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A Study On

DISTRIBUTION AND LOGISTICS


With Reference to NAGARJUNA FERTILIZERS & CHEMICALS LIMITED, KAKINADA MASTER OF BUSINESS ADMINISTRATION Submitted by K.KARUNAKAR MBA (Final) Regd. No: 108Z1EOO53 Under the esteemed Guidance of Mr.G.SHUBHAKAR, M.A (ECO.)., MBA.,M.phil.IRPM FACULTY IN MANAGEMENT

DEPARTMENT OF MANAGEMENT STUDIES RAJIV GANDHI INSTITUTE OF MANAGEMENT & SCIENCE R.C.No.124, Timmapuram Village KAKINADA 533 005 (Affiliated to JNTU- Kakinada) (2010-2012)

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CERTIFICATE

This is to certify that K.KARUNAKAR, of Master of Business Administration of MBA (Final) with Regd. No. 108Z1E0053 of Batch 2010-2012 has done his bonafide Project Work entitled A STUDY ON DISTRIBUTION & LOGISTICS under my guidance, submitted to JNTU-K UNIVERSITY, for the partial fulfillment of requirement in awarding the Degree of Master of Business Administration.

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ACKNOWLEDGEMENT

I should feel the responsibility to acknowledge the following distinguished personalities who graciously allowed me to carry out this project work successively. It is my immense pleasure to express my sincere thanks to Dr. M. VENKATA RAO Principal of RIMS for his support the making this project report possible. I am very much thankful to Mr. K. SANJAY KUMAR Head of the department, Department of management studies, RIMS. I am highly thankful to MR.G.SHUBHAKAR, Faculty in management studies and also project guide for his valuable advices and encouragement throughout the course. I would like to express my sincere gratitude to Mr.K.CHANDRA SHEKAR Training), valuable (Head and distribution NFCL), Mr. M.P.RAMA Logistics RAO for to (Headtheir me

Mr.I.V.R.SURESH timely

(Manager and

NFCL) given

guidance

suggestions

encouragement

throughout the project work. Finally, Grateful thanks to my parents, affectionate family members and friends who have been given a inspiration and a great support in molding my abilities in the right direction.

K.KARUNAKAR

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DECLARATION
I, K.KARUNAKAR, hereby declare that the project report entitled DISTRIBUTION AND LOGISTICS with reference to NFCL is a bonafied record of the original research work carried out by me in the department of Management studies, JNTU-KAKINADA.

I also declare that this report is a result of my own efforts and has not been submitted to any other degree or diploma.

Place: Kakinada

k.karunakar.

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CONTENTS CHAPTER I Introduction Objectives of the study Needs of the study Scope of the study Methodology off the study Limitations of the study

CHAPTER II Theoretical framework CHAPTER III Industry profile CHAPTER IV Company profile CHAPTER V Data Analysis & Interpretation CHAPTER VI Findings Suggestions Conclusion BIBLOGRAPHY ANNEXURE

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INTRODUCTION
Most producers use intermediaries to bring their products to market. They try to develop a Distribution channel (marketing channel) to do this. A Distribution channel is a set of interdependent organizations that help to make a product available for use or consumption by the consumers or the business users. Channel intermediaries are firm or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user.

DISTRIBUTION:
Distributors must provide security and maintain product quality while in storage or in delivery to several carries and destination points, all at a cost effective price for both the suppliers and customers.-American Fast Freight, Inc. Distribution is one of the four aspects of marketing. A distribution business is the middleman between the manufacturer and retailer or in commercial or industrial the business customer. After a product is manufactured by a factory/supplier, it is typically stored in a distribution companys warehouse. The product is then sold to the retailers or customers. The other three parts of the marketing mix are product management, pricing, and promotion. THE DISTRIBUTION CHANNEL: Frequently there may be a chain of intermediaries each passing down the chain to the next organization, before it finally reaches the consumers or end-users. This process is known as the Distribution chain or rather more exotically, as the channels. Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user. CHANNELS: A number of alternative channels of distribution may be available Selling direct (via sales force) Mail order (including internet and telephone sales) Retailers Wholesalers Agents (who acts on behalf of the producer)

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Distribution channels may not be restricted to physical products. They may be just as important for moving a service from producer to customer in certain sectors, since both direct and indirect channels may be used. Hotels, may sell their services (typically rooms) direct or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems and so on... CHANNEL STRUCTURE: To the various levels of the distribution, which they refers to as the channel length, Lancaster and massing ham also added another structural element, the relationship between its members: Conventional or free-flow This is the usual, widely recognized, channel with a range of middle-men passing the goods on to the end-user. Single transaction A temporary channel may be set up for one transaction, for example, the sale of property or a specific civil engineering project. This does not share many characteristics with other channel transactions, each one being unique. Vertical marketing system (VMS) In this form, the elements of distribution is integrated. LOGISTICS: Logistics is the process of designing, managing, and improving the movement of products through the supply chain. The supply chain is all the firms that engage in activities necessary to turn raw materials into a product and put it in the hands of the customer or business customer. The difference between a supply chain and a distribution channel is the number of members and their function. A supply chain consists of those firms that supply the raw materials, component parts, and supplies necessary for a firm to produce a product plus the firms that facilitate the movement of that product from producer to the ultimate users of the product. Managing the logistics requires experience and knowledge of organizing, purchasing, transportation, warehousing and planning so that the co-ordination of resource can be optimized and that project can succeed, Logistics can be considered as a tool for getting the products and services where they are needed and when they are desired. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of

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information,

transportation,

inventory,

warehousing,

material

handling,

and

packaging. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible. BACK GROUND: Logistics can be defined as having the right quantity at the right time for the right price. It is the science of process. Incorporates all industry sectors, and manages the fruition of project life cycles, supply chains and resultant efficiencies. The Oxford English Dictionary defines logistics as "The branch of military science relating to procuring, maintaining and transporting material, personnel and facilities. Logistics as its own concept in business evolved only in the 1950s. This was mainly due to the increasing complexity of supplying ones business with materials and shipping out products in an increasingly globalized supply chain, calling for experts in the field. BUSINESS LOGISTICS: In business, logistics may have either internal focus or external focus covering the flow and storage of materials from point of origin to point of consumption. The main functions of a logistic manager includes inventory management, purchasing, transportation, warehousing, consultation and the organizing and planning of these activities. Logistic manager combine a professional knowledge of each of these functions to coordinate resources in an organization. These are two fundamentally different forms of logistics: one optimizes a steady flow of material through a network of transport links and storage nodes; the other coordinates a sequence of resources to carry out some project.

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OBJECTIVES OF THE STUDY


To study about Logistics and Distribution. To have a thorough understanding of how Distribution & Logistics helps for manufacturing plant (NFCL). To know whether the transporters were satisfied with the existing range of services provided by the organization. To identify the various problems related to distribution & logistics activities and provide suggestions for improvement. To know the demand of NFCL urea in the market.

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NEED FOR THE STUDY


NFCL is one of the leading companies in fertilizers. The distribution of products is important process for the firm to exist for long time. To study about how the product reaches to the customers in time and to the right place. NFCL have more than 6000 customers all around Andhra Pradesh. So distribution plays a major role The increases in flexibility in the logistics network reduce overall landed costs and improve customer satisfaction. NFCL had conduct study on service satisfaction of logistics service providers because there were recurring disputes between company and transporters hence the study focused on doing through investigation on services satisfaction of logistics providers at NFCL through Questionnaire. The study also requires finding the loop holes in the existing system at NFCL.

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SCOPE OF THE STUDY:


The scope of the study is confined to Nagarjuna Fertilizers & Chemicals Limited, which are into the concerned industry. The study is done only in the organization (NFCL) dealing with Logistics in Kakinada area, A.P. Information is limited to the lorry owners who were the logistic service providers for the NFCL.

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METHODOLOGY OF THE STUDY


METHODOLOGY: Methodology is the system of methods followed by a particular discipline. Thus research methodology is the way how we conduct our research. The Methodology consists of the following modules.

SOURCES OF DATA: PRIMARY DATA: Primary data is vital for the accomplishments of the study. The primary data is the first hand information, which is being collected by the research in this study it is the interviews and opinions of the customers I collected the primary data by using questionnaire method. The questionnaire is used to know the satisfaction of the transporters, who play a important role in logistics. SECONDARY DATA: The secondary data refers to those, which were gathered for some other purpose and are available in the companys internal records, company websites, Text books & publications. Secondary data is used for getting information about the services and about the industry etc.

SAMPLING DESIGN: The sample taken for the questionnaire is 50 for the analysis of the data collected through the primary source.

ANALYSIS OF THE DATA: The procured data was analyzed by the statistical tool method and the results are supported with the graphical representations.

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LIMITATIONS:
A period of 45 days is not adequately sufficient to obtain a thorough observation of the organizations performance and consumers opinion. Not all transporters could spare their time to give proper answers for the questionnaire. The study is confined to only areas in East Godavari district.

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THEORETICAL FRAME WORK


INTRODUCTION: LOGISTICS AND DISTRIBUTION MANAGEMENT: Successful logistics and distribution operations are key for a business that hopes to prosper and grow. Logistics and distribution management professionals oversee the transportation and dispersion of goods, materials, labour and other commodities. Computer software, communications networks and other technologies are used to streamline the distribution process. If you have an interest in distribution and logistics management careers, consider earning a bachelors or associates degree in a business or computer technology field. Required skills include management and leadership skills, the ability to use computers and technology, a strong memory and ability to coordinate and process large amount of information under extreme time pressure. In business, a time is money and distribution managers help business to save time and make success. MEANING & DEFINITION: DISTRIBUTION: Distribution (also known as the place variable in the marketing mix, or 4 ps) involves getting the product from the manufacturer to the ultimate consumer. Distribution is often a much under estimated factor in marketing. Many marketers fall for the trap that if you make a better product, consumers will buy it. The problem is that retailers may not be willing to devote shelf-space to new products. Retailers would often rather use that shelf-space for existing products. LOGISTICS Logistics is defined as a business planning framework for the management of material, service, information and capital flows. It includes the increasingly complex information, communication and control systems required in today's business environment (business definition) It is a process of planning, implementing, and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of meeting customer requirements

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MANUFACTURER DISTRIBUTION PREFERENCES: Most manufacturers would prefer to have their products distributed widely that are for the products to be available in as many stores as possible. This is especially the case for convenience products where the customer has little motivation to go to a convenient retail outlet to get his or her preferred brands. For example, Soft drinks The vast majority of people would settle for their less preferred brand in a vending machine rather than going elsewhere to get their top choice. This is one reason is why being a small share brand in certain categories can become a vicious cycle that perpetuates itself. For most manufacturers, wide distribution is not realistically obtainable. In food product categories, for example, the larger super markets can carry a large number of brands. Smaller convenience stores and ware house stores, however, are likely to carefully pick a few brands. After all, if convenience stores were to carry as many products as supermarkets, the purpose of having a neighbourhood store with easy entry and exit would be defeated. In a very small number of cases, some manufacturers prefer to have their products selectively or even exclusively distributed. This is usually the case for high prestige brands or premium quality image brands that require considerable before and after sales service. LOGISTICS The logistics industry can be broadly divided into Ocean freight, Rail freight, Air freight, Trucking and third party logistics (3PL) services. The size of the Indian logistics industry is pegged at around USD 30 Billion. Their Industry is expected to grow at a 13% CAGR to USD 54 Billion by 2012. The growth of the industry is driven by: Increase in trade: The Indias foreign trade has been growing at 25% CAGR over the past five years and is expected to continue its impressive growth on the back of emergence of India as a manufacturing hub for garments, engineering goods, electronic hardware and other goods. Moreover, the high

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growth in domestic consumption and manufacturing outsourcing will further drive trade. Reforms in Government policy: There forms in government policy and proindustry initiatives like abolition of CST and private participation in Rail, Air and Port freight services in driving growth in logistics. Increased Government spending infrastructure: The Government plans to invest USD 44 billion in improving infrastructure across Roads, Ports, Railways, and Air Transport by FY12. The increase in government spending on infrastructure will leads to an increase in efficiency and catalyze the growth of the industry. Rise in Domestic consumption and Retail: Driven by changing life styles, strong income growth, and favorable demographic patterns, Indian retail is expanding at a rapid pace. The Indian retail market is expected to grow from the current USD 350 billion to USD 427 billion by 2012. This would drive the growth in logistics industry as the goods would need to be delivered from production centers to consumption centers. Containerization: Containerization is growth trends in India because of the need for inter modal transport. This has resulted in low handling costs and reduced pilferage and breakage. Through containerization of cargo is occurs pre dominantly in foreign trade, the changeover to containerization is expected to occur in domestic trade as well. In FY09, bulk cargo grew at 8% while containerized cargo increased at 18.5%, reflecting the growing demand for containerized cargo. BUSINESS OBJECTIVES OF DISTRIBUTION & LOGISTICS SYSTEM The General objectives of the logistics can be summarized as:

Cost reduction Capital reduction Service improvement

The specific objective of an ideal logistics system is to ensure the flow of supply to the buyer, the:

Right product Right quantities and assortments Right places Right time
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Right cost / price and, Right condition This implies that a firm will aim at having a logistics system which maximizes

the customer service and minimizes the distribution cost. However, one can approximate the reality by defining the objective of logistics system as achieving a desired level of customer service i.e., the degree of delivery support given by the seller to the buyer. Thus, logistics management starts with as curtaining customer need till its fulfilment through product supplies and, during this process of supplies, it considers all aspects of performance which include arranging the inputs, manufacturing the goods and the physical distribution of the products. However, there are some definite objectives to be achieved through a proper logistics system. These can be described as follows: 1. Improving customer service: As we know, the marketing concept assumes that the sure way to maximize profits in the long run is through maximizing the customer satisfaction. As such, an important objective of all marketing efforts, including the physical distribution activities, is to improve the customer service. An efficient management of physical distribution can help in improving the level of customer service by developing an effective system of warehousing, quick and economic transportation, all maintaining optimum level of inventory. The customers may be interested in several things like timely delivery, careful handling of merchandise, reliability of inventory, economy in operations, and so on. 2. Rapid Response: Rapid response is concerned with a firms ability to satisfy customer service requirements in a timely manner. Information technology has increased the capability to postpone logistical operations to the latest possible time and then accomplish rapid delivery of required inventory. The result is elimination of excessive inventories traditionally stocked in anticipation of customer requirements. Rapid response capability shifts operational emphasis from an anticipatory posture based on forecasting and inventory stocking to responding to customer requirements on a shipment-to-shipment basis. Because inventory is typically not moved in a time-based system until customer requirements are known and performance is committed.
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3. Reduce total distribution costs: Another most commonly stated objective is to minimize the cost of physical distribution of the products. As explained earlier, the cost of physical distribution consists of various elements such as transportation, warehousing and inventory maintenance, and any reduction in the cost of one element may result in an increase in the cost of the other elements. Thus, the objective of the firm should be to reduce the total cost of distribution and not just the cost incurred on any one element. For this purpose, the total cost of alternative distribution systems should be analyzed and the one which has the minimum total distribution cost should be selected. 4. Generating additional sales: Another important objective of the physical distribution/logistics system in a firm is to generate additional sales. A firm can attract additional customers by offering better services at lowest prices. For example, by decentralizing its warehousing operations or by using economic and efficient modes of transportation, a firm can achieve larger market share. Also by avoiding the out-of-stock situation, the loss of loyal customers can be arrested. 5. Creating time and place utilities: The logistical system also aims at creating time and place utilities to the products. Unless the products are physically moved from the place of their origin to the place where they are required for consumption, they do not serve any purpose to the users. Similarly, the products have to be made available at the time they are needed for consumption.. Moreover, a quicker mode of transport should be selected to move the products from one place to another in the shortest possible time. Thus, time and place utilities can be created in the products through an efficient system of physical distribution. 6. Quality improvement: The long-term objective of the logistical system is to seek continuous quality improvement. Total quality management (TQM) has become a major commitment throughout all facets of industry. If a product becomes defective or if service promises are not kept, little, if any, value is added by the logistics. Logistical costs, once
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expended, cannot be reversed. In fact, when quality fails, the logistical performance typically needs to be reversed and then repeated. Logistics itself must perform to demanding quality standards. Logistics is a prime part of developing and maintaining continuous TQM improvement. The Nature of Logistics The growing flows of freight have been a fundamental component of contemporary changes in economic systems at the global, regional and local scales. These changes are not merely quantitative with more freight in circulation, but structural and operational. Structural changes mainly involve manufacturing systems with their geography of production, while operational changes mainly concern freight transportation with its geography of distribution. As such, the fundamental question does not necessarily reside in the nature, origins and destinations of freight movements, but how this freight is moving. New modes of production are concomitant with new modes of distribution, which brings forward the realm of logistics; the science of physical distribution. Logistics involves a wide set of activities dedicated to the transformation and distribution of goods, from raw material sourcing to final market distribution as well as the related information flows. Derived from Greek logistikos (to reason logically), the word is polysemic. In the Nineteenth century the military referred to it as the art of combining all means of transport, revictualling and sheltering of troops. Today it refers to the set of operations required for goods to be made available on markets or to specific locations. Physical distribution is the collective term for the range of activities involved in the movement of goods from points of production to final points of sale and consumption. It must insure that the mobility requirements of supply chains are entirely met. Physical distribution includes all the functions of movement and handling of goods, particularly transportation services (trucking, freight rail, air freight, inland waterways, marine shipping, and pipelines), transshipment and warehousing services (e.g. consignment, storage, inventory management), trade, wholesale and, in principle, retail. Conventionally, all these activities are assumed to be derived from materials management demands.

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Distribution Center. Facility or a group of facilities that perform consolidation, warehousing, packaging, decomposition and other functions linked with handling freight. Their main purpose is to provide value-added services to freight. DCs are often in proximity to major transport routes or terminals. They can also perform light manufacturing activities such as assembly and labelling. Another important requirement was containerization, which conferred substantial flexibility to production systems in addition to the container being its own storage unit. The expansion of standard transport infrastructure such as highways, terminals and airports was also essential for the development of modern logistics. Logistics and integrated transport systems are therefore related, particularly because of the container which has concomitantly become a unit of load (transport), production and distribution. Thus, the physical as well as the ICT elements of technological change are being underlined as it helps strengthen the level of control distributors have over the supply chain. The technological dimension of logistics can thus be considered from five perspectives:

Transportation modes. Modes have been the object of very limited technological changes in recent decades. In some cases, modes have adapted to handle containerized operations such as road and rail (e.g. double stacking). It is maritime shipping that has experienced the most significant technological change, which required the construction of an entirely new class of ships and the application of economies of scale to maritime container shipping. In this context, a global network of maritime shipping servicing large gateways has emerged.

Transportation terminals. The technological changes have been very significant with the construction of new terminal facilities operating on a high turnover basis. Better handling equipment lead to improvements in the velocity of freight at the terminals, which are among the most significant technological changes brought by logistics in materials movements. In such a context, the port has become one of the most significant terminals supporting global logistics. Port facilities are increasingly been supported by an array of inland terminals connected by high capacity corridors.

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Distribution centers and distribution clusters. Technological changes impacted over the location, design and operation of distribution centers; the facilities handling the requirements of modern distribution. They serve different purposes depending the combination of fabrication, storage and distribution functions they perform within their supply chains. Modern distribution centers tend to consume more space, both from the site they occupy and the building area. From a locational standpoint, distribution centers mainly rely on trucking, implying a preference for suburban locations with good road accessibility supporting a constant traffic. They service regional markets with a 48 hours service window on average, implying that replenishment orders from their customers are met within that time period. They have become one floor facilities designed more for throughput than for warehousing with specialized loading and unloading bays and sorting equipment. Cross-docking distribution centers represent one of the foremost expressions of a facility that handles freight in a time sensitive manner. Another tendency has been the setting of freight distribution clusters where an array of distribution activities agglomerate to take advantage of shared infrastructures and accessibility. This tends to expand the added-value performed by logistics.

Load units. Since logistics involves improving the efficiency of flows, load units have become particularly important. They are the basic physical management unit in freight distribution and take the form of pallets, swap bodies, semi-trailers and containers. Containers are the privileged load unit for long distance trade, but the growing complexity of logistics required a more specific level of load management. The use of bar codes and increasingly of RFID (Radio Frequency Identification Device) enables a high level of control of the load units in circulation. For logistics, ICT is particularly a time and embeddedness issue. Because of ICT, freight distribution is within a paradigm shift from inventory-based logistics to replenishment-based logistics. The shift from a push to pull logistics is particularly important in a market economy. Demand, particularly in the retailing sector, is very difficult to anticipate accurately. Logistics is thus a fundamental component of a market economy.
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Distribution & Logistic Systems In a broader sense distribution & logistics systems are embedded in a changing macro- and microeconomic framework, which can be roughly characterized by the terms of flexibilization and globalization:

Flexibilization implies a highly differentiated, strongly market and customer driven mode of creating added-value. Contemporary production and distribution is no longer subject to single-firm activity, but increasingly practiced in networks of suppliers and subcontractors. The supply chain bundles together all this by information, communication, cooperation, and, last but not least, by physical distribution.

Globalization means that the spatial frame for the entire economy has been expanded, implying the spatial expansion of the economy, more complex global economic integration, and an intricate network of global flows and hubs.

The flow-oriented mode affects almost every single activity within the entire process of value creation. The core component of materials management is the supply chain, the time- and space-related arrangement of the whole goods flow between supply, manufacturing, distribution and consumption. Its major parts are the supplier, the producer, the distributor (e.g. a wholesaler, a freight forwarder, a carrier), the retailer, the end consumer, all of whom represent particular interests. Compared with traditional freight transport systems, the evolution of supply chain management and the emergence of the logistics industry are mainly characterized by three features:

Integration. A fundamental restructuring of goods merchandising by establishing integrated supply chains with integrated freight transport demand. According to macro-economic changes, demand-side oriented activities are becoming predominant. While traditional delivery was primarily managed by the supply side, current supply chains are increasingly managed by the demand.

Time mitigation. Whereas transport was traditionally regarded as a tool for overcoming space, logistics is concerned with mitigating time. Due to the requirements of modern distribution, the issue of time is becoming
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increasingly important in the management of commodity chains. Time is a major issue for freight shipping as it imposes inventory holding and depreciation costs, which becomes sensitive for tightly integrated supply chains.

Specialization. This was achieved by shifts towards vertical integration, namely subcontracting and outsourcing, including the logistical function itself. Logistics services are becoming complex and time-sensitive to the point that many firms are now sub-contracting parts of their supply chain management to what can be called third-party logistics providers (3PL; asset based). More recently, a new category of providers, called fourth-party logistics providers (4PL; non asset based) have emerged.

While many manufacturing corporations may have in-house transportation departments, increasingly the complex needs of the supply chain are being contracted out to third parties. Third party logistics providers (3PL) have emerged from traditional intermediaries such as the forwarders, or from the transport providers such as FEDEX or Maersk. Both groups have been at the forefront of the intermodal revolution that is now assuming more complex organizational forms and importance. In offering door to door services, the customer is no longer aware or necessarily concerned with how the shipment gets to its destination. The modes used, and the routing selected are no longer of immediate concern. The pre-occupation is with cost, reliability and level of service. The effectiveness of intermodal transport systems is thus masking the importance of transportation to its users. Logistics is thus concomitantly concerned by distribution costs and time. In addition, many dimensions are added to the function of distribution. While in the past it was a simple matter of delivering an intact good at a specific destination within a reasonable time frame, several components have become linked with distribution:

Distribution time, notably the possibility to set a very specific ETA for deliveries and a low tolerance for delays.

The reliability of distribution measured in terms of the availability of the ordered goods and the frequency at which orders are correctly serviced in terms of quantity and time.

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The flexibility of distribution in terms of possible adjustments due to changes in the quantity, the location or the delivery time.

The quality of distribution concerns the condition of delivered goods and if the specified quantity was delivered.

Geography of Freight Distribution Since cities are at the same time zones of production, distribution and consumption, the realm of city logistics is of growing importance. This issue is made even more complex by a growing dislocation between production, distribution and consumption, brought by globalization, global production networks, and efficient freight transport systems and logistics. This dislocation has incited a growing emphasis on issues related to supply chain integration so that in spite of acute geographical separation physical and managerial processes have minimal friction. It underlines that logistical costs in developing countries tend to be higher, which undermines economic development for the main following reasons:

The regulatory complexity of distributing goods in developing countries involves higher logistic costs and is inciting distributors to maintain higher inventory levels to cope with uncertainty. Custom regulations are complex and prone to delays and road transportation can be subject to arbitrary tolls and inspections. This is reflected in higher final goods or component prices that are assumed directly or indirectly by consumers.

Labor and infrastructure productivity in developing countries tend to be lower, which in many cases doubles logistics costs. The advantages of cheap labor can often be counterbalanced by lower levels of productivity. This also impacts the reliability of freight distribution with unreliable lead times and deliveries.

Modal and intermodal capacity is inconsistent. While several terminal facilities, particularly ports, are modern with capacity on par with global standards, hinterland transportation can be problematic with road segments unable to effectively handle trucks of standard capacity.

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TYPES OF DISTRIBUTION CHANNELS:


The first step in selecting a marketing channel is determining which type of channel will best meet both the sellers objectives and the distribution needs of customers. CHANNEL LENGTH Distribution channels can be described as being either short or long. A short channel involves few intermediaries. A long channel, on the other hand, involves many intermediaries working in succession to move goods from producers to consumers. In general, business products tend to move through shorter channels than consumer products due to geographical concentrations and comparatively few business purchases. Service firms market primarily through short channels because they sell intangible products and need to maintain personal relationships within their channels. Not-for-profit institutions also tend to work with short, simple, and direct channels. Please note Table below that highlights the characteristics of short and long marketing channels. Factors influencing marketing channels strategies CONSUMER CHANNELS The simplest and shortest distribution channel is a direct channel. A direct channel carries goods directly from a producer to the business purchaser or consumer. One of the newest means of selling in a direct channel is the Internet. A direct channel may allow the producer to serve its customers better and at a lower price than is possible using a retailer. Sometimes a direct channel is the only way to sell the product because using channel intermediaries may increase the price above what consumers are willing to pay. Another reason to use a direct channel is control. Many producers, however, choose to use indirect channels to reach consumers. Customers are familiar with certain retailers or other intermediaries and habitually turn to them when looking for what they need. Intermediaries also help producers fulfill the channel functions previously cited. By creating utility and
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transaction efficiencies, channel members make producers lives easier and enhance their ability to reach customers. The producer-retailer-consumer channel is the shortest indirect channel. GE uses this channel when it sells small appliances through large retailers such as WalMart or Sears. The producer-wholesaler-retailer-consumer channel is another common distribution channel in consumer marketing. BUSINESS-TO-BUSINESS CHANNELS B2B distribution channels facilitate the flow of goods from a producer to an organizational customer. Generally, B2B channels parallel consumer channels in that they may be direct or indirect. The simplest indirect channel in industrial markets occurs when the single intermediarya merchant wholesaler referred to as an industrial distributor rather than a retailerbuys products from a manufacturer and sells them to business customers. Direct channels are more common to business-tobusiness markets because B2B marketing often means selling high-dollar, high-profit items to a market made up of only a few customers. In such markets, it pays for a company to develop its own sales force and sell directly to customers at a lower cost than if it used intermediaries. CHANNELS FOR SERVICES Because services are intangible, there is no need to worry about storage, transportation, and the other functions of physical distribution. In most cases, the service travels directly from the producer to the customer. Some services, however, do need an intermediary, often called an agent, who helps the parties complete the transaction. Examples include insurance agents, stockbrokers, and travel agents. HORIZONTAL MARKETING SYSTEMS A horizontal marketing system is a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity. By working together, companies can combine their financial, production, or marketing resources to accomplish more than any one company could alone. Companies can join forces with competitors or noncompetitors.

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MULTICHANNEL DISTRIBUTION SYSTEMS A multichannel distribution system is a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments. This is also called a hybrid marketing channel. Multichannel distribution systems offer many advantages to companies facing large and complex markets. With each new channel, the company expands its sales and market coverage and gains opportunities to tailor its products to the specific needs of diverse customers. Multichannel distribution systems, however, are harder to control, and they generate conflict as more channels compete for customers and sales. DISTRIBUTION CHANNEL STRATEGY: Marketers face several strategic decisions in choosing channels and marketing intermediaries for their products. Selecting a specific channel is the most basic of these decisions. Marketers must also resolve questions about the level of distribution intensity, the desirability of vertical marketing systems, and the performance of current intermediaries. MARKETING CHANNEL SELECTION Marketing channel selection can be facilitated by analyzing market, product, producer, and competitive factors. A marketer could refer for insights into whether the distribution channel should be short or long for the product in question. Then, he or she could consider the alternative long or short channels for consumer goods, business goods, or services. DISTRIBUTION INTENSITY Distribution intensity refers to the number of intermediaries through which a manufacturer distributes its goods. The decision about distribution intensity should ensure adequate market coverage for a product. In general, distribution intensity varies along a continuum with three general categories: intensive distribution, selective distribution, and exclusive distribution.

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INTENSIVE DISTRIBUTION An intensive distribution strategy seeks to distribute a product through all available channels in an area. Usually, an intensive distribution strategy suits items with wide appeal across broad groups of consumers, such as convenience goods. SELECTIVE DISTRIBUTION Selective distribution is distribution of a product through only a limited number of channels. This arrangement helps to control price cutting. By limiting the number of retailers, marketers can reduce total marketing costs while establishing strong working relationships within the channel. Moreover, selected retailers often agree to comply with the companys rules for advertising, pricing, and displaying its products. Where service is important, the manufacturer usually provides training and assistance to dealers it chooses. Cooperative advertising can also be utilized for mutual benefit. Selective distribution strategies are suitable for shopping products such as clothing, furniture, household appliances, computers, and electronic equipment for which consumers are willing to spend time visiting different retail outlets to compare product alternatives. Producers can choose only those wholesalers and retailers that have a good credit rating, provide good market coverage, serve customers well, and cooperate effectively. Wholesalers and retailers like selective distribution because it results in higher sales and profits than are possible with intensive distribution where sellers have to compete on price. EXCLUSIVE DISTRIBUTION Exclusive distribution is distribution of a product through one wholesaler or retailer in a specific geographical area. The automobile industry provides a good example of exclusive distribution. Though marketers may sacrifice some market coverage with exclusive distribution, they often develop and maintain an image of quality and prestige for the product. In addition, exclusive distribution limits marketing costs since the firm deals with a smaller number of accounts. In exclusive distribution, producers and retailers cooperate closely in decisions concerning advertising and promotion, inventory carried by the retailers, and prices. Exclusive distribution is typically used with products that are high priced, that

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have considerable service requirements, and when there are a limited number of buyers in any single geographic area. Exclusive distribution allows wholesalers and retailers to recoup the costs associated with long selling processes for each customer and, in some cases, extensive after-sale service. Specialty goods are usually good candidates for this kind of distribution intensity. INDUSTRY SEGMENT-ROAD FREIGHT: The size of the Road freight segment is USD 10 billion. Approximately 65% of the freight is carried through roads in India. The road freight segment is highly fragmented with more than 16000 trucking players. The large number of small truck operators, increase in fuel price and poor quality of roads has led to lower profit margin for the trucking services companies. The leading trucks companies in India typically dont own the entire fleet but outsource approximately 75% of their trucks to smaller transporters. Increase in quality of Road infrastructure: Investments of USD 14 billion in high way development is envisaged by the government including development of the golden quadrilateral connecting the major cities (Delhi, Mumbai, Chennai and Kolkata) and development of North-South and EastWest corridors. Phase out of central sale tax (CST) and implementation of value add tax (VAT): Currently 3% CST is levied for interstate movements. This had led to preference for state-wise ware housing to enable intra-state sourcing and distribution networks. The phase wise abolition of CST by 2010 would catalyze interstate commerce and consolidate supply chains networks. INDUSTRY SEGMENT- RAIL FREIGHT: The Rails are operated in India by the Indian Railways (IR), a government undertaking. The size of the Rail freight segment is around USD 11 billion and is expected to grow at 8% year on year. Traditionally, IR has favoured carrying share to Road ways. However, the pro industry reforms and greater private sector participation have started to catalyze the growth in this segment.

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Privatisation of Rail container operation: Container Freight Stations (CFS) and Inland Container Deports (ICD) were privatised in the last decade. In 2006, the government of India awarded fifteen licenses to operate rail container services across all routes in India. Currently, eight players have already begun their operations. Private players will need to have their own terminals (ICDs) with rail siding the load and un load containers. Indian Railways is expecting an investment of approximately USD 2.5bn over the next two years for the purchasing of wagons, setting up of logistics parks and ICDs by the private players. Development of dedicated freight corridor: Indian Railway has planned an investment of USD 6.25 billion over the next five years to remove all capacity bottle necks. The projects include strengthening of the golden quadrilateral, strengthening of Rail connectivity to ports and development of multimodal corridors to the hinters land. INDUSTRY SEGMENT OCEAN FREIGHT: The major Indian ports are being stretched to maximum capacity. The total port capacity at major Indian ports in FY09 was 484mn tons while freight volume handled was 464mn tons. The increased domestic consumption and manufacturing growth has resulted in high growth in the India. The ocean logistics industry involves various intermediaries like freight forwarders (originates freight), customs house agents (offers customs clearing services), multimodal transporters (either shipping companies or freight forwards that are allowed to transport the cargo by more than one mode of transport), and inland container deports & container freight stations (provides services like stuffing, destuffing, warehousing etc.). Private participation in port infrastructure: one of the key factors for improved port infrastructure is private participation in port operations and ancillary services. Private operators are presently operating all major container terminals at ports in India. Also, private ports at mundhra and pipavav and the upcoming private port at Rewas (owned by Reliance Industry) in western India are augmenting Indias bulk and container cargo handling capacity. In addition, numerous ICDs and CFSs are being operated by private players.

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Large investments flow into ports: The major ports in India, public and private, are making large investments in increasing port drafts to accommodate mainline vessels, enhancing the capacity of their container terminals and improving rail and road links to and from the ports. The Indian government plans to spend USD 13 billion during FY06 to FY12 for these initiatives.

Advantages of a Distribution Channel When a customer is considering buying a product he tries to access its value by looking at various factors which surround it. Factors like its delivery, availability etc which are directly influenced by channel members. Similarly, a marketer too while choosing his distribution members must access what value is this member adding to the product. He must compare the benefits received to the amount paid for using the services of this intermediary. These benefits can be the following:

Cost Saving The members of distribution channel are specialized in what they do and perform at much lower costs than companies trying to run the entire distribution channel all by itself.

Time Saving Along with costs, time of delivery is also reduced due to efficiency and experience of the channel members. For example if a grocery store were to receive direct delivery of goods from every manufacturer the result would have been a chaos. Everyday hundreds of trucks would line up outside the store to deliver products. The store may not have enough space for storing all their products and this would add to the chaos. If a grocery wholesaler is included in the distribution chain then the problem is almost solved. This wholesaler will have a warehouse where he can store bulk shipments. The grocery store now receives deliveries from the wholesaler in amounts required and at a suitable time and often in a single truck. In this way cost as well as time is saved.

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Customer Convenience Including members in the distribution chain provides customer with a lot of convenience in their shopping. If every manufacturer owned its own grocery store then customers would have to visit multiple grocery stores to complete their shopping list. This would be extremely timeconsuming as well as taxing for the customer. Thus channel distribution provides accumulating and assorting services, which means they purchase from many suppliers the various goods that a customer may demand. Secondly, channel distribution is time saving as the customers can find all that they need in one retail store and the retailer

Customers can buy in small quantities Retailers buy in bulk quantities from the manufacturer or wholesaler. This is more cost effective than buying in small quantities. However they resell in smaller quantities to their customers. This phenomenon of breaking bulk quantities and selling them in smaller quantities is known as bulk breaking. The customers therefore have the benefit of buying in smaller quantities and they also get a share of the profit the retailer makes when he buys in bulk from the supplier.

Customers receive financial support Resellers offer financial programs to their customers which makes payment easier for the customer. Customers can buy on credit, buy using a payment plan etc.

Resellers provide valuable information Manufacturers who include resellers for selling their products rely on them to provide information which will help in improving the product or in increasing its sale. High-level channel members often provide sales data. On all other occasions the manufacturer can always rely on the reseller to provide him with customer feedback.

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Disadvantages of including intermediaries in the distribution channel

Revenue loss The manufacturer sells his product to the intermediaries at costs lower than the price at which these middlemen sell to the final customers. Therefore the manufacturer goes for a loss in revenue. The intermediaries would never offer their services to the manufacturer unless they made a profit out of selling his products. They are either made a direct payment by the manufacturer, for instance shipping costs or as in the case of retailers by selling the product at costs higher than the price at which the product was bought from the manufacturer (also known as mark up). The manufacturer could have sold at this final price and made a greater profit if he had been managing the distribution all by himself.

Loss of Communication Control Along with loss over the revenue the manufacturer also loss control over what message is being conveyed to the final customers. The reseller may engage in personal selling in order to increase the product sale and communicate about the product to his customers. He might exaggerate about the benefits of the product this may lead to miscommunication problems with end users. The marketer may provide training to the salespersons of retail outlets but on the whole he has no control on the final message conveyed.

Loss of Product Importance The importance given to a manufacturer's product by the members of the distribution channel is not under the manufacturer's control. In various cases like transportation delays the product loses its importance in the channel and the sales suffer. Similarly a competitor's product may enjoy greater importance as the channel members might be getting a higher promotional incentive.

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Advantages & disadvantages of Logistics: A 3rd Party Logistics Company carries off your shipping necessities for you. Most companies do not possess and control a trucking company for their fulfillment demands. A lot of companies have a transporting Manager, or a fulfillment skilled person to cover their transportation needs on a item-by-item basis. As your company becomes bigger it will no more be cost-efficient to keep employing managers for your shipping needs. It will get no more practicable to turn all shipments. 3rd Party Logistics Company has its own benefits and draw backs, if you as k a professional who has worked in this industry for quite some time that you would come across a fact that it requires a very deeper understanding between service provider and the company who is outsourcing the services to run the operations smoothly and efficiently. Advantages: The Third Party Logistics Provider will definitely have access to the cutting edge technology that is required to perform the functions easily and with efficiently. The Third Party Logistics Provider will use this technology to the best possible effect and make use of the technology at an appropriate standard than any other son-specialized organization. The Third Party Logistics Provider will have sufficient facilities and space to perform all the required tasks such as heavy transport facility and warehousing. The Third Party Logistics Provider will be capable enough to fulfill the requirements and goals of multiple clients at a time. The Third Party Logistics Provider can provide your company with greater flexibility and resources to fulfill the customer demands at different places. By using a Third Party Logistics Provider we can move after stocks and deliver them at very rapid pace.

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Disadvantages: Along with the advantages making use of Third Party Logistics Provider can cause some of the issues as well. If services are not managed nicely, they may cause great problems for the company reputation, and firms position. According to the latest research it has been proven that communication problems between buyers and suppliers are a major cause of operation failures. Supplier failure can cause major interruption to the operations of company. The main business goals and objectives of one company should not be the same as the other company in the strategic alliance between companies. The outsourcing company that is using the Third Party Logistics Provider may end up losing some of the control over the operation. RECENT TRENDS OF DISTRIBUTION & LOGISTICS: Distribution & Logistics managements primary focus is on optimizing the delivery of service to customers, by managing complex tradeoffs between customer service, transportation, warehousing and inventory. Some World Class companies have been able to reduce the costs of their logistics operations to 50% of the levels of their competitors. DEFINITION OF LOGISTICS What is Logistics = Logical thinking + Statistics "Logistics means having the right thing, at the right place, at the right time in the right quantity at the right price." Therefore Logistics is an optimization process of the location, movement and storage of resources from the point of origin, through various economic activities, to the final consumer. Key Logistics Trends: Globalization Supply Chain Integration Flexibility and Speed Track and Trace Capabilities
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Collaborative Logistics Reverse Logistics Transportation market places Optimization Technologies Growth and expansion of 3PL and 4PL services

LATEST TRENDS IN LOGISTICS Radio Frequency Identification (RFID) The first use of Radio Frequency Identification (RFID) was documented in the 1940s by the British Royal Air Force to Identify aircraft in World War II and was part of the refinement of radar. During the 1960s RFID was first considered as a tracking solution in the commercial world. The first applications involving RFID were developed over the next twenty years. These commercial applications were concerned with identifying an item inside a single location. The latest attempt to commercialize the use of RFID started in 1998, when researchers at the Massachusetts Institute of Technology (MIT) Auto-ID Center began to research new ways to track and identify objects as they moved between physical locations. This research centered on radio frequency technology and how information that is held on tags can be effectively scanned and shared in real time. Mechanics of RFID The basic principle of RFID is identifying an object using a radio frequency transmission. The technology can be used to identify, track, sort or detect a wide variety of objects. Communication takes place between a reader or interrogator and a transponder or tag. Tags can either be active, which means it is powered by battery, or passive, which is powered by the reader field. The communication frequencies used depends to a large extent on the application, and range from 125KHz to 2.45 GHz. Regulations are imposed by most countries to control emissions and prevent interference with other industrial, scientific or medical equipment. In a typical system tags are attached to objects. Each tag has some internal memory which it stores information about the object, such as its unique ID number, or details including date of manufacture and item information. When a tag passes through a field generated by a reader, it transmits this information back which
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identifies the object. Until recently the focus of RFID technology was mainly on tags and readers, which were being used in systems where relatively low volumes of data are involved. This is now changing as RFID in the supply chain is expected to generate huge volumes of data, which will have to be filtered and routed to ERP or Warehouse Management systems. Electronic Product Code (EPC) Electronic Product Code is the emerging RFID standard developed by the MIT Auto ID center. It is the RFID version of the barcode standard. EPC RFID also provides access to additional data about the origin and history of the specific batches or serial numbers. The EPC tag itself identifies the manufacturer, product, version, and serial number. Benefits Of RFID Supply chain management is investing in RFID as it can give them advantages in visibility of their products through the supply chain. The benefits are seen as improving on other methods of visibility such as EDI, bar coding and Advance Ship Notifications (ASN). Other benefits of RFID can be seen outside of normal supply chain such as a reduction in theft from the store, transport or storage, and a deterrent to increasing product counterfeiting. Both of these issues are costing companies billions of dollars each year. Pharmaceutical companies are increasingly worried about counterfeiting and RFID tags on each product may help with this issue. Advantages Of RFID Over Barcodes Unlike barcodes, RFID technology does not require line of sight reading. The tag can be read through other items while barcodes require line of sight. This implies that a RFID reader could read a pallet of mixed products, all of which contain individual RFID tags, without having to physically move any of the items or open any cases. If the pallet was full of mixed items, the large number of RFID tags can be read almost instantaneously. The tags are not read simultaneously but the tags are read sequentially, but the time to read the tags would be microseconds. The data on tag can be changed or added to as it passes through specific operations. Read-only tags are less expensive than read/write tags. RFID tags are less susceptible to poor environmental conditions where barcode labels can become unreadable. RFID tags can be sealed within a plastic enclosure eliminating many of
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the problems that affect barcodes in harsh environments where they are exposed to chemicals, heat and other harsh environments. TRENDS IN LOGISTICS Globalization - Long and complex supply lines - Global Distribution - Global Competition Customer power High Level of Service Expectations Short Product- Life Cycle Strong Pricing Pressures : Price-Based Cost Lower Customer Loyalty Information and Communication Technologies - Huge advances in technology - The Internet - Strengthen our Trends

Outsourcing - More actors in Supply Chain - Need for collaboration greater than ever - The rise of 3PL/ 4PL

Conclusion Nowadays, a business enterprise organizes itself into various segments in order to reach the highest possible level of effectiveness. Many companies find it more reasonable to follow business philosophy of integrated operations, and have even established separate departments with the purpose to carefully handle logistics functions.

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INDUSTRIAL PROFILE
India has been predominantly considered as an agricultural dependent economy. Agriculture plays a very dominant role as more than one-fourth of our GDP come from this sector. Nearly 70% of population depends on the agriculture for their lively-hood. The basic need for an agricultural dependent economy is fertilizers and urea is one of the main fertilizers. India is the second largest manufacturing country in the world. All fertilizers consist of three main ingredients. Nitrogen(N) -- which promotes general plant growth Phosphorous(P) -- which promotes flowering Potassium (K) which promotes strong roots. The ingredients are mixed in various combinations because plants have different needs. The combinations are indicated by a three number code: The first number is the percent of nitrogen (N) The second number is the percent of phosphorus (P) The third number is the percent of potassium (K) EVALUATION OF FERTILIZER: Fertilizer is simply, plant food. Just like the human body needs vitamins and minerals, plants need nutrients in order to grow. Plants need large amounts of three nutrients nitrogen, phosphorus, and potassium. These are commonly referred to as macronutrients. Fertilizer makers take those three nutrients from nature and put them into soluble forms that plants can easily use. There are a number of other nutrients plants need in small amounts. These are referred to as the minor nutrients, or micronutrients. These many nutrients are

typically produced separately, but end up being mixed together in varying amounts to match the needs of a particular crop. The analysis found on each bag or bulk shipment of fertilizer tells the farmer or consumer the amount of nutrients being supplied. States have a system of laws and regulations that ensure the fertilizer is properly labeled and delivers the amount for nutrients stated on the bag. Our world would be vastly different without commercial fertilizers. Following World War II, new technologies allowed for the rapid expansion of fertilizer

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production. Coupled with growing food demand and the development of higheryielding crop varieties, fertilizer helped fuel the Green Revolution. Today, the

abundance of food we enjoy is just one way fertilizers help enrich the world around us. While fertilizers provide many important benefits that are necessary for our way of life, the improper use of fertilizers can harm our environment. Weve used the most recent developments in science to study our products and make sure safety comes first. FERTILIZER: Fuel for growing plants just like humans and animals, plants need adequate water, sufficient food, and protection from diseases and pests to be healthy. Commercially produced fertilizers give growing plants the nutrients they crave in the form they can most readily absorb and use: nitrogen (N), available phosphate (P) and soluble potash (K), Elements needed in smaller amounts, or micronutrients, include iron (Fe), zinc (Zn), copper (Cu) and boron (B). Each crop year, certain amounts of these nutrients are depleted and must be returned to the soil to maintain fertility and ensure continued, healthy future crops. Scientists project that the earths soil contains less than 20 percent of the organ ic plant nutrients needed to meet our current food production needs. Therefore, through the scientific application of manufactured fertilizers, farmers are meeting the challenge of the future, today. Another component of plant DNA is phosphate, which helps plants to use water efficiently. It also helps to promote root growth and improves the quality of grain and accelerates its ripening. And potassium, commonly called potash, is

important because it is necessary for photosynthesis, which is the production, transportation and accumulation of sugars in the plant. Potash makes plants hardy and helps them to withstand the stress of drought and fight off disease. FERTILIZER TYPES: Because every crop is different and the soils and weather conditions crops are grown in vary dramatically around the world, commercial fertilizers, which are manufactured from natural sources, come in many formulations.

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Combining air with hydrogen using natural gas as the feedstock makes ammonia, the building block for nitrogen fertilizers. Ammoniated phosphates, which include mono ammonium phosphate (MAP) and diammonium phosphate (DAP), are made by reacting ammonia with phosphoric acid. Muriate of potash, also called potassium chloride, is made from mine ores that have been processed to remove naturally occurring salts. Ammonium nitrate is a solid fertilizer containing approximately 34 percent nitrogen that is water soluble and used in various fertilizer solutions. Aqua ammonia is another nitrogen-based fertilizer made by combining ammonia with water. It

contains up to 25 percent nitrogen and is either applied directly to the soil or is used to manufacture phosphate fertilizers. Nitrogen solutions are water solutions of ammonia, ammonium nitrate and, sometimes, urea, a solid fertilizer containing approximately 45 percent nitrogen, and other soluble compounds of nitrogen. Nitrogen solutions are used in ammoniating super phosphate, the manufacture of complete fertilizer and for direct injection into the soil. They vary in composition and nitrogen content and are sometimes applied under pressure. NITROGEN (N): Nitrogen is a part of all plant proteins and is a component of DNA and RNA the blueprints for genetic characteristics. It is necessary for plant growth and

chlorophyll production. Nitrogen is the building b lock for many fertilizers. Where does N come from? Nitrogen is present in vast quantities in the air, making up about 78 percent of the atmosphere. Nitrogen from the air is combined with natural gas in a complex chemical process to make ammonia. PHOSPHORUS/PHOSPHATE (P): Phosphorus as a nutrient is sometimes most valuable to plants when put near the seed for early plant health and root growth. Plant root uptake is dependent on an adequate supply of soil P. Phosphorus is relatively insoluble in water. The water in most soils must replace all of the P in the soil water 2 to 3 times each day to meet the crops demand for P. Phosphorus compounds help in directing where energy will be used. Phosphorus compounds are needed in plant photosynthesis to repackage and transfer energy. Phosphate is also a component of DNA, so it is one of the building

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blocks of genes and chromosomes. Phosphorus is involved in seed germination and helps plants to use water efficiently. Where does P come from? Phosphorus occurs in natural geological deposits. Deposits can be found in the U.S. and other parts of the world. POTASSIUM/POTASH (K): Potassium protects plants against stresses. Potassium protects plants from cold winter temperatures and helps them to resist invasion by pests such as weeds and insects. Potassium stops wilting, helps roots stay in one place and assists in

transferring food. Potassium is a regulator. It activates plant enzymes and ensures the plant uses water efficiently. Potassium is also responsible for making sure the food you buy is fresh. Where does K come from? The element potassium is seventh in order of abundance in the Earths crust. Through long-term natural processes K filters into the oceans and seas. Over time, these bodies of water evaporate, leaving behind mineral deposits. Although some of these deposits are covered with several thousands of feet of earth, it is mined as potash or potassium chloride. Potash ore may be used without complex chemical conversion; just some processing is necessary to remove impurities such as common salt.

FOOD FOR THE GROWING WORLD


INDUSTRY AT A GLANCE: Since 1883 the industry has worked to promote the advances in the development and application of fertilizers that have helped to feed a hungry world. The revolutionary concept of plant nutrition was born from the discovery of the biological role of chemical elements in plant nutrition and the need to feed a growing population concentrated away from the farm in the rising industrial centers of the world. Because of modern fertilizers, world food production since 1960 has more than doubled, keeping pace with the population explosion. Today, the fertilizer industry is poised to help produce the food that will be needed to feed the worlds projected 9 billion people in 2025. The fertilizer industry is essentially concerned with the provision of three major plant nutrients nitrogen (N), phosphorous (P) and potassium (K) in plant
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available form. Each nutrient is responsible for different aspects of plant growth and health. FERTILIZERS: Regulated for quality and safety like other manufactured goods, fertilizers are regulated for quality and safety at the federal and state levels. Every state in the country, plus Puerto Rico, has its own fertilizer regulatory program, usually administered by the state department of agriculture. STATE REGULATION: State regulation is concerned with consumer protection, labelling, the protection of human health and the environment, and the proper handling and application of fertilizers. Fertilizers are regulated at the state level because soil

conditions vary dramatically from state to state across the country. For example, the rocky, thin soils of New England are vastly different from the deep, rich black soils of the Midwest Corn Belt. A different level of fertilizer nutrients in the soil, different crops (potatoes versus corn, for instance) and different weather and cropping patterns require state-specific regulation. Where Science and safety come first the modern commercial fertilizer industry was founded on the revolutionary scientific discovery in the last part of the 18th century that chemical elements play a direct role in plant nutrition. This initial

concept was supported by direct scientific experiment and opened the way for industrial-scale manufacturing of fertilizers of all types in the 19th century, beginning with super phosphate in 1843. This was followed by ammonium sulphate, sodium nitrate and, finally, in the first two decades of the 20th century, the manufacturing of synthetic nitrogen fertilizers directly from atmospheric nitrogen. ASSESSING FERTILIZER SAFETY: Fertilizer research and development historically have been focused on maximizing economic crop yields from given rates of nutrient application. Since the advent of the modern environmental movement in the 1960s, research has also been concerned with minimizing potentially adverse human health and environmental effects from fertilizer manufacture and application. As part of its continuing commitment to safety, in 1996. The Fertilizer

Institute initiated a comprehensive safety assessment project to determine the risks, if


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any, of metals in fertilizer. Small amounts of metals are found in phosphate and potash fertilizers due to their presence in the mined ore bodies. In addition to

phosphate and potash products, some micronutrient fertilizers. Which come from both mined ores and recycled wastes, also contain metals. FERTILIZERS AT WORK IN INDUSTRY: Aside from their benefits to agriculture, fertilizer components are central to such industrial process as semiconductor chip making, resin manufacture, cattle feed production, metal finishing, the manufacture of detergents, fiberglass insulation and more, even rocket fuel. FERTILIZERS ENRICH OUR WORLD:
Improvements in agricultural efficiency through research and technology increase food output while protecting the environment and enriching our world in numerous ways. Fertilizers feed the growing world. As the worlds population continues to climb toward an estimated 8.5 billion in 2040, experts estimate that food production must increase more than two percent annually to even maintain current diets. Commercial fertilizers will be key in the fight to feed the growing world. Fertilizers protect the environment.The efficient use of fertilizer also helps to conserve the natural environment. With fertilizers and modern high yield farming practices, more food is produced per acre each year, so land may be conserved. Fertilizers, used properly, help to prevent the widespread loss of habitat that results from wasteful slash and burn low-yield farming, which is a major global environmental threat.

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MAJOR FERTILIZER PRODUCING COUNTRIES:


COUNTRY 2005-06 2006-07 2007-08 2008-09 2009-10

Nitrogen China India United States Russian Federation Canada 3.7 3.7 Phosphate United States China India Russian Federation Brazil 1.4 1.4 Potash Canada Russian Federation Belarus Germany Israel 3.3 3.4 1.5 3.4 3.6 1.7 3.6 3.5 1.7 3.4 3.4 1.7 3.7 3.5 1.8 9.0 3.4 9.2 3.5 8.2 4.0 9.2 3.7 8.2 4.3 1.4 1.5 1.4 9.0 6.4 3.0 1.9 9.0 6.7 3.2 1.7 8.5 6.4 3.4 2.0 7.3 6.7 3.7 2.3 7.6 7.4 3.9 2.4 4.1 3.9 3.5 20.2 10.1 13.8 4.1 21.5 10.5 13.5 4.1 22.8 10.9 11.2 5.0 21.5 10.9 9.9 5.4 22.1 107 10.6 5.5

Million metric tons, year ending June 30* Source: Food and Agriculture Association (FAO) and The Fertilizer Institute (TFI) For countries that report their fertilizer statistics on a calendar-year basis, data are shown under the fertilizer year that begins in that calendar year; for example, 2006 data are under 2006/07.

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MAJOR FERTILIZER CONSUMING COUNTRIES:


In million metric tons, years ending June 30* COUNTRY 2005-06 2006-07 Nitrogen China India United States France Pakistan 23.0 11.0 11.2 2.5 2.1 22.9 11.4 11.3 2.5 2.1 Phosphate China India United States Brazil Australia 9.3 4.0 4.2 2.0 1.1 9.4 4.1 3.9 2.0 1.0 Potash United States China Brazil India 4.8 3.4 2.4 1.4 4.5 3.5 2.3 1.4 4.5 3.4 2.2 1.7 4.5 3.5 2.6 1.6 4.5 4.0 2.7 1.7 9.0 4.8 3.9 2.0 1.1 8.7 4.3 3.9 2.3 1.1 8.9 4.3 4.20 2.5 1.2 24.1 11.6 11.2 2.6 2.2 22.1 10.9 10.5 2.3 2.3 22.5 11.3 10.9 2.4 2.2 2007-08 2008-09 2009-10

Source: Food and Agriculture Association (FAO) and The Fertilizer Institute (TFI) * For countries that report their fertilizer statistics on a calendar-year basis, data

are shown under the fertilizer year that begins in that calendar year; for example, 2006 data are under 2006/07

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The role of the fertilizer industry The fertilizer industry helps ensure that farmers have the nutrients they need to grow enough crops to meet the world's requirements for food, feed, fibre and energy. The nutrients supplied by the industry supplement on-farm sources of nutrients such as manure and legumes. Nutrients in manufactured fertilizers are in forms that can be absorbed by plants. All of these nutrients exist in nature, but the quantities are not sufficient to meet the needs of our growing, urbanized population.

LOGISTIC INDUSTRY
Globally, the logistics industry is valued at US $ 3.5 trillion. The US which contributes to over 25% of the global industry value, spends close to 9% of its GDP on logistics services. The Indian Logistics industry is presently estimated at US $ 90 billion. The industry has generated employment for 45 million people in the country in comparison with the IT and ITeS sector which employs approximately 4.3 million people. It is forecast to grow at a Compound Annual Growth Rate (CAGR) of approximately 8% over the next three to five years. Third party logistics (3PL) solutions, is slated to grow at a Compound Annual Growth Rate (CAGR) of over 16% from 2007-10. Consequently, 3PL service providers are expected to corner an increased share of the Indian Logistics pie, from 6% in FY06 to 13% in FY11 at a CAGR of 25%.

The primary growth drivers of this industry are as under:


Investments in the infrastructure sector amounting to US $ 350 billion: Increased efficiency and productivity of the transport system would result in lower transit times. Streamlining of the indirect tax structure: The introduction of Value Added Tax (VAT) and the proposed introduction of a singular Goods and Services Tax (GST) are expected to significantly reduce the number of warehouses manufacturers are required to maintain in different states, thereby resulting in a substantial increase in demand for integrated logistics solutions.

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Robust trade growth: Strong economic growth and liberalization have led to considerable increased in domestics and international trade volume over the past five years. Consequently, the requirement for transportation, handling and warehousing is growing at a robust pace and is driving the demand for integrated logistics solutions. Globalization of manufacturing systems: Globalization of manufacturing systems coupled with advancements in technology are increasingly compelling companies across verticals to concentrate on their core competencies and avail the cost saving potential of outsourcing. This is expected to contribute to an increase in the need for integrated logistics solutions, which is the niche of every Third Party Logistics Services.

The industry has been valued at US $ 125 billion in 2010. (CII)


A snapshot of the FDI regulations governing the industry is as under: 100% FDI under the automatic route is permitted for all logistic services expect services mentioned in points ii and iii below. FDI up to 100% subject to FIPB approval is permitted for courier services. FDI up to 49% under the automatic route is permitted for Air Transport Services, including Air cargo services. It is pertinent to mention in this context, that press Note 1 (2007) that is expected to be imminently notified by the DIPP proposes to increase the limit of FDI on Air Cargo Services in 74%. The industry has been at the receiving end of increasing interest from private equity sector. The year 2007 witnessed just under US $ 1 billion in private equity investments in this industry, representing approximately 7% of total private equity investments during the year, against 3% in the previous year.

PURPOSE OF LOGISTICS INDUSTRY The purpose of logistics industry is to enable an effective transportation or timely movement of goods from one place to another. This could be for the purpose of industrial transportation or even private purposes.

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DIFFERENT MEDIUM OF LOGISTICS SERVICES IN INDIA There are three medium of logistics services in INDIA. These can be categorised in the following way: Air Freight - This is a modern and the safest mode to ensure a fast delivery of goods. A chosen one by many because of the swiftness of the system there are many companies that are now even providing super fast deliveries by Airways even on the same day. Land Transport This is a means of logistics support that has with stood the test of time through the extensive network of roads in INDIA. It has been the popularly used method and used especially in the shipments of heavy articles like machinery and vehicles. This is also a chosen method in case of household packers and movers. Railways This is also an age old method of shipments and transport. Though most used in case of domestic services this is very effective in the availability of cost effective logistics support in INDIA. Waterways An essential part of this industry this is also a\one of the oldest methods. Shipments and transportation of goods is done on an international basis through this way. It is apt in case of shipments of oil, highly sensitive or volatile articles like Uranium.

KEY PLAYERS OF THE LOGISTICS INDUSTRY IN INDIA Among the key players of the Indian logistics industry there are certain international names along with national companies that are not only world leaders in the field but are also part of the Indian industry for a long time now The land which opens up wide array of opportunities for the logistics service providers across the world is India. The high demand for the logistics services is due to the significant growth of economy. A few years back the value of the India logistics market was is $14 billion and will grow at a rate of 7-8 per cent. The logistics companies in India cater to millions of retailers and meet the requirements of about a billion people. The list below gives the name of the best logistics companies in India. TNT EXPRESS: This company is a key leader in the international market in the sector of global express services. The company ensures safe and on time delivery of your documents,
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freight and parcels. The company offers time and day definite delivery in about 200 nations across the world. It operates 47 jet freighter aircraft and 26,000 road vehicles and has a network of 2,300 companies. AFL: One among the acknowledged leaders among the logistics companies in India is AFL. Through its domain of logistics services, the company has delivered world class service in India. In 1979, the company introduced the first ever courier service by forming an alliance with DHL World Wide Express. The company offers services like Logistics and warehousing, Courier Company and Custom Consultant. DHL: This company is one among the major logistics companies in India. It is a market leader globally in overland transport, air freight and international express. The company ranks No.1 in the world in contract logistics and ocean freight. The biggest logistics and express network in the world has a network in about 220 territories and countries, 72,000 vehicles, 350 Aircrafts, 36 hubs and 4,700 bases. BLUE DART: This logistics company is South Asia's top integrated express package Distribution and Courier Company. The domestic network of the company covers about 21,340 locations and provides service to 220 countries by the company's sales alliance with DHL. It provides the best service like Free Pick up from your location, Regulatory Clearances, Real Time Tracking, Free Computerized Proof of Delivery etc. GATI: The company is a key leader in the arena of express cargo delivery and a significant one in the supply chain management solutions and distribution in India since the year 1989.The company provides services like the Warehousing, Express Cargo etc. Logistics Solutions of the company are Warehousing, Supply chain Management. The Distribution Solutions of the company are Gati Surface Express, Gati coast to coast, and Gati Air Express etc. SELF-EXPRESS: It is one of the largest express companies in India. The company offers the best and integrated logistics solutions. In 2002 the Limca Book of Records declared the
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company as the Largest Logistics service Provider in India. The company has a network over 550 locations in 28 states and 7 countries. It has 3000 weather proof ISO-9002 vehicles. ASHOK LEYLAND: The leading provider of logistic vehicles for the India Army is this company. It is a key leader in the tractor-tailers and multi axle trucks. The company manufactures buses, trucks, engines and special application vehicles in India. It is promoting a new company called Ashley Transport Services Ltd. for exchange of information and integrated services related to logistics in order to tackle the business of freight contractors. AGARWAL PACKERS AND MOVERS: This popular Indian logistics company provides logistic services like the home shifting, car packing etc. across India. The company believes in keeping technology and people and of course heart and soul in the movement of the individuals respective items. The company offers quality service in transportation and packing. DTDC: The biggest Domestic Delivery Network Company is DTDC. The company offers high class delivery service in about 3700 Indian locations and 240 international places. The company dispatch about 10 million parcels in a month. It also offers low cost for bigger parcels to US, UK, India, Nepal, Dubai and other places across the world. SIZE OF THE GLOBAL LOGISTICS INDUSTRY Currently the annual logistics cost of the world is about USD 3.5 trillion. For any country, the annual logistics cost varies between 9% and 20% of the GDP, the figure for the US being about 9%. US-based Armstrong & Associates, Inc. Tracks the issues and trends in the world logistics market and in the US logistics market, in particular, in their annual surveys of top 25 global LSPs. According to the firm, the global logistics market sizes in 1992, 1996 and 2000 were USD 10 billion and USD 56 billion, respectively. In 2003 and 2004, the corresponding figures were USD 270 billion and USD 333 billion, registering high growth rates. Though most of the large LSPs are headquartered in Europe, the US logistics market is the largest in the world capturing one-third of the world logistics market.

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In 2003, it was about USD 80 billion. In grew to USD 89 billion, and in 2005, it registered an impressive growth rate of 16% to cross the USD 100 billion mark for the first time and reach USD 103.7 billion (Foster and Armstrong, 2004, 2005, 2006). However, considering the fact that the logistics market in the US is about 10% of its annual logistics cost (Foster and Armstrong, 2006), there is still immense potential for growth of 3PL in the particular, and in the world in general. SIZE OF THE INDIAN LOGISTICS INDUSTRY The annual logistics cost in India is estimated to be 14% of the GDP, which translates into USD 140 billion assuming the GDP of India to be slightly over USD 1 trillion. Out of this USD 140 billion logistics cost, almost 99% is accounted for by the unorganised sector (such as owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse operators, customs brokers, freight forwarders, etc.,), and slightly more than 1%, i.e., approximately USD 1.5 billion, is contributed by the organised sector. So, one can see that the logistics industry in India is in a nascent stage. However, the industry is growing at a fast pace and if India can bring down its logistics cost from 14% to 9% of the GDP(level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improve service delivery and customer satisfaction leading to growth of export of Indian goods and potential for creation of job opportunities. FUTURE PROSPECTS Despite problems, the Indian logistics industry is growing at 20% vis-a-vis the average world logistics industry growth of 10%. Since the organised sector accounts for merely 1% of the annual logistics cost, there is immense potential for growth of the sector. The major opportunities are highlighted below. Many large Indian corporate such as TATA and RELIANCE Industries have been attracted by the potential of this sector and have sectors and have established logistics divisions. They started providing in-house logistics services, and soon sensing the growth of the market, have started providing services to other corporate as well.

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Large express cargo and courier companies such as Transport Corporation of India (TCI) and Blue Dart have also started logistics operations. These companies enjoy the advantage of already having a large asset base and allIndia distribution network. Some large distributors have also forayed into the logistics business for their clients. Since logistics service can be provided without assets, there is growing interest among entrepreneurs to venture into this business. Indian shippers are gradually becoming more aware of the benefits of logistics outsourcing. They are now realizing that customer service and delivery performance are equally important as cost to remain competitive in this global economy. The Indian economy is growing at over 9% for the last couple of years (compared to the world GDP growth rate of 3%), which implies more outputs and more demands for specialized logistics services. The Indian government has focused on infrastructure development. Examples include the golden quadrilateral project, East-West and North-South corridors (connecting four major metros), Free Trade and Warehousing Zones (FTWZ) in line with Special Economic Zones (SEZ) with 100% Foreign Direct Investment (FDI) limit and Public-Private Partnerships (PPP) in infrastructure development. It is expected that infrastructure development would boost investments in the logistics sectors. In India, 100% FDI is allowed in logistics where as in China, until recently, foreign investment was not allowed in domestic logistics. Almost all large global logistics companies have their presence in India, mainly involved in freight forwarding. For domestic transportation and warehousing, they have tie-ups with Indian companies. As the Indian logistics scenario looks promising, these MNCs are expected to play a bigger role, probably forming wholly-owned subsidiaries or taking the acquisition route.
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The latter may be the preferred route of investment since the target company is readily acquired with its asset base and distribution network, and the need for building everything from scratch can thus be avoided. The benefits for the acquired company include the patronage of an MNC and access to the MNCs global network. As an example, DHL Danzas, the biggest logistics company in the world, has taken over Blue Dart. IMPACT OF LOGISTICS INDUSTRY ON ECONOMY: Industry reports suggest that in the year 2002, revenues earned by the logistics industry equaled USD$910 billion. As much as USD$571 billion was earned as revenue from transportation, USD$ 298 billion was earned from warehousing, USD$41 billion was from services related to logistics industry. Federal Reserve recorded a growth of 4% in the gross domestic product or the GDP in the year 2004, owing to revenues earned by the logistics industry. With the advent of latest and sophisticated know how, the logistics industry has a bright future ahead

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COMPANY PROFILE

NAGARJUNA GROUP - FOUNDER


Our founder Sri K.V.K.Raju (28.11.1928 16.06.1993) laid the foundation of the Nagarjuna Group in 1974 with an investment of Rs.50 millions. He was a

visionary and a professional technocrat entrepreneur who realized the importance of Core Sectors to an economy like ours. He has guided the group with his philosophy.

SERVING SOCIETY THROUGH INDUSTRY


Nagarjuna Fertilizers and Chemicals Limited (NFCL) is the first gas based fertilizer factory in South India. The plant is based on the latest fertilizer technology from M/s. Snamprogetti, Italy for Urea process with an installed capacity of 1500 Mt/day for each unit. The ammonia process is based on technology from M/s. Haldor Topsoe, Denmark with an installed capacity of 900 MT/day per each unit. The feed stock for unit I is natural gas and feed stock for Unit II is NG/Naphtha. The current consumption of natural gas is 2.15 million standard cubic meters per day and 500 MT of Naphtha per day. The natural gas is being received through pipe lines from Tatipaka situated 92 Kms away from the factory and is marketed by M/s Gas Authority of India Limited. Naphtha is being supplied by M/s

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HPCL. The water requirement of 6.0 Million Gallons/day is received from Samalkot Summer Reservoir through two pipelines.

FINANCE:
The total cost of the existing complex is Rs. 2156 corers (Rs. 1186 corers for Unit-I and Rs. 970 corers for Unit II). This consists of loan of Rs. 1,162 corers (Rs. 515 corers for Unit-I and Rs. 647 cooers for Unit II) sanctioned by IDBI, IFCI, ICICI, UTI, LIC, GIC and also Banks. The foreign exchange component of Rs. 781.07 cores was met by the Indian Financial Institutions like IDBI, IFCI & ICICI and also by Italian Buyers credit. The public and promoters subscribed the equity portion of Rs. 332.12 corers. construction of Unit II. The internal reserves of Rs. 323 corers were utilized for

LIVING IN HARMONY WITH NATURE NFCLS CONTRIBUTION TO ECOLOGY


Environmental protection is an avowed corporate philosophy and the plant is built on the principle of zero-effluent discharge and is totally eco-friendly. NFCLs aim is to maintain ecological harmony, which is NATURES INVALUABLE AND BEAUTIFUL GIFT TO MANKIND. Man can live in harmony with the environment only when mankind is guided by respect for the Mother Earth and all living things. Nagarjuna Fertilizers and Chemicals Limited believe that Industry should exist in harmony with nature. In pursuance of the corporate vision, and as a humble contribution to the Mother Nature, the complete ecological system in and around the factory has been changed by establishing a K.V.K.RAJU SUNDARAVANAMU in an area of 747 acres surrounding the Complex. The entire area has been covered with 4,50,000 plants consisting of 170 species, transforming a once highly saline marshy area devoid of any vegetation into a lush green arboreal park. The establishment of 1 KM wide K. V. K. Sundarvanam is an integral part of overall natural ecological system consisting of eleven water bodies for fish, habitat for animal life and sanctuary for both indigenous as well as migratory birds with the factory nestled in the most natural and idyllic surroundings created with dedication.

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An integrated Environmental Management Plan (EMP) has been incorporated in the basic design itself to ensure strict adherence to International Standards. The investment on pollution control equipment in the Plant is close to Rs.110 corers of capital investment and recurring expenditure of Rs.6 corers being spent annually for operating and maintaining the equipment.

MAIN FEATURES OF ECO-SYSTEM: A FORESTATION:


740 acres of area has been planted with 4.5 lakhs samplings of 170 species. Weak areas have been planted with selected species based on criteria like tolerance to salinity; availability from local sources and their ability survive with least maintenance. A full-fledged nursery with mist chamber and sprinkler irrigation

system has been developed for supply of plants to a forestation programmer.

ANIMAL ENCLOSURES:
A deer park with spotted deer has been set up in an area of six hectares with chain-link fence on all sides. Separate enclosures for birds, rabbits and certain other animals are made available. Some of these animals like jungle cat, fox, jackals, mongooses, squirrels, bats, snakes, and turtles are also being let out freely in this ecosystem as a part of our animal conservation program.

USE OF TREATED EFFLUENT:


The total treated effluent generated from the factory is being utilized through a network of over 17 KM of PVC pipeline for sustenance of the eco-system to show the purity levels of the effluents and the technological efficiency of the plant equipment.

AWARENESS PROGRAM:
As a part of NFCLs sincere endeavor to bring awareness about the benefits of cleaner environment on the general standards of life, company has started GREENING THE ROADS of Kakinada in Phases. As a part of this program, flowering trees were planted on either side of the 4 km length of roads from Bhanugudi Junction to Nagamallithota and from Nagamallithota to NFCL. program is being extended to further areas in phases. This

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VALUES STATEMENT OF NFCL COMMITMENT


The Associates of NFCL are committed to continuously evoking customer delight through constant review and monitoring and delivering proactive value added solutions. They are also committed to strive for satisfaction of all stakeholders in a balanced manner through sustainable growth and profitability

EXCELLENCE:
They shall continuously strive for Excellence in all dimensions of the company through teamwork, creativity and other means.

ETHICS:
They shall strive for wholesome business relationships by adhering to the principles of trusteeship, fair play and transparency in all our dealings that they shall practice a work cultural, which is performance driven and conducive to in proving discipline, accountability and depth of character, team spirit and honesty in all our personal and professional relationships. They shall build a learning organization where creativity, innovation, entrepreneurship and knowledge sharing are encouraged and fostered actively

CONCERN:
They consciously recognize that the development of associates is inextricably linked to the sustainable growth and profitability of the organization. Therefore, mutual care and concern between the associates and the organization shall be our abiding value.

NFCLS VISION STATEMENT


TO BE GLOBAL LEADER IN NUTRITION

For close to two decades, the employees at NFCL have predominantly been in the business of manufacturing and marketing Urea, a segment of the plant Nutrition business space. Given our cumulated experience and strengths in understanding the farmer, the agriculture, various initiatives taken in the past, the exposure of Indian agriculture to global economy and therefore the need for Indian farmers to be globally competitive, have realized the need to provide innovative and comprehensive Plant Nutrition Solutions.
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The leadership they refer to in our Vision Statement is in terms of providing innovative and creative solutions.

NFCLS MISSION STATEMENT


They shall: Pioneer transformation in the approach to plant nutrition Deliver holistic plant nutrition solutions to the farmers Be the most preferred organization to be associated with

Pioneer transformation in the approach to plant nutrition they shall develop crop, site and stage specific wholesome plant nutrition solutions. NFCL shall focus on all necessary initiatives towards this be it manufacturing technology, regulatory, logistics and using a mix of several sciences and skills. The most preferred

organization to be associated with in the process of providing these solutions, NFCL shall delight all the stakeholders employees, investors, suppliers, customers and society at large. The stakeholders would prefer to be associated with us not only for the higher value they offer, but also shall cherish their relationship with us due to the way they deal with them with full commitment, responsibility and accountability.

EMPLOYEE FOCUS
NFCLs aim to have the most satisfied employee base by the turn of the century through its commitment to Personal and professional development of the individual. Rewarding teamwork, innovation and quality behaviour Through job satisfaction Creating and sustaining a close-knit family culture wherein every individual experience a sense of belonging.

MARKETING:
NFCL is operating in Andhra Pradesh, Orissa, West Bengal, Maharashtra, Karnataka, Pondicherry (Yanam territory). A professional team, with a wide range of products, that include Urea, traded fertilizers (DAP, MOP, Complex fertilizers), Micro-nutrients, Pesticides, Organic fertilizers and Bio-Pesticides, has taken NFCL

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very close to the farmers and made NAGARJUNA a household name among the farming community Keeping pace with the changes in agricultural practices NFCL has developed organic-fertilizers and bio-pesticides with support from NARDI. A new concept in fertilizers i.e., Customized Fertilizer Granules (CFGs) has been developed and the product is in trials. NFCLs Development activities focus on imparting training to farmers and dealers on the latest package of practices in various crop sand technology transfers. Training programs are carried out both on campus at KVK, Kakinada and off-campus at villages and towns. A Well-equipped and trained development tem organizes the programs using audio-visual vans, jeeps, slide projectors and literature on products and crops, etc. State Governments, Agriculture Universities and the farming

community as a whole have acknowledged the effectiveness of development programs being carried out by NFCL.

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PERFORMANCE HIGHLIGHTS
YEAR PRODUCTION SALES SALES TURNOVER INCLUDING SUBSIDY (Rs. Crores) 364.48 NET PROFIT AFTER TAX (Rs. Crores) 32.11

Ammonia (MT) 1992-93 (8 months) 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 344498 386357 413390 412694 401627 699110 751542 796024 706528 689263 712534 723525 788471 756815 772584 782861 846533 188027

Urea (MT) 308453

MFG Urea (MT) 251599

591213 675149 708059 716910 689648 1212607 1297510 1364794 1221944 1187259 1325467 1382953 1379220 1324054 1354490 1378162 1482103

598787 659094 689767 695154 682836 1205376 1283195 1324497 1217629 1101776 1265376 1256704 1396927.35 1310856.05 1338302 1397101 1505484

606.51 843.14 882.27 922.49 795.88 1214.54 1435.96 1215.52 1062.69 748.65 1178.26 1385.63 1452.94 1815.24 2213.43 2383.90 2009.68

127.86 192.89 221.18 155.24 122.10 143.73 113.50 46.53 39.70 57.47 74.67 85.35 66.86 31.71 22.49 32.41 66.37

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CUSTOMER FOCUS
In recognition that business is based on quality and integrity, NFCLs aim to have the most satisfied customer base by enhancing farmer productivity through forward integration on the one hand, and through catering to industrial needs on the other. Unto this end, NFCL shall: Produce high quality products that give value for money Offer, both products and services Innovate to satisfy the real needs of customers Engage in fair, open and ethical practices.

SHARE HOLDER FOCUS


NFCL aim to keep its shareholders satisfied by: Delivering the best long-term return on investment amongst all companies in the Indian agri-business industry. Continuous growth and excellence in business performance.

AWARDS AND HONOURS

British Safety Council Award NFCL has bagged two awards from Indian Chemical Council, Mumbai for the year 2009-10. The awards have come in the categories of Water Resource Management In Chemical Industry under EHS Environment and Certificate of Merit for the Best Complaint under Responsible Care for Codes Environment Protection and Process Safety management.

2011 2010

NFCL has bagged FE EVI Green Business Leadership Best Performer award for the year 2009-10 under Chemicals and Fertilizers category organized by The Financial Express & Emergent Ventures in India.

2010

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Shri K. Rosaiah, Chief Minister of Andhra Pradesh presented the Best Management Award for the year 2009-10 to NFCL for maintaining excellent cordial industrial relations and for effective implementation of employee welfare activities on the eve of May Day at Hyderabad. Mr. R S Nanda, Director & Chief Operating Officer received the award on behalf of the Company.

2010

NFCL has bagged Green Leaf 2nd runner-up award in the Global Competition for Excellence and Innovation in Safety, Health and Environment held by International Fertilizer Industry Association (IFA). The award ceremony was held during the First Global Safety Summit conducted by IFA and hosted by Gulf Petrochemical Industries Company (GPIC), Bahrain. Dr

2009

Abdulhussain Mirza, Minister for Oil and Gas Affairs and Chairman of National Oil and Gas Authority, Bahrain gave away the awards, at a glittering ceremony at Ritz-Carlton, Bahrain.

NFCL bagged two awards from the Fertilizer Association of India (FAI), New Delhi. It won the prestigious FAI Environmental Protection Award in the nitrogenous fertilizer plants category and stood as joint winner for excellence in Safety Award. NFCL has been awarded for the 3rd consecutive year and 5th time in the span of last 8 years and this reckoning has been done out of 31 Nitrogenous Fertilizers Plants in the country. The awards were received by Shri R S Nanda, Director & COO and Mr. Ramashray Singh, SGM (Plant Operations) in a glittering ceremony held during the 45th FAI Annual Seminar, which was organized at Hotel Mariott in Hyderabad on 3rd Dec 2009. Shri MK Alagiri, Honble Minister for Chemicals & Fertilizers, Government of India, gave away the awards.

2009

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NFCL has bagged ICC AWARD for Excellence in Management of Health/Safety/Environment from Indian Chemical Council, Mumbai. Shri Srikant Jena, Honble Minister of State for Fertilizers & Chemicals gave away the awards, in a glittering ceremony held at Mumbai on 4th Dec 2009. The following steps helped to achieve this prestigious award:

2008

1. For the initiatives taken for improving the environment through CDM (Clean Development Mechanism). 2. Nil Reportable Accidents for consecutive period of three years (i.e for 2006, 2007 & 2008). 3. For attaining a 0/0 frequency rate / severity rate for the year 2006, 2007 and 2008.

NFCL bagged two awards from the Fertilizer Association of India (FAI), New Delhi. It won the prestigious FAI Environmental Protection Award in the nitrogenous fertilizer plants category and award for the best article in Production and Technology. NFCL has been awarded for the 2nd consecutive year and 4th time in the span of last 8 years and this reckoning has been done out of 31 Nitrogenous Fertilizers Plants in the country.

2008

National Safety Council Award from National Safety Council, Andhra Pradesh. Chapter for implementing the Process Safety Management Systems (PSMS).

2008

For the third time, Nagarjuna Fertilizers and Chemicals Limited has won the prestigious FAI Environmental Protection Award in the nitrogenous fertilizer plants category for the year 2006-07. NFCL has been honoured for outstanding contribution for the sustainability of ecological balance at Kakinada Plant. This Award reflects the collective effort, dedication and commitment of NFCL associates and responsibility of NFCL towards the society.

2007

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NFCL has been awarded with prestigious National Award for Excellence in Water Management by CII-Sohrabji Godrej Green Business Centre, Hyderabad.

2006

NFCL has won the Best Technical Innovation Award from Fertilizer Association of India for performance excellence in the field of production technology.

2006

Nagarjuna Fertilizers and Chemicals Limited has been awarded with 'Best Management' by Labour Department, Government of Andhra Pradesh on the occasion of May Day.

2006

NFCL participated in the Corporate Social Responsibility Award 2004-05 competitions, which were organized by The Energy and Resources Institute (TERI), New Delhi. A total of 180 Companies participated. NFCL was short listed in the Best Ten Companies and given a 'Certificate of Appreciation', for its efforts towards good Corporate Citizenship and sustainable initiatives amongst

2006

Corporates with turnover above 500 crore rupees. Award for Excellence in Natural Gas Conservation in the Fertilizers Sector category from Gas Authority of India Limited (GAIL). 2005

FAI (Fertiliser Association of India) Environment Protection Award in the Nitrogenous fertilizer plants category for the year 2004-05.

2005

5 Star rating in O H & S Audit from British Safety Council, UK Commendation Award in Leadership and Excellence Awards in Safety, Health & Environment (SHE) 2004, by Confederation of Indian Industry, Southern Region, Chennai

2005 2005

Water Efficient Unit Award during National Award for

2004
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Excellence in Water Management 2004 by Confederation of Indian Industry, Hyderabad

Award for Good Practices in Cleaner Production and Pollution Control by A.P. Pollution Control Board

2004

Environmental Protection Award in Nitrogenous Fertilizer Plants for 2001-02 by Fertilizer Association of India

2002

OHSAS 18001 Certification from BVQI, Netherlands Commendation Trophy by National Safety Council for

1995 2001

implementing OHSAS 18001 by A.P. Chapter and Director of Factories, Andhra Pradesh

Bronze Award for Occupational Safety for 2001 by ROSPA, U.K. Best Environmental Improvement Effort by Industries located in the State by FAPCCI

2001 2001

Best Environmental Management Plan 2000-01 by A.P. Pollution Control Board, Visakhapatnam

2001

Bronze Award for Occupational Safety for 2000 by ROSPA, U.K. Best School Industry Linkage by NCERT ISO 14001 EMS Certification by BVQI, Netherlands 3 Star Rating in OH&S Audit by British Safety Council, U.K. Vanamitra Award 1999 for developing and maintaining Green Belt by Government of Andhra Pradesh

2000 2000 2000 2000 1999

Merit Award for 1998 by Royal Society for the Prevention of Accidents (ROSPA)

1999

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Paryavarana Parirakshak Award by Rotary International District 3020 & Rotary Club of Waltair

1999

Golden Peacock Environment Management Award 1998 by 1999 World Environment Foundation (WEF), New Delhi

National Safety Award for 1998 by British Safety Council, U.K. Best Workers Welfare (Including Family Planning) effort by an Industrial or Commercial Unit in the State for 1997-98 from A.P. Chamber of Commerce and Industry

1999 1998

National Safety Award for 1997 by British Safety Council, U.K. Merit Award for 1997 from ROSPA, U.K. Awards for Innovative and Purposeful Programmes for 1996 from ICMA, Mumbai

1998 1998 1997

National Safety Award for 1996 by British Safety Council, U.K. Award of Merit for 1994-95 from National Safety Council, USA Rajiv Gandhi Parti Bhoomi Mitra Award for 1994 96 by Waste Land Development, Govt. of India

1997 1996 1996

National Safety Award for 1995 by British Safety Council, U.K. Golden Peacock National Quality Award for 1995 by Institute of Directors, New Delhi

1996 1996

Awards for Environmental Control Strategies & Safety in Chemical Plants for 1994 from ICMA, Bombay

1995

Best Industrial Canteen for 1994 by National Safety Council, AP Chapter, Hyderabad

1995

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Good Housekeeping for 1994 by National Safety Council, AP Chapter, Hyderabad

1995

ISO 9002 Certification from BVQI, Netherlands National Safety Award for 1994 by British Safety Council, U.K. EPIC award for Anti Pollution measures taken by the Industry from Environment Public Interest Committee, Kakinada

1995 1995 1993

OTHER GROUP OF COMPANIES OR INSTITUTIONS: Nagarjuna Agrichem Limited, Hyderabad Nagarjuna Palma India Limited
Nagarjuna Agricultural Research & Development Institute(NARDI),Hyderabad

KVK Raju International Leadership Academy Nagarjuna Power Corporation Limited Nagarjuna Haifa India Limited Nagarjuna Oil Corporation Limited,Chennai Bijam Biosciences Limited
Nagarjuna Foundation, Hyderabad

FUTURE PLANS OF THE COMPANY 1) To improve the capacity utilization and energy efficiency through technology up gradation. 2) Switching over to 100% natural gas as raw material instead of Naphtha in Ammonia plant II

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3) To continue to improve environmental performance under the framework of ISO 14000 EMS. 4) To enhance the standards in the present quality management system (ISO 9002) by adopting the ISO 9001-2000 revision. 5) To widen the scope and offer technical services to various external agencies including over as a excitement.

DIVERSIFICATION:
Nagarjuna Group is on the threshold of major growth phase. Nagarjunas aim is not just to meet the challenges of change, but to be the leaders in all the businesses that we are in namely, Agri Inputs/Outputs, Energy Sector and Refinery. Nagarjuna Group will thus have significant presence in the core sectors of the economy, which will have a multiplier effect on the industrial and socioeconomic development of the country. Nagarjuna Fertilizers and Chemicals Limited (NFCL) has sought the Centers permission to expand the existing production capacity of urea from 12 lakhs metric tones per annum to 17 lakh tones per annum, reports Business Standard. NFCL is also undertaking several activities for the development of the surrounding villages by providing free medical, educational and drinking water facilities besides supporting the mentally-retarded children. The Kakinada facility of Nagarjuna Fertilizers and Chemicals Limited (NFCL), has achieved a record Urea production of 113.1%, producing a total of 13.79 lakhs Metric Tones of Urea during 2005-06. The Plant has repeated this phenomenal feat, producing Urea more than its capacity, for the consecutive second year. NFCL produces Urea in two units. While the Unit one Produced 7, 03,645 Metric Tones, unit two also surpassed its capacity by producing 6,75,571 Metric Tones making this phenomenal feat repeated during 2005-06 too. Total capacity of the plant is 11, 94,600 Metric Tones. The Plant also has achieved this record production at a very optimal utilization of energy of 5.662 MKcal/MT of Urea against Internal target of 5.67 Mkcal/MT, which is already much lower than the standard Fertilizer Industry Coordination Committees (FICC) norm of 5.712 MKcal/MT. NFCL has one more reason to celebrate that full production of Urea i.e., 13.79 lakhs Metric Tones has been dispatched to the farmers.
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Along with the production, NFCL has also done well in sales and distribution wings. Its products, which include Mahazinc, Zinc Sulphate, zeta specialty fertilizers besides Urea have been sold out during 2005-06. Bureau Verities Quality International (BVQI) awards re-certification of ISO 9001:2000 for Nagarjuna Fertilizers and Chemicals Limited. Nagarjuna Fertilizers and Chemicals Limited (NFCL) has been re-certified of ISO 9001:2000 by Bureau Verities Quality International (BVQI), for its Quality Management Systems. The Flagship Company of the Nagarjuna Group has already been an ISO 9001:2000 organization since 1995. This re-certification, which is valid up to February 2008, is only an extension of recognition for companys excellent quality management systems. BVQI team has done the re-certification audit during February at NFCL plant Kakinada. After conducting audit in Plant Operations and Area Marketing Offices BVQI sent a certificate to NFCL in which it mentioned Quality Management System of the Nagarjuna Fertilizers and Chemicals Limited has been audited and found to be in accordance with the requirements of the standards ISO 9001:2000. BVQI is today the most widely recognized certification body in the world, offering solutions in the key strategic fields of companies operations: Quality, Health and Safety, Environment and Social Responsibility. It is recognized by more than 30 national and international accreditation bodies across the world to deliver ISO 9001 certification. Nagarjuna Fertilizers and Chemicals Limited Awarded the prestigious 5 star Rating by the British Safety Council, U.K: Nagarjuna Fertilizers and Chemicals Limited (NFCL), the flagship company of the Nagarjuna Group has been awarded the highly coveted 5 star rating by the British Safety Council, U.K. After a detailed Health and Safety Management System Audit conducted during the month of January 2005, the British Safety Council has awarded an Excellent rating (Score of 92.39%) to NFCLs manufacturing facility at Kakinada. The audit covered eight areas of NFCLs management systems leading to best practices, Fire Control Systems, Measurement and Control Systems, Workplace implementation, Verification, Best practice and Continuous improvement. The British Safety Council (BSC) is one of the worlds leading occupational health, safety and environmental organizations. BSCs Five Star Health and Safety Management System Audit is a benchmark for best practices. It provides a
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detailed examination of the organizations current practices, and gives a comprehensive report and plan for implementing, monitoring and achieving continuous improvement. It is based on the Business excellence Model and goes beyond HS(G)65 and OHSAS 18001 to measure how far an organization has gone towards achieving best practice. Information Technology & Communications Department, Government of Andhra Pradesh signs MOU with IKisan Limited To provide agriculture related information and services through Rajiv Internet Village Centers / (RSDPs/Rural eSeva Centers) In its efforts towards Grameen Vikas aimed at alleviating rural poverty and ensuring agricultural development, the Information Technology & Communications Department, Government of Andhra Pradesh today signed a MOU with Ikisan Limited to provide agricultural related information and services to the vast farming community of the state through Rajiv Internet Village Centers (RSDPs/Rural e-Seva Centers). The Information Technology and Communications Department has already set up 1200 kiosks spreading across the state under the Rural Service Delivery Point Project (RSDP) in rural areas to serve as centers of e-commerce and information dissemination. Ikisan Limited has partnered with the Information Technology & Communications Department to provide agriculture information software and services in these kiosks. The modules will be in Telugu and voice enabled addressing the needs of rural population comprising mainly of farmers. The kiosk operators will be provided training by Ikisan Limited enabling them to effectively utilize the software and other applications for the benefit of agriculturists. Ikisan Limited is a pioneer in Agri-Portals in India. A Nagarjuna Group initiative, Ikisan.com is a comprehensive Agri Portal addressing the Information, knowledge and business requirements of various players in the Agri arena viz., Farmers, Trade Channel partners and Agri Input/output companies. Leveraging

Information Technology and extensive field presence, Ikisan is positioned as an Information/Output companies. Leveraging Information Technology and extensive field presence, Ikisan is positioned as an Information/Knowledge exchange and an eMarketplace. An integrated agriculture group, Nagarjuna has core competencies in the fields of plant nutrition, plant protection, and irrigation and farm services.

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OUR VALUES: Deliver solutions that will please our customers deliver returns that motivate out investors take actions that strengthen us and inspire the best in others (by setting an example in relationship, integrity, honesty, humility and hard work) By understanding the deep and fundamental needs of our people, our customers our Environment). THE GROUP: Founded in 1973 by Shri K.V.K. Raju with a modest investment of US$ 23 million, the Nagarjuna Group Today is a prominent industrial house in India with an asset base of US$ 2.5 billion. 1974: Birth of a business group that pioneered several core sector enterprises in the coming decades. Starting with manufacturing steel, Nagarjuna Steels Limited was launched. 1985: With focus on agriculture input business started plant nutrition business with Nagarjuna Fertilizers and Chemicals Limited 1992: Forayed into the Crop Protection Business with Investments in Pesticide Formulations manufacturing followed by Technical Grade Manufacturing in the year 1994. 1995: Ventured into Energy Sector. Entered into power generation by setting up Nagarjuna Power Corporation Limited. 1997: Entered into petroleum by setting up Nagarjuna Oil Corporation Limited. Consolidating its core activities, today the Groups major operations cover Agri and Energy sectors. Investors and our Ecosystem (Alliances, Community and

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The logo exemplifies the Groups inner strength through the circles, which stand for the core values of the organization viz., concern,

commitment, quality and integrity towards its stakeholders viz.,

customers, employees, investors and community. The central circle

symbolizes the Sun, the source of prime energy for the solar system. The five circles also symbolize the five elements of the Universe and the The new corporate logo of the Nagarjuna Group symbolizes a dynamic and valuebased organization, actualizing the concept of Trusteeship. The triangle represents the planet Mars. immemorial Mars, from time has symbolized spirit of continuity.

prosperity, success and abundance of energy. represents The triangle in the logo the upward flow of

perennial energy towards the mission of the group Serving Society through Industry

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WELFARE MEASURES IN NFCL: It has taken several welfare measures to improve the general working conditions. They are given below. A.C. Facilities Drinking Water Facilities Lockers given to employees for keeping their belongings Annual Medical Examination First Aid Boxes at several locations Club Facility Cultural Activities Library Facilities School for children of NFCL employees Employees State Insurance Facilities Uniform to all Employees Groups savings linked Insurance Scheme Protective wear like helmets, safety shoes etc., Transport facilities Canteen facilities NFCL OBJECTIVES: Performance management High performance potential Individual growth potential Belief in Youth High Result Orientation Law procedure orientation Entrepreneurial Development Distinct Nagarjuna Group Ethos High sense of respect for value of time and money Harmonious employee relations Development of Human Resources on a continuous basis Highest importance to human values Objectives assessment of individual performance Disciplined behavior of all employees
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Belief in system management Belief dynamism Belief in multi skilled concept Continuous monitoring cost control FINANCE DEPARTMENT IN NFCL PLANT: There are Six sections in the project finance: General Accounts Bill section Cash and bank section Sales Tax Costing and FICC (fertilizers industry co-ordinate committee) CPC

BILL SECTION: This section receives bills from various departments in the plant. It checks the invoices as per the purchase order/service order terms and passes. The passed vouchers are send to cash and bank section. CASH AND BANK SECTION: The section makes payments as per due dates in mode of cheque or DD. This section decides that bills have to be paid in the order of importance. Travel bills and impress bills are paid to employees in mode of Cash. GENERAL ACCOUNTS SECTION: This section is also responsible to the maintenance of the accounts for the purpose of the all audits. Budget preparation initiating necessary control mechanism is also part & parcel of this department. It looks after the entire transport bills payments. All addition and deletions of assets related to Plant are done by this section. COSTING AND FICC: Fertilizers industry co-ordination committee is formed by members from different departments like agriculture departments, ministry of finance and representation of big fertilizer industry. FICC section in the finance department co-ordinates with other departments and calculates the production cost of urea and with proper documentation submits it to
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the FICC to fix the subsidy. It is also responsible for maintaining other statutory requirements and sends various reports to FICC. Preparing for the future, proactively, we are addressing the most important aspects of our organisation: Strategy Having a long term vision for the company Structure To facilitate achieve our strategy People Aligning related policies with Strategy and Structure. In turn to build the right capability, attitude and behaviour in employees. Process To enable employees to work more efficiently and effectively, to have the best in class internal business processes. Board of Directors Shri K.S. Raju Chairman Smt Medha Joshi (Nominee Director of IDBI) Shri M.P.Radhakrishnan (Nominee Director of SBI) Shri S.P. Arora (Nominee Director of IFCI) Shri K. Rahul Raju Managing Director. Shri Chandra Pal Sing Yadav (Nominee Director of KRIBHCO) Shri Yogesh Rastogi (Nominee Director of ICICI Bank Ltd) Statutory Auditors M/s M Bhaskara Rao and Co. Chartered Accountants

SWOT ANALYSYS OF NFCL: 1) STRENGTHS: Broad and modern product range Good corporate image, especially in Andhra Pradesh Excellent dealer network in Andhra Pradesh Strong dealer network in most of other states Open work culture Good working environment Qualified, trained & motivated team Location advantage of plant Kakinada port

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2) WEAKNESS: Broad product range is not computerized Some compliance about market attention 3) OPPORTUNITIES: Huge gap between usage inside and outside industry New irrigation projects increasing the market dimension Expansion profit offering double quantity. 4) THREATS: Decontrol Joint venture Non-availability of Raw Materials in future

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DISTRIBUTION-LOGISTICS IN NFCL
DISTRIBUTION DISTRIBUTION NETWORK: Over 225 people strong marketing forces is committed to provide total customer satisfaction through reliability, timeliness, courtesy, honesty and value for money. This commitment has helped us in achieving the status of the leading player in plant nutrition in the states of Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, New Delhi, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, west Bengal servicing 15 states, we have 3 zonal offices and 30 regional offices including specialty fertilizers and micro irrigation regional offices. Andhra Pradesh

SALES & MARKETING: Channel management: unlike many industries our strength is our ability to service our large base of customers through a wide spread dealer network present till small towns and village level. Our sales operations are managed by the latest SAP system installed in all the marketing offices while our sales personnel maintain direct and continuous contact with the vast dealer network to service them efficiently.
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Customer management: Nagarjuna has always been in the forefront in offering value added services directly to our customer right at his door steps. Our farm advisory and information services provide farmers with best agnormic, plant nutrition and protection advisories by farm visits as well as by online services through internet kiosks. Our scientists train farmers visiting them in the fields as well as by conducting specialized training programs at our research and farm centers. Supply chain management: Nagarjuna views supply chain optimization as a core focus area. For continuous improvements and streamlining of operations, supply chain is viewed in totality and hence headed by a senior level executive with long and distinguished experience in management of different function of the supply chain. The supply chain is characterized by best practices and systems which are continuously reviewed for improvisation opportunities. The process are standardized and are ISO 9000 certified. The main functions are: Commercial: The function is characterized by standardized process from material requisition to vendor evaluation and selection. Transportation & Warehousing: The operations are spread all across India and reach deeper into the far flung villages across the country. We handle material across Rails, Roads and Waterways across strategically chosen warehouses handling seasonal material across markets. Our storage, transportation and handling practices ensure best quality product reaches customer with minimal waste and losses. They have specialized softwares that aid them in optimizing their logistics operations across the critical performance criteria of costs, speed, quality, reliability and flexibility of operations to meet the customer requirements profitably.

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MODE OF TRANSPORT
The mode of transport in NFCL 1. Water 2. Rail 3. Road

NFCL uses water for imports and remaining two ways it will use in the country for Sending its products. Out of 100% it uses rake for 80% and through road 20%. The net weight of urea in bag is 50kg and sack weight is 130grms and the gross weight is 50.130grms and measured as 20 bags = 1000kgs =1 Metric ton. The type of trucks available is mainly of 17 tones capacity. Each truck will carry 340 bags. i.e. 17.000 MT NFCL is having nine transport contractors namely Avanthi, Avanthi warehousing, Sri Satyasai, Teja warehousing, Uma Ramaligeswara, Hari Karthika, Sri Bhupathi, Sangi, Sri Laxmi Srinivasa, Mohan Transport. The order of allocation will be prefixed ratios between contractors. Most of the trucks will be placed from Shiridi Sai lorry owners association and the above Mentioned Nine contractors are affiliated to this union. 1 Rake is equal to 42 Wagons. Each Wagon will carry 63tons and 1 Rake will Carry 2750 tons.

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Plan of transport

The above diagram show the goods move from the plant From plant NFCL will send its product through trucks on road to dealer and sub dealer. Another way is through rake. Through rake the goods will reach to rail head From goods shed products will be send to dealer. Remaining stock from goods shed with the help of local transport it will be send to ware house local and nearby field location Ware Houses as per requirement and plan by Regional offices. The stock stored at warehouse is used when required the company will send stock to dealers from the ware house. The company will observe least cost procedure in issue of material by calculating all possible means of cost.

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Truck loading procedure Daily on requirement Road plan will be raised by logistics planning transporter wise and it is intimated to transporters. Transporters will raise Truck entry permit which is a part of truck loading Advice (document) Truck after entering plant premises security will enter the truck in time and traffic Section at security gates (terminal) will enter the trucks in system and fill the truck loading advice with to be loaded particulars At Weigh Bridge truck will record the tare weight and proceed for loading. At bagging plant truck will be loaded with mechanized loaders and with small help by loading personnel and fill the truck loading advice with loaded quantity particulars. Truck will take gross weight at Weigh Bridge and after identified with the correct weight. It Will proceed to logistics terminal at gate. Logistics terminal will raise relevant STA/DC CUM INVOICE document. Security will check the truck and enter the check out time.

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LOGISTICS DISTRIBUTION
HIGHLIGHTS OF 2010-11
Total dispatches during 2010-11 : 21.23 Lakh MTs MU: 13.78 Lakh MTs - Rail: 12.22 Lakh MTs, Road: 1.56 Lakh MTs PU: 7.45 Lakh MTs - Rail: 5.90 Lakh MTs, Road: 1.55 Lakh MTs Ever Highest Rail Dispatches: 12, 21,598 Mts. Ever Highest Dispatches at Vizag: 1, 80,897 Mts in Sep09. Ever Highest Rail Freight : Rs 81.92 Crores Differential claim for manufactured urea under UFP is 20.30 Crores Differential claim for Pool urea against revised equated freight is 6.93 Crores For 2009-10: Rs.2 Crores, for 2010-11: Rs.4.93 Crores Dispatch Money earned : Rs.1.68 Crores Vizag : Rs.96 lakhs , Kakinada : Rs.72 lakhs E payment to Railways first in Vijayawada Division of SCR. Highest ever peak stock of 6.50 Lakh Mts (Jun-July10) Railway Claims settled during 2010-11: Rs 10.17 Lakhs. FTY 74 Two Point Rakes 27 Short Delivery 3 & 13 Mini Rakes. Rail Freight > 8 % approx. due to change in Classification. Highest No. of re-bookings in a month 19 June 2010. Ever highest rail ratio 96 % - July 2010. Member Traffic Visit to Kakinada Port first time. Transporters Resumed Truck supplies - managed < By 8 % when compared to KLOs hike. 24 % Road movement achieved in the Last Quarter of FY 08-9. Rake Dispatched to Assam for the 1st Time - Vizag Port. A year old MLDT pending wagons traced and being chased for delivery. 3. 45 Crores (DM 1.02 CD 1.59 & Freight 0.84) payments received from DoF on account of Import Operations. Rs.40 lakhs of Cuddalore LOB claims settled.

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Stock at all Ports is Zero as of 31.03.11. Claim worth of Rs 8.59 Lakhs settled mv NIKOLOAS. Earned 12 & 18 Days of Lay Time & in-turn Dispatch Money of 1.18 & 0.71 Lakh UDS for N.EMPERIOR & BIANCO DAN vessels at Kakinada. All Documents on Imports submitted for onward transmission. Mode / vessel / RO wise dispatches to configure in SAP for calculating vessel-wise profitability.

NOTE: MU: Manufactured urea PU: Pool urea UFP: Uniform freight policy SCR: South central railways MLDT: Railway code LOB: Loss on board KLOs: Kakinada lorry owners ISO: International standard officers RO: Regional Offices Production of 2010-11

Production & Silo :Production FTM Cum. Prodn FTY Avg. Prodn per day-FTM Avg. Prodn per day-FTY Closing Stock: Plat form Silo
By Road March.,09 Cum. Dispatch - Road FTY By Rail March.09 Cum. Dispatch - Rail FTY Total dipatch - FTM Cum. Dispatch FTY Avg. Disp per day -FTM Avg. Disp per day -FTY
Road Rail Ratio -FTM Road Rail Ratio - FTY

Mar-11
124098 1378162 4003 3776 0 32
Mar-11 28964.5 156535 96472.40 1221598 125436.90 1378133 4046 3776
23::77 11::89

Mar-10 87055 1354490 2808 3711 0 3


Mar-10 8459.95 149838 79938 1204662 88397.95 1354500 2852 3711
10::90 11::89

Ever highest Rail dispatch during 10-11

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Production Loss for the period 01.04.10 to 31.03.11


Month April April May June June July Aug Sep Kharif Oct Nov Dec Jan Feb Mar Rabi Kh+Rb No.of days Lost 17 0.4 3 3 0 0 0 0 23.4 0 9.6 10.4 0 0 20 43.4 Qty (Mts) 0 1168 877 387 0 0 0 0 2432 0 18569 21041 0 0 39610 42042 Remarks ATA Month April April May June June July Aug Sep Kharif Oct Nov Dec Jan Feb Mar Rabi Kh+Rb No.of days Qty (Mts) Lost Remarks 7.74 0 ATA 7.37 16.82 3.76 3.75 3.04 14.92 57.4 0.94 0 0 0 1.22 20.35 22.51 79.91 4540 0 7640 8139 5976 32782 59077 2196 0 0 0 2160 1143 5499 64576

ATA

ATA

Note: ATA: Actual Turn Amount State wise Dispatches MU & PU


State AP BH KA R OR TN MHR CH WB Y NM To tal State AP BH KA R OR CH MHR TN UP WB A SM To tal Rail 647435 86943 53424 82098 105309 4871 17833 223686 1221598 Rail 366794 10154 53818 43936 10163 5108 10179 33376 51291 5189 590008.6 Ro ad 156535 To tal Qty 803970 86943 53424 82098 105309 4871 17833 223686 0 1378133 To tal Qty 520921 10154 53818 43936 10163 6576 10179 33376 51291 5189 745603

156535 Ro ad 154126

1468

155594.4

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Over years performance


Q ty in Mts Financial Year 1995 - 96 1996 - 97 1997 - 98 1998 - 99 1999 - 00 2000 - 01 2001 - 02 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009-10 20010-11 Production Rail 708059 716910 689648 1212607 1297510 1364794 1221944 1187259 1193960 1392538 1379220 1324054 1354490 1378162 1482103 1655042 465011.00 509873.75 430337.20 856737.65 874260.40 993891.25 951530.45 980580.95 963967.85 1123674.65 1106281.65 1079231.85 1204662.00 1221598.00 1151348.40 1278513.80 Mode of Dispatach Road 243050 207030 232570 382612 423250 368922 243066 214019 230098 269284 272938 244809 149838 156535 376648 376648 Total 708061.00 716903.75 662907.20 1239349.65 1297510.40 1362813.25 1194596.45 1194600.00 1194066.2 1392959.05 1379220.00 1324041.00 1354500.00 1378133.00 1527996.40 1655161.80 Rail Co Eff. 66% 71% 65% 69% 67% 73% 80% 82% 81% 81% 80% 82% 89% 89% 79% 77% Rail Freight in Lakhs 1687 1770 1511 2796 2890 3165 2947 3615 3824 4403 4546 6100 7880 8187 8196 9284 No of Rakes 271 273 209 411 430 445 436 431 415 486 476 434 487 487 448 475

1995-10-Highlights 1) Rail year Highest- 1221598 MT. 2)Co -Eff-89%-3) Hieghest- Frt-8187 Lakhs

Ever highest production & dispatch in 10-11- Increased Road by 2 % Unit II production started in the year 1998-99 CDR unit commissioned in March11 EQ-ROAD FOR MARCH 2011
RO VZG KKD TPG BZA GNT NLR HYD KNL WGL YNM TOTAL Qty 1774 3786 3579 7127 4607 34 4437 3536 85 28964.5 Eq_Frt 451 189 286 452 569 616 723 140 473 Eq-Ld 213 44 130 250 337 486 407 32 275 RO VZG KKD TPG BZA GNT NLR HYD KNL WGL YNM TOTAL Qty 1925.95 1397 3522 612 731 272 8459.95 Eq_Frt 205 260 421 496 562 604 369 Lead 30 115 231 265 595 372 205

RO VZG KKD TPG BZA GNT WGL HYD NZB YNM NLR KNL Total

Qty 4464 32339.5 12636 44257.5 13604 13030 35075 34 1061 34 156535

Eq_Frt 459 205 287 481 536 723 683 1049 143

Eq-Ld 217 44 126 262 318 403 506 579 32

476

275

RO VZG KKD TPG BZA GNT WGL HYD NZB YNM NLR KNL Total

Qty 6457 30765.95 17772 43312 14104.05 8828 25377.5 1218 1258 746 149838

Eq_Frt 371 173 260 482 583 571 652 125 789 1063 433

Lead 199 39 122 244 282 372 567 32 567 651 254

2011

2010

Cost increased by Rs.43/-per Ton while lead also increased by 21Kms.

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DETENTION RAIL & ROAD Fig in hours


De te ntion :Truck Detention -Month in hrs Avg.Truck Detention - FTY in hrs Rake Detention - in hrs Avg. Rake Detention - FTY in hrs Avg.Gap between rake to rake - FTM in hrs Avg.Gap between rake to rake - FTY in hrs Mar-11 4.26 4.06 10.00 10.54 6.24 7.14 Mar-10 5.09 5.00 10.48 11.25 8.04 7.00

Truck detention is less by 54 Minutes & Rake Detention 30 minutes when compared to LFY Rake supply is improved due to inflow of Maize load rakes from Nov10 on wards

Production Vs Dispatches & Railway Freight Over the Year

Nagarjuna Fertilizers & Chemical Limited, Kakinada


Urea Production v / s Dispatches & Railway Freight - Over Years
Q ty in Mts Financial Year 1995 - 96 1996 - 97 1997 - 98 1998 - 99 1999 - 00 2000 - 01 2001 - 02 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 -07 2007-08 2008-09 2009-10 2010-11 Production Rail 708059 716910 689648 1212607 1297510 1364794 1221944 1187259 1193960 1392538 1379220 1324054 1354490 1378162 465011.00 509873.75 430337.20 856737.65 874260.40 993891.25 951530.45 980580.95 963967.85 1123674.65 1106281.65 1079231.85 1204662 1221598.00 Mode of Dispatach Road 243050 207030 232570 382612 423250 368922 243066 214019 230098 269284 272938 244809 149838 156535 Total 708061.00 716903.75 662907.20 1239349.65 1297510.40 1362813.25 1194596.45 1194600.00 1194066.2 1392959.05 1379220.00 1324041.00 1354500.00 1378133.00 Rail Co Eff. 66% 71% 65% 69% 67% 73% 80% 82% 81% 81% 80% 82% 89% 89% Rail Freight in Lakhs 1687 1770 1511 2796 2890 3165 2947 3615 3824 4403 4546 6100 7880 8187 No of Rakes 271 273 209 411 430 445 436 431 415 486 476 434 48800% 487

1482103 1655042 500881

1151348 1278514 404104

330472 376648 88949.5

1481820 1655162 493053.5

78% 77% 84%

81.37 92.71 29.29

448 475 151

2011-12 up to 8th Aug'11

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INTERPRETATION OF DATA
1) Are you satisfied with the loading process of NFCL?
No Of Respondents 38 12 50 Percentage 76% 24% 100%

Yes No Total

Are you satisfied with loading process of NFCL


24%

Yes 76% No

Observation: Here we can observe that 76% of the transporters are satisfied with loading process in NFCL and 24% of the transporters are not satisfied. So it is good response by the transporters about the loading process at NFCL.

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2) Are you satisfied about the detention time?


No of respondents 35 15 50 Percentage 70% 30% 100%

Yes No Total

Are you satisfied about the detention time


30%

yes 70% no

Observation: Here 70% of the transporters are satisfied about the detention time of loading and 30% of the transporters are not satisfied. This is positive response from the transporters about the detention time at the loading.

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3) Are you satisfied about the services which are provided by NFCL?
No Of Respondents 36 14 50 Percentage 72% 28% 100%

yes No Total

Are You Satisfied About the Services Providing By NFCL


28%

yes 72% No

Observation: Here 72% of the transporters are satisfied about the services which are providing by NFCL and 28% of the transporters are not satisfied. So this is a good response by the transporters about the services which are proving by the NFCL.

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4) Do you have any problems with NFCL?


No Of Respondents 15 35 50 Percentage 30% 70% 100%

Yes No Total

Do You Have Any Problems


30%

Yes 70% No

Observation: Here we can observe that 70% of the transporters are having No Problem but 30% percentages of the transporters are having the Problems with the company. So if the company tries to reduce the problems which are facing by the transporters then they can work more for the company.

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5) How employees of NFCL are responding with you?


S.No 1 2 3 4 Department Security Weighing bridge Bagging plant Traffic Excellent 21 4 17 18 Response good 22 17 23 21 Average 7 16 10 11 Poor 0 13 0 0 Total 50 50 50 50

How The Employees Of NFCL Are Responding With You


25 20 Axis Title 15 10 5 0 security Excellent good Average Poor 21 22 7 0 0 0 0 0 weighing Bridge 4 17 16 13 Bagging Plant 17 23 10 0

Traffic 0 0 0 0 18 21 11 0

0 0 0 0

Observation: Here we can observed that majority of the transporters are satisfied with employees of the Security Department, Bagging Plant, & Traffic Department. They are not satisfied with the response of the Employees at Weigh Bridge which is not a good sign for the company.

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6) Are they giving any special training to the New Transporters Based on the Requirements?
No Of Respondents Yes No Total 43 7 50 Percentage 86% 14% 100%

Are They giving Any Special Training To The New Transporters Based On The Requirements
14% Yes 86% No

Observation: Here we can observe that 86% of the transporters are responded that the company is giving training for the new transporters and 14% of the transporters are saying that the company is not giving the training for their new transporters. This shows that how the company was showing their responsibility.

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7) Do you have full knowledge on the Distribution Network of NFCL? No Of Respondents 37 13


50

Yes No Total

Percentage 74% 26% 100%

Do You Have The Full Knowledge On the Distribution Network Of NFCl


26%

Yes 74% No

Observation: Here we can observe 74% of the transporters are having the full knowledge about the Distribution Network of NFCL and 26% of the transporters are not having the knowledge on the Distribution Network of NFCL. So here the management has to give the full knowledge on the distribution network of the company.

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8) Do You Want Any Other Services Apart From What NFCL Is Providing? No Of Respondents Yes No Total 10 40 50 Percentage 20% 80% 100%

Do You Want Any Other Services Apart From What NFCL Is Providing
20%

Yes No 80%

Observation:

Here 80% of the transporters are not agreed with the other services apart from NFCL is providing and 20% of transporters are agreed with the other services have to be provide for the transporters.

This is a good sign for the company that the transporters are satisfied with the services which are provided by the NFCL.

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9) Are you aware of the responsive care implemented by NFCL? No Of Respondents Yes No Total 38 12 50 Percentage 76% 24% 100%

Are You Aware Of Responsive Care Implemented BY NFCL


24%

Yes 76% No

Observation: Here 76% of the transporters are having the awareness about the Responsive care which is implementing by the NFCL only 24% of the transporters are no awareness about this Responsive Care. This shows that the company is taking good care of their Transporters.

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10) Have you attended any training programs conducted by the NFCL on Defensive Driving?
No Of Respondents Yes No Total 22 28 50 Percentage 44% 56% 100%

Have You Attended Any Training Programme Conducted By NFCL On Defensive Driving

44% 56% Yes No

Observation: Here only 44% of the transporters are attended for the Defensive Driving at the Training Program and 56% of the transporters are not attended for this Training program on Defensive Driving. This is not a good result for the company from the Transporters about the Defensive Drive.

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11) Is NFCL Help Line stickers are Pasted On your Truck Bodies?
No Of Respondents Yes No Total 20 30 50 Percentage 40% 60% 100%

Is NFCL Help Line Stickers Are Pasted On Your Truck Bodies

40% 60% Yes No

Observation: Here only 40% of the transporters are pasted the NFCL Help Line Stickers to their Truck Bodies and 60% of the transporters are not pasted the Help Line Stickers to their Truck Bodies. So the company should provide more No. of the Help line stickers which will help to the Transporters at the time of Help.

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12) Rate the Overall satisfaction on working with NFCL


S.No 1 2 3 4 No Of respondents 14 33 3 0 50 Percentage 28% 66% 6% 0% 100%

Excellent Good Average Poor Total

Rate The Over All Satisfaction With NFCL


35 30 25 Axis Title 20 15 10 5 0 No Of respondents Excellent 14 Good 33 Average 3 Poor 0

Observation: Here it is a very good response by the Transporters for the company because they are very much satisfied with the NFCL when comparing with the other Companies which they are works.

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FINDINGS: There is no proper rest room facility to the drivers. There is no proper canteen facilities for the drivers. Loading procedure is better than the prievios year. There is no proper roads for entering into the company. There should be a canteen facility at Bagging Plant. The detention time of loading is slow when the wagons are being loading.

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SUGGETIONS: The management have to take action at the Weighing Bridge employees to maintain good response with the Truck Drivers. If possible they should permit to the Drivers to Bring the Meals inside of the Plant. Night time loading should be avoided. There should be a seperate loading point for the trucks when the wagons are loading. Company have to take resposibilty to give the knowledge to the new transporters about the Distribution Network. Conduct the Training programmes to the Transporters as well as to the Truck Drivers for their safety.

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CONCLUSION The universe is every day witnessing unimaginable growth in majority of the industries. The logistics industry is one such industry that is rapidly growing. Worldwide logistics industry is distinguished by fast technological advances and is growing rapidly than most other industries over the past years. With stiff competition around, the company is likely to reduce the profitability but with proper management of operations and improve the performance. The present scenario and the future of the organisation with regard to the management are satisfactory. The organisation can increase the market share by improving with more state of art technology. The organisation can diversify into related other business areas like warehouses for lease to other organisation. However, there are some areas where the company is not at the top-most position but it can certainly gear up in the future and is committed to acquire that spot. On implementation of the above recommendations, the management can lead to the top most position when bench marked in the coming years..

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BIBLIOGRAPHY MARKETING MANAGEMENT PHILIP KOTLER RESEARCH METHODOLOGY--C.R.KOTHARI WWW.LOGISTICWORLD.COM WWW.ASK.COM WWW.NFCL.COM WWW.GOOGLE.COM

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Annexure:
QUESTIONNAIRE TO KNOW THE SATISFATION OF TRANSPORTERS
PROFILE: 1. WHAT IS THE NAME OF THE LORRY UNION YOU WILL KEEP YOUR LORRY

2. NAME OF THE LORRY OWNER 3. PHONE NUMBER 4. WHAT IS YOUR SALARY a) Salary b) Battha

5. HOW MANY TRIPS YOU MAKE IN A MONTH.

6. IN A MONTH HOW MANY TRIPS YOU WILL MAKE FOR NFCL? 7. ARE YOU SATISFIED FOR LOADING PROCESS OF NFCL a) Yes b) No 8. ARE YOU SATISFIED ABOUT DETENTION TIME? a) Yes b) No

9. WHAT ARE THE SERVICES PROVIDED BY NFCL? a) Canteen b) Waiting/Rest room c) Other..

10. ARE YOU SATISFIED ABOUT SERVICES IN THE NFCL a) Yes b) No 11. DO YOU HAVE ANY PROBLEMS? a) Yes b) No 12. IF YES,WHAT ARE THE PROBLEMS _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________

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13. . HOW EMPLOYEES OF NFCL ARE RESPONDING TO YOU

S.NO 1 2 3 4

DEPARTMENT EXCELLENT SECURITY DEPT WEIGHNG BRIDGE BAGGING PLANT TRAFFIC

RESPONSE GOOD AVERAGE

POOR

14. ARE THEY GIVING ANY SPECIAL TRAINING TO THE NEW TRANSPORTERS BASED ON THE REQUIREMENTS? a) Yes b) No

15. DO YOU HAVE THE FULL KNOWLEDGE ON THE DISTRIBUTION NETWORK OF NFCL? a) Yes b) No 16. DO YOU WANT ANY OTHER SERVICES APART FROM WHAT NFCL IS PROVIDING? a) Yes b) No 17. ARE YOU AWARE OF RESPONSIVE CARE IMPLEMENTED BY NFCL? a) Yes b) NO 18. HAVE YOU ATTENDED ANY TRAINING PROGRAMMED CONDUCTED BY NFCL ON DEFENSIVE DRIVING?

a) Yes
a) Yes

b) NO
b) No

19. IS NFCL HELP LINE STICKERS PASTED ON TRUCK BODIES?


20. ARE YOU AWARE FOR EVERY EIGHT HOURS TWO HOURS REST TO BE TAKEN? a) Yes b) No

21. RATE THE OVERALL SATISFACTION WITH NFCL. a) Excellent b) Good c) Average d) Poor

22. ANY SUGGESTIONS ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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