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Organisation study at KERAFED

The organization study undertaken as a part of the curriculum was done at The Kerala Kerakarshaka Sahakarna Federation Ltd, (KERAFED) Thiruvananthapuram. This study provides an opportunity to expose the students to an industry / organization and its operational conditions. This study also aims at having a better understanding of various departments and its functioning.This report consists of a detailed study of the history of the company, product profile, organizational hierarchy, various departments and their functioning etc.

This study proved to be fruitful by familiarizing us to the organization and at the same time it also helped us to create practical awareness. KERAFED is one of the largest coconut oil producers in India. Its coconut oil complex at Karunagapally in Kollam district houses state-of the art facilities for extraction is one of the largest coconut oil mill in the sub-continent with an installed capacity of 200 TPD. KERAFED is the Apex Co-operative Federation of coconut farmers in Kerala. It is the single largest procurer of coconut/copra, produced in Kerala. It increases the income of 29 lakh farmers' families and creates employment opportunities is the industrial sector.


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Organisation study at KERAFED

Chapter- 2
Design of the study


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Organisation study at KERAFED

Objectives of the study

1. To study about the organization and how it functions.

To understand thee various functions of departments

3. To understand the flow of authority& responsibility of KERAFED 3. To assess the marketing efforts adopted by the company 4. To understand how the theoretical aspects are put to practice in the organization. Methodology

The type of research used for study is descriptive research. It includes facts, findings and enquiries of different kind. The major purpose of descriptive research is description of the state of affairs as it exists at present

Primary data.
Primary data is obtained through observation or through direct

communication with respondents in one form or another or through personal interview The primary data for the study obtained from: 1 .Unstructured interviews with Managers and Departmental heads, employees 2. Direct observation 3. Questionnaires

Secondary data.
Secondary data are those which have already been collected by someone else and which have already been passed through statistical process. The secondary data were collected from Company records

Journals Text books Annual reports Internet etc.


Organisation study at KERAFED

Scope of the study The study is intended to attain a first hand experience of the overall running of an organization. A detailed analysis of each of the activities performed by the departments is included in the study. It also provides a chance to see the practical constraints faced by the managers while putting theory into practice.

Limitation of the study

1. The company records which are of confidential nature were not provided. 2. Many of their financial audits are yet to be published and this limited the collection of data. 3. Since a face to face interview was conducted, there is a chance of biasing.
4. The busy schedule of the departmental heads restricted collection of detailed information

Period of study
The study was conducted from15 June 2009 to 25 July 2009


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Organisation study at KERAFED

Chapter---3 Industry Profile


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Organisation study at KERAFED

CHAPTER-2 INDUSTRY PROFILE The coconut palm is one of the most valuable plants to man. In Sanskrit the coconut palm is called kalpa vriksha, which roughly translated means Tree of Life. In India , it provides livelihood to about 10 million people through various activities from its cultivation to processing of its products. All the parts of the coconut tree can be put to useful purposes- the roots, the trunk, the wood, leaves, the blossom and all the parts of the nut.

Two major classes of coconut palm are typically recognized on the basis of stature: tall and dwarf. The ones most commonly planted for commercial purposes are the tall varieties, which are slow to mature and first flower six to ten years after planting. They produce medium-to-large size nuts and have a life span of sixty to seventy years. The dwarf varieties may have originated as a mutation of tall types. The dwarf variety may grow to a height of twenty-five to thirty feet and begin flower after three years, when they are only about three feet tall. Their life span is only about thirty years.


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Organisation study at KERAFED

India is the third largest coconut producing country in the world. Country Indonesia Philippines India Brazil Sri Lanka Thailand Mexico Vietnam Malaysia Papua New Guinea Production (MT) 16,300,000 14,500,000 9,500,000 3,033,830 1,950,000 1,500,000 959,000 940,000 710,000 650,000

Coconut Industry in India Coconut palms are grown widely in the coastal tracts of the country. The coconut economy of India is in a convenient status. India accounts for 22.34 per cent of the worlds coconut production and is one of the major players in the worlds coconut trade. Currently the crop is grown in 1.91 million hectares with an annual production of nearly 13000 million nuts. Copra processing, coconut oil extraction and coir manufacturing are the traditional coconut based industries in the country. The price of the coconut in the country is dependent on the prevailing price of coconut oil which is characterized by recurring violent fluctuations. The behavior of coconut oil price is relatively dependent on overall supply of oils and fats in the country. The fluctuation in the price of the coconut oil simultaneously reflects on the price of coconut. The volatile price situation often ends in the negligence of the coconut gardens, leading to attack of pests and diseases and low productivity. Of the range of ways, promoting cost effective coconut based farming system, product diversification and value

Organisation study at KERAFED addition play a crucial role in the stabilization of the coconut oil driven

domestic market and is essential for reorienting and engineering the Indian Coconut Industry cost effective and globally competitive. The Coconut Development Board has been playing pivotal role in promoting viable coconut based farming system, on-farm processing and products development. The production and marketing of value added products have started attracting commercial interest and the situation brought rejuvenation in the sector. The market promotional measures undertaken in pursuit of the popularization of health benefits of coconut oil and tender coconut water have attributed a stimulating effect on the less dependency of coconut oil driven coconut economy. There has been a well defined network in the country to undertake the R&D of coconut. The State Agricultural Universities, ICAR Institutes, Agriculture/ Horticulture Departments of States/ UTs, organizations like, NAFED, KERAFED etc. and private institutions contribute to the pursuit of the research and development process of coconut in the country.


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Organisation study at KERAFED


All India State-wise Final Estimates of area and production of Coconut

2005-2006 States Territories Andhra Pradesh Assam Goa Gujarat Karnataka Kerala Maharashtra Nagaland Orissa Tamil Nadu Tripura West Bengal A & N Islands Lakshadweep Pondicherry All India 104.0 19.1 25.3 16.4 385.4 897.8 18.0 0.9 50.8 370.6 3.3 24.9 25.5 2.7 2.1 1946.8 /Union AREA('000 Hectares) Production (Million nuts) 892.0 204.9 125.3 138.3 1209.8 6326.0 273.4 1.2 274.6 4867.1 7.0 323.5 87.1 53.0 27.9 14811.1 8577 10728 4953 8433 3139 7046 15189 1333 5406 13133 2121 12992 3416 19630 13286 7608 Productivity (Nuts/ha)

Strength of Indian Coconut Industry One of the leading producers of coconuts in the world producing 13 billion nuts per annum.

Organisation study at KERAFED Coconut area distributed in 18 states and three Union Territories under different

agro-climatic conditions. 3000 years' tradition in coconut cultivation. Premier coir manufacturing country in the world. Producer of best grade milling copra in the world yielding high grade coconut oil known for its aroma and flavor. Large number of farmer's co-operative societies in primary processing and marketing. Government agencies such as KERAFED, State Trading Corporation, Kerala State Marketing Federation and Karnataka State Marketing Federation in manufacturing and marketing of branded coconut oil in small packs. Hundreds of reputed and established private firms in manufacturing and marketing of various coconut products including branded coconut oil in small packs. Wide range of coconut products both edible and non-edible available for export. Technical know-how and trained manpower for the manufacture of various coconut based products. Good number of cultivars / varieties having specific nut characteristics. Availability of research support by reputed research organizations such as CSIR, ICAR and DRDO.

Coconut Products of India


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Organisation study at KERAFED A large number of coconut products are manufactured in the country which

have both domestic and export market. Vinegar and soft drink are manufactured in the country from coconut water. Tender coconut water is another product which is manufactured and marketed successfully. Coconut Products: 1. Tender Coconut Water 2. Copra 3. Coconut Oil 4. Raw Kernel 5. Coconut Cake 6. Coconut Toddy 7. Coconut Shell based Products 8. Coconut Wood based Products 9. Coconut Leaves 10. Coir Pith Coconut Oil Coconut oil makes up about 20 percent of all vegetable oils used in the world. Copra, the dried kernel is the chief commercial product from coconut, which is mainly used for oil extraction. Coconut oil is made from fully dried copra having maximum moisture content of six per cent. For the extraction of oil from copra the common method still prevailing in our country is by using rotary chucks. But the efficient system of extraction of oil is by the use of expellers. Coconut oil is an important cooking medium in Southern parts of the country especially in Kerala State. Besides, the oil has varied industrial applications. It is used in the manufacture of toilet soaps, laundry soaps, surface active agents

Organisation study at KERAFED and detergents, hair tonics, cosmetics, etc. It is used throughout the country as

a hair oil as it helps growth of the hair. As a massage oil it has a cooling effect on the body. Owing to these qualities coconut oil has a potential market in the country. Since the price of coconut oil in the international market is very much lower than the domestic price, the quality and attractiveness of consumer packs are important factors to compete in the world market. While the demand for coconut oil for cooking purpose is elastic, its demand as hair oil is inelastic. Coconut oil is marketed in bulk as well as in packs ranging from sachets containing 5 ml. to 15kg tins. The branded coconut oil in small packs is mainly marketed as hair oil and body oil. There are several brands known for their superior grade oil which have export market throughout the world. India has unbeatable quality advantage in this sector. Refined coconut oil is also manufactured in the country for industrial uses. Refined coconut oil is mainly used in the manufacture of biscuits, chocolates and other confectionery items, ice cream, pharmaceutical products and costly paints. Generally, filtered coconut oil is used for cooking and toiletry purposes. Virgin Coconut Oil Virgin Coconut Oil is also made in the country from the milk extracted from raw kernel. This is done on a small scale by the traditional method which is now partially mechanised or on a large scale by adopting wet processing technology. Coconut milk is fermented and then by mechanical process, water is separated from oil. No heating or application of sunlight or dryer is done for the process. The virgin coconut oil is free from trans fatty acid, high in medium chain fats (MCFA) known as lauric acid, which is identical to special group of fats found human breast milk and also rich in vitamin-E. High quality of this oil makes it an ideal massage oil for babies and also for skin and hair applications. Applications Cooking

Organisation study at KERAFED Coconut oil is widely used in cooking, the refined oil is the one most commonly used.

Manufacturing Coconut oil is used in volume quantities for making soap and cosmetics. Hydrogenated coconut oil is often used in non-dairy creamers, and snack foods. Fractionated coconut oil is used in the manufacture of essences, massage oils and cosmetics Coconut oil is an important component of many industrial lubricants, for example in the cold rolling of steel strip. Cosmetics and skin treatments Coconut oil is excellent as a skin moisturizer and softener. Coconut oil is used for styling hair, and cooling or soothing the head. As a fuelTraditional use Coconut oil is used in oil lamps. In diesel engines Coconut oil has been tested for use as a feedstock for biodiesel to be used as a diesel engine fuel. In this manner it can be applied to power generators and transport using diesel engines. Raw coconut oil can be used as a fuel for generating electricity by remote communities that have an abundant supply of coconuts and milling capacity, provided diesel engines are adapted. Coconut oil is currently used as a fuel for transport in the Philippines Health effects Studies have found that coconut oil can help in weight loss and poison recovery. Antimicrobial effects Coconut oil be used in the treatment of fungal infections.

Organisation study at KERAFED

Coconut Oil - Unique & Healthy

Coconut oil finds extensive use in food, toiletry and industrial sectors because of its unique characteristics. The numerous qualities of coconut oil reported are:

Oil of natural origin Edible in raw form Saturated and stable Pleasing flavour Light colour Pleasant aroma Biodegradable High resistance to oxidative rancidity Sharp melting behaviour Narrow temperature range of melting Skin friendly oil Effective heat transfer agent in frying Better shelf life for fried product Ideal for deep frying Ideal confectionery fat Provides moisture barrier and imparts high gloss for bakery items in spray oil use Carrier and protective agent for fat soluble vitamins Low viscosity Superior baby oil Oldest and most widely used cosmetic raw material Maximum glycerin content Easily saponifiable even in cold Good emollient on skin, skull and hair Gives softness and suppleness to skin on regular massaging Spreads easily on the skin when used as massage oil

Organisation study at KERAFED

Excellent base for hair oil Provides gloss to hair Germicidal and antimicrobial property Lowers evaporative loss of water from skin Protects skin from heat Ready penetration into the skin and appreciable water absorbing property Nourishes the hair roots and provides coolness to the body Imparts hardness and lathering property to soaps Illuminant and lubricant Does not leave a smoky flame if used in open lamps Blends well with other oils Potential fatty raw material in chemical industry due to its biodegradable nature Excellent fat source in the preparation of filled milk and infant food formulae Essential for the manufacture of toilet soaps, shaving cream, liquid soaps, natural shampoo and other cosmetics No harmful effects due to reheating Can be converted into diesel fuel Essential ingredient in ghee substitutes
Nutritional / Medicinal

Easy digestibility and absorbability Ideal energy source in baby foods Contains Vitamin E Composed mainly of short and medium chain fatty acids which have desirable qualities and functions Does not contain cholesterol Reduced fat accumulation in body Easily oxidized and therefore a preferred energy source

Organisation study at KERAFED Requires no transport system to absorb, digest and metabolize

Very low content of Omega 6 fatty acid Studies undertaken by the Biochemistry Department, University of Kerala showed that coconut oil: Does not elevate blood total cholesterol Increases blood HDL cholesterol
Consumed along with coconut kernel lowers blood cholesterol

Copra is the dried meat, or kernel, of the coconut. Copra making can be defined as the systematic process through which the fresh meat coconut containing 50 to 55% moisture is dried in sun or other sources of to bring down the moisture content to 5% to 6% only.

Eleven to twelve month old nuts are utilized for copra making to obtain the optimum output of better quality copra. The nuts are first husked to remove the fibrous outer layer of the husk. The husked nuts are then split into halves and the water is drained off. These halves are then kept for half an hour with the open side turned down to ensure that entire water is drained off, if this is not done , some moisture will be retained which will in turn lead to deterioration of copra. The halves or cups are now ready for drying, which should invariably start with in 4 hours after breaking. Two types of copra namely milling and edible are made in India. Milling copra is used to extract oil while edible grade of copra is consumed as a dry fruit and used for religious purposes. Milling copra is generally manufactured by adopting sun drying and artificial means. Substantial quantity of milling copra is manufactured using modern hot air driers resulting in the availability of superior quality copra which is required for the manufacture of best grade coconut oil. A good number of farmers' coIMK ADOOR Page 16

Organisation study at KERAFED operative societies are also involved in the manufacture and marketing of

milling copra. Milling copra is available in different grades. Edible copra is made in the form of balls and cups. Different grades of edible copra are available in the market according to the size, colour etc. Quality of copra is determined based on moisture content and extend of inferior type of copra.

Inferior types of copra are generally: 1. 2. 3. 4. Mould effect Immature or rubbery copra made from immature nuts. Insect attacked copra. Discoloured copra. Good quality copra is one which contains not more than 6% moisture. Coconut oil is obtained by crushing copra most efficient method of extraction is by expeller. Various Methods Chucks Rotary Mills Expellers Yield of oil 58% - 60% 62% - 63% 63% - 65%

Coconut Cake


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Organisation study at KERAFED Coconut cake is the residue left after the extraction of oil from copra which is

mainly used as a cattle feed. Coconut cake contains 4-5 per cent oil which is extracted by solvent extraction process. This oil is generally used for industrial purpose and de-oiled cake is used to make mixed cattle feed. There are a few such units in the country especially in Kerala.

NAFED National agricultural cooperative marketing federation, which was organized in 1958, represents the entire marketing structure at the national level. It was established with the object of coordinately and promoting the marketing and trading activities of the members in agricultural and other commodities. Their main objectives are: To make arrangements for the supply of agricultural requirements of

its members. To promote interstate and international trade in agricultural and other

commodities. To render advice and technical guidance to its members.

The main aim of NAFED is to assist the marketing of cooperatives in the states to develop their marketing business. In order to achieve this NAFED adopts various strategies with a view to ensure better returns to the farmers. It undertakes price support operation, buffer stocking, export and important of commodities etc to balance production with consumption. When the government of India formulates policies for support price in respect of certain commodities, it appoints NAFED as its agency for procurement. Coconut Day (2nd September) September 2nd , of every year has been designated as coconut day as per the decision of Asian and Pacific Coconut Community head quarters at Jakarta,

Organisation study at KERAFED Indonesia. Foundation day of APCC also falls on 2nd Sept. A major coconut

growing countries including India are the members of the APCC. The celebration of the annual coconut day is aimed at creating more awareness on the importance of the coconut and focusing world attention to this crop to enhance its potential in alleviating poverty, encouraging investment in the sector and promote total development of coconut industry in the member countries. In India coconut development board is taking the lead in the annual celebration of the coconut day


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Organisation study at KERAFED



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Organisation study at KERAFED Company Profile


Kerala Kerakarshaka Sahakarna Federation Ltd, (KERAFED) was registered under the cooperative societies Act in 1987, with assistance of European Economic Community, National Cooperative development Corporation and the Government of Kerala.. KERAFED is the Apex Cooperative Federation of coconut farmers in Kerala and is the largest producer of coconut oil in India. The federation started commercial production in 1993. The head office of KERAFED is located in Thiruvananthapuram. KERAFED's coconut oil complex at Karunagapally in Kollam district is one of the biggest such units in India, with a capacity of 200 Tons per day. The primary objective of Kerafed is to organize coconut growers by bringing them under the cooperative umbrella and to provide them with all supplies and services to augment their income base by increased productivity and value additions through the integrated system of production achievement, storage , processing, diversification and marketing of coconut oil and all/any products of coconut palm at a price remunerative to growers and fair to consumers. As the coconut farmers in Kerala were reeling under the strange hold of powerful p country trade cartels that consistently manipulate market conditions and dictate price trend to their advantage , Kerafed aimed at procurement of 50% to60% of the total coconut / copra produced in the state which will be processed at its own processing unit and marketed. KERAFED is the single largest procurers of coconut / copra produced in Kerala from 900 societies all over the state. KERAFED has a good distribution network consisting of stockiest , dealers and suppliers.


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Organisation study at KERAFED

The Objectives of KERAFED are: To reduce edible oil imports. To provide an impulse effect on internal production of coconut. To develop the agricultural potential of Kerala State. To strengthen the co-operative movement. To secure the marketing of coconut and its by-products, thereby assuring economic prices to the growers. To establish and manage infrastructure facilities for production and supply of inputs and processing, manufacturing and marketing of products and by products of coconut palm. To undertake research and development activities on production , processing and marketing. Thus to increase the income of 29 lakh farmers' families and create employment opportunities is the industrial sector. For effectively and efficiently carrying out the administrative and operational practices on a day to day basis, the state is divided into three region, .the southern region, the northern region and central region. The southern region consists of the revenue districts Thiruvananthapurm, Kollam, Pathanamthitta, and Alaphuzha, the northern region consists of Malappuram, Kozhikkode, Wayanad, Kannur and Kasargode districts and the central region consists of Kottayam, Idukki, Ernakulam,Thrissur, Palaghat districts. 300 primary agricultural credit cooperatives societies in each region are members of the federation to undertake production, procurement, marketing activities at the farmers level. For processing and product diversification, each region will have one processing plant with a capacity 200 tones of copra per day.


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FARMER FRIENDLY ORGANISATION For over 29 lakh coconut farmers in the state, Kerafed has been a beacon although, offering them attractive support prices for coconut and copra during unfavorable market conditions, procuring copra under the price support scheme on behalf of NAFED, Government of India and rendering value added services to enhance their earnings through improved activities productivity, and to by assisting them in production and help seminars farmers, and procurement. Apart from these, the Federation organises periodic extension like demonstration farms, training camps, exhibitions,

publication and distribution of bulletins and literature on coconut farming Also Kerafed reimburses the expenses for establishing copra driers, through the primary agricultural co-operative societies.

Sl. 1 2 3 4 5 6

Members of the Federation Government of Kerala Kerala state cooperative agricultural Kerala State Cooperative Agricultural Development Bank Ltd. District Cooperative Banks Ltd. Primary Cooperative Agricultural Bank Primary Agricultural Cooperative Credit Societies 1 1 1 9 25 898


935 Nos.


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Organisation study at KERAFED Value-Addition unit at the Kerafed Oil Complex Karunagapally

It has been decided that the Kerafed should diversify its activities through a valueaddition project. The 5.4-crore project would help produce 1,000 tonnes of desiccated coconut, 2,100 tonnes of coconut cream and 3,500 tonnes of coconut milk annually. As many as 103 lakh coconuts would be required for the project each year. Fifty per cent of the products were to be sold in the domestic market and the remaining exported.


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Organisation study at KERAFED

Copra Procurement Process

Farmers or coconut growers

Primary agricultural cooperative society


Mobile Team of Kerafed

Processing,plant /Godown

The coconut farmers deposit their product with the respective Primary Agricultural Cooperative Society and collect the rate of copra prevailing in the market on that particular day. Primary Agricultural Cooperative Society on their part check the quality of the copra and inform the KERAFED about the procurement details. The respective mobile team officers visit the society and collect the same after checking the quality and transactional details. This copra is then transferred to the processing plants.


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Product Profile

"KERA" Brand of coconut oil is produced by KERAFED from copra of the finest quality, directly procured from coconut growers in Kerala the land of coconuts. The copra thus procured is processed using the most modern technology. In the selection and processing of copra, KERAFED employs strict quality control measures to ensure product superiority and purity. A unique two stage filtering process is employed by KERAFED to retain the original aroma and flavour of coconut oil for a long period. "KERA" Brand of coconut oil is known for its quality, purity, longer shelf life and reasonable price. Its quality is conformity with the grade specifications laid down by the Bureau of Indian Standards vide IS: 542-1968. Certificate of Authorisation to grade "KERA" coconut oil under AGMARK has also been obtained. Kera, the branded oil from KERAFED, apart from being delivered in packages of 100 ml, 200 ml, 500 ml bottles, half and one litre pouches, 8 ml sachets, one litre pet bottles, 5 kg cans and 15 kg tins, is also marketed in bulk. The raw materials used for these packing are of virgin / food grade, approved by CFTRI, Mysore / other Government approved agencies. Secondary packing is done using 3/5 ply corrugated cartons, as per specifications. Apart from meeting the marketing needs in Kerala , Tamilnadu, Karnataka and Andra Pradesh etc, the programme to popularize the brand in cities like Newdelhi, Banglore, Mumbai and Kolkata is already on the roll. Kera has gone globally with export to Middle East countries. Kerafed had tie up with a leading retail chain in Dubai and Abu Dhabi for the two brands ,cooking oil `Kera' and hair oil `Kera Kesh'. There are also plans to develop more herbal oil products from coconut, as the federation has recently introduced 'Kerajam Kesamrudam' herbal oil in the state.


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Organisation study at KERAFED

KERA is proud to be patronized by millions as the tastiest of all cooking mediums and the most ideal hair oil. Truly the colour of gold and the smell of yore, KERA enjoys an undisputed plurality of the market share in keralites. Not resting on the laurels, the thought process is already at work at Kerafed. Plans are afoot to enter into the field of producing highly demanded coconut related products like desiccated coconut, coconut cream, bottled tender coconut water, coconut milk and confectionery products etc. It is hoped that the good will of KERAFED build up by high customer satisfaction by the performance of products like Kera, can be thus employed to conquer newer domains. Kerala -a feat achieved by ultimate customer satisfaction. A permanent place in the hearts of housewives, chefs and every food loving

Kerafed at a glimpse
Integrated development of coconut and coconut products Copra selection as per BIS parameters for processing Most sophisticated processing facilities Quality control laboratory with AGMARK guarantee By far the largest coconut oil mill in India Storage capacity of 2100 tones per day A predominant share of the market in Kerala is enjoyed by Kera, the year at economical rates. Safeguards the interests of over 27 lakh coconut farmers in Kerala


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Organisation study at KERAFED


Department Profile


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Organisation study at KERAFED


FUNCTIONAL AREAS Departmental study Organization structure Organization structure is the systematic arrangement of the people working for the organization to achieve predefined goals . The structure has two dimensions horizontal and vertical. The horizontal dimension indicates the departments and vertical dimension indicate hierarchy. Board of Management elected by members of the federation is headed by a Chairman. From those members an executive committee and a Chairman are elected. The federation has to get the approval from the board before implementing major decision. Managing Director appointed by the Government of Kerala is the supreme authority of the federation, normally an outside person. Director (projects) is at the top of the organization hierarchy among the employees of the organization. The departments in KERAFED are:1. Marketing Department. 2. Finance Department. 3. Cooperative Development Service Department. 4. Production centres. 5. Administrative Department.


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Organisation study at KERAFED

Chapter-6 Organization chart


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Organisation study at KERAFED

Organization structure
Managing Director Director Projects Marketing Manager Finance Manager Manager (CDS) Senior A/C Administrative Officer Plant Manager

Assistant Manager & Regional Managers

Assistant Manager & Assistant Manager (A/C)

Assistant Manager Packing

Confidential Assistant / Typist

Confidential Assistant


Assistant Manager (Mechanical & Production)

Junior manager (Quality Control)


Confidential Assistant / Typist

Supervisor Lab

Supervisor (Production Material)

Shift-in Charge (Filling)

Shift-in Charge (Mill)

Supervisor (Maintenance)


Godown Packing / Material Assistant

Supervisor (Filling)

Supervisor (Mill)


Workers IMK ADOOR Page 31

Organisation study at KERAFED

Marketing Department
Marketing Department is controlled by Marketing Manager, who is assisted by Junior Manager , three Regional Managers and Branch Managers. Below them are the confidential assistant and clerks. For each districts in Kerala , there are two marketing apprentices. the marketing department strategies and efforts helps the federation to increase the sales through the advertising, sale offers/discounts and creating proper distributing channels. KERAFED has it all-an aggressive marketing strategy, energetic sales team with an insight into the future. Structure of marketing department Marketing Manager Assistant Manager Confidential Assistant Functions To find new markets. Deciding pricing strategies. Strengthening the agency network. Appointment of agencies. Forecasting the demand. Creating awareness. Collection of payments. Grievance redressal of customers. Keeping relevant information and exchanging with other Regional Managers Branch Managers


Organisation study at KERAFED


The main objectives of marketing department are: Selection and appointment of stockiest/agents/direct sales customers

and others. Price fixation , fixation of sales commission and overall sales policy

including market budget. Order evaluation and acceptance of order registers, priority booking

registers, dispatch registers. The marketing manager monitors the pulse of the market, competition prevailing in the market , activities of competitors , demand levels etc. he analyses all such situations and then takes effective promotional activities .the assistant sales manager is concerned with general duties like finding out market of Kera oil by field work. The sales officer and other staffs in the department help to strengthen the link with agents.

Advertisement of KERAFED products are mainly done through media and such type of things are done by star communication. Main channel of communication with the customers are : 1. 2. MEDIA PRINT MEDIA News paper Magazines etc.


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Recently the advertisement of KERAFEDs products shown in Asianet and in Kairaly channel

PLACE (Distribution)
Apart from private distributors, Kerala State Civil supplies corporation and Consumer Federation has taken up distribution in the public sector . Thus confirming the availability of Kera to consumers year round. Additionally in Kerala itself Kerafed have around 5000 retail outlets selling Kera. Apart from meeting the market needs in Kerala, Kera has made its presence felt in States like Madhya Pradesh, Tamil Nadu, Andhra Pradesh and Karnataka also. The programme to popularize the brand in cities like Newdelhi, Banglore, Mumbai and Kolkata is already on the roll. Kerafed had tie up with a leading retail chain in Dubai and Abu Dhabi for the two brands ,cooking oil `Kera' and hair oil `Kera Kesh'. Exported 40 MT to middle east in 2006-07. Kera is currently part of the biggest retail network - CSD, Ministry of Defence. Oilseed co-operatives like Karnataka Oil Federation (KOF), Tamil Nadu Co-operative Oil Growers Federation (TANCOF) and Oil Federation of Madhya Pradesh will all soon be complementing the already existing marketing and sales channels of Kera, in their respective States. The marketing officials are visiting 50 outlets per day by which a consultant rapport is kept with the retailers were fixed to stock kera. The distributors network was revived and distributors were appointed wherever vacancies existed . In addition , non performing distributors were replaced . all the distributors were given a target based upon the market potential and they were fixed to keep minimum of one week stock in Godown. The complaints of distributors , retailers and consumers were immediately solved.

Organisation study at KERAFED Sales `Kera' from `Kerafed' continues to play a dominant role as cooking oil in the

Kerala market. Between 400 and 600 tonnes of `Kera' coconut cooking oil was sold in Kerala, in pouches, every month. Kerafed expects to sell about 20 tonnes of coconut cooking oil in the Gulf market every month. Sales creates record during the Onam seasons. Kera sales volume 1 liter 500ml 100ml and others 75% 20% 5%

Districts Thiruvananthapuram Kollam Pathanamthitta Alappuzha Kottayam Idukki Ernakulam Trichur Palakkad Malappuram Kozhikode Wayanad Kannur Kasargode

District wise sales(MT) 2007-08(9Months) 676.90 1193.30 316.35 483.03 540.56 67.57 897.35 227.70 161.92 102.96 315.98 123.9 87.08 140.48


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Cooperative development services Cooperative development services department is responsible for the procurement of coconut / copra from PACS and individual coconut farmers. KERAFED is the single largest procurer of coconut in Kerala. Its primary function is to procure coconut and copra from the producers through primary co-operatives with support price declared from time to time by the Union Government. The direct interaction with the farmers eliminating middlemen results in the entire benefits accrued to the farmers and only best of raw materials then sourced goes into the making of Kera. KERAFED gives much importance to the quality of collected copra and therefore
lending moisture meters to the PACS at a subsidy . this ensures the quality of copra procured, even at grass root level.

CDS departments is also dealt with purchase of packing materials such as cans, pet bottles, carry bags etc. these are purchased by inviting quotations annually. The firms quoting lowest bid is selected. .

Structure of Cooperative development services department Manager CDS Senior Accountant Assistant manager (packing) Senior Assistant


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Organisation study at KERAFED Cooperative development services department forms an integral part of the activities of the firm . Superior quality copra is required for the manufacture of best

grade coconut oil. Since the availability of copra is comparatively seasonal, sometimes a large quantity of copra should be stored for meeting festival seasons.

Purchase policy
The whole procurement policy is aimed at giving maximum benefits to the farmers.

As per procurement policy , Kerafed has to collect coconut through PACS. But the so collected coconut is insufficient to meet the demand , it can collect from the individual farmers also. Members societies get the market price plus Rs 40/ quintal, in addition to service charge since the coconut / copra is collected at the plants , actual transportation cost is also paid. Kerafed has procured 9501.5MT copra during 2006-07 and 7751MT in 2007-08(9months). In addition to copra, Kerafed also purchased coconut from farmers directly at 4 Rs 40 paisa / coconut. Kerafed is constantly trying to increase its copra procurement by giving more incentives to the primary agricultural cooperative societies that procure more copra. This will motivate other societies to boost up their copra procurement. The copra procurement guidelines are issued time to time , to which concerned officers act accordingly. The finished goods reaches the consumers through distributors appointed in districts and cities.

The main competitors of KERAFED in the state are KPL SHUDHI, THEJAS, KLF NIRMAL etc .Parachute is the main market leader in the Indian branded coconut oil industry. The main players in the Indian market are SHALIMAR, COCO CARE, TATA products etc.


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Organisation study at KERAFED

FINANCE DEPARTMENT A well managed financial department is the strength of a good business enterprise . In Kerafed , finance department is headed by finance manager responsible for all the financial transaction, procurement and allocation of funds are the major function of finance department. The main sources of funds of Kerafed are;1) Share capital contribution of government of Kerala. 2) share capital contribution by cooperative institutions. 3) Loans from NCDC, cooperative banks and government of Kerala. 4) Grants and subsidies. These funds are employed for the procurement of copra, marketing expenses and administrative expenses etc. Structure of finance department Finance manager Assistant manager(accounts) Senior Accountant Accountants Cashier The major functions of the finance department are; Accounting. Auditing. Internal Auditing. Statutory Auditing. Government Auditing. Assistant manager( Finance ) Staffs

Releasing the payments and collecting receipts from contract with outsiders.

Organisation study at KERAFED

Information management Budgeting The various sections working with the finance department are ; Budgeting Commercial Accounts Bill Passing Establishment Cash Works One of the primary functions of the finance department is maintaining the books of accounts .in this process extensive use of computers are employed for the purpose of feasibility and accuracy. The trial balance is prepared on this basis of the various ledger folios and other transaction details and then profit and loss account and balance sheet is prepared based on trail balance. Budgeting is one of the other vital activities undertaken by this department. The budgeting process involves prediction of future sales and the preparation of estimates based on that sales. Data such as future sales are provided by the marketing department on the basis of past sales details and current market conditions. The future production , labour, cash and other resource requirements are detailed in the budget. The budgeting is an all important task and no margin of error is expected in this activity. The process of internal auditing is conducted by cooperative wing auditor assisted by the finance department and statutory audit by an professional chartered accountant. The finance department of Kerafed conducts inspection of concerned transactions details of primary cooperative societies. The salary of an employee consists of basic pay, increment, dearness allowance, city compensation allowance which is paid monthly to employees. The payroll will be prepared one day before the disbursement , enabling the employee to see different allocations before he accepts the salary . The mode of payment is through bank or cash counters according to the employees wish. The cash section deals


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Organisation study at KERAFED with the payment and receipt of cash. The payment exceeding Rs 20000 will be in

cheques. Finance department maintains a full record of all activities in computers . Consolidated records of accounts are made using computers.


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ADMINISTRATIVE / H R DEPARTMENT In KERAFED Administrative department is responsible for general as well as personnel administration. Administrative officer is the head of the department .In KERAFED administrative department is just like the H.R department commonly seen in other organization. The functions of administrative department includes;1) General as well as personnel administration.
2) Administrative functions , includes attendance monitoring , recording and

controlling absenteeism etc. 3) Other functions like providing canteen services, ESI , Provident fund , accident benefits. 4) Keeping and maintaining confidential report of each employees for the purposes like promotion , fringe benefits , training etc. 5) Maintaining the relationship with workers and organization. 6) To provide sufficient and adequate training to employees when any technological changes are introduced. Employee profile Category Permanent employees Deputation Contract Temporary and casual Employee Compensation Structure 1) Basic salary. 2) Dearness allowances. 3) Home rent allowances. 4) City compensation allowances. 5) Special allowances.

Number of employees 95 7 12 147

Organisation study at KERAFED Medical reimbursement schemes are also available for the workers and

gratuity is given in collaboration with Life Insurance Corporation of India. Paying bonus 8.3%(minimum bonus). One day leave as compensation and ESI.

Structure of administrative department Administrative Officer Confidential Assistant Clerks / staffs This department is responsible for the human resource activities of the firm and has got a vital role in the company . The administrative officer acts as a link between government and the organization . He has the responsibility to monitor and inform the activities of the organization to government and pass the government the organization.

Recruitment Employees are recruited through 1.The Kerala State Public Service Commission. 2.By deputation from other department. 3.Through direct recruitment by the board.

Organisation study at KERAFED

4.On contract basis. Training and Development Staff and employees are given training in office management in association with HRD . Employees are also given computer training .various training programs are given to workers also. Employee compensation KERFED employee compensation structure contains: 1. Special allowance.
2. House rent allowance.

3. Dearness allowance. 4. Basic salary.

Trade Unions Trade unions are voluntary organization of employees or employers formed to protect and promote their interests through collective action .their presence is felt in all activities of an organization. In Kerafed there are two trade unions for employees ; 1) Kerafed staff association . 2) Kerafed employees organization .


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PRODUCTION PLANT The production department function of Kerafed is to manage the production and to produce the product according to the demand. Production department undertakes the process of transformation of copra into oil and oil cake. A series of processing is used to convert copra into oil. The machine and equipments in Kerafed is installed in straight line basis. The capacity of the plant is 200MTPD (Metric Tonnes per Day). The raw material copra is send to the plant by carriage. when it enters the factory gate it is send to the weight bridge for checking the weight and then it is send to the Godown and unloaded. The Quality department reaches there and do the physical inspection, takes samples of copra to test whether the copra is rubbery of fungus affected and also test the moisture content of copra . Based on the standard prescribed by Kerafed , if all the things are right then it is accepted for processing. The production department of Kerafed has the following three division. Storage division. Manufacturing Process. Packing and filling unit.


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Organisation study at KERAFED

Hierarchy of Production plant

Plant Manager

Assistant Manager (Mechanical & Production)

Junior Manager (Quality Control)

Supervisor (Production Material)

Shift-in Charge (Filling)

Shift-in Charge (Mill)

Supervisor (Maintena nce)

Supervisor Lab

Godown/ Packing / Spares Assistant

Supervisor (Filling)

Supervisor (Mill)




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Organisation study at KERAFED

Storage Division. The storage capacity of Godown is 6000tonnes. The gigantic size of the Godown is not proportion with the amount of copra procured. Thus almost 50% of the Godown capacity is unutilized. The storage division follows FIFO method of issuing. for processing. The pros and cons due to this method are; The copra that comes first goes out first. Thus no accumulation of old stock is allowed and there by no wastage as a result of decay or low quality. The effect of current market price is not at all considered in FIFO method because the stock assed now may have been purchased at a very early time with different market price and so it will be difficult to fix the sales price. The Godown section is headed by an officer in charge whose office is situated inside the Godown. He maintains the records pertaining the intake of copra and also transfer of copra to the manufacturing division. copra to be transferred to the manufacturing division is done through conveyors whose base starts from within the Godown. There are nearly100 temporary loading and unloading workers at the production plant. Manufacturing Division The manufacturing unit is headed by a technical officer whose cabin is situated with in the manufacturing unit. The production plan of the unit depends on the market demand of the product. It depends or varies on the festival seasons. More product is required during the festival seasons especially during onam. There are mainly three shifts in the factory. The man power required to run the unit per shift is 16. Fire Extinguisher, Gas masks, Safety belts and First Aid box etc are provided to ensure the safety of employees.

Organisation study at KERAFED

The machines that are operated : 1) Conveyor systems used for copra loading. 2) Copra cutting Cutter for slicing copra. 3) Boiler system for heating copra. 4) Expellers for copra crushing . 5) Filters for oil filtering. 6) Tank forms for oil storage . 7) Packaging. Manufacturing process Well dried copra with a moisture content not exceeding 6 per cent is cleaned well from any foreign matter. In the manufacturing unit , dried copra is received through the conveyors and is directly passed through a cutting machine and there it goes for crushing. After crushing , the copra is converted into small which are required for the purpose of extraction. These small pieces are transferred to the expellers by small passages consisting of crushed blades and gates. The crusher blades crush the pieces of copra into smaller pieces before being fed into expellers . The purpose of gates is to check the flow of any unwanted substances into expellers. If any waste substance is found along with the copra then the gates are closed and the entire lot is carried back in the return passage and cleaned before reintroducing it into the expellers . The crushed copra is then put into the expellers and first extract oil, second extract oil etc is derived which is then passed on to the first filter and then the second filter . This process of double filtration provides pure and high quality oil. This oil is then passed on to the storage units through pipelines and the oil is stored in the bulk for sediments in order to get clear oil for one week. After one week it is used for packing and filling. The oil cake obtained as a by-product will find a ready market as a cattle feed and in the manufacture of mixed cattle feeds. Extraction from copra Oil content

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Oilcake Loss

Organisation study at KERAFED 32%


The entire process and machinery in the manufacturing division is automated and thus requires minimum labour. The modern equipment in the unit ensures smooth flow of work as well as contribute to the overall quality of the final product. As the machines are laid on straight line basis , any error in anyone unit except the expeller can cause a temporary halt or delay in the work. PRODUCTION PROCESS CHART Copra GODOWN CLEANER CUTTER Oil OIL TANK Oil CRUSHING UNIT EXPELLER (Stage -1) EXPELLER (Stage -2)
Oil cake


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The oil complex at karunagapally houses State-of the art facilities for extraction, processing and packing of coconut oil under extremely hygienic conditions. Packing And Filling Unit is highly mechanized and here oil is usually packed in different packs ie ; from 6ml sachets to 15 kg tins. As per the demand the packing division takes oil from the storage tanks and uses it for filling into sachets, pouches and bottles . Strict quality specifications are followed in terms of material used as packing material The raw materials used for these packing are of virgin / food grade, approved by CFTRI, Mysore / other Government approved agencies. Secondary packing is done using 3/5 ply corrugated cartons, as per specifications . This section is headed by a separate officer, shift-in-charge whose cabin is located inside the packing unit. Due to this layout , the officer can have a complete view of the unit and effective control over the unit. Man power required per shift is 37. Bottling filling line in the plant can automatically fill and seal bottles .There is also a sachet machine which fills oils in 6ml sachets. The role of manual labours in this unit is limited. Machine Pouch Filling Machine Single Double Tin/ Can Bottle Filling Line machine Sachet Filling Machine 2 1 1 1 1 Number

Quality Check process in this unit is undertaken under two levels, increase of the oil quality and also the quality of the packing material . Before any oil is used for packing the Quality Control lab technically checks that the lot of oil on

Organisation study at KERAFED the basis of specified guidelines due approved , the process of packing is

undertaken. The price of the product varies frequently and on that basis the machine is adjusted to print the existing price. In the packing unit manual weighing is also conducted after the oil is packed to ensure 100% accuracy.

(2)QUALITY CONTROL DEPARTMENT Quality specifications of a global standard are adhered to by KERAFED stringently at all stages of production. To the extend that only Grade I copra certified by the Bureau of Indian Standards (BIS) is set aside for aside for processing . KERAFED'S quality control laboratory meeting AGMARK parameters confirms the purity of Kera. Every load arrived at Godown is subjected to quality tests, to detect inferior types of copra. Inferior types of copra are generally : 1) Mould effected. 2) Immature or rubbery copra made from immature nuts. 3) Insect attacked copra. 4) Discoloured copra. And to find out the Moisture content. The fungus seriously affects the grade of oil. The moisture content affects the shelf life. If the load fails the Quality test, the load is rejected. If the load passes the quality inspection, the load is accepted and deposited at KERAFED Godown. In order to ensure quality , initially Random sampling techniques is used .Random sample is drawn for its moisture test at the laboratory . Copra with moisture content below 6% is normally accepted for processing in KERAFED. Once the Quality Report is ready from section, the Material Receipt and Service Request prepared by the Procurement Section is given to Account Section for the


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Organisation study at KERAFED Approval of the cost of material and then passed by plant manager.

The oil extracted is subjected to the following tests: 1) Acid Value This is a test to asses the quality of oil. Free Fatty Acid content in the oil is examined. This is to determine the grade of the oil. If Free Fatty Acid content in the oil is 0 to 1.5 it is considered as 1St grade. 1.5 to 3 it is considered as 2nd grade. But both can be used as edible oil. 2) Moisture Test Presence of moisture decreases the shelf life of edible oil. In KERAFED the maximum permissible moisture content in oil is .25.if the moisture content is 0.1 , the oil will be very high quality . it will be transparent with pleasant odour. 3) Colour test Kera oil posses calculation is Y + 5R Where Y indicates Yellow R indicates Red. The value of Y and R is obtained from an instrument called Lovibond Tintometer. A value up to 4 units is permissible. 4) Unsaponification matter a light Yellowish tinge. The formula used for the


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Organisation study at KERAFED It is an important test carried out to find the adulteration in the oil. Here

adulteration tests are not required at Kerafed because kera is its product. As it has no profit motivation , question does not occur. The oil content of oil cake obtained as a by-product is also tested. Usually shelf life of any coconut oil is 6 months but kera oil has a shelf life of 1 year which speaks of the high standards of quality maintained.


Departmental Hierarchical of Quality Control department Product Specification/ Oil Standard

Moisture % wt., Max. 0.25 Colour in 1/4 cell Lovibond Y+5R, not Deeper than Acid value, Max. Unsap. matter % by wt., Max. Polenske Value, Min. 4 2.0 0.8 0.8


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Organisation study at KERAFED





POTENTIAL ENTRANTS Entry Barriers Threat of New Entrants

Bargaining Bargaining Power Power





The competitive structure of industries is a very important in business environment .Identification of forces affecting the competitive dynamics of an industry will be very useful in formulating strategies


Page 55

Organisation study at KERAFED According to Michel porters well known model of structural

analysis of industries ,the state of competition in an industry depends on five basic competitive forces viz;
1 Rivalry among existing firms 2 Threat of new entrants 3Threat of substitutes 4 Bargaining power of suppliers 5 Bargaining power of customers

(A) Rivalry among Existing Firms

1. 2. 3. 4. 5. Number of Firms and their Relative Market Share. State of Growth of Industry. Product Standardization and switching Costs. Diverse Competitors Fixed or Storage Costs.

(B) Threat of New Entrants

1. 2. 3. 4. 5. Government Policy Economies of scale product Differentiation Capital Requirement Monopoly Elements

(C) Bargaining power of Suppliers

1. 2. 3. Extent of concentration and domination in the Importance of product to the buyer. Importants of the buyer to the supplier. supplier industry.


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Organisation study at KERAFED 4. 5. Extent of substitutability of the product. Switching cost.

(D) Bargaining power of customers


The volume of purchase relative to the total sale of The importance of the product to the buyer in terms The extent of standardization or

the seller.

of the total cost.


differentiation of the product.


Profitability of the buyer(low profitability tends to

pressure costs down).

6. Extent of buyers information (E) Threat of Substitutes

1. 2. Category Killers Unauthorized products


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Organisation study at KERAFED



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Organisation study at KERAFED


Strength 1. 2.

Brand name Kera has a strong brand image. Quality of products. Most modern machinery for oil extraction . Plants have adequate production capacity. Strong network of primary co-operative societies in the state. Product diversification is possible

4. 5.

Weakness 1. Policy formulation and decision making are much affected by

government interference and this result in delay of decision making and implementation. 2. Use of coconut oil, edible oil is much less in North India. So the

market expansion on northern region restricted. 3. Many times Kerafed is forced to procure copra at a price greater than

the market price, as per the direction of Nafed.


Not utilizing the installed capacity of production units.


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Organisation study at KERAFED

Opportunity 1. A large portion of the rural population in Kerala is still using the

coconut oil obtained from the country chucks (not the brand oil) so there is a huge market potential for brand coconut oil in the segment. 2. Advertisement and promotional activities the market can be

expanded to other states. 3. Primary agricultural co-operative societies and co-operative

marketing societies form a large network in the country. Through proper coordination of the co-operative societies the federation can enhance procurement and marketing.

Adequate support from Nafed, government of Kerala and other


Threat 1. Unfiltered coconut oil obtained from country chucks are available

in market at low price.


There are some arguments that coconut oil as edible oil cause

health problems. 3. 4. Heavy competition from private companies. Liberal import policies of Government lead to cheaper substitutes

for coconut oil.


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Organisation study at KERAFED

CHAPTER-6 SUMMARY OF FINDINGS: 1) The federation itself and the brand kera have a good reputation among the keralite consumers.
2) Lack of professionalism in an age of competition.

3) The two oil mills manned and managed by the federation in Karunagappally in Kollam district and Naduvannur in Kozhikode were not utilizing the installed capacity of copra crushing operation.

Quality specifications of a global standard are adhered to by

KERAFED stringently at all stages of production. Still the federation has not tried for ISO certification. 5) The procurement of copra as per the recommendations of NAFED has made the federation to collect and store copra at a price higher than the market price. This resulted in loss.

KERAFED gives maximum benefits to the coconut farmers

and at the same time provides high quality value added products to the consumers.
7) KERAFED facing stiff competition in the market.

8) Little efforts for product diversification and expansion. 9) Not much concentration on exporting.
10) Lack of raw material in peak times


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Organisation study at KERAFED

SUGGESTIONS 1. 2. The federation should start measures to get the ISO certification. The marketing efforts should be increased especially advertisement

and sales. 3. Vigorous drive in raw material procurement besides full utilization of

the copra crushing units.


Developing and marketing more Value added products from coconut oil is needed. Studies had proved coconut oils potential in the field of Cosmetics and skin treatments , as a fuel for generating electricity, as a feedstock for biodiesel , in the treatment of fungal infections etc.

5. Give more attention on export market.


Give promotions regarding more production of coconut, eyeing a increased raw material supply in future through purchasing of green coconut


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Organisation study at KERAFED

CONCLUSION The study has covered The Kerala Kerakarshaka Sahakarna Federation Ltd, (KERAFED) Thiruvananthapuram functions, its organizational structure, the various departments of KERAFED, manufacturing of kera oil etc its marketing activities and the quality control techniques adopted, promotional aspects and other related marketing activities.KERAFED gives maximum benefits to the coconut cultivators and at the same time provides high quality value added products to the consumers. KERAFED is committed to setting high quality standards and maintaining them. The brand kera enjoys good reputation in all markets. It continues to play a dominant role as cooking oil in the Kerala market .While concluding my project I express my faithful thanks to our respected teachers who have helped us from beginning to the end of my project work . I also extend my thanks to the entire staff of KERAFED and hope KERA conquers new markets.


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Organisation study at KERAFED

Journals Annual Reports

Company records WWW.


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