation.
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It is ample testimony that this unit has been crushing more cane
utilizing full or near full capacity when the other units in Andhra
Pradesh are working for below 75 per cent capacity. The units awarded
prizes for higher capacity utilization competition by the state government
in the years1983-84 and 1984-85. The area already developed and which
the improved practices that are being adopted under a phased progamme
to get more yield with high sucrose content is sufficient to feed the unit
even after proposed capacity increase. The grower’s community will get
disappointed if the units are not expanded to the capacity to take all the
cane that is being grown in the area.
CANE DEVELOPMENT ACTIVITIES
Three-Tier Seed Nursery Programme
The company providing seed material incentive for growing seed
nurseries of improved new sugarcane varieties under three tier seed
nursery programme under the supervision of the Agrl. Staff (84 Field
staff + 12 Agricultural Officers + 2 Cane Managers and General Manager
(Cane).
Seed Saving Technology
They have introduced seedlings plantation to reduce the cost of
cultivation in sugarcane crop by 35% than the normal planting method,
which helps in reducing the seed material and labour cost. By seed
saving technology, the cane growers are saving ` 5000/- to ` 6000/- in
both seed as well as labour cost. They have given ` 10.00 lakh for
developing seed saving technology in the factory area for 2009-10
planting season.
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Seed Subsidy
The company providing seed cane subsidy of `.7000/- per one acre
for planting sugarcane crop. The total amount of subsidy for seed cane is
` 6.30 crores for planting 9000 acres during the 2009-10 planting
season.
Ratoon Management Subsidy
The company providing ` 2000/- per acre of ratoon crop for taking
up ratoon management practices like stubble shaving, malathion
drenching, gap filling with seedlings, earthing up and inter-cultural
operations. The total amount for ratoon management subsidy is ` 2.20
crores for 11000 acres of ratoon crop during 2009-10 season.
Wider Spacing Incentive
The company encouraging the cane growers for partial
mechanization of cane cultivation likes inter-cultural and harvesting
operations. For this purpose, the spacing between the rows has to be
increased. So we are encouraging the cane growers to take up spaced
plantation by giving incentive of ` 3000/- per acre.
Trash Utilisation Incentive
In factory area, the farmers had the practice of burning the
sugarcane trash after harvesting the cane, which is becoming a threat for
global warming. To change the trash burning practice, they have
introduced trash utilization incentive of ` 1000/- per acre for utilizing
the sugarcane trash for mulching or for removing the cane trash from the
field.
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Interest-Free Loan Facilities to Cane Growers
All the inputs like Organic Manure, Inorganic Manure, Weedicides,
and Pesticides etc are provided with interest free loan to the cane
growers.
Crop Loans
The Company providing crop loans to the cane growers under tie-
up arrangement with commercial banks. These loans are recovered from
the subsequent cane payments after supply of cane.
Loans for Improvement of Irrigation Facilities
The company providing term-loans to the cane growers for
purchasing PVP pipes for bore wells, which will be recovered in three
years from their cane payments. As the irrigation facilities are improved
on a long term basis, the farmers are coming forward to take up cane
plantation.
Cane Transport System
The company providing transport facilities to cane growers on
subsidy basis for supplying cane from distant villages of 25 kms and
above. We provide transport subsidy of ` 50.00 lakh to cane growers’
transporting cane from distant villages.
GROWTH OF THE UNIT
The sugar unit at Chagallu commenced crushing on 2nd December,
1931 with an installed capacity of 750 TCD and having licensed capacity
of 1,250 TCD. In view of availability of cane during 1964, scheme of
expansion is taken up for the achievement of the licensed crushing
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capacity of 1,250 TCD, and the installed capacity is raised to 1,250 TCD.
It was expanded by 1968 to 3,000 TCD. A letter of intent is obtained for
substantial expansion to 5,000 TCD, in the year 1975. During 1970s and
early 1980s the sugar industry is plagued with vicious circle of surpluses
and shortages of sugar production due to various reasons including
Government policies. Especially in the vicinity of Chagallu, good number
of khand–sari sugar mills is working in those days and there used to be
large scale diversion of cane from the registered zone of the sugar factory.
In the view of the uncertainty of availability of the raw material, the
expansion can not be taken up and the letter of intent was surrendered.
Now, from the year 1984-85, with the pragmatic policies of the
government in respect of sugar price, levy price and change of proportion
of levy and free sugar etc., the sugar industry has been recovering and
registered steady growth in general, in chagallu apart from the
government policy, the company has been providing subsidies and
incentives to encourage more and more growers to take up sugarcane
cultivation. Now with the availability of raw material, the company
wishes to undertake modernization which would result in substantial
expansion also.
The company wishes to modernize the plant and machinery to
improve productivity, quality and economize energy wherever possible in
order to attain the standards of performance prescribed by the
government and to remove bottlenecks, if any, to obtain smooth
functioning. With this in view, an endorsement to increase licensed
capacity to 3,800 TCD under press note No.2 dated 15-1-1986 of the
department of industrial development, is obtained in the year 1987.
Subsequently license has also been applied for substantial expansion to
TCD and obtained letter of intent in December 1988 and the present
application for assistance is the consequence of the same.
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The success of any sugar factory depends on availability of raw
material, i.e. sugar cane which is agro based. Therefore, availability of
adequate sugarcane supply is the primary requisite. The other
infrastructural facilities power, water, communications are already
available.
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CHART-5.5: ORGANISATION CHART-THE JEYPORE SUGARS LTD.
CHAIRMAN &MANAGING DIRECTOR
Executive Director
Chief executive G.M(Cane) D.C.M(F&A) D.G.M
Purchase Transport GH GenSt Dy Manager Cane Manager Cane I/c I/c I/c I/c (F&A) Acct
Clerk Sr Mnager Yard Ao Inch sup
Managers ACSDO Clerk Cane Exam Unid Banta FM ( Diy Banta)
Clerk Mech Cooks Clerks Boys Drivers Boys Cleaner Boys Public Rela&Liason
Mol&
Est Inchg MO H T K Security Welfare
Clerk Comp T K Welfare Sr off (EDP) Clerk Sr Programmer
L W O
Trainee Progranner
SystAsst/Asst Prog
D E O’s
P O
F M Tr
T r
G.M. (Factories)
Manager Chief Manager Dist Engg Engineer (Coger) Ma
Sr Engr Sr Engg J E Sr Engg Sr Engg Dy Manager (p) Asst Mngr A .E A.E Sup (Elec) (Inst) Asst Manager (p) (QC) A
JE JE Workmen AE AE Sr. Mfg.Chem. Lab Chem.
Sup. Sup Tr/App JE JE Mfg.Chem TraineesChemis
Clerk/DM Clerk workmen Sup Asst. Lab Boys
Workmen Workwomen Sr.Engg Workmen Tr/.App Civil Tr/App
Sugar sales I/C P.S. to Tracer Maistry
Sales
Clerks
Tr Tr Banta
CE Desp
Steno Tel opr Clerk
D.G.M (Elec)
Tr/.App
Clerk Tr/App
D.G.M.(Process)
Mfg.Chem Tr/App
H.panMan
Pan Incharge Ad
Workmen A G M
Tr/App
Officer
AAO
Clerks
D C M
Mol&Begassee Sales clerk
G.
(Tech)
Staff&
workers Workers
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TABLE-5.17: HUMAN RESOURCE STRENGTH OF THE JEYPORE SUGARS LTD., AS ON 31-12-2010
(Figures in no’s)
S.NO
Category (grade)
Permanent
Seasonal
Trainees
Contract App.
Daily App.
Daily total
1 2 3 4 5 6 7 8 9
10
11
12
13
Officers
Supervisors-A
Supervisors-B
Supervisors-C
Clerk-A
Clerk-B
Clerk-C
Highly skilled
Skilled-A
Skilled-B
Semi-skilled
Un-skilled
Trainees and App
29(100.0)
30(100.0)
18(100.0)
25(71.42)
12(92.30)
48(57.83)
21(40.38)
23(100.0)
85(92.39)
88(63.30)
139(63.47)
60(39.73) -
- - -
10(28.57)
1(7.69)
35(42.16)
31(59.61) -
7(7.60)
51(36.69) 80(36.52)
91(60.26) -
- - - - - - - - - - - -
319 (68.30)
- - - - - - - - - - - -
60 (12.84)
- - - - - - - - - - - -
208 (44.53)
29(100.0) (2.14)
30(100.0) (2.22)
18(100.0) (1.33)
35(100.0) (2.59)
13(100.0) (0.96)
83(100.0) (6.14)
52(100.0) (3.84)
23(100.0) (1.70)
92(100.0) (6.80)
139(100.0)
(10.28) 219(100.0)
(16.21) 151(100.0)
(11.17)
467(100.0) (34.56)
Total
576
(42.63)
306
(22.64)
319
(23.61)
60
(4.44)
208
(15.39)
1351
(100.0)
Note: Figures in the brackets indicate the percentages to respective total. Source: Office Records of the Jeypore Sugars Ltd.
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TABLE-5.18: PRODUCTS PRODUCED BY THE JEYPORE SUGARS LTD.
Station
Name of the product
Units Installed capacity
Chagallu
Janagareddigudem
Rayagada
Sugars
Molasses-by product
Industrial alcohol
Ethanol
Fusel oil-by product
Ferromanganese
/ferrochrome
Power (electricity)
Industrial alcohol
Extra Netural alcohol
Fusel oil-by
product
Industrial alcohol
Indian made foreign liquor
M Ts
M Ts
BLs (per annum)
BLs
(per annum)
BLs (per annum)
M Ts
(per annum)
MW (per hour )
BLs
(per annum)
BLs (per annum)
BLs
(per annum)
BLs (per annum)
BLs
(per annum)
8500TCD
1,20,00,000
90,00,000
18,000
12
50,00,000
30,00,000
9,00,00
Source: Office Records of the Jeypore Sugars Limited.
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TABLE-5.19: OPERATIONAL SCENARIO OF THE JEYPORE SUGARS DURING 2000-01 TO 2009-10
Year Cane crushed
(lakh MTLS)
Annual Growth
rate
Sugar production (lakh QTLS)
Annual Growth
rate
Sugar recovery
(%)
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 CARG
1003861 1017552 1232830 851372 927518 1114655 1260124 1119566 583127 593633 -5.11
- 1.36 21.15 -30.94 8.94 20.17 13.05 -11.15 -47.91 1.80
1144402 1126014 1314332 921628 1075620 1224740 1395110 1213750 640042 617127 -5.98
- -1.60 16.72 -29.87 16.70 13.86 13.91 -12.99 -47.26 -3.58
11.40 1107 10.66 10.83 11.57 11.00 11.07 10.86 10.98 10..40
Source: Annual reports and office records of the Jeypore Sugar Limited.
HUMAN RESOURCE STRENGTH OF THE JEYPORE SUGARS LTD
Table 5.17shows the category wise human resource strength of the
unit. As evident from the table, the total manpower of the unit is 1,351 of
which 42.63 per cent (576) are permanent, 22.64 per cent (306) are
seasonal and 23.61 per cent (319) are trainees, and 4.44 per cent (60),
are contract apprenticeship and 15.39 per cent (208) are daily
apprenticeship, the major share of the employees are permanent. The
relationship with the staff and workers continued to be cordial during the
year. The Directors wish to place on record their appreciation of the
valuable work done and co-operation extended by them at all levels.
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PRODUCT MIX OF THE UNIT
Traditionally white sugar is used to be the only product of the
sugar industry but in due course of time, molasses and bagasse emerged
as the commercially unable by-products of the industry. Those two
byproducts are now effectively utilized for producing alcohol, ethanol,
power, Ferro manganese, spirit and Indian made foreign liquor, paper
etc. the Jeypore company has a diversified product mix which includes
sugar, molasses, industrial alcohol, ethane’s, power, Indian made foreign
liquor, slag dumpings and Ferro manganese as can be viewed from table-
5.18.
OPERATION OF THE JEYPORE SUGARS
Table-5.19 shows the operational profile of the Jeypore Sugars Ltd,
in terms of cane crushed, production of sugar and sugar recovery during
2000-01to 2009-10. It can be seen that the cane crushed by the factory
during 2000-01 to 2006-07 is increased but year is decreased to 593633
MTLS during 2009-10 from 1003861 MTLS during 2000-01. Annual
growth rate of cane crushed in the year 2009-10 by 2008-09 is 1.80 per
cent. The annual compound rate of growth for the decade is -5.11 per
cent.
The table also reveals the production of the sugars is also
experienced an increased to 1144402 QTLS (2000-01) and stood at
1395110 QTLS (2006-07), but last two years production is declined to
640042 QTLS during 2008-09 and 617127 QTLS during 2009-10.
Annual growth rate of sugar production in the year 2009-10 by 2008-09
is -3.58 per cent .the annual compound rate of growth of last ten years
was -5.98 per cent. The recovery performance is observed to experience
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no wide variations. It is evident from the table the recovery ratio of the
factory, during the decade under review, ranged between 11.40 per cent
(2000-01) and 10.40 per cent (2009-10). Moreover, during 2009-10,
through cane crushed and production experienced a setback. The
recovery rate is observed to be less consistent.
SUBSIDARY COMPANY
Sri Rama Distilleries limited is purchased in the year 1988 by the
Jeypore Sugars Co Ltd., and now it is flourishing well on its own after
take-over. At present this unit is producing 45 lakhs liters of ractified
spirit per year.
THE PROSPECTS OF DISTILLERIES AT CHAGALLU AND
JANGAREDDY GUDEM
The company can opt for the production of extra neutral alcohol or
ethanol or absolute alcohol based on the prices as per the market
demand and get maximum benefit as all the products can be
manufactured in our distilleries.
a) Co-generation: The co-generation project has worked continuously
and successfully during the season and generated 23916 MW of
power. The company took a strategic decision to modify the boiler
to use coal as alternative fuel at a cost of ` 6 crores at chagallu.
This will enable the company to process imported raw sugar in
case of shortage of sugar cane. Moreover the power plant can feed
power to the grid throughout the year increasing the turnover.
b) Electro metallurgical division: The lease in respect of the
ferromanganese plant has expired in January 2007. The
ferromanganese/ ferrochrome products market has considerably
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picked up and the price of the final products are good. Hence, the
company is actively considering the revival of the ferromanganese/
ferrochrome unit in the due course.
c) Distillery division at Rayagada: The operation in the IMFL
bottling unit during the year is satisfactory. The demand for the
products is on the rise. The company is taking steps to increase
the production substantially and to introducing one or more new
varieties.
NEW SUGAR UNIT AT POTHAVARAM
The new sugar mill project at Pothavaram is being set up on 123
acres of land. Is complete in all respect but for some balancing
equipment and other final face of start up. The company is confident that
it can commence operation in the ensuring sugar season for the year
2010-11.
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TABLE-5.20: FINANCIAL PERFORMANCE OF THE JEYPORE SUGARS LTD., DURING 2004-05 TO 2009-10
(` in lakhs)
Year Turnover/sales Net profit
after taxes Annual
growth rate Net profit margin
2000-01 1900.30 1801.37 - 9.48 2001-02 20437.17 3927.68 118.04 19.21 2002-03 22934.97 7321.96 86.42 31.92 2003-04 21371.08 6591.67 -9.97 30.84 2004-05 18100.14 1753.73 -73.40 9.68 2005-06 25098.80 32143.34 83.28 12.80 2006-07 25658.14 1125.65 -64.98 4.38 2007-08 21151.11 6067.96 439.0 28.68 2008-09 18696.36 2991.32 -50.70 15.99 2009-10 24735.24 1924.92 -35.64 7.78 CARG 5.34 1.56
Source: Office Records of the Jeypore Sugars Ltd.
FINANCIAL PERFORMANCE OF THE COMPANY
Table-5.20 reveals the profit performance of the Jeypore Sugars
Ltd., during 2000-01 to 2009-10. It shows the sales, net profit after
taxes. As evident the sales of the company has been consistently
increseaing during the last ten years. During 2000-01 sales is
` 19000.30 lakh. Highest sales during the period is ` 25658.14 lakh
during 2006-07 and during 2009-10 the sales is at ` 24735.24 lakh.
Over the last six years ending with 2009-10 the compound annual rate of
growth is 5.34 per cent. Net profit after taxes during 2000-01 stood at
` 1801.37 lakh. In this period highest net profit after taxes stood at `
32143.34 lakhs during 2005-06 and during 2009-10 net profit after
taxes is ` 1924.92 lakhs. The compound annual growth rate is of net
profit after taxes is 1.56 per cent. The net profit margin experienced
fluctuations over the years. During 2002-03 is at the peak of ` 31.94
lakhs and during 2009-10 it was ` 7.87 lakhs finally it shows the
increasing turnover and net profit after taxes every year.