fact project.jk
TRANSCRIPT
INTRODUCTION
FACT (The Fertilisers and Chemicals Travancore Limited), a
Government of India enterprise, has business interests in manufacturing and
marketing of fertilizers, caprolactum, engineering consultancy and fabrication of
equipments. Units of FACT include the two manufacturing divisions-
Udyogmandal complex (UC) and Cochin division (CD), the consultancy unit
FACT Engineering & Design Organization (FEDO), the fabrication division
FACT Engineering Works (FEW) and the Marketing division. The company has
also interests in petrochemicals, hydrometallurgy, chemicals and pharmaceuticals.
OBJECTIVES OF THE STUDY
The organizational study was done at FACT, UDYOGAMANDAL to
achieve the following objectives.
1. To understand in detail about the overall working of the organization
2. To study about different departments & it’s functioning
3. To study the organizational structure of the company
4. To understand the manufacturing process of the company.
SCOPE OF THE STUDY
Study covers overall functioning of FACT. There is much scope in FACT
for organization study because they have more than 15 major and minor
departments. Entire operation of the organization is analyzed with the data
available. Study is mainly based upon the nature of work carried out by each
department. The organization structure and working conditions in FACT definitely
helped us to understand how a big organization is functioning. More over it is a
central Government organization, which helped us to observe how government is
managing the company.
REASON FOR SELECTING THE COMPANY
FACT is not merely one of the biggest fertilizers and chemical companied
in India, but it is the triumph of public sector companies and has established itself
as a great enterprise. It is a giant reputed multidivisional or multifunction
organization employing around 3139 employees. As a result it is a perfect place to
study the various functions and responsibilities of an organization.
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LIMITATIONS OF THE STUDY
1. Time constraint is a major limiting factor.
2. Almost all the plants in Udyogamandal division and petrochemical division
was under maintenance and tight security hence detailed study regarding
the plants cannot be made.
3. Time constraint is a major limiting factor.
4. Secondary data available from company manuals were outdated (the
manuals are being updated)
5. Lack of co- operation from certain departments due to their work load.
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INDUSTRY PROFILE
India is the third largest manufacture of nitrogenous and phosphates
fertilizers in the world. The Indian fertilizer industry provides a vital input for
agriculture ensuring self-reliance in food grain production and food security of the
nation. Growth and development of fertilizer industry is playing an important role
in the growth of the economy as a whole.
Fertilizer is generally defined as “any material, organic or inorganic,
natural or synthetic, which supplies one or more of the chemicals required for the
plant growth”. Sixteen elements are identified as essential elements for the plant
growth, of which nine are required in macro quantities and seven in micro
quantities.
Of the 16 elements, carbon, Oxygen and hydrogen are supplies by air and
water and therefore not treated as nutrients by the fertilizer industry. The main aim
of the industry is to provide the primary and secondary nutrients that are required
in macro quantities.
Although the components of finished fertilizer products are relatively
simple chemicals, highly developed manufacturing technologies are employed in
the production of fertilizers, and the production plants are capital intensive. The
production process varies in accordance with the nutrients produced. Quality
control during production focuses on the declared nutrient content of the products
and, in case of solid fertilizers, on physical properties.
Chemical fertilizers are divided into three groups of Nutrient elements.
They are Nitrogen, Phosphorous and Potassium.
The significant challenge being faced by the Indian fertilizer industry is the
volatility of the prices of feedstock and raw materials and limited availability in
international market. The cost of feedstock and raw material constitute a large part
of the total cost of production of fertilizers. The government has played and
continued to play an important role in ensuring the availability of feedstock and
raw materials at a reasonable price.
INTERNATIONAL SCENARIO
The use of manure and compost is probably as agriculture itself and many
other materials such as ground bones, wood ash from burning the fallen trees.
Dried blood and fish were employed long before the chemistry of soil and crops
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was understood. The disappearance of frontiers combined with improvements in
the technology of fertilizer manufacture and more effective transportation led to a
growing role of fertilizers for producing the needed food and fiber.
World’s leading fertilizer producers are Russia and United states. Other
leading producers include China, Canada, France and India. The fertilizer industry
in United States is organized into separate segments for producing and marketing
nitrogen, phosphate or potash intermediates and products. Industry in the European
Union is governed by a wide number of manufacturing regulations. Regulations
pertaining to the fertilizer industry cover the health and safety of employees and
general public, conditions for the safe storage and transportation of manufactured
fertilizer material and intermediates, limits on emissions to the atmosphere and
water (fresh and marine), limits on noise levels, and the treatment and disposal of
waste products resulting from the production of fertilizer or fertilizer
intermediates.
All fertilizer manufactures in the European Union strive to minimize the
environmental impact of their manufacturing process, both by improving the
efficiency of those processes and by abating emissions.
NATIONAL SCENARIO
The Indian fertilizer industry has helped in the growth of the Indian
economy. The fertilizer sector by enhancing the agricultural productivity has inturn
resulted in providing major support to the farmers who are primarily department
on agriculture. Fertilizer has also played a pivotal role in Indian’s food security.
The industry had a very humble beginning in 1906, when the first
manufacturing unit of Single Super Phosphate (SSP) was set up in Ranipet near
Chennai with an annual capacity of 6000 MT. The fertilizers and Chemicals
Travancore of India Ltd. (FACT) at Cochin in Kerala and the Fertilizer
Corporation of India (FCI) in Sindri in Bihar (now Jharkhand) were the first large
sized- fertilizer plants set up in forties and fifties with a view to establish an
Industrial base to achieve self – sufficiency in food grains. Subsequently, green
revolution in late sixties gave an impetus to the growth of Fertilizer industry in
India. The seventies and eighties then witnessed significant additions to the
fertilizer production.
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The fertilizer industry in India Consists of three major players – the
Government owned Public undertakings, Co-operative Societies like IFFCO,
KRIBHCO and units from Private sector. There are about 33 major producers
producing N and NP/NPK fertilizers in the country at present. The fertilizer
industry of India had made constructive use of the fertilizer subsidy provided by
the government of India to ensure that the country achieved reasonable self-
sufficiency in food grain production.
The fertilizer industry has organized itself through Fertilizer Association of
India (FAI) to co-ordinate with the Government of India to achieve the Macro –
economic objectives related to agricultural sector and to provide other services.
The problem of industry are the seasonal demand for its product, large working
capital requirements, long credit period enjoyed by the buyer and the constant
clamor of environmentalist lobby for slashing the use of chemical pesticides and
fertilizers.
Indian agriculture has witnessed a low rate of growth of around 1.5% in
recent years. Low and unbalanced use of fertilizer could be the major cause for
this. Adoption of new and improved technology and development and utilization
of alternate and cheaper sources of feedstock coupled with education and
awareness creation among farmers on balanced use of fertilizers are essential to
correct the situation.
Fertilizer Industry in India is almost solely dependent on imported raw
materials like Rock Phosphate and Sulphur and intermediate products like
Phosphate and complex fertilizers. This overdependence and high volatility of
prices of feedstock are major issued confronting the industry.
STATE SCENARIO
Kerala has high degree of land use. The state’s agriculture productivity is
decreasing year by year. The production and cultivation of rice is decreasing and
the farmers are attached to commercial crop like rubber and coconut. Due to
decrease in the cultivation of rice, the consumption of nitrate and potash has come
down.
In the per hectare consumption of fertilizers among different states in India,
the position of Kerala is one of the low ranking states.
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COMPANY PROFILE
Name Fertilisers and Chemicals Travancore Ltd
(FACT)
Slogan Pioneers in Progress
Established in the year 1944
Location Udyogamandal, Cochin, Kerala
Promoters Government of India
Production units of
FertilizersUdyogamandal; & Ambalamukal
Fabrication Division FEW, Palluruthy , Cochin
Engineering and
consultancy Division-
FEDO
Udyogamandal
Marketing Division Head
officeUdyogamandal
Area Offices Udyogamandal. Chennai, Bangalore and
Hyderabad
Regional Offices
Udyogamandal, Palakkad, Coimbatore, Madurai,
Trichy, Chennai, Bangalore, Belgaum, Hassan,
Hyderabad, Hospet, Kakinada, Nellore and
Vijayawada.
Marketing TerritorySouth India: Kerala, Tamil Nadu, Karnataka,
Andhra Pradesh
HISTORY AND PRODUCTS
HISTORY OF FACT:
The birth of fact emerged out of a crisis situation that guided the
enlightened perception of a far- sighted visionary. It is a tale of initiatives,
enterprise, innovation and adventure, unheard in the annuals of industrial
developments in India. It was conceived by the foresighted statesman and
administrated, Sir C.P Ramaswamy Iyer, the Divan of Travancore (Kerala in older
days was known as Travancore). The Fertilizers and chemical Tavancore limited
popularly known as fact, was indeed a revolution when it was established as the
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first large scale fertilizer factory in the country. Since then it has played a major
role in creating fertilizer consciousness among our farmers. Since giving a positive
direction to the modernization of agriculture in India. And that, of course is an
interesting story- a story of never ending challenges and constructive response.
During the Second World War, there was an acute storage in the supply of
food all over the world. The 1940s were a time of critical food storage in our
country. The traditional approach to cultivation was not of much help in finding a
solution to this problem. Hence, the search for a long term solution led to the
introduction of fertilizer in our agricultural scenario. Moreover, when it came, it
did through the vision of Dr. C P Ramaswamy Iyer, who mooted idea of increasing
food production by the application of fertilizer as a long term solution to food
problem. To give concrete shape to his idea, he sought the help of Seshayee
Brothers, one of the most popular industrialists at that time for making a fertilizers
company. And India’s first large scale fertilizer plant was set up in 1944 at
Udyogamandal on the banks of the river Periyar in Eloor Panchayath in the Kerala
state. Shri. N Gopalaswami was appointed as the first chairman o FACT. The new
venture of course had to go through many teething troubles. For instance, the raw
material necessary for the production of ammonium salts were not available in the
state. But this deficiency was overcome by adopting a revolutionary method
known as the FIREWOOD GASIFICATION PROCESS. However, initial
difficulties notwithstanding, the plant at Udyogamandal went into commercial
production in 1947, with the slated capacity to manufacture 50,000 tones of
Ammonium Sulphate (10,000 tons of N). This was followed by the production of
SUPERPHOSPHATE in a new plant with a capacity of 44,000 plants. A Sulphuric
acid plant of 75 tons per day also installed which was considered large going
standard at that time.
Meanwhile the inner dynamics of FACT was finding another expression in
the formation of new unit with the help of the state Government and Methur
Chemical & Industrial Corporation Ltd. For the production of caustic soda which
later become today’s Travancore- Cochin Chemical Ltd., a Kerala Government
undertaking. This indeed was a big leap forward as it replaced all the imports of
that product, saving a considerable amount of foreign exchange. FACT was the
first to use it by- product, chlorine, as hydrochloric acid to produce Ammonium
Chloride. These by- products produced by FACT paved the way for setting up of
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other industrial units around the FACT complex viz. Hindustan Insecticide Ltd.
Indian Rare Earth Ltd., etc. In the late 50s, the Udyogamandal Division launched
its first expansion with an outlay of Rs.3 crores. Highlights of the period were the
installation of two plants to produced Phosphoric Acid & Ammonium Phosphate.
The second stage of expansion involving Rs. 3 crores saw the replacement of the
Firewood Gasification process and the Electrolytic Process by the Texaco oil
Gasification process for which a new plant was set up. FACT became a Kerala
State Public sector Enterprise on 15th August 1960. On 21 November 1962, the
Government of India became the major shareholder. The second stage of
expansion of FACT was completed in 1962. The third stage of expansion of FACT
was completed in 1965 with setting upon a new Ammonium Sulphate Plant.
FACT has been a pace-setter in marketing evolving a continuous and
comprehensive package of effective communication with farmers and promotional
programs to increase the fertilizer consciousness among our farmers. In fact,
FACT was the fertilizer manufacture in India to introduce the village adoption
concepts since 1968 to improve agricultural productivity and enhance the overall
socio-economic status of farmers. FACT has a well-organized marketing network,
capable of distribution over a million tones of fertilizers. With the licensing of
Cochin Division in 1966, FACT further expanded and by 1976, the production of
sulphuric acid, Phosphoric acid and Urea was started. In 1979, production of NPK
was commercialized.
PRODUCTS
FACT manufactures straight fertilizes, complex fertilizer, fertilizer
mixtures and chemicals.
A. STRAIGHT FERTILIZERS
AMMONIUM SULPHATE:
Ammonium sulphate is a nitrogenous fertilizers containing 20.6% nitrogen,
entirely in ammonical form. It has excellent physical properties-non hygroscopic,
crystalline, and free flowing. It is ideal as a straight nitrogenous fertilizer and also
as an ingredient in fertilizer mixtures. It is the most widely preferred nitrogenous
fertilizer for top dressing on all crops. Another unique advantage is that it contains
24% sulphur, an important secondary nutrient.
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B. COMPLEX FERTILIZERS:
FACTAMFOS 20-20-0-13 (Ammonium Phosphate Sulphate)- It is a
chemical blend of 40 parts of ammonium phosphate and 60 parts of ammonium
sulphate. It contains 20% N and 20% P2O5. The entire N is in ammonical form
and P is completely water-soluble. In addition, Factamfos contains 13% sulphur, a
secondary plant nutrient which is now attaining great importance in the agriculture
scene. Factamfos 20-20-0-13, with the granular form and non- hygroscopic and
free flowing nature, has excellent physical properties. It is ideal for application on
all soils and all crops. It can also be used for foliar application.
C. FACT MIX
FACT prepares on a very large scale all the standard NPK mixtures under
the brand name “FACT MIX” for different crops for Kerala as stipulated by the
Department of Agriculture. In addition, FACT prepares special tailor made
fertilizer mixtures of any required grade for plantation crops like coffee, tea,
rubber etc. FACT mixtures are superior in quality with the presence of ammonia
cal nitrogen, water-soluble phosphorous, and other major nutrients like sulphur,
calcium etc.
D. CAPROLACTAM
It is the raw material for Nylon-6. The product quality of FACT
Caprolactan is among the best available in the world.
E. GYPSUM
A by- product of phosphoric acid, gypsum (95% by weight Ca SO4) is an
ingredient for manufacture of Portland cement, plaster of Paris, Gypcrete,
Gypboard, etc., and is also used as inert filler in pharmaceuticals, paper, paints,
insecticidal dusts, etc. It also has widespread usage as soil ameliorant with its
liming properties.
It is a rich and cost effective source of sulphur and Calcium with 16%
Sulphur and 22% Calcium. FACT is marketing bagged Gypsum in brand name
FACT Gypsum in all 4 southern stated as a soil conditioner with fertilizing
properties.
F. IMPORTED FERTILIZERS
FACT imports Urea and Potash from Gulf countries and Russia for
consumption in all 4 southern states as per requirement. Urea with 46% Nitrogen
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in the granular/periled from and Potash With 60% K2O serves the nutritional
requirement in the four southern areas.
G. BIO FERTILIZERS
Three types of bio fertilizers namely Azospirillum, Phosphobacter and
Rhizobium are produced and marketed as “BIO FACT”.
H. FACT ORGANIC FACT is also marketing organic manure produced from
city compost, in brand name “FACT ORGANIC”.
I. ZINCATED FACTAMFOS
This special product containing .3% Zinc in FACTAMFOS has been launched to
address the widespread deficiency of Zinc in most soils of south India.
VISION, MISSION & GOALS
VISION
To be a market leader in fertilizer, petrochemical and a significant player in all
other business including engineering/technical service providing maximum
customer satisfaction & reasonable return to shareholders adhering to business
ethics & professionalism & adequate concern for community & environment.
MISSION
To functions a dependable & globally competitive producer of fertilizer & other
products & to develop self reliance in the field of engineering & technology
especially in the field of fertilizers, chemicals, petrochemical& oil gas industries.
GOALS
1. To produce & market fertilizers & Caprolactum & other products
efficiently and economically, besides achieving reasonably & consistent
growth.
2. To effectively manage the resources & assets of the company to ensure a
reasonable return on investment.
3. To focus on cost reduction & technology up gradation in order to become
competitive in its line of business.
4. To invest in new business lines, where profit can be made on sustainable
basis over the long term.
5. To constantly innovate & develop new products & services to satisfy
customer requirements.
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6. To provide services to the farming community by organizing technical, soil
testing and other productivity improvement services in agriculture.
MARKET SHARE
The market share of FACT is about 85% in the south Indian fertilizer market.
ORGANIZATIONAL STRUCTURE
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BOARD OF DIRECTORS
BOARD OF DIRECTORS
DIRECTOR MARKETING
DIRECTOR TECHNICAL
CHIEF VIGILANCE
OFFICER
COMPANY SECRETARIAT
DIRECTOR FINANCE
G M MARKETING
G M HR GM (UC) GM (CD) GM F&F GM MATERIALS
CM FEDO CM FEW
CM PURCHASE
CM PRODUCTION
CM MAINTENANCE
CM SALES
CM DISTRIBUTION
CM AGRONOMY
MGR STORES
MGR QUALITY
MGR SAFETY
MGR R & D
KRL TN AP KA
CSP CME
MGR TRAFFIC
MGR STORE
PE PE PE
TRAFFIC AMMONIUM SULPHATE
AMMONIUM PHOSPHATE
PHOSPHORIC ACID
SULPHURIC ACID
AMMONIA
PORTER’S FIVE FORCE MODEL
THREATS OF NEW ENTRANTS
There are no much new entrants to the fertilizer industry as the existing
companies are making profits with the help of government subsidy. But new
companies emerge in bio-fertilizer manufacturing, which has not been a threat to
FACT as it is dealing with chemical fertilizers.
THREAT OF SUBSTITUTE PRODUCTS
The major threat to FACT is the bio-fertilizers.
Organic fertilizers include naturally occurring organic materials,
(e.g. chicken litter, manure, worm castings, compost, seaweed, guano,
bone) or naturally occurring mineral deposits (e.g. saltpeter). Poultry
litter and cattle manure often create environmental and disposal problems,
making their use as fertilizer beneficial. Bones can be processed into
phosphate-rich bone meal; however, most are simply buried in landfills.
BARGAINING POWER OF CUSTOMERS
The company is not affected by bargaining of customers as FACTOMFOS
is the best product available in this category. The demand is more than the supply.
BARGAINING POWER OF SUPPLIERS
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The rock phosphate which is a major raw material for the production of
FACTOMFOS is scarce. The company is importing it from outside India.
COMPETITIVE RIVALRY WITHIN THE INDUSTRY
SPIC
Short for southern petrol industrial chemicals. Urea Si ammonium
phosphate and intermediaries. Aim to be globally competitive and JV for Hybrid
seeds, JV’S for urea and phosphoric acid abroad.
MFL
Madras fertilizer LTD (products – NPK 17:17:17 and variants Vijay Urea,
Bio-fertilizers, Agrochemicals) plans to switch over to LNG from Naphtha and
import ammonia.
NFL
Nagarjuna Fertilizer LTD (product –urea)
MFL
Mangalore fertilizer LTD. (products- urea, complex fertilizers)
RCF
Rastria Chemicals Fertilizers LTD. (Products-urea, DAP, MOP, Complex
Fertilizer).
IFFCO
Indian Farmers Fertilizers Co-operative (Product-Urea, Ammonium
Phosphate and Complex Fertilizers.
Chambal Fertilizers and Chemicals- Urea
Coromandal fertilizer- DAP and complex fertilizer.
KRIBCO
Produces urea only, participating in Indo Oman and Indo Ira projects for
cheaper gas. Zuari Industries.
HUMAN RESOURCE DEPARTMENT
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Human Resources are a term use to describe the individuals who comprise
the work force of an organization. Human Resource Management is one of the
most complex and challenging fields of endeavor. It is considered to be the most
expensive and important resource of every organization. In FACT the scope of
Human resource department is very vast. The basic HR functions include all the
basic HR function that is ought to be performed by them. This includes
recruitment, selection, induction, training and development, motivating the
employees, performance appraisal, grievance handling etc. HR department deals
with the basic personnel and general administrative functions of the company.
As the part of cost reduction measures from 1998 onwards, FACT reduces
its employee’s strength. FACT has more than 9000 employees earlier, but it is now
reduced to approximately 3139 employees by successful implementation of
Voluntary Retirement Scheme (VRS). From selection to recruitment, the HR
department of FACT is there to do all things that are necessary for the betterment
of employees and for the growth of the organization.
OBJECTIVES OF HR DEPARTMENT
1. To maintain the optimum manpower required to sustain the growth of the
organization.
2. To provide, create, utilize, and motivate employees to accomplish
organizational goals.
3. To manage and train the Human Resource to ensure their personal and
organizational development.
4. Maintain high morale, encourage value system and create environment of
trust and mutuality of interest.
5. To provide attractive incentives, rewards and other benefits to ensure
retention of competent employees.
6. To integrate the Udyogmandal division and Petrochemical division as
Udyogmandal complex.
ORGANIZATIONAL CHART OF HR DEPARTMENT
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CMD
DIRECTOR (TECHNICAL)
GM (HR)
CM(EST)
CM(IR)
CM(T&D)
CM (IE)
MANAGER(LEGAL)
MANAGER(WELFARE)
MANAGER(PR)
FUNCTIONS OF HR DEPARTMENT
1. Establishment functions
2. Industrial relation function
3. Welfare function
4. Industrial Engineering
1. ESTABLISHMENT FUNCTIONS
I. Recruitment and Selection
The Recruitment policy is done as per prescribed recruitment specification
with proper authority appointment by board of directors. The following are the
sources of recruitment.
1. Employment exchange as per provisions of employment exchange act.
2. Employees on deputation from government
3. Apprentices who completed training in FACT.
4. Casual labors who were initially taken from employment exchange.
5. By transfer from public sector undertakings.
II. Performance appraisal
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Performance appraisal in FACT started in 1962 in 1984 the systems was
further revised to include assessment, assessment at training needs and
performance counseling, potential. For successful functioning of an organization
good performance of employees is essential. Continuous evaluation of
performance of employees and appropriate suggestion at correct time will help to
improve their performance.
Features
1. For managerial employees, self-appraisal system is adopted. Rating is
given according to some scales like job knowledge, quality of work.
2. Reporting and receiving officers specified for each level of appraisal.
3. Assessment by assessment committee and on the basis of it grade is given.
4. Communication of final rating to employees formally.
5. Provision for appeal to employees is given.
6. There is a feedback mechanism.
III.Redressal of Employee’s grievances
FACT has a systematic mechanism to handle the grievances. There is
different mechanism for managerial and non-managerial employees.
1. Handling of managerial grievances
The issues that lead to grievances in this level relate to work, work place,
transfer, promotion, salary issues etc. The concerned officer will bring the
grievance orally to the next immediate superior officer. If the issue is not resolved
at this stage, officer submits a written petition to CMD. Normally all grievances
arise out of decision taken at the division level shall be processed within the time.
2. Handling of non managerial grievances
The major issues are relating to wage payment, complaints against
colleagues, overtime leave etc. According to the procedure the trade union will
present the grievances. At first stage the employee in person will take up this
grievance with foreman or assistant manager. The answer will be given within 48
hours. If it is not satisfactory to the employee, either he in person or accompanied
by his department will present his grievance to the head of department for solution.
If it is also not satisfactory to the employee, he can request to forward the
grievance to the grievance committee consisting of representative of management,
unions and department where the solution would be given.
3. Training
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The training and development activities of the company have been
centralized with effect from April 2004. With this arrangement the Management
development Centre (MDC), the training centre of Cochin division, Udyogamandal
division and the petro chemical division have been combined into one department
called “FACT Training Centre”. Centralization was effected with a view to
utilizing all resources productively and to identify training needs of employees
based on a uniform approach and imparting required training. In addition to te in-
house programs conducted with internal as well as external faculties, employees
are nominated to attend specific programs outside the state as well as within the
state.
2. INDUSTRIAL RELATION FUNCTION
Industrial relation operates only within the organization. The inter-
organizational relation is handled by the corporate cadre. 60-70% of management
time is lost in resolving IR issues. Employees have to follow the standing orders
approved by labor Department of Government of Kerala. Standing order is a book
containing DO’s & DO NOT’s. Whenever there is a violation of these rules or
misconduct by employees there is procedure for punishment including principle of
natural justice. Employees there are procedure for punishment including principle
of natural justice. Employees will be given a chance to explain the reason for such
violation.
In organizations, there will be tendency to employees to join in trade
unions for protecting their own rights and help the management to run the
organization in a good manner. In various divisions of FACT there are total of ten
recognized trade unions functioning.
UDYOGMANDAL DIVISION
1. FACT employees association.
2. FACT workers union.
3. FACT employees congress (INTUC)
4. FACT employees organization
PETROCHEMICAL DIVISION
1. FACT employees association
2. FACT Workers organization
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COCHIN DIVISION
1. FACT employees union
2. FACT employees association
3. FACT employees sangh
4. FACT Workers congress
FEDO
1. FEDO employees association
2. FEDO employees congress.
3. WELFARE FUNCTIONS
1. Statutory schemes
2. Non Statutory Schemes
3. Incentive Schemes
4. Voluntary Schemes
Statutory Schemes
1. Employees State Insurance (ESI)
2. Provident Fund and Miscellaneous Provision Act 1952 – exempted scheme
in FACT.
3. Payment of Gratuity Act 1972
4. Kerala Labor Welfare Fund Board Rules, 1975
5. Industrial employment (standing orders) Act, 1946
6. factories Act 1948 – covers (health, safety welfare)
Non-Statutory schemes
1. Family relief fund
2. Superannuation benefit fund
3. Family pension scheme of the company
4. Retirement benefit fund
5. Employees welfare fund
6. Uniform
7. Children’s education allowance
8. Medical allowance
9. Leave and holiday
Incentive schemes
1. Incentives for employees
2. Incentives to promote Hindi
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3. FACT Merit Award
4. FACT Service Award
5. Incentives to promote sports and players.
Voluntary schemes
1. Contributory Health Scheme
2. Sports and Recreation
3. Lalitha Kala Kendra
4. FACT employees Housing Co-operative Society
5. FACT employees Housing Co- operative society
6. School facilities
7. Company accommodation (Quarters facility)
4. INDUSTRIAL ENGINEERING
The main objective of this section is to make effective utilization of the
manpower resources and restricting it for the benefit of the organization.
Main Functions are
1. Manpower planning that composes of manpower audit and forecast future
requirements.
2. Custodian of Manpower inventory.
3. Work Study
a) Removing system bottlenecks
b) Production incentive etc.
4. Maintenance scheduling
5. Work environment study
6. Employee problem analysis.
Working time
The working time of administration section and workers are different. The
administration section works from 8 AM to 4 PM.
The workers work on shift basis. There are 3 shifts.
1. 8AM- 4 PM
2. 4PM- 12 PM
3. 12 PM- 8 AM
PUBLIC RELATIONS DEPARTMENT
The image builder of the organization is PR Department, as the person in
the department maintains close relationship with the public and media to carry out
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all related functions. PR Department is under the control of Public Relation
Officer. The backbone of the Brand building process is public relation officer.
Public relations are the latest entry to the management discipline when the
company starts expanding and becomes relevant when the market competition
increases. Any novel idea or concept introduced by the companies in the market is
part of public relations. PR becomes saturated when the conventional methods are
saturated and the company should move one step ahead inn the competition.
PRO’s role is proportional rate with competition. Whenever there is competition
there should be a role of PRO.
No Competition- No need of PRO
Two aspects of PR
1. Internal PR
2. External PR
1. Internal PR
The best tool for internal PR is fact News (House Magazine) and is
circulated to all employees on a monthly basis. It is bind the employees together to
make them a part of FACT family.
2. External PR
Press meetings are conducted twice in a year, press release; handouts are
the main tools for external Public relations.
PRODUCTION DEPARTMENT
FACT has a very complex production department which not only has the
responsibility to maintain sustained levels of production but also planning
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activities during shut down and maintenance work. The department maintains
focuses on the end product while the intermediates are produced as per
requirement.
FACT has mainly two divisions namely Udyogamandal complex and the
Cochin division. The Udyogmandal complex is further divided into Udyogamandal
division and Petro chemical division.
OBJECTIVES
1. Production Planning
2. Coordination of production function
3. Coordination with maintenance and production department
ACTIVITIES
1. To convert raw material into finished products
2. Preparation of production budget
3. Preparation of daily, monthly and yearly production reports
4. production target fixing
5. Sending reports to government and other interested parties
6. Estimation of monthly and annual requirements of various raw materials,
chemicals and catalyst and other operating supplies
7. Follow the safety precautions while inside the pant
8. Keeping the machineries and other equipments in operating condition.
FEATURES OF PRODUCTION PLAN
1. Production plan is based on the idea of producing the maximum with
available raw materials and production capacity of plant.
2. Day- today production is planned according to raw material availability.
3. Daily production plan is prepared and likewise annual plan is also prepared
4. Day wise production plain is monitored
5. Production plan is always flexible
PRODUCTION PROCESS
21
Start here
Production Target Plant
Maintenance
Approval of Production
plan
Raw material Availability Monitoring
Checking deviation
Production
Based on installed production capacity of the plant and production data for
the previous year annual production targets for the next year are prepared.
Necessary feedback is also taken from marketing department while fixing the
production targets. The production targets thus fixed are presented to the corporate
office for review and approval by CMD and the plant managers are informed of
the same. The production and consumption rations for the previous years are duly
considered. All the data are complied to form the production budget. A copy of the
production plan and budget is sent to the finance department for preparing finance
budget. The production plan and budget are then presented to the government for
approval. The production budget then acts as the basis are then presented to the
government for approval. The production budget then acts as the basis for further
performance monitoring. Based on the production plan, purchase department
initiates action for producing raw materials. In the event of any change in the
annual production plan becoming necessary, the corresponding change in the raw
22
material, requirements are intimated to the purchase department. Production
planning department receives data from all the plant and other interfacing
departments and complies them.
ORGANIZATION STRUCTURE OF PRODUCTION DEPARTMENT
S.A- SULPHURIC ACID
A.S- AMMONIUM SULPHATE
C.H- CYCLOHEXANE
23
DIR (TECHNICAL)
GM (CP & PC)
GM (CD) GM (UC)
DGM (UD) DGM (PD)
MTCE PRDN MTCE PRDN
C.M.E C.S.P C.M.E C.S.P
Traffic Factamfos S.A A.S Ammonia
Caprolactam C.H RAP HYAM ANONE
HYAM- HYDROXYLAMINE
MTCE- MAINTENACNE
PRDN- PRODUCTION
PLANTS AT UDYOGAMANDAL DIVISION
1. Ammonia plant
2. Ammonium Sulphate plant
3. Ammonium Phosphate Sulphate Plant/ FACTAMFOS
4. Acid Plant
1. Ammonia plant
The capacity of the ammonia plant is 900 TPD and 90 TPD for synthesis gases.
The investment for the plant was about Rs. 618 Crores. The main raw materials
required are hydrogen and nitrogen. Hydrogen is obtained from Naphtha (which is
acquired through pipeline from BPCL). There is also a captive power plant, which
enables the continuous power supply.
2. Ammonia Sulphate Plant
This plant has a capacity of 680 TPD. This is also a by- product of
caprolactam which is devised in the Petrochemical Division. Here, there are 46
helpers and 25 operators working in the plant.
24
PLANT MANAGER
PROCESS ENGINEERS
ASSISTANT PLANT MANAGER
OPERATORS
PLANT MANAGER
SHIFT INCHARGES
OPERATORS
HELPERS
3. FACTAMFOS Plant :-
FACTAMFOS is a chemical fertilizer which has Nitrogen, Phosphate,
Potassium and Sulphur in the ration 20:20:0:13. The major components required
here for its production are ammonia, sulphuric acid and phosphoric acid. But
ammonia and sulphuric acid is now replaced by ammonium sulphate liquor, which
is a by- product of Caprolactam.
There are 2 plants of capacities 300 TPD (Commissioned in 1966) 150
TPD (Commissioned in 1972)ach. These are 24 hours working plants with an
annual functio9ning of 330 days.
FACTAMFOS is the premium product of FACT. There is also an in house
phosphoric acid plant of 100 TPD, but due to the scarcity of the raw material rock
phosphate, it’s not being functioned anymore. The production from the 300 TPD
and 150 TPD plant comes to around 850 tons and 350 tons respectively, which is
200% above the expected efficiency.
4. Sulphuric acid plant:
The sulphuric acid plant is designed to produce 1000 TPD of monohydrate.
The plant is based on the double conversion, double absorption process and was
designed by FEDO in collaboration with Davypower gas plant. The plant produces
200 tons of Oleum and 400 tons of sulphuric acid. It supplies the sulphuric acid to
the petrochemical division for production of sulphur dioxide.
25
PLANT MANAGER
ASSISTANT MGRS
PROCESS OPERATORS
HELPERS
PLANT MANAGER
DEPUTY PLANT MANAGER
PLANT ENGG
HELPERS
PETROCHEMICAL DIVISION
FACT Petrochemical Division is one of the only two manufactures of
Caprolactam in India. They have strictly adhered to documented Quality systems.
In February 1996, FACT Petrochemical Division was certified to ISO 2002 (1994)
and ISO 14001 (1996). This prestigious certification was conferred by RWTUV,
the reputed German Quality Audit firm.
FACT caprolactam Plant was built with license and know- how from the
world leaders in caprolactam technology- M/s Stamicarbon, the engineering
subsidiary of DSM of Netherlands. Sourcing of technology from a single source
ensured unified package and excellent consistent quality right from the time of
commissioning. Detailed engineering od the plant was undertaken by Chiyoda
Corporation of Japan in association with FACT Engineering and Design
Organization (FEDO), a subsidiary unit of FACT.
The plant can produce 50,000 TPA of caprolactum and 2, 25,000 TPA of
Ammonium Sulphate as co- product. FACT Caprolactam is available in 25
Kilograms packed in a multilayer bag.
Caprolactam is the popular Monomer for the versatile Nylon-6 Polyamide.
Textile yarn manufactured from Nylon-6 exhibits fine drape, resistance to
abrasion, high flexibility, chemical and biological stability etc. Nylon-6 is widely
used in manufacture of fishing nets, tyre yarns, sewing threads, industrial drive-
belts etc. As an engineering plastic, it finds wide application in castings, injection
moulding and extrusion. 10,000 to 12,000 Metric tons per year of Caprolactam is
earmarked for meting export orders. FACT Caprolactam is currently being
exported to USA, China, Korea, Taiwan, Philippines, Australia, Slovenia and Sri
Lanka. Response from our buyers indicate that they consider FACT Caprolactam
26
at par with the best available anywhere in the world. Domestic buyers are mainly
Sino Fibers , Gwalior; Century enka ltd, Chennai and Gujarat Polyfils.
The other plants present in the PD are Anone plant, Hyam plant
(Hydroxylamione), Cyclohexane plant, captive power plant and RAP
(Replacement ammonia plant). Products from these plants are essential for the
production of Caprolactam and ammonium sulphate.
CHALLENGES OF PRODUCTION DEPARTMENT
1. Scarcity of raw materials, mainly phosphoric acid
2. Due to aging of plants, the company continues to incur considerable
amount towards repairs and maintenance
3. Shortage of workers at times of emergency
4. As the production plants are inter dependent, a small failure in one plant
affects the whole production
5. Huge start up costs of ammonia plant
6. Unawareness of employees with new systems like SAP
MATERIALS DEPARTMENT
27
Material department is headed by GM materials, who is further headed by
different department heads like administration, work, loading and unloading as
depicted in chart.
Company uses raw materials for production of finished products at a time
depending on the availability and the cost of the raw materials. Even though there
are many formulations with different combination of raw materials, there is no
compromise on the quality of final products.
Raw material used in FACT is sulphur, phosphorus, Rock phosphate,
ammonia, benzene, furnace oil, chlorine and packing materials. The vendors for
raw materials are petroleum companied and for furnace oil Cochin refinery BPL,
IOC. Company directors will take last decision in vendor selection. Raw material
section is headed by Deputy Chief Manager (materials). The main functions of RM
section is procurement of raw materials like Sulphur, Phosphorus, rock phosphate,
ammonia, benzene, furnace oil, chlorine etc.
OBJECTIVE
1. Maintaining a steady flow of raw materials to production department.
2. Ensure identification and trance ability of raw materials.
3. Ensuring identification and trace ability for finished feeds.
4. Reduce the loading and unloading time of feed raw materials to the
minimum possible time.
5. Control and account for the materials in the organization.
6. Ensure the availability of materials and its quality.
FUNCTIONS
1. Importing raw materials under the approval of safe purchase committee
constituted by the Board of Directors.
2. Maintaining adequate raw materials needed for production.
3. Procurement of machineries, Intermediaries, equipment & spares.
4. Inspection of Materials
5. Transportation of Raw materials, products and by- products
6. Accountability for materials.
7. purchase of stationary and other Equipment needed by individual
departments
8. Vendor development.
ORGANIZATIONAL STRUCTURE OF MATERIALS DEPARTMENT
28
This department is divided into 3 sub Departments. They are:
1. Purchase
2. Stores
3. Traffic (Logistics)
1. PURCHASE DEPARTMENT
Purchase is an important boundary function that support operations by
acquiring major resources for the conversion process. It is not unusual of the cost
of purchased materials to exceeds as a percent of total product cost, the value
added internality to the product through manufacturing and assembly. The
purchase covers the product through manufacturing and assembly. The purchase
procedure covers the following areas procurement of goods and services for the
company.
1. Capital items (for project and other purposes)
2. Equipment and spares.
3. Raw material & intermediary materials
4. Package item involving design, supply, erection and commissioning.
Purchase department is again divided into 3 sections they are
1. Raw materials
2. Equipment spares and supplies
3. FEDO & FEW transport, contracts and stores
29
GM (MATERIALS)
CM(PURCHASE RM)
DY.CM(RM)
MGR (E.S.S)
MGR(T.S.S)
MGR (STORES)
MGR (TRAFFIC)
2. STORES DEPARTMENT
OBJECTIVES
Collection and receiving of purchased
Inventory management & control
Issuing materials to use departments
Disposal of surplus and objective materials
FUNCTIONS
1. Receiving
2. Holding
3. Inventory
4. Issuing
5. Disposal
3. TRAFFIC DEPARTMENT
OBJECTIVE
1. To ensure loading and dispatch of products
2. To ensure right quality and right product to right vehicle and to the right
destination
FUNCTION
1. Loading
2. Arrangement
3. Movement
Traffic department is responsible for the dispatch of products to various
markets. They maintain contacts with the market department and production
departments. The dispatch section of marketing division gives the demand of
various depots in each state to the traffic departments. Based on this, schedules are
formed and product is dispatched.
MAJOR TRANSPORT CONTRACTS
A.S.R.T- A.S.R Transport
B.T- Bharath transport
COSMO-COSMO carried
E.L.F- expert Linear Enterprise
L.R.L- Lucky Road line
J&J- J&J Enterprise
M.R.D.- M.R.D Transport
30
P.K.A- P.K. Aboobacker & Co
P&P- P&P Logistics
S.K.L.S- Sree Krishna Lorry Service & S.P.M- S.P Muthuraman
CHALLENGES IN MATERIALS DEPARTMENT
1. Transportation of ammonia
2. Procurement of phosphoric acid
3. Changes in government policies and restrictions
4. Safe transportation of chemicals as they are very harmful
TRAINING DEPARTMENT
31
The training and development activities of the company have been
centralized with effect from April 2004. Training centre of FACT has started job
oriented courses in fire & Safety engineering. New courses in Heavy equipment
operation and maintenance, welding technology and process plant operation are
being organized. These courses are planned to be offered in association with
Governmental agencies and statutory bodies. The aim is to convert the training
centre into a “Skill Development Academy” with a view to provide facilities for
skill development and making educated youth employable.
ORGANIZATION STRUCTURE OF TRAINING DEPARTMENT
FUNCTIONS
1. Training officers and workers of the company as a whole in identified areas
2. Meeting the obligation of apprentice Act 1961/1973
3. Facilitating post qualification training, inplant training and project work to
students
4. Facility for employees to attend external training programs.
CHALLENGES TO TRAINING
1. Improper feedback
2. Improper selection of employees from the various departments
3. Limited time available due to the pressure of production tar
4. Unavailability of a proper library
32
CM (Training)
MGR (TRG)
Officer (TRG)
INSTRUCTORS
STAFFS
Training programs
1. Employee Development Programs.
FACT Training centre conducts training programs for
supervisory/Managerial and Non- Managerial employees of FACT and other
companies/ organization in Kerala. The training centre includes programs on
Refresher training in various branches of knowledge like mechanical, electrical,
instrumentation, Civil Unit operations, general topics related to HRD, ISO
standards, safety, Health, Environment, energy conservation etc.
2. Skill Development Programs
FACT training Centre is conducting a one-year full time diploma course in
fire & safety engineering. It also conducts certification course in Heavy Equipment
Operation, Instrumentation Maintenance & Welding.
3. Apprenticeship training
FACT training centre is an approved Centre for Apprenticeship under
Board of Apprenticeship training/Regional Directorate of Apprenticeship Training
Chennai.
4. Academic Programs- technical & Non- technical it includes in Plant
training/project work for engineering/ professional students.
RESEARCH AND DEVELOPMENT
33
FACT began research in a modest scale in 1962 with just four scientists.
Over this nucleus has grown into a full- fledged but compact integrated division
with a team of about 12 personnel. The division is recognized by the ministry of
science and technology for in house research and by the ministry of environment
and forests, Government of India. The Research and development centre function
with the aim of carrying out in depth research in new fertilizer formulations,
innovation in the fertilizer production for cost control ad value addition of by
products, existing product lines and waste utilization in the organization. R& D is
carrying out the specialized services such as the monitoring and controlling the
quality of the finished products before they are dispatched to the market and
periodical collection of product samples from filed go downs, distributors, dealers
for the evaluation of post dispatch quality as a part of thee tiers quality control
system being practiced by the company. R&D centre is also producing biofertilsers
and dispatching directly to marketing area of the company in all the four southern
states.
OBJECTIVES
1. To carry out in- depth research to new fertilizer formulation
2. Value addition to existing product lines in the organization
3. To provide specialized service to other divisions in the organization
ORGANIZATION STRUCTURE OF R&D
FUNCTIONS
34
MANAGER (R&D)
ASST.MANAGER (R&D)
OFFICER
STAFF
a) Development of Coir pith based formulation for Agro/ Horti End use.
b) Development of substitute for conventional carrier in the production of
Bio-fertilisers
c) Experiments to develop a process for production of 100% water soluble
NPK fertiliser grade 20:20:20
d) Production of Bio-fertilisers such as Rhizobium, Azospirillum and
Phosphobacter(Bacillus Megatherium) from its 150 TPA plant.
1. Benefits derived
a) The study on Coir pith compost has identified shortfall in parameters
prescribed on the Fertilizers control order 1985. An alternate study was
requested on this area by Central Coir research Institute, Alleppy to
formulate a marketable Coir pith compost meeting all the parameters
referred in the FCO.
b) Based n the research on the raw material consumption, R&D has devised a
formula for feed rates of inputs for Factamfos 20:20:0:13 based on the
product composition, mole ration and plant load for 100% yield. It is the
most suitable and handy for any complex fertilizer manufacturing plants at
FACT.
c) On successful completion of study on coloring of Zincated Factomfos, 250
kg of dye was prepared at R&D Centre to carry out trial run production of
colored Factamfos. Trial run production of Zincated factomfos with color
was completed at 150 TPD plant successfully.
d) During the year 2010- 11 R& D Centre has enhanced the Biofertilizer
production to the level about 75 MT.
e) R& D Centre has developed Micro nutrient Fortification in Complex
Fertilizers will bring 10% additional income to the company.
2. Future Plan of Action
a) FACT R&D Centre proposes to continue the quality control cell activities
covering entire marketing network of FACT.
b) Ensuring the productivity of biofertilisers in accordance with the demand
from the Marketing Division.
c) Time bound action to complete the MOU and other Research Projects.
d) Extending value added service to other departments and divisions.
3. Expenditure on R&D
35
Details of expenditure on R&D are given separately.
Expenditure on R&D
Year Capital Revenue Total
Rs. In Lakhs
As % of total
Turnover
2009-2010
2010-2011
2011-2012
0.00
0.00
0.00
48.39
73.27
71.60
48.39
73.27
71.60
0.023
0.029
0.024
Source: Annual Report 2011-12
SAFETY DEPARTMENT
36
As per the factory’s Act 1948, any Organization with more than 1000
employees or for Industries classified as major accident Hazardous (MAH) by the
Government of India, requires a safety department with a notified safety officer.
FACT has a well-established safety department to look after the needs of
Udyogamandal division and Petrochemical division. Safety has been given at most
importance by the company. It aims to see that an employee remain as healthy as
he entered the plant, by providing safe working conditions, safe tools and
procedures to carry out all the operations.
ORGANIZATIONAL STRUCTURE OF SAFETY DEPARTMENT
FUNCTIONS
1. Functions of safety department is not limited to reporting accidents and
arranging compensation, it also involves making a detailed investigation
regarding the cause of the accident, communicates suggestion to the concerned
authority and takes necessary steps to improve the conditions and to avoid
further occurrence of similar accidents.
2. Prevention at source by correction of unsafe acts, unsafe situations or both.
Good preventive maintenance program, ensuring material quality etc.
3. By sticking the factory to the Factories Act and regulation and laid down safety
procedures.
37
DEPUTY GENERAL MANAGER (UD)
MANAGER (FIRE) MANAGER(SAFETY)
INSPECTORS
FIREMAN
ASSISTANTS
INSPECTORS
4. Bringing up all levels of working to a correct safety attitude through training
and interaction.
5. In addition to the safety department, safety committee is set up to promote
active participation at all levels. Safety committee meets once in two months.
6. Housekeeping instruction committee is set up to inspect the whole factory area
at least thrice in a year and decides inter-departmental housekeeping awards.
7. A safety manual highlighting safety practices/instructions has been prepared
and distributed among employees as guidelines.
8. Routine plant inspection by safety and fire staff notice unsafe condition and
corrective measures are taken.
9. Safety cartoon/caution boards are displayed at important locations.
10. Steps such as organizing seminars in colleges and in near and in far locality so
as to make aware of the general public, rescue steps to be taken when the plant
is under serious malfunction and also to educate people about various chemical
hazards.
11. FACT Safety day is celebrated each year on 6 th March every year.
12. Organize and conduct mock drills based on onsite emergency plan to future
improve upon the emergency plan.
The Udyogamandal and the Petrochemical Division is having a separate
safety department, which does the above-mentioned functions for each plant.
SAFETY MEASURES
1. Bringing up all levels of working to a correct safety attitude through training
and interaction.
2. Safe production by prompt attention on built-in-safety or integrated safety.
3. Effective effluent treatment system in operation to render it harmless before
letting it out of the factory
4. A safety manual highlighting safety practices/ instruction is distributed among
employees as guideline
5. Routine plant inspection by safety fire staff and other staff in the line function
notices unsafe condition to take corrective measures.
6. Display of safety cartoon or caution boards at important locations
7. Preparation of valuable information of safety and distribution among
employees
38
8. Organizing and conduct of mock drills based on onsite emergency plan to
further improve upon the emergency plan
CHALLENGES OF FIRE & SAFETY DEPARTMENT
1. Aged plant and machinery
2. 24/7 running major hazard industry
3. Maintenance of safety equipment
4. Constant need to renew safety equipment
39
MARKETING DEPARTMENT
Marketing is the process by which companies create customers interests in
products or services. Fertilizer marketing is different from other product
marketing. Fertilizer has a high demand therefore; it can be termed as a seller’s
market. However its demand is seasonal and is very much dependant on the
monsoon. Market penetration is very difficult, and once a company captures a
market, its brand is substituted for the product. The brand image plays an
important role. The whole market is also dependent on farmer’s awareness about
fertilizers. All of these call for a planned marketing effort and huge requirement of
funds to meet the seasonal demand of fertilizers. FACT has been a pace setter in
fertilizer marketing, through innovative farmer education and fertilizer promotion
programs, FACT related awareness about scientific cultivation and fertilizers use
among farmers. FACT is maintaining a multichannel system in distribution and
marketing. In Kerala, they have a series of central depot and authorized retailers.
The central depot functions as strong, cum selling points and the majority of
authorized retailers are co-operative societies. The main market of FACT consists
of South Indian states such as Kerala, Tamilnadu & Andhra Pradesh. Because of
the vast area and demand Andhra Pradesh is considered to be the main market of
FACT fertilizers. FACT also exports its other products to different countries. The
division continues its farmer education programs like demonstrations, village
adoptions, farmer training and seminars. Krishi Vigyan, Kendras and group
training in Integrated Pest Management (IPM).
OBJECTIVES
1. Monitoring of sales and distribution.
2. Study the market scenario and adequately respond to the changes in the
buyer market.
3. Liaison with bulk buyers, central and state government officials and
officials of fertilizers association of India.
4. To bring more innovation in the field of mixtures and increase its sales.
FUNCTIONS OF MARKETING DEPARTMENT
1. Sales
2. Market research and agronomy
3. To conduct awareness programs for farmers about fertilizers
4. Preparation of sales report
40
5. Processing and sending replies to audit queries at the divisional level
6. Liaison with bulk buyers, central and state government officials and
officials of fertilizers association of India.
7. Sales force motivation through internal and external training programs
ORGANIZATIONAL STRUCTURE OF MARKETING
MARKETING FIELD ESTABLISHMENT
1. AREAS
2. REGIONS
3. SALES TERRITORIES
4. AGRO SERVICE CENTRES
Sales department also consist of MPS (Manager Sales Prommotion
Services) who handles sales promotion services and SRM (T) (Senior Regional
Manager (Trading) who handles traded products including imports. The
41
Director (Marketing)
General Manager
Deputy General Deputy General Manager (Co- Ordination)
Chief sales manager
Assistant Manager
(Tamil Nadu)
Assistant Manager (Kerala)
Deputy Chief Manager
(Caproplactum)
Assistant Manager
Andrapradesh
Assistant Manager Karnataka
CDM
Distribution Department supervises the MSV (Manager Stock Verification) and
MMOP (Manager Mixing Operations) for various mixing centres.
SALES DEPARTMENT
Chief Sales Manager who provides Staff assistants to division head, sales
department. He exercises overall supervision of field sales besides coordinating the
sales promotion activities.
Main products
1. FACTAMFOS 20:20:0:13/Ammonium Phosphate
2. Ammonium Sulphate
3. Caprolactum
4. FACT Mix
FUNCTIONS
1. Monitoring of sales in the areas
2. Monitoring of price and terms of FACT products with competitors
3. Processing credit proposals for dealers and institutions
4. Processing proposals for extending Special incentives/ credit terms to
dealers, Door delivery of stocks, and pre- positioning of stocks, off season
Rebates
5. Committee work for appointment/cancellation of dealers.
6. Monitoring the flow of MIS from market research department and from
field establishments
7. Submission of reports/statements to ministry of government of India and
state governments on various aspects connected with activities of division
8. Processing proposals for special agreements/ sales terms with bulk
buyers/commodity boards/plantations
PROMOTIONAL TOOLS AND AIDS
Sales promotion and service department is to process various proposals
originating from the field for arranging sales promotional aids such as leaf lets,
banners, strip boards etc and ensures prompt and timely supply of such times, by
procuring them as per the prescribed purchase procedure in force in the company.
Promotional activities through different media are
a. Print media
A schedule of advertisement is prepared crop wise and fertilizer wise based
on crop calendar furnished by area managers. Monthly release of advertisements is
42
made through approved advertising agencies, as per the budgetary allocation with
sanction from competent authority
b. Audio Visual & Electronic media
Radio jingle being in vernacular are produced at respective states and area
manager releases product radio jingles through all India radio coinciding with crop
manuring season as per the budgetary allocation
c. Outdoor visual aids
The design/art work for dealer board, stickers, banners, wall paintings,
posters, hoardings etc are furnished by advertising agencies for approval
d. Farm literature
Leaflets and pamphlets containing information on products and
requirement of crops are printed and distributed among the farmers, during
promotional programs.
DISTRIBUTION DEPARTMENT
Physical distribution of products is a major function of the marketing
division. Chief Distribution Manager is entrusted with planning, monitoring and
implementing of product distribution and coordinating the movement from
production units and ports. Marketing operations of FACT in respect of fertilizers
follow a completely centralized pattern. The marketing network of FACT is spread
over the southern states of Kerala, Tamil nadu, Pondicherry, Karnataka and
Andhra Pradesh.
In each state, there are 4 area office and 16 regional offices. The
distribution network consists of 100 Agro Service Centres, 50 field storage points
and over 7900 retail selling points in these states, and serves the farmers by the
supply of fertilizers and agronomy advice. Through innovative farmer education
and fertilizer promotion programs, FACT has created awareness about scientific
cultivation and fertilizer use. The states offices are called area and their sub
divisions are called regions. The distribution is based on the government plan.
TRADING DEPARTMENT
It deals with the import of urea, potassium and other materials necessary
for the production as well as for the sales. The trading is done mainly through the
43
Cochin port and then the operations are transferred to states where by the
marketing operations take place.
Marketing Areas
Area Offices, Regional Offices
Trivandrum, Kerala
Alleppey, Palakkad, Kottayam, Kannur
Bangalore, Karnataka
Bangalore, Mangalore, Hospet, Belgaum
Chennai, Tamil Nadu
Vellore, Trichy, Coimbatore, Madurai
Hyderabad, Andhra Pradesh
Hyderabad, Vijayawada, Kakinada, Nellore
Marketing Operations
1. Agro Service Centres- 100
2. SWC/CWC Points- 43
3. Soil Testing Laboratories- 3
4. Area & Regional Offices – 20
5. Field Sales Offices – 100
6. Dealer Points – 7759
MARKETING RESEARCH
Marketing Research Department is essential for the success of marketing
function. The main function of marketing research is the collection, analysis and
interpretation of data pertaining to fertilizer market.
The main functions done here are:-
1. Preparation of product wise, month wise annual sales plan for each area
2. Publication of annual report of division
3. Monitoring and reporting of competitors sales as per performance
prescribed
4. Collection, scrutiny, analysis and compilation of region wise, area wise
sales performance of own and purchased products for providing
information to management on achievement against the target on a daily
basis
5. Submission of monthly performance report of the division to the CMD
44
6. Ensuring product availability, dispatch monitoring and inventory control
7. Submission of various statements to FAI (Fertilizers Association of India)
for publication in their fertilizer statistics yearbook
CHALLENGES OF MARKETING DEPARTMENT
a) Non-availability of sufficient working capital and severe liquidity crunch
b) Lack of product range
c) Decreasing Market share of FEDO & FEW due to stiff competition
d) High cost of working capital
e) Farmers turning to bio fertilizers
45
VIGILANCE DEPARTMENT
Vigilance Department of FACT is headed by a Chief Vigilance Officer (C.
V. O), who possesses the status rank and perquisites of a Functional Director.
Vigilance is an integral part of the management function. It has adopted preventive
vigilance as the main theme. The stress is on transparency and accountability in the
working of the company. Anonymous complaints are not taken. Vigilance Officers
are deputed from time to time to speak on vigilance matters during the service
training programs of the company to sensitize the employees and the public about
evil of corruption.
ORGANIZATION STRUCTURE OF VIGILANCE DEPARTMENT
46
CVO
CHIEF MANAGER
Dy. CHIEF MANAGER
INSPECTOR
COMPUTER SERVICE DEPARTMENT
The computer department of FACT was launched in the year 1965, with the
introduction of first generation computers in finance to meet the growing need for
the speedy data processing. This multi system computer department is constantly
updating its hardware and soft ware. They started online computing in 1986. The
centre is equipped with servers in all its divisions connected by FACT NET. A
complete implementation and interlinking of various departments were completed
in 2004. From 2009 onwards, FACT implemented SAP. Before that, FACT was
following the customized ERP system.
OBJECTIVES
1. To keep the management abreast of the past paced technological changes in
the field of information technology and recommending timely
enhancements of the IT resources in the enterprise
2. To project FACT into the promising area of e-commerce as soon as the
technology is adopted in a big way in the Indian business sector.
ORGANISATION STRUCTURE
Role of Computer Services Centre (CSC)
1. The Nodal Centre which looks after all the IT related aspects of the
Organization.
2. Maintenance and support services for all computer infrastructure &
FACTNET Connecting all Divisions on 24x7 basis for smooth operation of
FACT FORWARD system
47
Deputy General Manager
Chief Manager
Manager
System Administrator
Staffs
Deputy Chief Manager
3. Administration of all servers and related hardware of FACT FORWARD
system
4. Administration of user authorizations in FACT FORWARD system
5. Administration of all legacy servers, databases, security and data back up
6. Administration and monitoring of computer network spread across all
divisions through WAN, LAN
7. Administration of mail and internet
8. Planning and procurement of all software
9. Development and maintenance of software
10. Training on Computer awareness and Application to internal users
11. Project guidance to IT and Management students to the tune of every year
CSC locations
SC Functions in Head Office complex as the Nodal Centre with support to
Head Office, Udyogamandal complex, corporate office, RAP complex, Marketing
HO and remote offices, Training, HR, Old FEW complex.
With sub centres in:
1. Petrochemical complex
2. Cochin Division caters to W/Island
3. FEW Palluruthy
Reason for SAP ERP system
1. In the globally competitive industrial scenario, to take the organization
forward at a global level in manufacturing, delivering products & services.
2. Replace the existing custom- built ERP system, which is around 10 years
old lacks MIS/ decision support/ e- commerce facilities
3. Inherent limitations of the obsolete technology for further enhancements.
4. Implementation of e- procurement/ e- payment systems mandated by
ministry to bring in more transparency.
SAP PROJECT GO- LIVE – 12 NOV 2009
1. Go live across all offices all Functionalities Including 150 + marketing
Sales outlets in South India
2. No parallel Run
3. Tightly integrated processes, forcing co- ordination with various
functionalities
48
Modules Implemented
1. Production planning
2. Materials management
3. Sales and distribution
4. Plant Maintenance
5. Project Systems
6. Human Resources with payroll, ESS/MSS
7. Finance and Costing
8. Business Intelligence with BOBJ
9. SRM for e- procurement
Production Planning
1. Daily Process Order
2. Bill of materials for each product
3. Daily production confirmation
4. Material consumption confirmation
5. Availability of consumption ratio
6. Automatic product costing
7. Online availability of production / consumption data
8. Online availability of stock of raw materials/ intermediaries
9. Better analysis and planning capabilities
10. Improved MIS
Quality Management
1. Inspection of Incoming materials
2. In-process analysis
3. Quality Analysis of Finished products
4. Standard method for complaint reporting
5. Online availability of analysis data
6. Statistical analysis possible for each parameter
7. Standardized and customized reports for quality analysis
Materials Management
1. Centralized Material/ Vendor Master Maintenance
2. Uniform material code across organization
3. Online transactions for material receipts/ issues
4. Centralized Purchase Requisitions
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5. Procurement process through the system with generation of documents like
enquiry/ Bid comparison/Order etc
6. Online availability of material stock – storage location wise
7. Online availability of reports- standard and custom
8. E- procurement system
Sales and Distribution
1. Online Dispatch plan and Advices
2. Centralized Price Master and rebates
3. Online Centralized Customer master data/ Information
4. Online receipt and issue of materials
5. Online sales order and bank receipts
6. Process order based Mixing Operations at MC’s
7. Integrated credit checking facility
8. Online stock/ in transit stock, sales, receipts across ASC’s
9. FMS upload data generated from the system
10. Improved MIS reports
Plant Maintenance
1. Centralized Equipment Master
2. Online Centralized Equipment master data/ Information
3. Online Work Requests
4. Online equipment log
5. Automatic building up of Equipment history
6. Automatic costing of maintenance activities
7. Improved MIS reports
Human Capital Management
1. Centralized Employee Master
2. Tightly Integrated HR, TIME and Payroll system
3. Employee and Manager Self Service
4. Payroll process based on HR and Time data
5. Online availability of employee master data / Information
6. Improved MIS reports standard & custom
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Finance & Costing
1. Integration of Production, Materials, Maintenance, HR & Pay Roll and sale
function with Finance
2. Integrated Financial statements including marketing outstation
3. Online Centralized Customer and Vendor master data / Information
4. Drill down of information up to the base document level
5. Availability of Customer / Vendor balances including Security Deposit/
EMD in single Window
6. Element Wise Cost of Production for the Period is available
Business Intelligence
1. Online MIS and decision support system
2. Drill down reports
3. Dash Board for better representation for analysis
4. Performance analysis on KPIs
5. Statistical analysis on Key Parameters
Benefits
1. Single source of Information
2. Information visibility
3. Standardization of Business practices
4. Integration of Business Functions
5. Elimination of redundant data
6. Improved information accuracy
7. Better analysis and planning capabilities, improved MIS
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QUALITY CONTROL DEPARTMENT
At FACT, quality has always been articles of faith and strictest
international standard are adhered to producing the various products. The
sophisticated microprocessors based digital distribution control system brings
about efficiency in information management and process optimization. The
process control based on line analysis assures consistency in quality throughout the
manufacturing process and in finished products.
A well-equipped and modern laboratory provides reliable analytical
support. Extensive trouble shooting facilities aid the rigorous quality assurance
programs. Exceptionally qualified and experienced and specially trained high
caliber professional provide expertise at all levels of quality control departments.
A customer service cell comprising trained technical expert provides extensive
products applied support.
Quality control is a process by which entities review the quality of all
factors involved in production. Quality assurance attempts to improve and stabilize
production, and associated processes, to avoid, or at least minimize, issues that led
to the defects in the first place.
OBJECTIVES:
1. Ensure that product quality matches with standard quality
2. Achieve high levels of safety
3. Minimize delay in procurement of raw materials
4. Maximize capacity utilization
5. Minimize wastage
6. Achieve low break down
7. Process optimization
8. High order booking
9. Achieve timely delivery
10. Minimize customer complaint
11. Customer satisfaction through excellence in quality of production and
services
12. Adherence of documented quality system
13. Promoting quality culture among employees
14. Continuous improvement in the quality management system
52
QUALITY MANAGEMENT PRINCIPLE
1. Customer focus
2. Leadership
3. Involvement of people
4. Process approach
5. System approach to management
6. Continual improvement
7. Factual approach in decision making
8. Mutually beneficial supplier relationship
To maintain quality standard in order to ensure customer satisfaction and to
reduce the costs associated with the scrapping of defective goods. Quality control
costs can be reduced by the inspection of variables in the production process.
These include the raw materials that go in to the production process, work in
progress and the machinery used.
FUNCTIONS OF QUALITY CONTROL:
1. Quality checking
2. Process control assurance
3. Pollution control
Quality checking:
Raw material- pre and post dispatch check. It is usually done by FACT
quality control cell or external agency if expertise is required. A well-equipped
modern lab provides reliable analytical support. Extensive troubleshooting
facilities by qualified and experienced professionals. Quality is checked with the
frequency of two hours.
Process control assurance:
The samples are tested in the lab. There is one main lab for UD division
and sub labs for each plant.
Pollution Control
By taking air and water samples. If samples contain more than required
level of effluent, then the matter is reported to the plant the manager, Quality
department and GM (UC).
POLLUTION CONTROL MEASURES:
1. Hydrocarbon – detectors are placed in vulnerable areas in the plant for
transmission to control room.
53
2. Computerized automatic ambient air monitoring system is placed at
stations, inside the plant and two in the township to monitor ammonia,
carbon monoxide, non- methane hydrocarbon, sulphur dioxide and oxides
of nitrogen on a continuous basis. The company continues to give top
priority to pollution control activities. It has already invested lot of money
especially for setting up pollution control plans at Udyogamandal, Cochin
and petrochemical divisions. FACT Udyogamandal, Cochin Division are
ISO 14000 certified units. As a commitment to humanity, the company has
taken all necessary safeguards to prevent water and atmosphere pollution
caused by effluent gases and liquids thrown out from the factory. The
company could maintain all effluent parameters within limits as prescribed
by the statutory authority. Treated liquid effluent and gas emission from
plants conform to pollution control board are followed in the disposal of all
hazardous wastes generated. The ambient air quality monitory stations
continuously monitor the level of pollutants like sulphur dioxide, oxides of
Nitrogen, Ammonia, Carbon monoxide, Hydrocarbons and Suspended
particulate matters.
STRUCTURE OF QUALITY CONTROL DEPARTMENT
ACTIVITIES CARRIED OUT:
1. Improving the quality of effluence on a continual basis
2. Minimize dust problem in sulphur handling
3. Reduction of contamination of raw effluents with vapour condensation
from Hyam plant.
4. Reduction of noise level in sulphur dioxide / acid plant main air blower
5. Reduction of SO2 emission during start up of sulphuric acid plant
54
SHIFT- IN- CHARGE
MANAGER (QUALITY CONTROL)
CHEMIST
LAB ASSISTANT
6. Minimize and recycle waste water from phosphate plant and sulphuric acid
plant.
FACT has been always giving priority for social responsibility and
environmental protection. During the year 2008-2009, FACT installed a new start-
up alkali scrubber for the sulphuric acid plants in Udyogamandal division. The
new system will ensure that the SO2 emission and the resulting atmospheric
pollution during start – up is minimized. With the new facility, FACT has a
unique distinction of having start up scrubber system in all its sulphuric acid
plants. Production units of FACT are ISO 14001 certified units which always give
top priority to ensure clean air and better living environment to the inhabitants
around the factory. The effluent treatment plant was kept in operation along with
the parent plant throughout the year for treating the effluents by effective pollution
control measures. The characteristics of the treated effluents leaving the factory
and the emission from the stakes are maintaining within the limits set by the
Kerala State Pollution Control Board. FACT has three computerized ambient air
monitoring station installed at Udyogamandal. To monitoring the quality of the
factory and to ensure a clean environment to the locality.
CHALLENGES OF QUALITY CONTROL DEPARTMENT:
1. Lack of expertise to handle raw materials quality checking
2. Aged machinery
3. High noise pollution
55
FINANCE DEPARTMENT
INTRODUCTION
Men, material, machinery & money are the important factors required for
an organization in these, money or finance has also its own importance. For
successful functioning of an organization, adequate finance is necessary. It is the
lifeblood of an organization.
Managing finance is an important function of every organization. This dept
looks after the books of accounts and monitor the cost, the profitability of the
divisions and ensures the cash flow on sales. They also keep credit under control
etc.
OBJECTIVES
1. Manage & account for the financial resource of the organization
2. Forecast the requirement of financial in the future and plan accordingly and
to check for deviation.
3. Report the financial performance of the company to management,
4. Stakeholders & and to comply with the Govt. rules and regulation
ACCOUNTING PROCEDURE
FACT is a central Government enterprise. As a multi unit, organization there is a
specific accounting procedure in this company. There is a uniform classification in
the financial accounts to be followed by all the units. To record all the transactions
of units, a nine digit code number is used. To indicate the general account section,
first four digits are used. Last five digits indicate the sub ledger accounts.
FUNCTIONS
Maintenance of general accounts.
1. Billing
2. Preparation of journal, ledger and tribal balance
3. Financial resources and material accounting
4. Cost accounting
5. Auditing
6. Payroll
7. General accounts
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ORGANISATION STRUCTURE OF FINANCE DEPARTMENT
PROCESS OF FINANCE MANAGEMENT
In finance department of FACT there are five sections to carry out the
accounting process. They worked effectively for the successful accomplishment of
the process.
1. The five sections are
2. Bills & Materials section
3. Sales section
4. Costing, MIS, Budget
5. Cash, bank & Payroll section
6. Tax & duties section
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DIR (FINANCE)
GM (FINANCE)
DGM (IA)DGM
(FINANCE)
MGR (IA) CM (BILLS)
CM (SALES
)
CM (GEN. A/C)
CM (COSTING,
MIS, BUDGET
MGR (CASH, BANK,
PAYROLL)
MGR (TAXES, DUTIES)
BILLS & MATERIALS
Important functions of this section includes the following
1. Sales of tender form
2. Remittance of security deposit
3. Receipt to certified bill in the specified format
4. Issue of material to the extractors
5. Remittance of EMD
STORES ACCOUNTING
The stores accounting is also an important part of accounting process. They
need to handle the receipt of store, issue, return of store etc. This section does this
it in a careful manner.
Functions of this section are
1. They handle the receipts of stores
2. They also deals with issue of stores
3. Returns of stores
4. Value adjustments
5. Reconciliation with control accounts
6. Unconsumed materials lying at site at the close of financial year
SALES ACCOUNTING
The sales of the product & distribution are necessary to succeed in the
market. Therefore proper maintenance of accounts regarding sales & distribution is
an important part in accounting process. Main functions are
1. Accountability for selling and distribution of products & byproducts
2. Transfer of information from depots to head office
3. Recording the transaction
4. Compilation of reports
COSTING, MIS & BUDGETING
This section handles the ascertainment of cost of production, provides
necessary & detailed information, helping to prepare a budget, forecasting the
performance and finally making a plan.
COST ACCOUNTING
A) IDENTIFICATION OF COST CENTRE
In production divisions cost records are maintained on the basis of cost
centres. It is a location or equipment or a group of both together for which cost can
58
be ascertained separately. An expenditure, which is incurred exclusively for a cost
centre and can be identified as relating to a specified cost centre, will be allocation
or identification to a cost centre is not possible, such expenditure will be
apportioned to different cost centres on an accepted or predetermined basis.
B) COST CENTRE AT UDYOGAMANDAL DIVISION
DM water, steam, CPP, Process water, Ammonia, Sulphuric Acid,
SO2/Oleum, Phosphoric acid, Pollution Control, Ammonium Sulphate,
Ammonium Phosphate
C) COST OF PRODUCTION
In production divisions the process cost system is followed for finding out
the cost of production of various products and services. In two ways, cost sheet is
prepared. The items in the cost sheet are compiled on the basis of elements of the
products cost sheet all the products are prepared both in process wise and elements
wise.
MIS (MANAGEMENT INFORMATION SYSTEM)
The running of every business administration needs very much
information. Providing such information is an important part in accounting
process.
The main aim is to provide the management with vital facts which affects
the efficient running of the business for decision making on planning, organization
and controlling the major activities of the organization and initiating suitable
action.
It mainly consists of
1. Divisional Reports – Two monthly reports for each division- one for the
finance department & another for the GM’s office.
2. P & L Account- Statement and its analysis
3. Information about production performance of the division
4. Inventory position details
5. Cost of production – Actual and budget for the month
6. Specific information important for the management – Major projects, man-
hour utilization etc.
59
SWOT ANALYSIS
STRENGTH
1. High capacity utilization of available space through residential areas,
banks, shopping facilities etc.
2. Proper utilization of the bye products and very less effluent discharge.
3. A high quality product, FACTAMFOS is a premium product in complex
fertilizers containing sulphur.
4. Sustained operating parameters of the plant at good level and productivity
of plant at good level.
5. Proper measures taken to provide environment friendly atmosphere.
6. Highly experienced and technically skilled manpower.
7. Employees are highly paid.
8. One of the two producers of Caprolactum in India with world – class
quality.
9. ISO Certification to most of the divisions.
10. Strong dealer network in south India.
11. Good engineering and consultancy design, perhaps one among the best in
Indian fertilizer segment.
12. FEDO has own process know-how for hydrogen, sulphuric acid,
ammonium sulphate DAP and complex fertilizers.
13. FEDO has worked in association with many international process licensors,
has acquired the capacity of customizing and designing projects to the
requirements of the customers.
14. FEDO is an approved centre of surveyors and audit for portliness,
installation, non- destructive testing energy audits, and ISO audits and so
on.
15. Premium product in the complex fertilizer segment containing sulphur.
16. Strong marketing network in southern India.
17. Faith of farmers on FACT products.
18. 90% market share in fertilizers in south India.
WEAKNESS
1. Does not have a significant market reach outside South India.
2. Very less investment on R & D.
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3. Due to the interdependence of production plants, a small failure in one
plant affects the whole production cycle.
4. Plants at a position of renewal and replacement.
5. Most of the employees are at the age of retirement.
6. Procedures followed are cumbersome and often led to delay in decision
making.
7. Lack of product line diversification.
8. Lack of working capital resources.
9. Several unskilled jobs which could be sub contracted are undertaken by
permanent employees at high cost.
10. Unwillingness of employee to make important decision.
11. Improper division of work.
12. 80% of the employees are above the age of 45.
13. No serious attempt at carrier planning and succession.
OPPORTUNITIES
1. Scope for expansion and diversification.
2. Utilization of land for generating additional revenue.
3. Replacing employees who retire from job by young talents, which can help
to come up with innovations and new technologies.
4. More investment on research and development.
THREATS
1. Non-availability of sufficient quantity of phosphoric acid and other inputs.
2. Volatility in the prices of raw materials and feed stock like Naphtha,
furnace oil, etc.
3. Unfavourable policy of the Government
4. Diminishing market for Caprolactum
5. Infiltration of more fertilizer products to the southern markets from other
producers
6. Inherent bottlenecks in infrastructure facilities
7. Lack of product differentiation
8. High pricing and scarcity of raw materials
9. Severe liquidity crunch leading to non-operation of plant at higher capacity
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MCKINSEY’S 7’S FRAME WORK
While some models of organizational effectiveness go in and out of
fashion, one that has persisted is the McKinsey 7S framework. Developed
in the early 1980s by Tom Peters and Robert Waterman, two consultants
working at the McKinsey & Company consulting firm, the basic premise of
the model is that there are seven internal aspects of an organization that
need to be aligned if it is to be successful.
For example :
Improve the performance of a company
Examine the likely effects of future changes within a company.
Align departments and processes during a merger or acquisition.
Determine how best to implement a proposed strategy.
The 7S model can be used in a wide variety of situations where an position
perspective is useful. The 7-S model is a tool for managerial analysis and
action that provides a structure with which to consider a company as a
whole, so that the organization’s problems may be diagnosed and a strategy
may be developed and implemented
The McKinsey 7S model involves seven interdependent factors which are
categorized as either "hard" or "soft" elements.
Hard elements Soft elements
Strategy Shared Value
Structure Skill
System Staff
Style
62
Hard elements are easier to define or identify and management can
directly influence them: These are strategy statements; organization charts
and reporting lines; and formal processes and IT systems.
Soft elements: these soft elements are as important as the hard elements if
the organization is going to be successful. On the other hand, can be more
difficult to describe, and are less tangible and more influenced by culture.
1. Strategy: the plan devised to maintain and build competitive advantage
over the competition.
2. Structure: the way the organization is structured and who reports to
whom.
3. Systems: the daily activities and procedures that staff members engage
in to get the job done.
4. Shared Values: called "super ordinate goals" when the model was first
developed, these are the core values of the company that are evidenced
in the corporate culture and the general work ethic.
5. Style: the style of leadership adopted.
6. Staff: the employees and their general capabilities.
7. Skills: the actual skills and competencies of the employees working for
the company.
Strategy
The company introduced fertilizer mixtures which is of high demand and
each mixture is specific for a crop.
The company is in the process of integrating its divisions as Udyogmandal
complex to reduce the manpower.
The company is into the bio-fertilizer sector which is of high demand for
farmers.
Structure
63
BOARD OF DIRECTORS
BOARD OF DIRECTORS
DIRECTOR MARKETING
DIRECTOR TECHNICAL
CHIEF VIGILANCE
OFFICER
COMPANY SECRETARIAT
DIRECTOR FINANCE
G M MARKETING
G M HR GM (UC) GM (CD) GM F&F GM MATERIALS
CM FEDO CM FEW
CM PURCHASE
CM PRODUCTION
CM MAINTENANCE
CM SALES
CM DISTRIBUTION
CM AGRONOMY
MGR STORES
MGR QUALITY
MGR SAFETY
MGR R & D
KRL TN AP KA
CSP CME
MGR TRAFFIC
MGR STORE
PE PE PE
TRAFFIC AMMONIUM SULPHATE
AMMONIUM PHOSPHATE
PHOSPHORIC ACID
SULPHURIC ACID
AMMONIA
System
The company works in three shifts to manage the production process which
is operating 24 hours through out.
The company shut down production for two months every year for the
maintenance works.
The company has implemented SAP but as its in the initial stages, old
system and SAP run parallel.
Shared values
The company was established to provide employment.
64
The company works in an environment friendly manner, providing proper
systems to discharge effluents which are not harmful.
The training department helps engineering graduates to get industrial
training.
Style
The style of leadership adopted.
There are four types different leadership styles
Directive leadership
Supportive leadership
Participative leadership
Achievement oriented leadership
The company works according to supportive leadership style.
Staff
The company contains 3139 employees.
The company contains the most experienced talents of the fertilizer
industry.
Skill
To run this business has knowledge about the chemical industry.
The maintenance work is done by people from mechanical, electrical and
civil.
The production process is controlled by DCS, so require people having
knowledge in instrumentation.
FINDINGS AND CONCLUSION
FINDINGS
1. The core areas of FACT are the production and marketing of fertilizers and
petrochemicals.
2. HR department is in the process of integration of UD and PD as
Udyogmandal complex, which can help in optimum utilization of the
manpower.
65
3. Very less investment on R & D and no proper research works happening,
which can help FACT.
4. Most of the plants are at the limit of renovation.
5. High fixed overheads, which makes cost of production higher than returns,
and depend on government subsidies to adjust this.
6. The production process is affected by the breakdown of equipments.
7. Strict rules and procedures are followed by FACT for issuing quotations.
8. Very less young employees.
9. FACT produces high quality products and accepted by world at large.
10. Good canteen, drinking water, medicare facility available to employees.
11. It gives more importance to the employees’ safety measures.
12. Due to the shortage of employees proper training cannot be given to
employees as there is no one to replace them.
CONCLUSION
The Fertilizers and Chemicals Travancore Limited (FACT), incorporated in
the year 1943 at Udyogamandal, is a Multiproduct, Multi-Divisional Company
focused in the manufacture and marketing of fertilizers, chemicals and
caprolactum. It has been a great experience for me to do the organization study in a
reputed organization like FACT as it is a company with various types of
departments and more than 3500 employed. It was the right time to do a project at
FACT as after many years of losses, they made a profit of 19.5 crore rupees profit
this year (2011-2012). The company is undergoing an integration of Udyogmandal
division and Petrochemical division as Udyogmandal complex. We were able to
visit the different production plants and meet many highly experienced people in
the industry. We were able to understand the work culture in a public sector. We
were able to analyze both the positives and negatives of a public sector working
environment. An impact is seen in its low funding of R & D department and
reluctance to new technologies. It also helped us to understand the importance of
long term planning for future renovation expenses. The effect of changes in
government policies also was able to study.
The study was conducted with a view to understand the functions of FACT
and its department. During the course of study, I was successful in achieving these
objectives and could familiarize with an organization and its environment. This
66
study has improved my confidence by its successful completion to undertake such
studies in the future.
RECOMMENDATIONS
1. Improving the efficiency and productivity of existing plants.
2. Hire young talents who have innovative thinking and the courage to take
risk.
3. More investment on R & D department.
4. Growth and diversification in core sector (fertilizers and petrochemicals)
67
5. Re organizing marketing network with special focus to new products,
organic fertilizers, bio fertilizers, trading of fertilizers.
6. Effective and productive use of all other assets of the company such as
gypsum, land and human resources for growth and diversification.
7. Enter into the joint ventures with global companies in order to compete
globally.
8. Young and talented innovative workers should be given opportunities as
there is lack of fresh and young blood in the organization.
9. FACT’s product has already captured South Indian market but there is a
need to expand operations to North India.
BIBLIOGRAPHY
BOOKS
1. Chary.S.N, Production and Operations Management, 2010, Tata McGraw
Hill Educational private limited.
2. Dessler Gary, Human Resources Management, 2007, Asok K.Ghosh,
Prentice-Hall of India private limited.
68
3. Kachru Upendra, Production and Operations Management, 2007, Excel
Books.
4. Kotler Philip, Lanekeller Kevin, Koshy Abraham, Jha Mithileshwar,
Marketing Management- A south Asian perspective, 2009, Derling
Kindersley India private limited.
5. Saxena Rajan, Marketing Management, 2010, Tata McGraw Hill
Educational private limited.
6. Singh.N.K, Human Resource Management, 2008, Excel Books.
COMPANY DOCUMENTS
1. 68th Annual Report
2. FACT diary
3. FACT department manuals
4. Personnel manual
WEBSITES
1. www.fact.co.in
2. www.thehindu.com
3. www.quickmba.com
4. www.mindtools.com
5. www.economywatch.com
6. www.fert.nic.in
ABBREVIATIONS
1. UC – Udyogmandal complex
2. UD – Udyogmandal division
3. PD – Petrochemical division
4. CD – Cochin division
5. CVO – Chief Vigilance Officer
6. DIR – Director
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7. GM – General Manager
8. CM – Chief Manager
9. MGR – Manager
10. R& D – Research and Development
11. KL – Kerala
12. TN – Tamil Nadu
13. AP – Andhra Pradesh
14. KA – Karnataka
15. CSP – Chief Superintend Production
16. CME – Chief Mechanical Engineer
17. PE – Plant Engineer
18. PR – Public Relations
19. PRO – Public Relation Officer
20. EST – Establishment
21. IR – Industrial Relation
22. T & D – Training and Development
23. CMD – Chief Managing Director
24. Dy. CM – Deputy Chief Manager
70