ORGANISATION STUDY AT KANCOR INGREDIENTS LIMITED

Project Report Dissertation submitted in fulfilment of the requirement for the Degree of

MASTER OF BUSINESS ADMINISTRATION Of M.G university By SALU RAJAN SREE NARAYANA GURUKULAM COLLEGE OF ENGINEERING KADAYIRIPPU MAY 2013 Under the Guidance Of Mr. VIBIN KUMAR HR Manager
Kancor Ingredients Limited Angamaly South, Ernakulam

ORGANISATIONAL STUDY
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CERTIFICATE

This is to certify that the report of the Organizational Study done by SALU RAJAN, first year batch, in partial fulfillment of the requirements for the degree in master of business administration of MG University.

ACKNOWLEDGEMENT
Behind every successful effort there lies a contribution from numerous source irrespective of their magnitude. My project is no exception and I take this opportunity to express my sincere thanks those helping hands whole heartedly. It is with great pleasure and gratitude I acknowledge my indeptness to those who have helped me in completing this project work. Let me take this opportunity to express my sincere thanks to all of them, although they all cant be mentioned here. I thank my project guide Mr. Vibin Kumar and Mr. Naibi Kurian faculty of Sree Narayana Gurukulam college of engineering and all other faculty of the college for the helping hand provided by them in making the project a success. I would like to express my sincere thanks to Mr. Vibin Kumar, HR Manager of Kancor ingredients Limited (Guide for the organizational study) for permitting me to do this project. The speedy and neatly completion of the project work is achieved due to the sincere co-operation and help of all employees of Kancor Ingredints Ltd. I express my sincere thanks to all employees for creating a congenial atmosphere making me able to complete this project successful. I give my profound thanks to my friends for helping me. Last but not least I wish to thank my family for their help and support that I needed especially while not at site it will not be possible for me to complete this project satisfactorily without them. Above all I wish to thank God Almighty for having blessed me to complete this project.

DECLARATION

I, SALU RAJAN, hereby declare that this Project titled Organizational Study at Kancor Ingredients Limited is record of the study by me, in partial fulfilment of the requirement for the first year degree in master of business administration and which I am submitting this project as a record of original work done by me and has not been previously formed on the basis for the award of any academic qualification, fellowship or other similar title of any other university.

SALU RAJAN

CONTENT
CHAPTER 1 INTRODUCTION

General Introduction Objective of Study Methodology of Study Scope of The Study Limitations of Study Chapterisation
CHAPTER -2 THEORETICAL BACKGROUND

Concepts of organisation,departmentation Process&structure of organization Types of organization Types of departmentation Authority&delegation of authourity Centralization&decentralisation

CHAPTER 3

INDUSTRY PROFILE

World Scenario Indian Scenario

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 Growth in Spices Market State Scenario Present Status

CHAPTER 4 COMPANY PROFILE

History Origin of the Name Kancor KANCOR An active partner in innovation KANCOR- Reliable responsive resourceful Mission Vision Snapshot View of Kancor Milestones Awards won ISO certification Business Divisions Market Share Competitors Products Layout of Kancor
DEPARTMENTAL DETAILS

 Organization Structure Organization Hierarchy Department Details Human Resource Department Production and Maintenance Department Commercial Department Project Department Finance & Accounts Department Quality Control And Quality Assurance
Department

Research And Development Department It Department Marketing Department SWOT Analysis Strengths Weakness Opportunities Threats
OBSERVATION/SUGGESTIONS/CONCLUSION

Observation
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 Suggestions Conclusion Bibliography

CHAPTER 1

INTRODUCTION
General Introduction Objective of Study
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 Methodology of Study Scope of The Study Limitations of Study Chapterisation

General Introduction
An organization is a group of people that together have a social arrangement to dispense tasks for a goal they all want to achieve. The original word 'organization' comes from the Greek word Organon which itself is derived from the word Ergon which literally translates to 'organ' which is a compartment for a particular job. There are a wide range of different

organizations within our social structure that allow our society to function and fulfill their public duties; co-operatives, charities, nonprofit corporations, governments, corporations, Universities, companies, non government organizations, international organizations, armed forces and any other types that are similar that cover the public sector and the private sector. There are also what is known as hybrid organizations which are a combination of two of the above such as a combination of a corporate organization and the government. If we look at organizations from a social sciences perspective then we need to understand that it is a subject for analysis using a number of disciplines which include; sociology, political sciences, psychology, economics, management and organizational communications. When people say they are studying organizations they may say that they are studying; organizational studies, organizational structure, organizational analysis and organizational behavior. All of these names mean the exact same thing but are the names that are given by different institutes to their courses. When studying organization, you will learn three different perspectives to look at it; Process related perspective, Functional perspective and Institutional perspective. Process related perspective looks at how an organization is viewed as an entity, that it is in effect being re-organized so that the focus shifts on the organization to become a set of precise actions or tasks. Functional perspective is different as it focuses on how it is similar to a business and how they are being used. Finally, an institutional perspective is where they look at an organization's structure and whether it is useful within the correct social context. An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment. Organizations are a variant of clustered entities. An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and
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individual. Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organizations actions.

OBJECTIVES OF THE STUDY Primary Objectives

To conduct a study on organizational structure of the company. To familiarize with a business organization. To familiarize with the different departments in the organization and their function.

Secondary Objectives

levels.

Understand how information is used in organization for decision making in various

To enable us to understand how key business processes are carried out in an organization.

The study entitled "An organization study" of "Kancor Ingredients Ltd" has the following scope.

The study attempts to understand the performance of different departments. To understand the facilities given to the employees.

To obtain information regarding strength, weakness, opportunity, and threats of various departments. The working condition in the organization. To understand the performance of the company

METHODOLOGY OF THE STUDY

To conduct this study, different methodologies have adopted. The single most important one is observation method. In addition to that, I conducted interviews and made interaction with managerial staff, workers to learn from their experiences. Besides that, I walked through various documents, manuals, boards, and computer systems to understand more about procedures and systems.

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SCOPE OF THE STUDY

The project is done on the basis of curriculum plan of our degree of master of business administration affiliated to the M.G University. The organization which I choose for the completion of the project is Kancor ingredients Limited. The time duration of the project is from 16-April-2012 to 12-May-2012. Organizational studies are "the examination of how individuals construct organizational structures, processes, and practices and how these, in turn, shape social relations and create institutions that ultimately influence people. Organizational studies comprise different areas that deal with the different aspects of the organizations, many of the approaches are functionalist but critical research also provide alternative frame for understanding in the field.

LIMITATIONS OF THE STUDY

This study is not free from limitations. I also come across some of the limitations during the study like the management is reluctant to provide financial data. And not able to go deeper into the functioning aspects of the kancor ingredients limited. Getting companys willingness to implement the proposed technique needs strategic decisions and its a time consuming process. Company was not ready to provide the data soon they did after a lot of thoughts and proper convincing that will be using for academic interests.

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Chapter-2 Theoretical Background and Literature Review

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CONCEPT OF ORGANIZATION
Organization is the process of: 1. Identifying and grouping the work to be performed. 2. Defining and delegating responsibility and authority. 3. Establishing the relationship for the purpose of enabling people to work efficiency together in accomplishing objectives.

Principles of organization Principle means the theoretical basis on which something is built up. The theoretical basis is formulated from fundamental truth. Some of the important principles to be followed for developing round and efficient organizations are: Principle of unity of objective. Principle of specification. Principle of co-ordination. Principle of unity of command. Principle of span of control. Principle of exception. Principle of flexibility. Principle of simplicity. Principle of communication. Principle of efficiency.

Requisites of good organization The objective are to be clear, can did and well defined and the organization must have a capacity to achieve it. All activities therein must be implemented easily and effectively. All activities therein must be properly co-ordinate. Organization must be complete; it should include all essential activities. The communication system within the organization must be effective. The span of control at all level must be reasonable.
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 There should be provisions for future expansion, whenever needed. All activities and functions follow defined procedures. The organization must be such that it promotes the morality of employees. There should be proper diversion of authority and responsibility. Organization Organization is the process of identifying and grouping work to be performed, defining and delegating responsibility and authority and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objective. Importance of an organization Significance of the organization in any institution may be discussed as below: (i) It ensures optimum use of human resources: It establishes persons with different Interests skills, knowledge and viewpoints. (ii) It stimulates creativity: A sound and well conceived organization structure is the source of creative thinking and initiation of new ideas. (iii) Use of improved technology: A good organization provides for optimum use of technological improvements. (iv) Co-ordination in the enterprise: In a good organization, the different departments perform their functions in a closely related manner. (v) Executive development: The pattern of an organization structure has strong influence on the development of executives. (vi)It ensures cooperation among workers: A good organization promotes mutual Goodwill and co-operation among workers also.

Process and Structure of organization Organizing, like planning, must be a carefully worked out and applied process. This process involves determining what work is needed to accomplish the goal, assigning those tasks to individuals, and arranging those individuals in a decision-making framework
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(organizational structure). The end result of the organizing process is an organization a whole consisting of unified parts acting in harmony to execute tasks to achieve goals, both effectively and efficiently. A properly implemented organizing process should result in a work environment where all team members are aware of their responsibilities. If the organizing process is not conducted well, the results may yield confusion, frustration, loss of efficiency, and limited effectiveness. In general, the organizational process consists of five steps (a flowchart of these steps is shown in Figure 1)

Figure 1 The organizational process.

Review plans and objectives. Objectives are the specific activities that must be completed to achieve goals. Plans shape the activities needed to reach those goals. Managers must examine plans initially and continue to do so as plans change and new goals are developed.

Determine the work activities necessary to accomplish objectives. Although this task may seem overwhelming to some managers, it doesn't need to be. Managers simply list and analyze all the tasks that need to be accomplished in order to reach organizational goals.

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Classify and group the necessary work activities into manageable units. A manager can group activities based on four models of departmentalization: functional, geographical, product, and customer. Assign activities and delegate authority. Managers assign the defined work activities to specific individuals. Also, they give each individual the authority (right) to carry out the assigned tasks. Design a hierarchy of relationships. A manager should determine the vertical (decision-making) and horizontal (coordinating) relationships of the organization as a whole. Next, using the organizational chart, a manager should diagram the relationships

TYPES OF ORGANIZATION

Organizations can be divided into four types. Each type will be briefly discussed here, with attention for the culture and structure being used. One way to measure organizational types is by using OCAI, the Organizational Culture Assessment Instrument. This system is quite popular due to its effective and simple nature. Two primary characteristics are measured by this system:

The ratio of stability versus flexibility, and The ratio of internal versus external mindedness.

Based on these two dimensions, four types of organizations can be discerned, which are briefly discussed here. Hierarchical Organization The hierarchical organization is very effective in a relatively stable environment where the efficient and predictable delivering of products is its main reason of existence. Following the

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rules and procedures is of the utmost importance here. This type of organizations is often characterized by a machine bureaucracy with a role culture. Market Organization In a more competitive environment, hierarchical organizations are no longer that effective, since they are too internal minded. A more external minded organization is required in such conditions. This type is called the market organization and is strongly focused on the result of the production processes. The economical and political environment is perceived is dangerous and is approached aggressively. The focus in this type of organization lies primarily on the results and productivity. The feeling that holds the company together is that feeling of being better than the competition. Here, a task culture dominates.

Family Organization In a family organization (which is most often a professional bureaucracy) the idea that success is a consequence of individual development, teamwork and shared norms and values is paramount. The freedom of action for the individual employee is cherished. This type of organization is characterized by a lot of attention for the individual and a strong sense of solidarity. The culture in this type of company is personal culture Adhocracy In an adhocracy, the temporary character of the organization is the central tenet. This is a consequence of the central position of innovation and fast adaptation to new situations. Hierarchical power levels are missing and someones influence can strongly fluctuate based on the problem that is being solved. In cultural perspective, creativity, entrepreneurship and a dynamical attitude dominate. The overall task is innovation and the production of unique and original services and products. The dominant culture in this type of organization is a combination of a task and personal culture

Types of departmentation

There are basically five types of departmentalization in organizations. The five types of departmentalization are: functional, product, customer, geographical and process.

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 Functional departmentalization Most companies practice functional departmentalization. An example is the Production department, HR department, Accounts department, Marketing department and IT department. Product departmentalization When a company has a wide range of products, product departmentalization is a logical choice. For example, Kimberly Clark manufactures childrens products, toiletry and industrial hygiene products. Each product cluster has its own manufacturing plant, research and development, and marketing team. Customer departmentalization When a company has different customer bases, customer departmentalization allows better customer servicing. A travel agency can have one team taking care of corporate customers, and the other team taking care of walk-in retail customers. Geographical departmentalization Geographical departmentalization is good for a multi-national company. The company can hire local employees to serve different customers from different geographical locations. The different offices in different countries usually report to a regional headquarters. For example, the regional headquarter for Asia is in Singapore, and the regional headquarter for Europe is in London. Process departmentalization Process departmentalization is practiced in many factories with assembly line. The employees are grouped into a team to take care of a specific process. Conclusion to the five types of departmentalization Most companies employ a mixture of different departmentalization types. It can be functional departmentalization with process departmentalization. The important thing is that each employee knows exactly where he or she fits in.

Authority and Delegation of Authority

In context of a business organization, authority can be defined as the power and right of a person to use and allocate the resources efficiently, to take decisions and to give orders
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so as to achieve the organizational objectives. Authority must be well- defined. All people who have the authority should know what is the scope of their authority is and they shouldnt mutualize it. Authority is the right to give commands, orders and get the things done. The top level management has greatest authority. Authority always flows from top to bottom. It explains how a superior gets work done from his subordinate by clearly explaining what is expected of him and how he should go about it. Authority should be accompanied with an equal amount of responsibility. Delegating the authority to someone else doesnt imply escaping from accountability.

Delegation of authority Delegation of authority is the base of superior-subordinate relationship, it involves following steps:Assignment of Duties - The delegator first tries to define the task and duties to the subordinate. He also has to define the result expected from the subordinates. Clarity of duty as well as result expected has to be the first step in delegation. Granting of authority - Subdivision of authority takes place when a superior divides and shares his authority with the subordinate. It is for this reason, every subordinate should be given enough independence to carry the task given to him by his superiors. The managers at all levels delegate authority and power which is attached to their job positions. The subdivision of powers is very important to get effective results. Creating Responsibility and Accountability - The delegation process does not end once powers are granted to the subordinates. They at the same time have to be obligatory towards the duties assigned to them. Responsibility is said to be the factor or obligation of an individual to carry out his duties in best of his ability as per the directions of superior. Responsibility is very important. Therefore, it is that which gives effectiveness to authority. At the same time, responsibility is absolute and cannot be shifted. Accountability, on the others hand, is the obligation of the individual to carry out his duties as per the standards of performance. Therefore, it is said that authority is delegated, responsibility is created and accountability is imposed. Accountability arises out of responsibility and responsibility arises out of

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authority. Therefore, it becomes important that with every authority position an equal and opposite responsibility should be attached.

Therefore every manager,i.e.,the delegator has to follow a system to finish up the delegation process. Equally important is the delegatees role which means his responsibility and accountability is attached with the authority over to here. Centralization and Decentralization It is said to be a process where the concentration of decision making is in a few hands. All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management. According to Allen, Centralization is the systematic and consistent reservation of authority at central points in the organization. The implication of centralization can be :1. Reservation of decision making power at top level. 2. Reservation of operating authority with the middle level managers. 3. Reservation of operation at lower level at the directions of the top level. Under centralization, the important and key decisions are taken by the top management and the other levels are into implementations as per the directions of top level. For example, in a business concern, the father & son being the owners decide about the important matters and all the rest of functions like product, finance, marketing, personnel, are carried out by the department heads and they have to act as per instruction and orders of the two people. Therefore in this case, decision making power remain in the hands of father & son. Decentralization It is a systematic delegation of authority at all levels of management and in all of the organization. In a decentralization concern, authority in retained by the top management for taking major decisions and framing policies concerning the whole concern. Rest of the authority may be delegated to the middle level and lower level of management.

The degree of centralization and decentralization will depend upon the amount of authority delegated to the lowest level. According to Allen, Decentralization refers to the systematic effort to delegate to the lowest level of authority except that which can be controlled and exercised at central points. Decentralization is not the same as delegation. In fact, decentralization is all extension of delegation. Decentralization pattern is wider is scope and the authorities are diffused
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to the lowest most level of management. Delegation of authority is a complete process and takes place from one person to another. While decentralization is complete only when fullest possible delegation has taken place. For example, the general manager of a company is responsible for receiving the leave application for the whole of the concern. The general manager delegates this work to the personnel manager who is now responsible for receiving the leave applicants. In this situation delegation of authority has taken place. On the other hand, on the request of the personnel manager, if the general manager delegates this power to all the departmental heads at all level, in this situation decentralization has taken place. There is a saying that Everything that increasing the role of subordinates is decentralization and that decreases the role is centralization. Decentralization is wider in scope and the subordinates responsibility increase in this case. On the other hand, in delegation the managers remain answerable even for the acts of subordinates to their superiors.

Implications of Decentralization 1. There is fewer burdens on the Chief Executive as in the case of centralization. 2. In decentralization, the subordinates get a chance to decide and act independently which develops skills and capabilities. This way the organization is able to process reserve of talents in it. 3. In decentralization, diversification and horizontal can be easily implanted. 4. In decentralization, concern diversification of activities can place effectively since there is more scope for creating new departments. Therefore, diversification growth is of a degree. 5. In decentralization structure, operations can be coordinated at divisional level which is not possible in the centralization set up. 6. In the case of decentralization structure, there is greater motivation and morale of the employees since they get more independence to act and decide. 7. In a decentralization structure, co-ordination to some extent is difficult to maintain as there are lot many department divisions and authority is delegated to maximum possible extent, i.e., to the bottom most level delegation reaches. Centralization and decentralization are the categories by which the pattern of authority relationships became clear. The degree of centralization and de-centralization can be affected by many factors like nature of operation, volume of profits, number of departments, size of a concern, etc. The larger the size of a concern, a decentralization set up is suitable in it.
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CHAPTER

-3

INDUSTRY PROFILE
International Scenario National Scenario Growth in Spices Market State Scenario Present Status

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International Scenario
International trade in spices is currently estimated to be around 400,000 tons annually, at approximately US$1.5 billion. The total value depends to a large extent on the prevailing price of pepper, which is the leading spice on the world market. This trade has expanded steadily over the past two decades. Spice exports in the 1970-75 periods were only slightly more than half the present amount, at 222,000 tons ($300 million) annually. From 1981 to 1985 the yearly average moved up to 350,000 tons ($1 billion). It is expected that import volume will continue to grow even beyond the current level, but the rate will vary from country to country and from one spice to another. Import values may not, however, follow the same upward trend, depending on the price levels of individual spices, and in particular of pepper. Over the last several years prices of almost all spices, and particularly pepper, have gone down dramatically, primarily because of excess supply. In many cases market prices have been below production costs. This pattern is likely to continue for another two to three years. The result will probably be lower levels of production, which in turn may help to raise prices somewhat over the medium term. The United States is the world's largest importer of spices. Its foreign purchases in 1991 (including spice herbs, mustard and sesame seeds) came to 242,719 tons, valued at $395 million, compared with 239,960 tons ($385 million) in 1990. The Canadian market for spices is relatively small, importing approximately 12,000 tons annually. Among other European markets, the principal importers are Austria, Sweden, Norway, Finland and Switzerland. Sweden and Finland are major consumers of cardamom. In recent years, markets in the Middle East, in particular Saudi Arabia, have accounted for a substantial and increasing share of the spice trade, in terms of value, largely because of considerable imports of cardamom and pepper. These markets hold a share of over 80% of total world consumption of cardamom. Morocco, Algeria and Libya are large purchasers of pepper, but demand in these three is closely tied to price levels. In the Asian and Pacific region, the major spice importer is Japan, the third largest market for spices in the world, followed at some distance by Australia and New Zealand. India is the world's largest producer and overall consumer of spices. Although domestic consumption in

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Singapore and Hong Kong is small, the importance of the former, in particular, in the interparty trade of spices still remains considerable. Pepper, mainly from Indonesia and more recently from Viet Nam, passes through Singapore to the main consuming markets. It is estimated that around one fifth of the pepper entering international trade moves through Singapore. During the last two decades fundamental changes have occurred in the structure of the spice trade, in both exporting and importing countries, which have influenced the pattern of this trade.

End-use pattern of spices (%) COUNTRY Belgium Luxembourg Canada Denmark Finland France Germany Italy Japan Netherlands Spain Sweden 55 50 40 50 50 40 70 60 50 50 35 35 40 35 40 50 20 40 45 40 10 15 20 15 10 10 10 a 5 10 INDUSTRIAL and 45 RETAIL 45 INSTITUTIONAL 10

Source: www. spicesboardofindia.com From the above table we came to know that Japan stands first in the industrial end user pattern and Finland and Italy stands last. Italy stands first in the retail end use pattern and Japan stands last. Finland stands first in institutional end-use pattern and Denmark and France stands second and spain stands last.Since the early days of the spice and herb trade, the industry has become progressively more concentrated. Today, two firms dominate the global spice and herb market - McCormick and Company Inc, and Tone Brothers Inc (a subsidiary of Associated British Foods). In contrast to manufacturing where power is concentrated in the
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hands of a few, the growing of spice and herb crops is generally carried out by thousands of small scale farmers dispersed over remote areas. The demand and prices of spices and herbs fluctuate with global weather patterns, past production levels and changes in consumer and manufacturer preferences. In recent years, an increase in the number of countries supplying spices and herbs has led to an overall drop in the market price. These factors can make it very difficult for small-scale farmers to make a decent living.

NATIONAL SCENARIO
Indian spices are exported to more than 140 countries. The aroma, flavor and exquisite characteristic of Indian spices are well acclaimed the world over. The wide range of 52 spices and its products in our export basket have impressed the discerning consumers. These buyers have identified India as the destination for quality spices. Indian spice industry sector consists of 2100 registered exporters, of which 100 exporters contributes to the extent of 80%of exporters. Out of the 380 manufacturer exporters, 98 units have been established in-house laboratories and 35 units with ISO 9000, 18 units accredited with HACCP certification. 32 spice brands have been registered with the Spices Board. More than 20 processing units have upgraded their technology to meet the international quality standards/buyers requirements.

Growth in Spices Market

The Indian spice market has shown remarkable growth in spice and culinary herbs exports. Indian spices manufacturers are making substantial efforts to improve the quality of spices backed up by technological advancement in order to tap the international market. Advanced technologies such as carbon dioxide extraction, cry grinding, encapsulation of spice oil is being undertaken to ensure high quality of spices and their derivatives.

STATE SCENARIO
Kerala is a land of spices considering the large variety of spice grown in the state. Kerala had trade relations with Persia, ancient Europe, ancient Singapore and other Eastern countries. Kerala attracted foreigners only because of its abundant resources of spices. Pepper or Black Gold as it is otherwise known is the sole reason why the Europeans were particular in building the Suez Canal so that they could reach the coast of Kerala with very less amount of time. Kerala plays a major role in the production and export of spices from India. Human
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substance pattern in Kerala were shaped primarily by its physical, climatic and ecological characteristics. The greatest natural endowment of this humid -tropic region was the existence of a high degree of biodiversity. The agricultural settlements of Kerala which evolved nearly 2000 years ago have depended on this bio diversity as their prime resource. Kerala is renowned the world over for being the major producer and exporter of pepper, better known as the king of spices. The most popular among the spices are pepper, cardamom, turmeric, chilies and ginger. Pepper, known as the king of spices is perhaps the worlds oldest known spice and is cultivated in over 158000 hectares in Kerala, which account for 96% of the total production in the country. In Kerala, Kancor have fewer competitors owing to the less number of players in the field. The main competition is from synthite industries.

The other players in the state are Synthite Industrial Chemicals limited AKAY AVT Plant Lipids IFF Eastern

PRESENT STATUS
At present India produce around 2.5 million tones of different spice valued at approximately 3 million US dollar, and hold the premier position in the world. Because of the varying climate suitable for the spice cultivation almost all spices are grown in this country. In almost all the 28 states and six union territories of India, at least one spice is grown in abundance. No country in the world produces as many varieties of spices as India. Indias export Market F.Y. 2001 (U.S. $ 44 Billion)
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COUNTRIES Asia Africa North America CIS and Baltic LAC Europe Other Source: Export policy manual

PERCENTAGE 38.7% 4.1% 22.4% 2.3% 2.2% 25.9% 4.3%

From the above table we could understand that Asia stands first in the export market by 38.7%. Followed by Europe with 25.9%. And LAC stands last by 2.2%.

CHAPTER - 3 COMPANY PROFILE

History Origin of the Name Kancor KANCOR An active partner in innovation KANCOR- Reliable responsive resourceful Mission Vision Snapshot View of Kancor
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 Milestones Awards won ISO certification Business Divisions Market Share Competitors Products Layout of Kancor

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HISTORY

Jayasinh .V. Mriwala Chairman-JVM Group

Sanjay.J.Mariwala MD-SM-Group

Ajay. J. Mariwala MD-VKL Group

Mohan .J. Mariwala MD-Auto Hanger

Kancor Ingredients Ltd.

Kancor Color Ltd.

Omni Kan earth science pvt ltd.

Omini Active Health Technologies Ltd.

Source: On Boarding Manual 2009 Fig.3.1. The Family Tree From the above chart we could understand that jayasinh. V. Marivala is the chairman of JVM Group. The JVM Group is divided into 3 and they are SM Group, VKL Group, Auto Hanger. Jayasinh. V. Mariwala has 3 children and they are the head of these 3 sub groups. Mr. Sanjay. J. Mariwala is the head of SM Group and Ajay. J. Mariwala is the head of the VKL Group and Mohan .J. Mariwala is the head of the Auto Hanger Group. Sanjay. J. Mariwalas SM

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Group is divided into 4 and they are Kancor Ingredients Ltd, Kancor Color Ltd, Omni kan earth science Pvt Ltd and Omni Active health technologies Ltd.

ORGIN OF THE NAME KANCOR

Kanji moraji, grandfather of Chairman J.V M Mariwala was the founder of Mariwala group & Bombay oil Industry In 1990, Bombay oil Industry had a joint venture with Mc Cormick- a leading American food company specializing in spices. This venture was named as Kancortaken from kanjis Kan &Mc Cormicks Cor & thus KANCOR. The Mariwala Family has been in spice business for over a century. They started business operator in 1911 a kanji moraji trading in spice like pepper, ginger and turmeric. In 1935, Vallabhadas kanji ltd formed in alleppey, kerala to source and procure spices and copra in 1947. Bombay oil industries (BOI) established to refine coconut, groundnut and other oils; pioneering branded packaged consumers products like parachute coconut oils, and saffola in kerala in 1970, BOI started oleoresins and botanical extracts division in angamaly kerala. The whole group restructured itself in 1989, the division into independent companies for each lines of business. Oleoresins division became KANCOR Flavor and Extracts Limited (KFEL) Spices exports Organized under Vallabhadas Kanji Ltd (VKL) Stearic acids and castor oil remained with BOI Consumer production divition became Morico Industries Ltd.

In 1990, KFEL became a join venture between the J V Mariwala groups (60%) and Mc Cormick and Co.Lnc 40%. In 1996, the J V Mariwala group required Mc cormicks 40% holding. The group main food businesses are KANCOR, VKL and KM food Ingredients. In 2007, January 1 the name of the KANCOR Flavor and Extracts Ltd changed to KANCOR Ingredients Limited.

KANCOR An active partner in innovation

Product venture partnership they help translate concept into commercially successful products, working closely with the customer. The task force undertakes the whole spectrum of activities from scanning raw materials, developing suppliers, set up lab test methods, pilot plant scale ups and application traits. Value chain partnership; being vertically integrated, they can offer complete solution across various value station along each line of business from farm sourced agricultural raw materials to sophisticated isolated molecules. Above all, the principle of delivering value for money drives all programs.

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Group synergy partnership; research and development team works in tandem with the sale and marketing team. They are supporting by modern infrastructure comprising of laboratory facilitated documentation center pilot plants, test kitchens and tie-ups with international laboratories and testing institution.

KANCOR- Reliable responsive resourceful

The logistics services provide door-to-door deliveries and management of delivered cost in keeping with the changing global scenario. Structured procurement solutions offer our customers total assistance in planning and managing inventory, marketing information risk management and optimization cost. A LAN/ WAN and ERP investment in IT and communication system ensures efficiency and integrity in information transfer and superior level of service and also quality assurance system in credited ISO 9000, 22000, BSI, UK since 1994.

MISSION
Our mission is to apply 'true value' to all kancor products with the support of state-of-the-art factory facilities. To build an international business in extracts oils seasoning ingredients flavours and fragrances. To be an innovative resourceful and profitable company To meet customers requirement of quality service and price consistency To make Doing, business with us easy and delightful to our customers.

To provide congenial and entrepreneurial work environment. In which employees can respond to the needs of business and service earn fair rewards can be satisfied.

VISION
Our vision is to assimilate innovative concepts in product manufacturing with advanced technology, to provide customers with products that actually give value for money. By 20-20 they to reach 5 billion dollar company

Tag line
"Ingredients Solution Partnership"

Values (Guiding Principles)

Kancor strive towards excellence in everything they do. Kancor will endeavors to attain highest level of customer satisfaction. Their focus is on quality, superior performance and profitability levels by imbibing proper system and values in business and to harness and develop people competencies and skill for the overall growth.
37

Geographic Presence
UP- Bareilly (KIL) Mint Division Karnataka- Byadgi. KancorColours Tamilnadu- Tuticorin (KIL) Kerala- Angamaly KIL Oleoresin Division

FOCUS
80% products are exports to various countries 20% focus on national markets We have turnover 25 crores

PRODUCTS AND MARKETS

SPICES EXTRACTS

SPECIALITY PRODUCTS

NATURAL COLORS

PRODUCT CATEOGORY

MINT

ESSENTIAL COLORS

BOTANICALS

Source: On Boarding Manual 2009 Product Category

38

Snapshot View of Kancor

Company Name Address ZIP City Region Country Phone Fax E-mail www Services

KANCOR INGREDIENTS LTD No. VII/138, Kancor Road, Angamaly South 683573 KERALA Kerala - Ernakulam INDIA +91 484 3051000 +91 484 2452662 mail@kancor.in www.kancor.in EXPORT MARKETING PRODUCTION

Founded Contact person Products to sell

1935 Mr. MAHIBALAN RAGHUNATHAN EDIBLE PREPARATIONS & SPICES > CARDAMOM EDIBLE PREPARATIONS & SPICES > CLOVES EDIBLE PREPARATIONS & SPICES > CORIANDER EDIBLE PREPARATIONS & SPICES > GINGER EDIBLE PREPARATIONS & SPICES > NUTMEG EDIBLE PREPARATIONS & SPICES > PEPPER

39

EDIBLE PREPARATIONS & SPICES > ROSEMARY EDIBLE PREPARATIONS & SPICES > SWEET MARJORAM

Management Managing Director: Sanjaya Mariwala Executive Director: J.J. Negandhi Chief Executive Officer: Geemon Korah Vice President (Commodities): K.M.Antoo Vice President (Finance): V. Muralidharan General Manager (Operations): T.Karthikeyan Turnover of the company During the last 3 years the company has a turnover of 400 cores.

40

MILESTONES
1857- Kanji Moorarji sets up a modest trade in spices. 1891 - Kanji Moorarji expands its business horizons to Europe. 1935- Vallabhadas Kanji Ltd (VKL) was founded. 1944- Bombay Oil Industries (BOI) was founded. 1957- Acquired Shree Jagdish Oil Industries Ltd. 1970- Set up BOI's oleoresin plant at Angamaly in Kerala. 1978- Became the first company to isolate pure cur cumin from turmeric. 1983- Diversified into consumer products, fatty acids, chemical and spice extracts division. 1989- Tied-up with mccormick USA, under the name Kancor Flavours and Extracts Ltd 1996- Mariwala Group reacquires McCormick Equity in Kancor. 1997- Majira Foods Pvt. Ltd is set up for specialized agriculture and curing of Marigold 2002- VKL becomes India's first HACCP certified food processing company 2003- VKL's in-house Steam Sterilization plant was founded. 2004- Awarded US patents for Kancor's Luteins esters land free Luteins. 2005- Kancor Flavors and Extracts were renewed as Kancor Ingredients Ltd to incorporate a wider segment of products. 2007- Kancor expands into Kancor Colors to process. 2008- With the successful implementation of ikan, Kancor Ingredients becomes SAP driven.

41

Awards won ISO certification

IFANCA International- HALAL Certificate of Spices Board Certificate Of Registration-ISO22000 C.TPAT- CT.PAT RQA ISO 22000 ORGANIC Certification Orthodox Union-Letter Of Certification-KOSHER USDA- Organic HACCP Certification Indian Organic Certification

BUSINESS DIVISIONS
KANCOR's businesses are organized and 4 division to provide a clear and synergistic focus to each business for customer's service, product innovation and profitability. 1. Oleoresins and extracts KANCOR produces and supplies spice oleoresins, natural colors and botanical extracts for a l l industrial formulation needs. Products are available in liquid parts powders and water-soluble version. 2. Essential Oils They supply a full spectrum of essential oils, spice oils, sweet oil, mint oils and isolates, menthol, crystals and perfumery and flavour formulation all over the world. 3. Botanicals and photochemical KANCOR's botanical division has been set up to expertise the availability of different spices of medicinal plants, roots and herbs. This will supported all your needs of herbal and botanical raw materials for medicinal and nutraceutical purpose. 4. Specialty products This division works along with R & D department. They are mainly concentrated in value addition to existing products and developing new products. 5. Supplementary products
42

Kancor has wide range of supplementary products in their list. They are of wide applications.

MARKET SHARE
The percentage of an industry or markets total sales that is earned by a particular company over a specified time period is market share of that company. Market share is calculated by taking the companys sales over the period and dividing it by the sales over the period and dividing it by the total sales of the industry over the same period. This metric is used to give a general idea of the size of a company to its market and its competitors. In 2007 companys market share was 17% after two years it became almost double that is 335 now in 2011, after 4 years, it is almost thrice, that is 50% Company is very much progressing.

CAPITAL OF THE COMPANY

Working capital of the company in 2011 is 4931 lakhs. It was 3849 lakhs in 2010. The share capital of the company is 936 lakhs.

STRATEGIC OBJECTIVES

PLANS

PROGRAMMES

AND

LONG

TERM

The main strategic plans and long term objectives of the company are to find out more customers of traders and do direct selling and to introduce new products. And to achieve the next target that is 277 corers. Going to open more marketing units in abroad. Also Kancor is going to set up a business unit in USA and Singapore within a short period. Kancor made an agreement with South African countries for the development of backward irrigation.

COMPETITORS
Synthite Synthite Industries Ltd (Synthite) is the largest oleoresin extraction firm in the world, supplying ingredients to the major food, fragrance and flavour houses. Synthite contributes 50 per cent of India's exports in the spice oleoresin market. They have a portfolio of over 500 products - from fresh & dried spices to oleoresins, added value products and application oriented solutions. Synthite's range includes raw spices, spice oleoresins, essential oils, natural food
43

colours, floral concretes/absolutes, resinoids, seasonings, health/functional food ingredients, spray dried and added value products as well as application oriented solutions. Plant lipids

Plant Lipids was started in 1979 as a company for making steam distilling essential oils mainly from spices and selling the products within India. In 1989, solvent extraction was introduced to produce both spice oils and oleoresins. From then on exports also started. Akay Akay is a leading global supplier of paprika and spice oleoresins from India Akay has a long-standing heritage in the production and supply of paprika and spice oleoresins to the global market, providing both flavour and functionality into a wide range of spice and colour products.

Avt AVT Natural Products is the world's largest Oleoresin pigment manufacturer

and exporter with large volume exports to food processing and cosmetic industries in Mexico and the USA.

EMPLOYEES
There are total 450 employees working in kancor .out of which they are divided in to staff, workers, casual laborers and contract employees. There are 250 employees who are in direct payroll.70 head load workers are paid daily wages according to the settlement agreement (for 4 years).Workers are assigned in different grade levels .grade3 is the lowest level; g2, g1, special grade, charge man and work charge man are the highest level. For staff officer is the lowest level: executive, senior executive, assistant manager, manager, senior manager, DGM. GM, are the highest level.

HUMAN CAPITAL AT KANCOR

Staff

192
44

Plant workmen Head load workers Contract workmen Security and Housekeeping
PRODUCTS

73 70 75 40

Kancor has an excellent product range for each and every food industry. The main products are Camptothecin, Colchicine, Thiocolchicosides, DAB III.some of the other main products include:

Spice Oleoresins
Spice oleoresins are extremely versatile products which may be used i n their own form, combined with natural spices in a blend, or as a base to produce a variety of different seasoning blends, flavours and perfumes. Extracts and essential oils form the major part of Kancor's portfolio of spice offerings to customers worldwide. Oleoresins and Spice oils are made from Black pepper, Capsicum, Nutmeg, Cassia, Celery, Cardamom, Cinnamon, Clove, Coriander, Garlic, Ginger, Mace, Mustard, Onion etc.

Essential oils
Essential oils are volatile and liquid aroma compounds from natural sources, usually plants or spices. They impart the characteristic fragrance and flavour of the plant or spice. The oils are obtained through steam or hydro distillation, extraction and Expression.

Mint and Menthols

Mint and Menthol products are important ingredients in several interesting products including Personal care products, Health care products, Food and beverages. One of the most exclusive products derived from Mint is Menthol, obtained by chilling mint oil. It has a distinct peppermint flavour. Peppermint and spearmint are ideal ingredients in mouthwashes, toothpastes, chewing gums, cigarettes, chewing tobacco.

Floral Extracts and Fragrances

45

Kancor's floral extracts are widely used in many of the exclusive cosmetic and perfumery formulations across the globe. The delicate fragrant principles from the freshly harvested blooms are carefully extracted as per the sensitive requirements of individual perfumers. Yet again, Kancor re-iterates its commitment to customization while proudly celebrating its bountiful Indian origins.

Organic Products
The organic products range of Kancor assures quality beyond compare. Nurtured and processed in the purest form of 'natural potency', they are highly acclaimed for their optimal organic properties. The main items are Super Critical Extracts, Essential Oils, and Vanillaetc

Natural Food colors

Kancor's expertise in extracting the purest forms of colours from nature has assured an unassailable reputation as a reliable, responsive and resourceful supplier of food colors worldwide covering a wide spectrum of applications in beverages, sauces, Confectionary, food coatings and snack food seasonings.

Oleoresin paprika
Regular oleoresin formulations with oil or water soluble specifications ROBO-RED (Deodourised paprika) - A proprietary process eliminates the undesirable chilliodour in paprika oleoresin.

Natural Spice Flavouring Systems

Natural spice flavouring systems are both standardized and customized offerings to enhance the flavour intensity in food through extremely flexible product formulations. It is available in both liquid and dry form.

Liquid products are;

Aqua Spice - Water soluble flavouring systems using oleoresins for water soluble applications. Flavoleum - Blends of various oleoresins, essential oils presented as liquid seasonings. TruNote - These products are extracted at sub ambient temperatures by gases. This ensures that thermally unstable actives are captured and a true, cleaner product is obtained.

Dry Products are;

46

GRANOR - Granulated oleoresins on non salt carriers by dry blending. FLAVOR SPRAY- Spray dried encapsulated oleoresins for dry blends. Plator Oleoresins coated on dry carriers such as salts, dextrose. Phytochemicals In recent years, Kancor has ventured into Phytochemicals through continuing research efforts to provide significant new insights into the understanding of the mechanisms that underlie the action of Phytochemicals i n human disease protection.

Cucumin
It is the principle pigment of turmeric that provides a bright strong yellow shade in solution Annatto - An orange- yellow natural food colourant, used since ancient century.

LAYOUT OF KANCOR

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48

CHAPTER - 4 DEPARTMENTAL DETAILS

Organization Structure Organization Hierarchy Department Details Human Resource Department Production and Maintenance Department Commercial Department Project Department Finance & Accounts Department Quality Control And Quality Assurance
Department

Research And Development Department It Department Marketing Department

49

BOARD OF DIRECTORS Chairman - Mr. J. V. Mariwala Managing Director Mr.Sanjay Mariwala Board members: - Mr. Ajay .J. Mariwala Mr. J.J Negandhi

Sanjay Mariwala M.D

Geemon Korah CEO

Ashoke Roy CFO

Vasanthakumar CPO

Source: Company Manual Total Management Team (TMT) From the above chart we could understand that Mr. Sanjay Mariwala is the Managing Director of the company. Mr. Geemon Korah is the chief executive officer. Mr. Ashoke Roy is the chief financial officer. Mr. Vasanthakumar is the chief personal officer.

50

ORGANISATION STRUCTURE

MD

CPO

CFO

CEO

HR

IT

ACC & FIN

COMMERCIAL

PROJECTS

ORD

EOD

SPD

SUPPLY PRODUCT P

BED/ PHYTO

IR

RM SOURCING

OPER

INT.SALES & MARKETING

QA

QC

Source: Primary data

51

Diagrammatic Representation of the Organizational Structure In Kancor ingredients Ltd Managing Director is the head of the company and under him there are chief personal officer, Information Technology department head, Chief Financial officer, Commercial department head and chief executive officer. Under chief executive officer there are Projects, ORD, EOD, SPD, Supply Product, BED/PHYTO, IR. Under ORD there are RM Sourcing, OPER, INT. Sales and Marketing, QA, QC.

Abbreviations MD CPO CFO CEO HR IT ACC & FIN ORD EOD SPD Managing Director Chief Personal Officer Chief Financial Officer Chief Executive Officer Human Resource Information Technology Accounts & Finance Oleoresins Department Essential Oils Department Specialty Products Department

SUPPL.PRODUC Supplementary Products BED/PHYTO IR RM Sourcing OPER QA QC Botanical Extracts / Phyto chemical Divisions Industrial Relations Raw materials Sourcing Operation Division Quality Assurance Quality Circle

Source: Primary Data

52

ORGANISATIONAL HIERARCHY
BANDS M.D President Vice President LEVELS M.D CEO,CPO,CFO Senior Vice President Vice President Head Head Assistant Head Manager Group Leader Team Leader Lead Associate Executive Senior Associate Associate Team Member

Source: Primary Data DEPARTMENT DETAILS

The effective management of entire activities and operations of the firm is done by decentralization. The form is decentralized to seven departments. For the best management of each department, it is headed by a General Manager and assisted by Managers and Assistant Managers. The nine major departments in this firm 1.Production & Maintenance Department 2.Human Resouce Department 3. Commercial Department 4. Projects Department 5. Quality Assurance Department 6. Research and Development Department 7. IT Department
53

8. Marketing Department 9. Finance Department

54

55

COMMERCIAL DEPARTMENTS Structure of the Commercial

Department

Local Purchase Imports

56

COMMERCIAL DEPARTMENTS

Managing Director

Business Head (Extracts)

DGM (Supply)

Local Purchase Manager

Manager for Imports

Senior Executive

Executive

Executive

Executive

Source: Primary Data Structure of the Commercial Department

57

As a manufacturing company, the most important function is the sourcing and processing raw materials. The commercial department concentrating on logistics, advance licensing and buying of raw material. This department report to CEO. The department functions inter locks with the production department. This department collecting information about global availability of the raw materials. The main raw materials of KANCOR are Pepper, Chilly, Turmeric, Celery and Nutmeg etc. Raw materials are collecting from local market as well as imported from different countries like Vietnam, Sri Lanka, Indonesia and Malaysia. Almost 95% of pepper has imported from the Sri Lanka and more than 80% of ginger form Indonesia. In the case of new suppliers, firstly they a sample from the customers. Then the quality assurance department checks the raw materials. The quality of raw materials is good then they pass to production department for a trial lot. If trial lot is acceptable, suppliers have added their supplier list. Commercial Department is headed by the business head and he is reporting to the CEO. He is assisted by Deputy Commercial Manager. There are two sections under the Commercial manager. 1. Local Purchase 2. Imports 1. Local purchase All the domestic purchases are coming under this section. It is carried out by the Local Purchase Manager with the help of Local Purchase assistant Manager and the Executives. The purchase within the country is done by the local purchase department. The major purchases are on chilies, turmeric, ginger, celery, herbs like alpha-alpha, rosemary etc. E.g. Chilly biught from Vijayakrishna spices, Andra Pradesh 2. Imports Some raw materials are imported from other countries as they are not available in the local market or which are very cheap in the foreign market as compared to the domestic market. It is the done by the manager for Imports and he is assisted by senior executive for Import. Major imports are on pepper, turmeric, ginger, white pepper, cashew, nutmeg etc. E.g. Pepper supplied from Shukra, Srilanka

58

Main functions 1. Logistics 2. Advance licensing 3. Buying Raw materials 4. Watch the market. Make daily reports on price and availability of spices. 5. Negotiate with vendor for quantity, price and quality 6. Check the arrival schedule of raw materials. 7. Coordinate the sales team 8. Vendor management system Suppliers are selected mainly based on three factors 1. Correct delivery time 2. Quality of materials 3. Best negotiated price Kancor have 2 3 suppliers from same origin for supplying raw materials. The company has the storage capacity of 300 to 400 million tons of goods. Godowns are meant for 3 types of goods. Raw materials, intermediate good and finished goods. Thus they ensure continuous supply of raw materials for production. The company is never ready to make adjustments with the quality of the goods. It concentrates on activity ingredients and not on appearance.

59

PROJECTS DEPARTMENT
Structure of the Project Department Sustainable development

60

PROJECTS DEPARTMENT

DGM

MANAGER

SENIOR EXECUTIVE

EXECUTIVE

Source: Primary Data

Structure of the Project Department Infrastructure is an important factor for a company as well for the country. Project department acts as the initiator for any development of the company. It is important that specific time target is given to the department and the vision of the department is to complete it at the right time. Initially such a department was not there within the organization. It was originated in the year 2010 for the organized and the well structured working of the company.

61

Projects department is connected to R & D department. Whatever R & D does in lab is replicated by the department. Current project:Project department is currently undergoing the projects of Implementation of technologically advanced manufacturing system. Constructing office building Construction of roads etc. Windmill solar energy development projects Diversification in different areas

If a major blow takes place in the machinery, which the workmen cannot handle, project department comes to action. Major function of the department includes replacement, modification for running of machinery etc. This is the most unsecured job in the company since once the job is completed they become jobless. But since Kancor is a developing company the issues are quite less. Sustainable development measures:1. Energy audit of machineries to save the power. If any loss is found proper action are taken by the department to overcome those. 2. LCD and CFL lamps are used to save energy. 3. Department is planning to implement wind mill and solar power. 4. Proper advice given to employees to avoid using cars as much as possible for saving energy. 5. Machines are checked on completion of each bath of production to save energy and to increase product efficiency. 6. Effluent treatment plan for reusing water and thus reducing pollution.

62

FINANCE & ACCOUNTS DEPARTMENT

Structure of the Finance And Accounts
Department

Financial Departments Raising Fund Fixed Assets Customer Audit Financial Audit Salary Payments

63

FINANCE & ACCOUNTS DEPARTMENT

MD

CFO

FINANCE

ACCOUNTS

MIS

TREASURY

Source: Primary Data

Structure of the Finance and Accounts Department Financial department will handle all the financial activities in the company like maintain the record of receipt and payment. Accountant maintains the sales records; maintain the records from buyers and customers. The finance department handles taxation and insurance. The finance department also deals the legal matter. It also does the foreign bill discounting through their foreign exchange bank. Rising of working capital sundry debtors management, management of loans etc. Have done by the finance department. The company has a very strong position. It does work together with the MIS department for preparation and updating of profit & Loss account, Final accounts, cash flow statement and fund flow statement.
64

Financial Departments has four divisions 1. Finance Division Their division arranges money for company operation by credit from bank, issuing shares, debentures, loans, retained economy etc. This company mainly depend two types of credit facility from the bank. They are a packing credit (per shipment credit) packing credit manually given to exporters. It has low interest rate. It helps the production and packaging for the shipment process. Foreign credit (post shipment credit) credit should liquidate within six months by producing the export documents. The company issues two types of shares, that are equity shares and preference shares. The Mariwala family members subscribe all shares. 2. Accounts Division The accounts department using tally for their accounting purposes. Accounting clearly records all the transaction and updates all necessary files. 1. Sales Book 2. General Ledger 3. Personal Ledger 4. Material Stock Ledger 5. Balance Sheet 3. MIS division The main function of this division prepares budget report.MIS division collects data from all departments which is using for budget preparation. MIS also doing the activities for collecting actual result and comparing with the data has and according to the budget is preparing. It helps the financial to reduce deviation of actual results from budget. 4. Treasury This division takes care of investments, operations; payback to financial institutions etc. Kancor has investments in mutual funds, acquisition/setting up of new companies, in group companies etc.
65

Raising Fund There are different methods of raising funds. It can be through capital raised from the share holders, borrowing as loans from banks etc. All these activities are planned based on the requirement and it is done by the accounts department. The manager present with different options to CEO and get approval from the management and then move on with the procedures for raising the funds. The banks involved with Kancor are SBI, Axis and SBT. Salary Payments Salary/Remuneration is paid on or before 7th of every succeeding month through ICICI bank or it is paid at the last of same month. Fixed Assets The company has fixed asset at Angamaly, Agapparambu, Bareilly and Byadigi. Financial Audit Statutory Once in a year Income Tax Audits Internal Audit Twice in a year CERA Audit Twice in a year Customer Audit There is a yearly budget review which starts at January. Budget is prepared from AprilMarch. The budget is based on various factors like availability of raw materials, capacity to produce, availability of blending tools, availability of skilled manpower. Weighted average is used for inventory management. The depreciation method followed is For Income Tax Written Down Method Company Details Straight Line Method

66

QUALITY CONTROL AND QUALITY ASSURANCE DEPARTMENT

Structure of the Q.C and Q.A Department Quality Control Quality Assurance

67

QUALITY CONTROL AND QUALITY ASSURANCE DEPARTMENT

CEO

MD

BUSINESS HEAD

QA MANAGER

QC SENIOR MANAGER

ASSISTANT MANAGER

SENIOR EXECUTIVE

QC MANAGER

EXECUTIVE

EXECUTIVE

Source: Primary Data Structure of the Q.C and Q.A Department

68

Quality Control Quality Control department compare the quality of finished products as that with the expected requirements. The department analyses the final product. The marketing department provides information regarding the customers requirement on certain products and quality control department will be checking whether the products meet the requirement of customers and gives feedback. QC Lab requirements:The following standards operating procedures are required in the lab; 1. Analytical method 2. Calibration method 3. Specifications regarding commodities, non commodities, chemicals, additives, packing materials etc. 4. Quality plan 5. Training record should be maintained. Quality Assurance KANCOR aims at meeting customers expectation for service and quality. Company products are kosher certified and packaging UN approved. All the function of this department is according to the ISO standards system. There is one manager for the quality assurance department accountable to business head. Department activities include day-to-day quality control, which is very vital for the success of the company. The department works in association with commercial department. All activities of what commercial department need to be taken as it requires specification and what actually the customer needs from them is taking after the lab consent, even though at many situation it needs to be discarded due to the varied specification of customers. The main analysis works of Quality Assurance department are:1. High performance liquid chromatography

69

2. Spectro photo meter & Gas liquid chromatography for determination of active ingredients and residual solvent. 3. GC for essential oil profile. 4. Polari meter, Refract meter and Viscometer for determination of physical properties. 5. Microbiological testing 6. Pesticide residue and toxin screening of spices. In addition to these other equipments used for quality assurance are electronic balance, water bath, heating mantels, hot plates, Rota vapor etc. The quality assurance department assures the quality of raw materials, chemicals, solvents, additives, and diluents, packing materials, processing vessels, process etc.

70

RESEARCH AND DEVELOPMENT DEPARTMENT Structure of the R&D Department

71

RESEARCH AND DEVELOPMENT DEPARTMENT

GM

MANAGER

ASSISTANT MANAGER

SENIOR EXECUTIVE

EXECUTIVE

OFFICERS

Source: Primary Data

Structure of the R&D Department The research and development department does a major part analysis for the companys production. They do work on sample. R & D does the work that supports the marketing divisions. The department is connected to specialty products division. They also analyze on solvent that need to be using for extraction and decide on their effective mixture.

72

The functions of this department are 1. New product development 2. Adding more values to the existing product 3. Process improvement 4. Cost reduction 5. Improve the product quality to meet the customer needs 6. Product development on self-intimation of the department members. The request to the research and development can be internal or external. The internal request is mainly from the production department. The department will take appropriate steps in that request. The external request will be from the customers. The customer requirement will be forwarded from the marketing department. Research and development will analyze the customer needs and decides whether to accept or reject that offer, they will analyze the requirement of the resources and do review operation in the pilot plant. Steps incurred in product development are as follows:1. Request from marketing department 2. R&D accesses the feasibility 3. If it is feasible, the allocation is done. 4. Product being developed in the lab. 5. Standardization of the product in the pilot plant 6. Finally commercialization of the product by production department.

73

IT DEPARTMENT
Structure of the I.T Department

74

IT DEPARTMENT

MD

BUSINESS HEAD

AM

EXECUTIVE

OFFICER

Source: Primary Data

Structure of the I.T Department The IT department is working under the control of managing director. It can be called as brain as it controls the entire system. Destruction or failure of this may end up all the activities of the organization. Therefore, IT department is very important in KANCOR. Technology of KANCOR ingredient is advancing day with the help of this department. The IT department provides the application software called outlook for email access and other communication. ERP solutions are used by Kancor for data control. SAP(Systems Applications, and products in Data processing) is being in finance & control (FICO), Material & Management(MM), and Sales and Distribution (SD). Production and QC Department uses an in-House developed KANCOR ERP.A Chennai developed software COSMOSFT is used in HR Department to
75

enter payrolls. B-ONE Software is used as Performance Management System (PMS). IT Department has also developed an INTRANET for the whole control. The main advantage of KANCORS IT Department from other competitors is that they develop their own softwares and databases. The activities are 1. To give Technical support to end users 2. Provide Software and Hardware support to each department. 3. Training to new employees about new software. 4. To take the backup of the database and stores into removable hard disk. The servers are 1. 2. 3. 4. 5. Database server Communication server Tally server Thin client server File server

The advantages are 1. Easy updating of the data 2. Centralized Storage of the data 3. Easy retrial of the data 4. Reduce the time of the data processing 5. More securities to the data by providing ID and password 6. Setting the priorities to each department Operating systems used in servers are: 1. Windows 2003

76

2. Windows 2008 Operation systems used in clients are:1. Windows XP 2. Windows 2007 Various Softwares used in the organization includes, 1. MS Office 2. Adobe acrobat 3. Auto CAD etc. Various internet services used by the organization are:1. RELIANCE, Lease line 2. BSNL, Lease line 3. BSNL Broadband Around 150 computers are used in the Company as normal PCs and thin client. It includes 30 Laptops issued to management level employees. Mail facilities are provided to blackberry handset users.

77

MARKETING DEPARTMENT
Structure of the Marketing Department Pricing Sales Division Business subdivision Marketing Division

78

MARKETING DEPARTMENT

CEO

BUSINESS HEAD

DGM

ACCOUNT MANAGER

ASSISTANT MANAGER

CUSTOMER SUPPORT EXECUTIVE

Source: Primary Data

Structure of the Marketing Department Marketing Division Marketing division is responsible for planning, organizing, directing, and controlling the marketing activities. The basic goal of marketing is satisfaction of needs of customers and generation of revenue for the business. The main responsibilities of this department are:
79

1. Business generation to targeted level (Sales Forecasting, Order booming, Market Development, Enquiry generation, Publicity and Advertising support) 2. Collection of payment 3. Coordination with the departments and ensure customer satisfaction by adherence to time. 4. Coordination with administration and accounts in factors like budgeting 5. Promotion of products through worldwide food exhibitions, advertising in neutraceutical journals etc. Food exhibition Food Ingredients Europe was conducted in Paris at the end of November 2010. The same was conducted in Philippines with the name Food Ingredients Asia. 6. Product stocking and packaging 7. Advising the R & D department to develop related products according to customer requirements and suggestions. Sales Division The sales within the country are done by the Local Sales Division. The sales abroad are done by the Exports Division. These two are controlled by the manager and assistant manager in each division and they are supported by executives. There are three modes of sales i.e. 1. Direct sales and 2. Dealer Channel sales 3. Traders The direct sales are done through the sales and marketing personal and it is managed directly through the firm. The firm has appointed dealers in different other states and the dealer management is done by marketing and sales department. The marketing support and sales lead management is done by the company personnel. The orders placed by the dealers are scrutinized and once the order is placed, the dealers job is over. The rest of the process is completely handled by the

80

marketing and sales department. The dealers are provided with a commission for each order which is disbursed on completion of each order process. Business subdivision 1. Oleoresins biggest division 2. Essential oils 3. Specialty products 4. Botanical and Phyto Chemicals 5. Supplementary Products The consumer of Kancor is mainly meat industries (Sausages) or industries related to neutrachemicals. In India the main customers are Nestle, ITC, Boost, HUL etc. Main export companies are Mc Cormick, Griffith, Symrise, International Flavours and Fragrance (IFF) etc. The market shares of Kancor are 24% globally. It was 13% three years back. The most profitable market for Kancor is USA and after that Europe, Asia and Middle East, Africa. About 500-600 tones of oleoresins are exported per year. Every year there is a target which the marketing department achieves easily. Last years target was 130 crores and the department was able to achieve 137 crores. Pricing More than 80% of the cost of product is contributed by the raw materials. Chilly is being collected from Andra Pradesh, Karnataka and pepper from Sri Lanka, Indonesia, and Vietnam etc. The company which buys raw materials at the cheapest price is more competent. Maximum raw materials are brought at their crop season. Price fluctuation is an important factor which affects the demand for industries requiring large volume of products. Annual contracts are maintained. For example, for chilly the crop season is from January to May. More actual users engage in contracts and the company is liable to keep the same price throughout the contract. For biggest buyers the company provides 5-10% discount. In short company which has better stock position gains more.

81

Kancor has global warehouses, two in USA and two in Europe. The sales revenue is mainly through direct selling. 80% of the transportation is through sea ships and 20% through air flights. Kancor also does internet marketing. There is an enquiry format in the webpage. The procedure is as follows for prospective customers. 1. Enquiring the requirement 2. Getting maximum information like quality requirements etc. 3. Sending a sample 4. Price details 5. Responding to the order 6. Delivery within 6 months to 1 year.

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83

PRODUCTION AND MAINTENANCE DEPARTMENT

Structure Of The Production Department PRODUCTION DEPARTMENT The Production Process MANUFACTURING PROCESS

84

PRODUCTION AND MAINTENANCE DEPARTMENT

MD

CEO

GM OPERATIONS

PRODUCTION MANAGERS

ASSISTANT MANAGERS

ASSISTANT MANAGERS

SHIFT EXECUTIVE

Source: Primary Data Structure of the production Department

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PRODUCTION DEPARTMENT
The production department is the most vital one as regards KANCOR. Both management and staff worker facilities here and they maintain needs of customers satisfaction. This department is inter-linked with commercial and personnel department in particular with the backup of marketing department. The department has the function like crude manufacturing, maintaining efficiency in production and manpower management related to the production etc. The basic work of this department has complimented with plants installed in the site. Production process in KANCOR extends to sourcing agricultural materials, cleaning and grinding them, extraction, distillation, isolation and purification, standardization of extracts, granulation and formulation of special blends and products. The four divisions are oleoresin & Natural Colors, Essential Oils, Nutraceutical Extracts and Botanicals. Table 3.5 Division of Production plant 1. 2. 3. SEP 1 PLANT SEP 2 PLANT PILOT PLANT 2,4&5

Source: Company Manual Plant capabilities are Solvent extraction plant, Water extraction facility for herbs, Steam distillation plants for spice oils, Mustard plant, Isolation units, Platter spice products units, Mint/ derivatives contract facility There are around 80 workers in the production unit. 20 metric tons of spice extracts are manufactured daily The production process in Kancor extends to sourcing agricultural materials, cleaning and grinding them, extraction, distillation, isolation and purification, standardization of extracts, granulation and formulation of special blends and products.

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The production process can be summarized as

Raw materials collection

Cutting of raw materials

Steam distillation

Extraction

Filtration

Evaporation

Concentration

Stripping

Source: Primary Data

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MANUFACTURING PROCESS:1. Raw Materials Inspection:The raw materials have checked whether it can give specified products. This happens at the initial vehicle and material checkups and the lab analysis with the final decision of material quality by the commercial department. 2. Pre cleaning:This has done for the initial oil extraction in spices like pepper, celery. 3. Pre Treatment / sizing:This process involves flaking, grinding or pelletisation before putting into the extractor. 4. Steam Distillation:It is a process to recover the steam volatile components from spices. Steam volatile oil contributes to the characteristic aroma of each spice. These oils are generally recovered by applying steam directly to the spice followed by the condensation of the distillate. 5. Solvent Extraction:It is used to recover the active ingredients from the spice. this spice is made in contact with a suitable solvent that will dissolve the active ingredients. It is an efficient method for the separation of valuable active from spice without losing the natural flavor. It is the process through which liquid extracts are converted into free flowing granules.

6. Filling and packing:This is the final stage, where the packaging material after quality check are taken and are loaded with the final material ready to ship to the final destiny. 7. Labeling and dispatching

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Kancor labeling system ensures that both inner and outer packaging career is standardized, incorporating all necessary information to meet all the standards customs and purchase requirements. Customers specified data can further incorporated on individual request. The company has an excellent support system and storage system. The support system consists of 1. Boilers 2. Diesel Generator 3. Effluent treatment plant 4. QA Lab The storage system consists of 1. Raw materials Godown 2. Finished Goods Godown 3. Intermediate Godown

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Human Resource Department Structure Of The Hr Department Employee Details Working Hours Attendance Recrutment Appointment Induction And Training Performance Appraisal

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Human Resource Department

Managing Director CEO

Vice President (HR)

Manager (HR)

Assistant Manager (HR)

HR Executive

Source: Primary Data

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Structure of the HR Department Kancor believes that Human Resource is their core strength. They will ensure that their people are continuously enriched in their competencies and shall grow together with the company. Kancor provide equal opportunities to all employees and all qualified applicant for employment without regard to their race, caste, religion, colour, ancestry, marital status, sex, age, nationality, disability and veteran status. Kancor pay special attention to assign, monitor and provide feedback on tasks. Objectives and goals set for all individuals in line with companys business requirement and facilities long term sustainable personal growth. Human Resource Department is the part of total management of an organization which specially deals with the human resources in respect of their Talent acquisition, Training and development, Performance management system, Succession planning, Computers mapping, Organizational developing initiatives.

Employee Details
The employees are classified into Staff, Plant workmen, Head load workers, Contract workmen, Security and housekeeping.

HUMAN CAPITAL AT KANCOR Staff Plant workmen Head load workers Contract workmen Security and Housekeeping 192 73 70 75 40

WORKING HOURS
The factory works @ hours a day and seven days a week with rotational weekly offs. Office hours Monday to Saturday are from 9.00 AM to 5.00 PM. 10 minutes grace time is permitted
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to report in the morning in case of late arrival for reasons beyond control. Shift timing for the operations department are as follows:

1st shift from 8.00 AM to 4.00 PM 2nd shift from 4.00 PM to 12.00 AM 3rd shift from 12.00 AM to 8.00 AM ATTENDANCE
Daily attendance is recorded through RFID system.ID card needs to be shown and registered daily at the machine installed near the canteen. Salary is prepared based on the machine and the card supplied in the welcome kit. It should be used for both ID purpose and as well as for attendance recording.

FREE MEDICAL CHECKUP

It is mandatory for every employee to have routine medical checkups. The company will arrange for periodical medical checkup at its cost.

RECRUTMENT
The first step in the development of a concerns personnel activity is to employ the right type of persons to operate the organization. The recruitment process differs depend on requirement. The requirements are done for all departments. The declaration about the requirement of a particular post will be done through company website and the printed media. The HR department collects the application and short lists them according to the experience and qualification.

APPOINTMENT
After completing the interviews, a short listing of candidates are done and then the final list is prepared. All the appointment are done by Managing Director of the company.

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INDUCTION AND TRAINING

Induction refers to the initial training provided to the workers on their admission to an organization. The object of this training is to introduce them to the organization and familiarizing him with it. The induction and training program is done based on respective departments. All the new appointments are given this program varies for different departments. In Human Resources Department induction program, the employees are given training on how to manage HR related issues like attendance, leave management, responsibility management, motivation of employees, recruitment policies, interview policies, interview etc. a main area of training for HR Department is the file management of each employee of all department. Accounts department induction program consists of training in basic book keeping to preparation of reports. The report preparation is done department wise and this helps in budget preparation and budgetary control. The training is provided in phase by phase manner and the final phase consists of live training as assistants to the accounting personal. Different interaction program are done for the new appointment. After selecting an employee, he will be introduced into different departments. Different training classes are given to the employees. Training programs like mental capability improvement, safety controls etc are done for the employees.

PERFORMANCE APPRAISAL
The performance appraisal system is done based on the job knowledge, quality of the work, target fulfillment, cost consciousness, interpersonal relationship, communication,

commitment and dedication and conduct and discipline, punctuality and attendance. The entire department provides a detailed report on each employee in the above said factories i.e. Key Result Areas (KRA). HR personnel review this in a financial year. This is a grading system for each department, according to which the increment and the bonus is given to the employees. If there are issues to be sorted out, discussions are done with the employee and they try to find the solution.

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CHAPTER - 5 SWOT Analysis

Threats
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 Weakness Opportunities Strengths

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In SWORT analysis Strengths, Weakness, Opportunities and Threats of Kancor Ingredients Pvt Ltd, Angamaly is analyzed and noted. STRENGTHS Some of the strengths of Kancor Ingredients Limited which I found out during my organizational study are it has spice trading traditions from centuries back. Kancor got ISO 22000, HACCP, KOSHER, HALAL certified company. It has got multiproduct production facility. And also it offers high quality products at competitive price. And the company is located in land of spices-Kerala. There are many experienced people in the company. Kancor is the oldest oleoresin plant in Kerala. It has got an responsive customer service. The company is located near to Seaport, Airport, Rail and National Highway. It is good expertise in oleoresins, flavor and extracts. Also there is an excellent IR & HR atmosphere. WEAKNESS Some of the weaknesses of the company are modern technologies emerge worldwide and there is no direct contact with final customers also the Environmental hazards adversely affect the functioning of the company. Also there is difficult in transportation and the Poor crops in different parts of world cause irregular supply of raw materials. There is a lack of advertisements. Kancor mainly follows JIT, so excess raw materials is not stocked even if it is available at a lower price. And the Supply chain depends on market conditions. The size of the regional market is very small. It is due to high prices of the products. And also Trade unionism in any working class. OPPORTUNITIES Some of the opportunities for the Kancor ingredients Ltd are Vertical integration, Product diversification, many of the companies are now globally outsourced to India, and also Better position than their competitors. It has got a versatile process and also the global demand will increase in 2011-2012. Export covers EUROPE and JAPAN, which is not much affected by recession. Focus on new products and high value products are growing in R&D. Direct marketing will increase. Good monsoon expected this year. A stable government in centre will help to increase exports

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THREATS Some of the threats of Kancor ingredients Ltd are straight control by US and UK markets. And also the straight control by environmental agencies such as PCB (Pollution Control Board). The new E-commerce strategies are adopted by the leaders in the industry. High cost technologies are evolving in the company. Shortage of manpower with technical/key skills. And also the retirement of experienced workers. Quality assurance is another area of threat to the company. As it is a food industry high degree of hygienic conditions to be followed by the company.

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Observation/ Suggestion/ Conclusion

Bibliography Suggestions Conclusion Observation

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OBSERVATION Some of the findings which I come across in this organizational study are there is a declining trend was noticed in pepper industry. The issue of duty free license to specified value addition norms and export obligations has been advantages to the company. Also the ginger oil export has been declined. The Japan was emerging as major trading competitors for pepper oil and USA is the major buyer of ginger oil. Financially sound company and there is a good industrial relation. Also the company got qualified and skilled workers. And there is a friendly environment. USA is the major buyer of ginger oil. Also the company got long-term experience in the market. And also majority of employees were satisfied with the working condition. The company has a good R & D Department. The company has a centralized computer system. The company provides employment to the local people. The main customers are Pepsi, Nestle, Hindustan Uniliver ltd, Wipro and Dabur. A k Flavors, Synthite, Plant Lipids and AVT are main competitors. SUGGESTIONS Some of the suggestions in my opinion are management should consider the performance of employees for taking promotion decision also the company should exploit the domestic market. It should expand export opportunities. The organization should provide better recreation facilities to the employees like reading room, library, culture association etc. Also the company should increase the sales promotion activities in the Indian market. Company should improve the logistic orientation and try to have a logical vision and turn its efforts to meet these visions. CONCLUSION The organization study conducted at the firm. Kancor Ingredients Ltd helped a lot to know about the working of the enterprise. The registered office of the firm is located at Kancor road, Angamaly South, Ernakulum District and the Menthol Crystallization and Aroma oils situated at Bareilly, Uttar Pradesh. The Marigold Flower Cultivation Plant is situated at kangayam. The report presented is based on the prevailing situations of the market. However, the fluctuations in the global economy, the situation is expected to improve by the second quarter of the financial year. The long term outlook of global oleoresins industry and Kancor is very much positive with efforts such as diversification.
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In the study, the organizational structure which includes different individual departments and their sub divisions, how they operate, and detailed SWOT analysis was done. The different functions of each department and the roles of each staff were situated. The company is very prospective and promising. The strengths of the company are unquestionable and that will overcome the weakness easily. By their business expansion they can be in the prime position. BIBLIOGRAPHY BOOKS 1. C.S. Venkitarathnam & Srinivasthava, Personal Management and Human Resource OTHER MATERIALS 1. Magazines 2. Manuals WEB 1. www.Kancor.in 2. www.google.com 3. www.spicesboard.com 4. www.careersinfood.com URL http://www.blurtit.com/q781137.html http://en.wikipedia.org/wiki/Organizational_structure http://www.learnmanagement2.com/ORGANISATIONAL%20FUNCTIONS.htm http://findarticles.com/p/articles/mi_hb3099/is_n4/ai_n28619486/ http://www.ethical.org.au/guide/browse/guide/?type=142 http://www.infobanc.com/mandi/manspic1.htm

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FINANCIAL

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BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 2011-2012

(000rs)
PARTICULARS 31-03-2012

(000rs)
31- 03-2011

Revenue from operations (Gross) Less: Excise duty Revenue from operations (Net) Other income Total revenue

30383 120 30254 91 30345

23654 120 23534 255 23789

Expenses Cost of materials consumed Purchases of stock-in-trade Changes in inventories of finished goods and work-in-progress Employee benefits expenses Finance costs Depreciation and amortization Other expenses Total expenses Profit before exceptional items and tax Exceptional Items Profit before tax 1499 1362 264 3256 28358 1987 305 1682 1393 1192 258 2317 23064 725 725 18475 5268 (1766) 13053 5067 (216)

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Tax expense:Current tax Deferred tax charge(credit) 738 (222) 516 16 Income tax related to previous year 532 217 (31) 186 13 199

Profit for the year

1150

526

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BALANCE SHEET FOR THE YEAR ENDED 2011-2012 PARTICULARS EQUITY AND LIABILITIES Shareholders' funds Share capital Reserves and surplus Non-current liabilities 936 2882 3618 936 1949 2885 31-03-2012 31-03-2011

Long-term borrowings Deferred tax labilities (Net) Long-term provisions

40 302 342

152 204 212 588

Current liabilities Short-term borrowings Trade payables Other current liabilities Short-term provisions 10009 ASSETS Non-current assets Fixed assets Tangible assets Intangible assets Capital work-in-progress Non-current investments 2220 149 178 2547 429 2007 194 152 2353 380 7380 5234 2900 1083 792 4385 2097 589 329

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Deferred tax assets (net) Long-term loans and advances 3392 Current assets inventories Trade receivables Cash and Bank Balances Short-term loans and advances Other current assets 10777 Total 7804 14169 10833 3029

18 398

296

5773 2743 542 306 413

3303 2502 634 932 433

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