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MGT 401

Term Paper
ON

RFL Chair (RFL Plastic LTD)

Submitted To: Shawkat Kamal Senior lecturer Submitted By: Faysal Ahmed 05304073 Md. Samiul Islam 05104119 Yaseen Ahmed Salahuddin 05304068

BRAC BUSINESS SCHOOL

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Date of submission July 29th 2010

RFL Chair (RFL Plastic LTD)

Transmittal Message Shawkat kamal Senior Lecturer BRAC Business School 66 Mohakhali, Dhaka-1212. Subject: Letter of Transmittal Dear Sir, With great pleasure we are submitting our final report on rfl plastic chair. We have found this chair study of the report to be quite interesting, beneficial and insightful. We have tried our level best to prepare an effective & creditable report. The report contains the strategy taken by rfl company while they produce and marketing their product and a look at how it is done in the practical way. Here we have gathered information through different sources such as websites and actual interviews from admin and production department of RFL plastic company ltd. We honestly hope that our analysis will help to give idea about the strategy practice of a reputed plastic company. We hope you will find this report worth all the labor we have put in it. We welcome your entire query & take pride to answer them. Yours sincerely, Faysal Ahmed 05304073 Yaseen Ahmed Salahuddin - 05304068

Acknowledgement
Our acknowledgement begins by thanking our course teacher, Shawkat Kamal who has provided us with suggestions for making this Final Report and also provided us with the format for preparing this report. Then we would like to show our warm-hearted gratitude to Anup Padder (Management Trainee of RFL LTD) who has provided us with great deal of information, adequate data and helped throughout for the accomplishment of this report successfully. Finally, last but not the least, we all would like to thank each and every member of our group for all the hard works regarding the report and we ourselves like to congratulate us for the accomplishment of the report successfully.

Methodology
The report is based on primary data by conducting personal interviews with Anup Padder Management Trainee of RFL LTD, and secondary data obtained from the website of RFL LTD and the internet. We have work in a group of three and complied all the information together it was pretty hard for us to get all the informations because we had problems getting an interview with a superior officer of RFL LTD more over we could not find much informations in the internet.

Table of contents

Transmittal message...... 03 Acknowledgement 04 Methodology.. 05 Scope ... 07

The OrganizationIntroduction & History, .......... 08-09. SWOT Analysis................................................................................. 10 Production................ 11 Distribution.............. 12 Annual Report 13

Conclusion ............................................................................... ........ 14 Recommendation . ........ ................14 Reference .................................................................14

7 We have chosen this company because it is a Bangladeshi company and they are one of the largest manufacturers of indoor and outdoor plastic products for domestic and export markets in Bangladesh. As we are studying Business Strategy we thought by doing a report on this company we would learn how these types of Bangladeshi companies implement the business strategies in the real world. RFL LTD is a renowned company in Bangladesh not only for plastic products but also for products like Cast Iron, uPVC and Building Material Products.

1.1 Objectives
Our main objective is to represent a Term Paper on RFL Chair However; the main objectives of the report are given follows: Having knowledge about the company and their business strategies. To identify their distribution strategy. To identify their production process. To explore new segments of market and to cater to it To identify what the consumer needs and providing it to them Where the raw material comes from? To enhance the strength and skill of the organization that will contribute to company's increasing growth both in domestic and global markets To expand distribution network to make the products available at customers' doorsteps Finding out their long term goals and missions for sustaining in this competitive market.

Scope:
The use of fashionable plastic good like chairs is increasing at a rapid pace in the rural areas of Bangladesh. Despite being a developing nation, we see bright prospects in the plastic industries. However the use of plastic chairs in the urban areas is still to emerge. The prospects of the use of

8 plastic chares have tremendous potentials as we see the ever increasing uses of plastic products in Bangladesh. Thus we have chosen the topic RFL Plastic Chares for our project.

2.0 Company Overview


RFL is a nationally recognized brand in Bangladesh for plastic, PVC (Polyvinyl Chloride) and cast iron products. RFL Plastics, a subsidiary of RFL Industries is one of the largest manufacturers of indoor and outdoor plastic products for domestic and export markets. RFL Plastics Limited commenced its operation in 2003. The vision of the company is to make molded household products and furniture made of plastics of decorative design at an affordable price. The company's product ranges include household items like table ware, kitchen ware, cleaning accessories, storage containers, multipurpose ware, baby ware, hangers and furniture items like Arm Chair, Armless Chair, Table, Stool etc. Due to its perceived superior quality, innovative design and varying ranges, RFL has already been established as most preferred brand in plastic category in Bangladesh. With the expansion of its product line and capacity, the RFL products are now being exported in various countries around the globe. RFL has become a benchmark for competitors on the lines of quality by manufacturing premium quality products to give clients excellent services and true value for money. The unmatched products have given a big name to the domestic market so much so that the name is accepted with trust and quality assurance the nation over. This is possible because the company is professionally managed and promoted by people who ensure that creativity is given full freedom to blossom and talent is nurtured in the company.

2.1 History

9 RFL (Rangpur foundry Ltd) started its journey with Cast Iron (CI) products in 1980. The initial main objective was to ensure pure drinking water and affordable irrigation instruments for improved rural life. Today the company has its wide ranges of CI products like pumps, tube wells, bearings, gas stoves etc and has achieved the prestige as one of the largest cast iron foundry and light engineering workshop in Bangladesh. With a vision to serve the common people of Bangladesh with quality necessity products, RFL diversified its operation into PVC category in 1996 & in Plastic Sector in 2003.

2.2 Facts- current status of the company with findings


Plastic Product Lines of Chairs
RFL has a wide range of plastic products, as our report is on RFL chair we listed only chair related products below

Types of Product Arm Chair Arm less Chair Stool Table

Name of Product Arm Chair Arm less Chair, Slim Chair, Dining Chair Short Stool, Medium Net Stool, High Net Stool, VIP Stool, Square Stool, Deluxe Stool. Tea Table, Center Table, Baby Reading Table, Restaurant Table, Reading Table, Dining Table.

Comparison between RFL Chairs and their competitors RFL Chairs Arm Chairs
Arm less Chair Stool

Prices Average 000000 00000 000000

Bengal Chairs

Prices Average

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Prices Average

000000 00000 00000

00000 0000000 00000

10 By analyzing the above table we can see that RFL has a higher price in average than its competitors this is only because they want to portray themselves as a superior brand than their competitors and they also provide high quality products to their consumers.

3.0 SWOT matrix


Strengths RFL has achieved a strong brand image. It has selected a good relevant brand name for its products whereas other firms suffering from it. RFL talks quality and gives quality to its customers. RFL has updated manufacturing plant with the capacity to meet the demand. RFL has a wide variety of products which others do not have. RFL has achieved a good competitive advantage through its distribution coverage system. RFL has the state of the art machineries and equipments for manufacturing their plastic chairs and other products. They have their own R&D department for innovating new models and getting to know the taste and preferences of the consumers.

Weaknesses The prices of their plastic chairs are competitively higher than the other competitors.

11 Though they have good distribution coverage system, products are always available in posh urban areas but in some urban places they fail to provide the product in time, as a result they are losing a potential market share. Opportunities The Company has the option to expand its product folio by introducing plastic furnitures like office and school furnitures. The Company has the potential to expand to smaller towns and other geographies. Existing markets are not fully tapped and the company can increase presence by penetrating further. By doing this RFL will have the inherent advantage of this trend. Threats Their main threats are their competitors (Bengal Plastic ltd., Taj Plastic ltd. etc) which are also reliable brand names in Bangladesh People of our country still think that this type of plastic product will not give them that satisfaction what they could have from the wood furniture

Description of one of the opportunities of RFL The biggest opportunity for RFL Plastic chairs is that they are one of the market leaders in producing plastic products and they have a renowned brand in the market. By taking all these in hand they can make their own outlets for selling their products in the rural areas of Bangladesh which they are not doing. By doing this they can take away most of the market share because in the rural areas people prefers plastic furnitures more than wooden or any other kinds of furnitures.

4.1. Production

12 The factory is located 30 miles (50 km) East of Dhaka at Ghorashal, Narshingdhi and is equipped with 70 plus injection molding machine, the factory is about 600,000 square feet. It is fully equipped with state of the art injection molding, vacuum forming and blow molding machines with a conversion capacity of over 3,300 tons (3,000 MT) of resin per month. RFL currently utilizes 500 production molds and an in-house mold repair shop. Through vigorous selection and evaluation process, best quality food grade plastics are used as raw materials for manufacturing. Around 3000 workers under the supervision of more than 100 technical experts put their effort to give the shape of the consumer demands. Each process line of manufacturing goes through stringent quality control process and checked against slightest of non conformance. RFL has more than sixty machineries which produce all of their plastic products these machines are only stopped while changing the molds inside the machines. For producing the plastic good RFL uses the best quality raw material which is called resin it is mainly imported from Malaysia and Indonesia. The resin a raw material use for plastic products is given in the machineries and the mold of the plastic chairs or any other plastic products which they want to produce it inserted inside the machineries. After that the machines are turned on and most of the times the machineries are switched on twenty four hours non stop, it only takes few minutes to make one product, after the product is completed they send it to the inspection area when the inspection is completed the final product is sent to the nearest depot where it is stored and shipped to the distributers or the distributers come and take away the final product.

4.2. Distribution
RFL does not have any fixed distributers or any outlets for chairs of their own but all of their chairs are distributed by different types of retailers who clams to be the distributers if RFL, all of these distributers first has to go to their head office in Dhaka city and ask for how many items

13 they want and in what quantity, then they go to the nearest deport and give the receipts and take away their products and sell them in their retail stores and from their the final product reaches the final consumers.

5.0 Marketing strategy


They have their own sales outlets and distributors all over Bangladesh and also export their products in different countries outside Bangladesh. They promote their plastic chairs by advertising in medias like TV channels, radio, print media etc in Bangladesh. They also participate in different trade show or fair to promote their product. The company has its own R&D laboratory which explores about product and design innovations that can meet both expressed and unexpressed consumer demand.

Annual Report
Financial Performance of RFL Group RFL has performed outstanding in the market during last few years. The maximum amount of share capital that RFL is authorized, The amount of money that has been received by shareholders of RFL, profit before tax and after tax, earning per share , return on paid up capital, price earnings ratio and some other information of Last 5 years are given belowParticulars Authorized Capital Paid up capital Turnover (Net) Gross Margin 2005 200,000 100,000 383,007 79,694 2006 200,000 100,000 433,894 88,437 2007 200,000 100,000 440,923 89,513 2008 200,000 100,000 502,499 102,049 2009 200,000 100,000 556,564 113,266

14 Profit before tax Net profit after tax Tangible Fixed Asset Cumulative reserve and surplus Shareholders Equity Dividend Proposed (%) Return on Paid up Capital (%) EPS Price Earnings Ratio 191,68 11,402 107,991 39,111 155,111 16 18.94 1.89 11.22 200,02 12,149 95,128 42,982 158,982 16 19.87 1.99 10.19 225,89 13,547 86,178 47,519 162,519 16 20.54 2.05 14.56 255,15 17,493 76,960 68,049 168,229 18 20.71 290,64 21,871 71,390 51,599 172,099 20.50 21.87

2.07 2.19 34.52 52.81 Value in 000 Tk.

Conclusion:
RFL is creating a new movement in plastic industry. People are moving from wood furniture to plastic furniture. For these reason RFL have a good opportunity to grave the potential market. They always trying to giving the modern plastic furniture and they are doing it by producing different product model.

Recommendation:

15 RFL LTD is a very big company and the only few recommendations that we came up with is that as they do not have their own outlets for selling their plastic chair products and they also do not have fixed distributers they can implement some outlets of their own and make few distributers how will only sell their products. The need for plastic products are now growing in the rural areas and they can get a first mover advantage in this matter and give more value to their brands.

Take the Scrap into Account


Scrap is a major challenge for plastic products manufacturers. During production, there is always some excess material, such as flash, feed, or tail. This expected scrap must be taken into account when planning the material required for each job

Built-in Quality Management


Because variability in quality is present from raw materials through the manufacturing process, it is critical to have good processes and excellent quality systems. Good processes involve documentation and workflows, which RFL provides through integrated web-based help and interactive business models. RFL quality systems include integrated control plans, statistical process control, and failure mode effects and analysis (FMEA) at the design and process levels of the application. Combined with the ability to manage manufacturing issues by splitting orders and generating material review boards, RFL offers an industry-leading solution for built-in quality.

A Solution for Both High and Low VolumesAt the Same Time
Most plastic products manufacturers face the challenges of a mixed-mode environmentthat is, running high-volume production on some products and low-volume or discrete production on others. This often becomes a scheduling nightmare because of limited machinery capabilities and downtime during changeovers between products. IFS Applications provides a solution to this problem by making it possible to run some products as production line items (high volume) and others as discrete (job shop). IFS provides graphs and tables to pinpoint where the issues are or are going to be, allowing the scheduler to react faster and be more proactive. For the discrete order applications, a setup matrix that helps minimizes downtime during changeovers. IFS Applications also includes constraint-based scheduling (CBS) for production environments in which there are a need to schedule around a constraining workstation.

Reference:
http://www.rflplastics.com/aboutus.htm

16 http://www.google.com/ RFL Annual Report

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