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Page No. Introduction Manufacturing Unit 1 : Ghaziabad, Uttar Pradesh Manufacturing Unit 2 : Sonipat, Haryana Manufacturing Unit 3 : Chennai, Tamilnadu Manufacturing Unit 4 : Mumbai, Maharashtra Manufacturing Unit 5 : Hyderabad Andhra Pradesh Manufacturing Unit 6 : Wazirpur, New Delhi Manufacturing Unit 7 : Firozabad, Uttar Pradesh Manufacturing Unit 8 : Ghaziabad, Uttar Pradesh
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Manufacturing Unit 1: Ghaziabad, Uttar Pradesh Product category: Cutlery, Kitchenware, Bar Accessories, Tableware
About the Unit This Manufacturing Unit is one of the most reputed companies engaged in the manufacture and export of a wide range of stainless steel cutlery, kitchenware, bar accessories and tableware in India. Established in the year 1977, the unit has succeeded in building an enviable reputation in the international market and is known for strong customer-centric approach and industry expertise. The business strategy of the firm is to keep delivery on time, and keep cost and quality of the good as desired according to customers need. With over thirty two years of experience, the units emphasis is on continually upgrading its manufacturing techniques and keeping abreast of the latest technology to further enhance the quality of its products. The company participates in various fairs organized by different industries group and associations. For example, the company does participate in EPCH Fair, which is held twice in a year, and also participates in industrial fair in the UP Stall. These fairs showcase products and give the firm a chance to publicize itself in foreign and as well as in domestic market. The firm has the quality certificate of: ISO- 9001-2000. Objective and Corporate Philosophy Customer satisfaction is the core of corporate philosophy and providing esteemed customers the best value for their money is the commitment of the unit. The large manufacturing and storage facilities enable the firm to produce a wide range of world class stainless steel house ware items which can be shipped out at a short notice. Due to the persistent efforts and commitment to perfection, units name has become a trust-worthy brand in the stainless steel house ware sector. Product Spectrum Constantly striving to design and manufacture products that meet clients taste and requirements of the unit, products are a fine blend of quality and innovation. The unit offers a comprehensive range of product that includes.
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Cutlery: Spoons, forks, knives, table knives, steak knives, fish forks, fish knives, cheese knives, coffee spoons, soup spoons, parfait spoons, syrup spoons, fruit forks, dessert spins, dessert forks, dessert knives, baby spoons, etc.
Kitchenware: Kitchen tools, spoon rest, ladle, skimmer, spaghetti server, salad server, cake server, colanders etc. Bar Accessories: Cocktail shakers, wine coolers, tool set, trays, stirrer jigger, ice buckets, ice tongs, ashtray. Etc. Tableware: Coaster, table trivets, salt and pepper shakers, paper napkin holders, flower vase, serving tray, etc
An alluring range of all-occasion gift sets is another specialty of the unit. Advantage of Infrastructure of the Unit The company has a strong and comprehensive infrastructure comprising of state-of-art technology and sophisticated machinery that makes each product a work of art. The modern facility in the manufacturing Unit also boasts of an in-house Research and Development wing. From rolling, cutting, polishing to finishing and packaging of the products, all activities are undertaken in-house to ensure strict adherence to the units own quality standards. Empowered By Skilled Workforce A pool of skillful and multi-tasking workforce that comprises of metallurgical experts, production and service personnel, and designers who, over the years, have gained experience in their respective fields is the main strength of the unit. The company is constantly engaged in conceiving innovative and creative designs that makes the unit, a trend setter in its chosen field of expertise. A Penchant for Quality The products of the unit confirm to the internationally prescribed standards of quality. Commitment to quality remains a prerequisite for the firms own self evaluation and motivation for progress. All products of the unit go through stringent checks, right from the procurement of raw material from reputed vendors to the final stage of packaging and
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delivery. The units own check and test facility helps ship only flawless and world class products. Foot Print across the Globe This has earned many accolades in its sphere of expertise by addressing the exact requirements of rapidly growing world-wide clientele. Since the inception of the firm, the firm has managed to outgrow the competition and capture the imagination of units esteemed clients across the Global Market. Annual Turnover The unit mainly deals in Cutlery, Kitchenware, Bar Accessories, and Table ware. The growth of the unit has been impressive in the past few years, but declined due to relocation of the unit from Delhi to Uttar Pradesh. The annual turnover for the last four years is given in the following table: Year 2005-2006 2006-2007 2007-2008 2008-2009 Annual Turnover (in crore Rs.) 4.5 3 4 4.5
The unit manufactures customized products on demand for both foreign and domestic markets. 80% of the units output is consumed by domestic market only. The unit exports mainly to USA, UK, and Turkey. Profitability in domestic market is higher as compared to foreign market. The firm has no foreign collaborations. The firm has not undergone any merger and acquisition. 5-star Hotels, restaurant encompasses majority of the domestic market. The unit has been the leader for its products especially for hotel industry. Now a days due to recession the unit has been facing low demand in terms of domestic and foreign demand for its products. Employment The firm employs local labour. There is no such problem with labour. The firm has 20-22 total numbers of workers. The firm does not give any incentive to its workers. But do pay extra wages for overtime of workers according to per hour wage rate plus dinner. National Productivity Council
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Problems faced by the unit Relocation of the unit Manufacturing Unit was relocated from Delhi to Uttar Pradesh in 2006. Relocation slowed down the growth of the unit. The cost of relocation (shifting cost + operations starting cost) put an extra burden on the unit and thus affected the growth of the unit negatively. Raw Material and Cartelization At present the per kg cost of steel is about Rs.80. The total cost of raw material as a share of total cost of production is about 80%.The unit uses steel (patta) as a raw material for the final product of the unit. One of the renowned company manufacture the steel rollers. The firm encountered the problem of shortage of raw material as this steel rollers manufacturing unit exported most of its steel products to China. Further these rollers are then turned into steel (Patta) as the raw material for the unit. Recently the factories which transform the steel rollers into steel (Patta), clubbed together and made their group, exactly a cartel. Now the supply of steel (Patta) totally depends on the decision of this group. In the recent past, they have shown spurious shortage of raw material and charged higher prices for their output. Furthermore, the partial treatment of state government in taxes like anti-tax on buying raw material from outside the state, stock transfer tax, etc. has been increasing the prices of the raw material and thus cost of production. The future paths will be impressive for the firm if Government provides help in setting up agency which will continuously monitor the steel (patta) prices and by not levying the partial taxes on the raw material. Infrastructural Issues The firm has no such problem in terms of power supply, transportation, road, etc. But the firm faces problem in road transportation at border areas of state, where the quality of roads is in deplorable condition. The firm requires space to expand its operations. Earlier the firm shifted to Uttar Pradesh from Delhi due to space constraints. In the present financial recession situation the firm has also been facing the problem of lack of enough funds to expand its business operations.
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Technological Constraints and Competitiveness The unit does not use automated technique to produce its final output. This restricts the firms capacity in production. On the other hand the foreign countries having automated techniques are able to fulfill the large order demand of the customer. Due to the problem of no automation technique the firm cannot produce with coils. Chinese products have much better quality as compared to the Indian firms because of lack of technological upgradation. But recent steps taken by Delhi government have helped the industries in adopting the automated techniques. Low Margin Low margins or profitability is a major cause of lesser number of firms in this industry. After going through the different processes of manufacturing a lot of steel becomes scrap. And the low price of this scrap increases the cost of raw material (steel) and thus shrinking profitability. Government Intervention Required The unit is satisfied with the Foreign Market Policy of the Government. The products of the unit come under the category of Duty Drawback (DPEB), therefore no export duty is levied. The Unit seeks from the state government (Uttar Pradesh) not to levy partial taxation system. The UP government has put anti-tax by putting tax on buying raw material from outside UP area. Similarly, government has put stock transfer tax of 4%, according to which if a firm wants to transfer its stock from UP to any other state then that firm has to pay 4% tax to government. The unit wants relief from this kind of partial taxation system.
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SWOT ANALYSIS
STRENGTHS Well educated and experienced value with products to Price WEAKNESSES sensitiveness of the Indian
management Strong R&D Good infrastructure Strong marketing network Well established brand in
customer Environmental hazards The problem of making cartel of steel (patta) producing factories Low/ limited capacity The prices of raw material are very high Low scrap items prices. Discrimination by state government in terms of taxes the best in class
OPPORTUNITIES Huge potential in domestic market Favorable central government polices for SMEs Good consumer base in both
THREATS Fluctuation in dollar-rupee exchange rate Stringent countries Cheap imports from china and other Asian countries Cartelization of raw material producing firms quality norms of EU
international and domestic market Increasing demand in international market Align strategy for growth. Align and upgrade environment for future
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Conclusion In the present globalization period if a country wants to compete in the foreign market then it has to focus more to make its industry more efficient and competitive. This is what is needed for the manufacturing Unit. The partial taxation at state level and cartelization of raw material producer are hindering the growth as well as competitiveness of the unit. Therefore government has to withdraw from such taxation system and make a monitoring agency to help the firm and industry.
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Manufacturing Unit 2: Sonipat, Haryana Product category: Cutlery, Kitchenware, Bar Accessories, Tableware
About the Unit This manufacturing unit is 25 years old unit engaged in the production of premium stainless steel kitchen/ table/ bar accessories. It is promoted by a family having experience of three decades in the production of stainless steel products. Steel is a challenging material to play with, to craft as per ones creative needs. Its durability, shining and hygiene is not a new thing for all of us. But due to its toughness, very few have succeeded in moulding this material to their deep sense of creativity. Right from its inception in 1984, the unit has been breathing, sensing, imagining and admiring creativity and art of craftsmanship for stainless steel cutlery, kitchen tools and utensils. Three quarters of units total sale are attributable to international markets. The unit is, therefore, fully aware of the fact that differences in eating habits do not always run parallel to a countries border. The specialists monitor the changes taking place and often know from previous experience in which direction these changes are heading. The deep rooted melody of crafting cutlery and kitchen tool has given birth and a new meaning to the world of utensils. The long standing experience has nurtured the units new plant at Kundli for meeting the ever rising demand of its domestic as well as global customers. Situated at Delhi- Haryana border, manufacturing unit is well equipped with latest state of the art technology and knowhow. A world ever getting smaller increases the market opportunities. A coordinated effort combining people, location and time is the key to success. A separate and parallel R& D section is assisting the different manufacturing processes. The products of the unit impart pure look and originality in style. This high order of quality is achieved through stringent quality control at every step. Unit Profile Total Factory Area Year of Establishment Management Executives Research and development 80,000 sq. ft. 1984 20 5
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Sales and Marketing Production Staff Quality Control Applicable Standard Quality standard Total Annual turn over Product Category
Unit offers creativity and art of craftsmanship for Stainless Steel Cutlery, Kitchen Tools and Utensils. The Unit has formulated the established most comprehensive technological process for the manufacturing of Kitchenware, Table Cutlery, Table top tools, Bar tools and Handcrafted cutlery. These include:
Regular Canister Cocktail Shaker 6 Pieces Kitchen Tools with Stand 5 Pieces Kitchen Tools with Square Caddy 6 Piece Tube Set Tea Spoon & Table Spoon Cake Fork & Table Fork Table Knife Oval Ring Kitchen Tool Spaghetti Server Basting Spoon Perforated, Slotted, Solid Masher & Sauce Ladle
Objective of the Unit To excel in the Global Market by having a competitive advantage over others. Organization Structure The responsibility and authority of the unit personnels, who manage, perform and verify work affecting quality is clearly defined with the organization structure with freedom and authority in terms of the following: National Productivity Council
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1. Execute all the action needed to discharge the authority and Responsibility in performing there process and quality system. 2. To ensure that quality system is established, implemented and maintained in accordance with the international standard. 3. To liaison with external parties on matters relating to quality system. 4. To identify and record any problems relating to the products process and quality system. 5. To initiate, recommend or provide solution to designated channels. Human Resource Management Policies Participation of workers and inviting views of its customers have been a tradition for the unit. Resultantly, low priced, functional products with modern designs have become a normal phenomenon. Above all regular quality audit has had an added advantage on increasing the working efficiency of the unit. An integrated team of designers, products developers and purchasers are formed for discussing design, materials and suitable suppliers in achieving specialization for each and every product of the unit. Radiantly, these fully awakened efforts are breathing fresh oxygen into the lungs of its workmen. The unit has established strict norms for health and safety of its workers by taking precautions on all health hazards factors. Prohibition of child labour has always been given a top priority. Business Strategy The unit has been in process of shifting its distribution channel from Importer based network to Agency based network. The unit has already set up its authorized agents in Italy, Israel, Greece and many more are under their process of formation. This allows the products to reach the market with a competitive price tag inspite of their good quality. The products are regularly updated, modified and further improved to respond to customers needs and latest design trend. To meet the changing expectations of its customers and environmental policies of the Government the unit is putting its consistent efforts for an all round development like: Cost reduction. Cost control fixation of new standards in production National Productivity Council
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Quality and innovative designs are evolving as a major concern for shaping a better dayto-day life for a common man. Modern manufacturing facility giving a thrush of relief from polluted environment. Most competitive prices offered have already been set an example to be followed by others. Technological Manufacturing Process The unit has formulated and established most comprehensive technological process for the manufacturing of products. A Good Management Practice Press Working Technology The raw material is further processed into various sheet metal press, working technological operations by means of precession press tools/sheet metal dies, designated, developed and manufacture in tool room, leading to successful contribution to achieve quality products during production stages. In-Process Production Quality Inspection During each stage of press working, the quality control engineers carry out vigilance inspection of all products to ensure dimensional accuracy, free from any manufacturing defects. Non-confirming products are RED-MARKED and kept in rejected material bins for rejected storage areas. Only quality-inspected products are further allowed to process into subsequent manufacturing operations with Inspection Tags. Store-Handling Black production materials are sent to Store for storage and handling for further issue of materials to polishing contractors under Store Requisition Form.
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Polishing/Satin Operations Quality control engineers carry out 100% vigilance inspection of polished materials with regards to 1. External finished surface quality. 2. Material defects such as Dents, scratches, Marks, Unfinished polish areas, Etc. 3. Fixation of Bar codes/labels/Electrical Stamping/Stickers, etc. 4. Accessories-Any packing special material requirements. Packing Carton Marking/Weight Marking Special care is taken by the packers to ensure that only quality approved materials are packed in required packing cartons. Weighing of Materials Each master cartons are marked with respect to:1. Net weight in kgs. 2. Gross weight in kgs. Marking of Carton Nos. According to the packing list each master carton are marked by respective nos. to avoid any short shipment of supply. Transportation of Material Forwarding Division Finally forwarding division transports the packed cartons as per packing list for onward containerized loading to Mumbai port for final destination as per invoice details.
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Labour Productivity Year 2003-04 2004-05 2005-06 2006-07 2007-08 No. of Employees 50 80 110 120 180 Annual Turnover (in Lakhs) 134 1321 1916 2820 2987 Turnover/Wor ker (In Lakhs) 2.68 16.51 17.42 23.50 16.59
Environmental Norms and Relocation The patti-patta is manufactured through rolling process and in this process the pickling process is also involved. This combined process is called as Stainless Steel Pickling. During this process acid is evolved. This acid is neutralized by mixing alkali (caustic soda) in it. New Delhi Pollution Control Committee, Department of Environment, Govt. of NCT of Delhi has issued a notice saying, It is hereby directed that all such units, engaged in the activities falling under prohibited/ negative list shall stop their activities and relocate themselves outside Delhi on or before 6th February 2010, without fail. Failure to do so will invite strong regulatory action as per provision of Air (Prevention and control of Pollution) Act, 1981 and Water (Prevention & Control of Pollution) Act, 1974.If these manufacturing units which are engaged in the production of patti-patta are closed on the basis of above notice then not only these units will be effected but those units which are engaged in the manufacturing of utensils, cutlery and kitchen tools will also be closed down. Although the pollution created by the pickling process is neutralized by mixing alkali in it, but even then if the Government does not agree with it then the time period of minimum of two years may be given to these units and the alternate site may be allotted to these units. If this problem is not taken seriously, then the Indian market will be flooded with China made utensils, cutlery and kitchen tools. Impact of this order is minimized in case of the unit as it is not involved in production of patti-patta but unit purchase it from other manufacturers. If these manufacturing units will be closed down then it can make impact on cost of patti-patta, which will hit directly the profit of the unit.
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SWOT ANALYSIS
STRENGTHS Well educated and experienced WEAKNESS Negligence toward domestic market Power cuts Customers negligence toward brand Price sensitiveness of the Indian
innovation and design Delivering customers Developing organization the best in class quality products to
OPPORTUNITY Huge potential in domestic market Favorable government polices for SMEs Availability financing Increasing demand in international market Align strategy for growth Align and upgrade environment for future of cheap source of
THREATS Fluctuation in dollar-rupee exchange rate Stringent quality norms of EU countries Higher export duties on final products Higher import duties on raw material Cheap imports from China and other Asian countries
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Government Intervention Required Although there exists various clusters of cutlery sector in India, but they are not given due recognition and facilities. Government should strengthen its cluster development policy. Some special attention needs to be provided to these clusters in order to ensure further growth in these sectors. Conclusion The unit is among the leading manufactures & exporters of stainless steel cutlery, Kitchen tools Barware, Utensils etc. and handcrafts of India, they always strive for the excellence in style and function. It exports to more than 40 country across globe and also have strong presence in Indian market. Units major market include Germany, U.K., France, Italy, Australia, Middle East, North America and Latin America. Units experience of more than two decades always aspire to meet the identical demands of the customer and have endeavored to find a way by offering fancy and elite products to satisfy long standing requirements of the customer. Unit has annual turnover of Rs. 400 crores and running successfully in profit since inception. Unit has gained the global status in quality, profit, customer satisfaction, widening of markets and export to China.
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Manufacturing Unit 3: Chennai, Tamil Nadu Product category: Cutlery, Kitchenware, Bar Accessories, Tableware
About the Unit This Manufacturing Unit is a 50 years old unit engaged in the production of premium stainless steel kitchen/ table/ bar accessories. Product Spectrum Constantly striving to design and manufacture products that meet clients taste and requirements of the unit, products are a fine blend of quality and innovation. About 200 products are being manufactured by the unit. The unit offers a comprehensive range that includes: Cutlery: Spoons, forks, knives, table knives, steak knives, fish forks, fish knives, cheese knives, coffee spoons, soup spoons, parfait spoons, syrup spoons, fruit forks, dessert spins, dessert forks, dessert knives, baby spoons, etc. Kitchenware: kitchen tools, spoon rest, ladle, skimmer, spaghetti server, salad server, cake server, colanders etc. Bar Accessories: Cocktail shakers, wine coolers, tool set, trays, stirrer jigger, ice buckets, ice tongs, ashtray. etc. Tableware: Coaster, table trivets, salt and pepper shakers, paper napkin holders, flower vase, serving tray, etc Objective of the Unit To excel in the Global Market by having a competitive advantage over others. Human Resource Management Policies There are about 280 employees working in the factory. Out of the total 280 employees, 200 are permanent and about 80 are on contract basis. The wages paid to the workers are as per norms of the factory act. The wages have gone up by 1.5 times in the past five years. There is no category of skilled labour in the factory.
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Labour Productivity No. of Employees 120 140 170 190 200 240 280 Annual Turnover (Crores) 420 500 530 600 600 700 750 Labor Productivity (per person) Rs Crores 3.50 3.57 3.12 3.16 3.00 2.92 2.68
Antidumping Duty State (Tamilnadu) Government has imposed Anti Dumping Duty on the raw material. Because of this prices have become 30% higher within the last three months. For the manufacturing of good quality products, 40% of the material goes as wastage (30% in cuttings and 10% in the process). This degrades the cost competitiveness of the unit. At present the China Made kitchen products are flooded in Indian market as well as in the World market and it has become very difficult to compete with the China Made products in the local market as well as in the international market due to the imposition of Anti Dumping Duty. It is also pointed out that the non stick utensils are available in the market which has no brand. These non sticky utensils are so cheaply available in the market that the Indian Manufacturers cannot compete with it. These are approximately 30% cheaper than the Indian products.
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SWOT ANALYSIS
STRENGTHS Well educated and experienced customer value with the best in class WEAKNESSES Price sensitiveness of the Indian customer Low/ limited capacity The prices of raw material are very high Low scrap items prices. Discrimination by state government in terms of introducing the Anti Dumping Duty. products to Wastage is on a very higher side. The wastage cost is very low
management Strong R&D Good infrastructure Strong marketing network Well established brand in international market. Enhancing
innovation and design Delivering customers Developing organization. Availability of electricity is sufficient. quality
OPPORTUNITIES Huge potential in domestic market Favorable central government polices except the Anti Dumping Duty Good consumer base in both
THREATS Fluctuation exchange rate Stringent quality norms of EU countries Cheap imports from China and other Asian countries Monopoly for the supply of raw material in dollar-rupee
international and domestic market Increasing demand in international market Align strategy for growth. Align and upgrade environment for future
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Findings The firm has the automated technique, which provides quality products to the firm. The sufficient space is available for the working. The cartelization of important raw material producers. No Monitoring agency for the steel prices. Intense competition in terms of quality from other countries, especially from China.