1

CHAPTER ONE

INTRODUCTION

INTRODUCTION

Introduction to the Study

The organization study was done to understand the day today operation of the organisation
and the involvement of various departments in the organisation. It is also useful for
determining the total quantity of production in year by year and details. It is a part of
academic curriculum that an organisational study must be conducted during the M.B.A
Degree Programme. Oil Palm India Ltd is started as a subsidiary of the plantation corporation
of Kerala Limited with the objective of developing Oil Palm cultivation. The company is a
joint venture of Government of Kerala and Government of India. The study can be helpful for
the organisation to identify its strength and development opportunities within the
organisation.
To have better knowledge about the industry
To know better about the working environment
To learn new methodology of industry

Scope of Study
The study gives detailed information about the company and its product, as the study was in
the Head office of Oil Palm India Limited located at Kottayam as well as Estates and Factory
located at Yeroor, Kollam. The scope of the study includes an insight into the companies
various functional departments, strength and weakness and the opportunities and threats faced
by the company which provide the Organisation with efficient data which can be helpful for
further developments.

Objectives of the Study

To Study the structure of the organization.

To have a better knowledge about business organization Oil Palm India limited

To study about the different departments of OPIL and their functioning

To understand the organization culture and its effect on employees.

To know the efficiency and succession of the company.

Significance Of The Study

To study the relationship between the workers, managers and top authority existingin
the company.

To identify various problems in the processing production

To perform a SWOT analysis of the organization.

Methodology Of The Study

Research comprises defining and redefining problems, formulating hypothesis or suggesting
solution, collecting, organizing and evaluating data at careful y testing the conclusion
determine whether they fit the formulated hypothesis
Method Of Data Collection
Collection of data was done in two ways; both primary and secondary data was used
Sources Of Primary Data ; The purpose the collection of the primary data is very
expensive and time consuming
Primary data collected during the study is the form of ;
Direct Interview Method
In direct interview method of collecting data personally with each and every departmental
managers helped n deriving more details about the functions of the departments
Sources of Secondary Data ; Secondary data is collected by a researcher for the purpose
of his study and is published in various media. This data can be used as a source of
information, secondary data has an advantage of being less expensive and less time
consuming.

Limitations Of The Study

The study was conducted for a very short time. The data collected from the employees are
biased. Company management was reluctant to disclose confidential data. Complex technical
details could not be completely recorded. The reliability of the study depends up on the study
accuracy of the data in annual reports. Possibilities of errors and bias in information.

CHAPTER TWO

ANALYSIS OF BUSINESS ENVIRONMENT

Analysis of the Remote External Environment

Bursa Malaysia Derivatives (BMD) is the largest futures market for crude palm oil.
Malaysia & Indonesian FOB prices set the mood in the physical market.The 1980s saw a big
shift of markets where by a large portion of the processed product was exported to
developing countries such as India, Africa, including Iraq and Iran, China and South Korea.

Factors Influencing Palm Oil Price

The supply- demand and price scenario of competitive oils, via Soybean oil.The supplydemand scenario of all oils seeds' in consuming centers! This, is from these countries.The
palm oil production cycle: April-December is peak production period.Import regulation
imposed in the importing countries.

Nature Of The Business

Known to be the most productive oil crop, a hectare of oil palm can produce 5 tons of
palm oil. This is 5 to 10 times more than yield of any commercially grown oil crop. With the
potential, a palm oil industry in the Philippines at full- scale development could pay a
significant role in improving one balance of payment through the production palm oil as
import substitute and as a major export. It could also pay a leading role in the governments
efforts of effecting the amelioration.
Impoverished masses of nuclear farms and milling plants were set up in
strategically in 304.350 Iecrures throughout the Mindanao areas identified by the southern
Philippines. Development authority as feasible for this crop and farmers, organized as
cooperatives, participate as out growers for the nuclear farms, nearest to
Palm Oil is been consumed for more than 5000 years and its nutritional value as a natural
resource continues to be discovered ever today. First introduced to Malaysia in.1870 as an
ornamental plant, the Elaeis Guinensis tree, also known as oil palm tree, is now a leading
agricultural of a wide range of processed Palm oil product. Today Palm fruit oil and Palm oil
products are used in many food and non-food applications. They can be used as frying media
and making margarines, shortenings, soap, oleo chemical and other products.

Palm oil is obtained from Fresh Fruit Bunches (FFB) of Oil Palm Cultivations. There
are several commercial, variants of Palm Oil available viz:
RBD (Refined Bleached Deodorized) Palm Oil.
Crude Palm Oil (CPO)
Palm Kernel Oil
Crude Palmolein
Crude Palm Oil when subjected to refining results the other fractions. Palm Oil is
form of edible vegetable oil obtained from fruit of Oil Palm tree. It is the second most widely
produced edible oil and now it sine passed Soybean oil. and become widely produced
vegetable oil in the world. Crude Palm Oil (CPO) is obtained from monocarp of the fruits and
depending on the variety and the age of the Palm oil. to bunch ratio is within the range of
25% to 28%. Interims of productivity per unit area, the Oil Palm yields of Palm oil per
annum is more than 3700kg/hectare. Compared to 875 kg/ hectare for peanut oil and 389
soybean oil.
Crude Palm oil is extracted from the fleshy portion of the fruit wall while the kernel
yields Palm kernel oil. The crude Palm oil is deep orange red in colour and is a temperature
of 20degree centigrade.
Industry Profile
Current Scenario
Palm

oil

unique

composition

makes

it

versatile

in

its

application

in

food

manufacturing and in the chemical, cosmetic and pharmaceutical industries. Its semi-solid
physical properties are needed in much good preparation. Its non-cholesterol quality and
digestibility make it popular as base material in the manufacture of various non-edibles
products.
In the food industries, palm oil is the choice for manufacturing solid fat products.
Palm Oil and strain and popularly used worldwide in making, margarine, shortening and
confectionary and in frying snacks food.
Palm oil is also used in manufacturing of soaps, detergents and other surfactants. It is
a good raw material producing oleo chemicals, fatty acids, fatty alcohols, glycerol and other

derivatives for the manufacture of cosmetic, pharmaceuticals, households and industries

products.
Global Scenario
Palm oil with an annual production of 25-27 million tons is second most produced in the
world. Malaysia (13 million tons) and Indonesia (10 million tons) are the major producers.
They together account for 85% production. Around 80% (21-23 million tone of global
production is exported Malaysia and Indonesia 12-12.5 and 6 million tons respectively are
major exports.India, China and EU are the major importers Price competitiveness has been
reason for increased consumption of the oil.

Indian Scenario
India imports roughly 2.5-3.5 million tons of Palm Oil and its variants a year.India imposes
60%duties on crude oil and 75% (imposed in 2003-2004 Union Budget) on Refined Bleached
Palm Oil. The import ratio is highly dependent on the duty imposed. In addition to the
customs duty. Government of India also imposes tariff value, on winch the customs duty is
calculated irrespective of the actual price at which the oil is imported.In 2002-2003 India
imported 21.5 Lakh tons of crude palm oil and 3.15 Lakh tons of Refined Blenched Palm Oil.
However in 2003-2004 till July from November 03 India has imported 13.5 lakh tons of
crude palm oil and 4.8 lakh tons Refined Blenched Palm Oil. .Kandla Mumbai, Kakindan are
the major ports for palm oil entry to india and major trading points too.

INDUSTRY ANALYSIS
Industry Key Players

Asian Plantations

Philippines Oil Palm India Ltd

Ricol Mills Corporation

Universal Robina Corporation

RFM Corporation

Mine Oil Mill Corporation

Oleo Fats

Royal oil Products

Pacific Oil Products

The above companies, except the Oil Palm India Ltd, which are engaged in down
stream processing of crude palm oil, produce the following:

RBD (Refined Bleached and Deodorized) palm oil

RBD Palm Olein

RBD Palm Sterain

Hydrogenated Palm Oil

Competitor Analysis
As if now Oil Palm India Ltd has no competitor in Kerala and has an
advantage of being the only producer of palm oil in the state
Private Sector Cultivation
The oil palm was planned in Malaysia in 1870. The first commercial planting of oil palm in
Malaysia started in 1917 at Tennamaran estate Selangor.
Development was, however, slow and it took another 50 years before it began to pick up
pace. The impetus came in the late 1950s when the Malaysian Government embarked on
a massive agricultural diversification programme to case dependence on the traditional
rubber for export earnings. Many estates replaced rubber with oil palm and also opened
up new lands for the cultivations of oil palm.
Within a relatively short time, the planned areas under oil palm increased tremendously.
In 1960 the total planted area was 54700 hectares it had reached 300,800 hectares. In
1993 a total of 2.3 million hectares had been planted and by the year 2000 about 2.9
million hectares are expected to be planted with oil palm.

Public Sector And Independent Small Holders

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Originally, the cultivation of palm, oil was limited to the plantation sector because of high
level of organization and capital investment required. The success of the Government land
resettlement schemes, started in the 1960, marked a pioneering effort towards introducing the
crop to smallholders. At the forefront is the Federal Land Development Authority (FELDA).
Other agencies involved include the Federal Land Consolidation and Rehabilitation Authority
(FELCRA), and the State Economic Development Corporations (SEDCs).
The nuclear farms provides technologies and planting materials, supervises their fanning
activities and buys their product for processing by the milling plant into the crude palm oil
and kernel oil for the domestic and export market.Palm fruit oil is consumed worldwide in
more than 100 countries. In some part of the world, palm fruit oil often still consumed in its
undefined state, as an ingredient of traditional dishes where it contributes its characteristic
golden red colour and unique flavor. However, to most users, palm oil is more familiar as a
refined vegetable oil product purchased at their local store product, incorporated into their
every day foods...
Buyers of crude palm oil are as follows

Parison

Hindustan lever

Wipro Ltd

Godrej

SSD Oil Palm

The main buyers of Kernel Oil are as follows:

Triveni Oil Industries

Godrej

Agrovet Ltd

Palm Kernel India Ltd

Continuity of Supply
Being a perennial tree, the palm oil is harvested throughout the year. Its productivity,
per hectare per year is very high. Palm oil has the advantage of reliable and regular supply
compared to some oils from annual crop

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CHAPTER THREE

ORGANISATIONAL ANALYSIS

12

Overview of the organisation

Oil Palm India Ltd was established as a subsidiary of plantation corporation of India Ltd in
1977. Subsequently in 1983 this became independent unit as a joint venture of the Kerala
with a share participation of Rs.499.29 Lakhs and Rs.679 respectively. The company was
established with the objective of developing oil palm cultivation in the state and to find a
solution for the shortage of oil. Company has got atotal area of 36 acre hectares of plantations
spread over three estates - Yeroor (2029.87hc), Chithara (1225.65hc) and Kulathupuzha
(390.12hc) all in Kollam district a part from this one for the poduction of hybrid variety of
palm trees, seed garden has also been also set up at Thodupuzha. Initially it was intended to
cultivate oil palm in 6000 hectares of land. However due to the constraints in getting land
allotted by government ,the plantation has been limited to 3640 only and could not develop
further cultivation since 1984.
Mission vision and objectives of the organisation
Mission; The main mission of the Gil Palm India Ltd is to develop Oil Palm
cultivation in the state to find solution for the shortage of oil. And to develop the company as
a farmer friendly organization and for giving employment to people who are lower grade in
the society.
Vision; Promote oil palm cultivation in small farmers holdings and introduced a new.
crop among the fanners. To produce edible quality palm oil and production of various by
products using the waste material, after the extraction of the crude palm oil.
Organisational Objectives

To take over and run the oil palm plantation corporation of India Limited and that
established or cultivated by the government of Kerala or by any other person for the"
purpose of carrying on the objects.

To engage in and carry on the business of planter, grower and cultivator of oil palm.,
arecanut coconut and other palms, groundnut, cocoa, rubber, tea, cardamom, tobacco,
cashew, pepper, ginger, tapioca, eucalyptus, sugarcane, cotton and or any other
agricultural industrial crop or produce.

To process and render marketable produce grown by the company and to carry on the
business of processing, manufacturing and dealing in palm oil and other oils and any
other products in which oil or any other produce of the company is used.

13

To sell, purchase, export, import deal and trade in all produce grown or processed by
the company and all products manufactured by the company and other products used
for the purpose of growing, processing or manufacturing such products.

Products And Markets

Oil palm is the richest source of oil. Oil Palm India Ltd was established in the year 1977 with
the objective of propagating oil palm cultivation in the country and more particularly in
Kerala. The various varieties that are marketed under the Oil Palm India Ltd are given below:
Crude Palm Oil Palm Nut Kernel Cake Palm Kernel
Oil Palm India had products in its early stages. But now the company produces only
two products i.e. Crude Palm Oil and Palm Kernel.

Crude Palm Oil (CPO)

Palm Oil is one of the most commonly used vegetable oils. Oil Palm are grown in tropical
countries. Mainly South East Asia, India and some African and South American countries.
Before being refined, oil is called Crude Palm Oil. Palm oil or palmolein is the oil produced
from the red oil palm oil tree. The crude palm oil is deep orange red in colour and is semi
solid at a temperature of 20 degree centigrade. Palm oil or polyolefin is the oil is the oil
produced from the red oil palm tree (Elasis Guincensis). Palm oil extracted from the pulpy
portion (Meso carp) of the fruit of oil palm. Palm oil contains an equal proportion of
saturated and unsaturated fatty acid containing about 40% of oleic acid, 44% palmitic acid
and 5% stearin acid.
Palm Kernel
Palm Kernel oil is tropical oil derived from seeds of oil palm tree fruit. Because this is
mainly a saturated oil (80%-85% Saturated)and low in essential fatty acids, palm Kernel oil
may be heated without the risk of creating harmful breakdown products(as is the within
saturated oils, when heated) palm kernel oil is saturated oil, some research in areas ripe with
live palm trees(where very flesh palm kernel oil is available) that a diet high in tropical oils
may decrease cholesterol level, however other contradicts these finding. As with other

14

saturated oils, palm kernel oil (especially palm kernel oil) should be used in moderation or
avoided in one's diet.
Palm Oil is of interest both- commercially and technically for the following reasons as
it is readily available at all point of time in a year. It is economically period, although straight
comparisons of ccmmodity prices don't tell the whole story. Refined palm oil from Malaysia
should be compared with party hydrogenated soybean oil. If is a source of the solid fat
needed for the functionally of many food facts, without the cost of hydrogenation and the
concomitant formation of translate fatty acids. .Palm mid - fraction is a major component of
cocoa butter equivalent fat. Palm oil and palm oelin have good stability at frying temperature.
Large scale industrial frying, in Europe and Asia is properly the largest application of palm
oil. It is available in bulk in fractionated form. In addition to regular palm oil and palm
stearin, special oleins with iodine values up to 65 are available and a whole range of
softened, hard strains.

Uses Of Palm Oil; palm oil is very versatile oil with a range, of distractive. properties which
enable it to meet most of the technological requirements for formulating fat products. By
fractionating palm oil, it uses are further increased. Hydrogenation and interesterification
increase in usage even there especially in making specialized and sophisticated edible
products.
Palm oil is the liquid fraction obtained by fractionation of oil palm oil after
crystallization at a controlled temperature. The physical characteristics of palm oil differ
significantly from those of palm oil it is available in; a wider range of fatty acids and
triglycerides compositions. The hard fraction, palm stearin, is a very useful source of fully
natural and hard fed component, for products such ad shortenings, party margine, venaspathi
etc.
Uses are classified into edible and non-edible uses.
Edible Uses

Margarine

Frying fat for snack foods /fast foods

Vanaspathi

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Non- diary creamers

Ice cream

Cocoa butter substitute

Non-edible uses; For making Soap and detergents

Range of products
Technological has provided the industry with processing and fractionation techniques
'turning out wide range of products to suit consumers manufacturing, requirements.
Versatile and superiority
Its versatility makes palm oil a suitable raw material for many applications both in
edible and uon-edible products. It has the flexibility to be used as it or in fractionated forms,
lis resistance to deterioration and rancidity makes it excellent oil for deep flying.
Cost Benefit
Being naturally hydrogenated, palm oil requires minimal hydrogenation or none, whereas
other oils need to be hydrogenated. Furthermore, it is a natural product which contains no
chemically-produced leans acid isomers
Nutritional Value
Palm oil is one of the world's most widely consumed edible oils. Like other vegetable
oils, palm oil is cholesterol free, easily digestible, absorbed and utilized by the human body.
Since 1987 palm oil Research Institute of Malaysia has pursued a policy of supporting
research on the nutritional and health aspects of palm oil throughout the world. The
consensus from the findings of numerous human and animal feeding studies is that Palm Oil
is indeed wholesome and safe and its consumption in the habitual diet not only poses no risk
to the development of coronary heart disease but may even offer protection in view that the
oil raises the level of the good high density lipoproteins and lowers the levels of the band low
density lipoproteins.
In addition there is now increasing evidence to show that the minor components of
Palm oil such as the vitamin E, tocotrieols, and the carotenoids have several beneficial

16

physiological properties that are associated with a reduction of risk to coronary heart disease
and some forms of cancer.
Business performance
. Share capital
The company has an authorized share capital of Rs. 120,000,000 and the paid up
capital of Rs. 117,876,000.
The share holding pattern are as under:Government of india : 49,929 shares of Rs. 1000/- each.
Government of Kerala: 67,947 shares of Rs. 1000/- each.

Oil India Ltd is a profit making company for the last 15 years and paying dividend to
the Central & State Govt for the last "12 years. Production and scale of crude palm oil over
last 6 years are given below
Table 1
Revenue generated for last five years
Period

Qty. of oil production (MT)

Qty. of oilso M (MT)

Revenue in lakhs)

2007-08

5792.216

5445.21

2101.95

2008-09

7370.50

795065

2734.70

2009-10

6604.50

6353.17

1971.82

2010-11

6881.00

6864.66

2577.35

2011-12

7503.00

7641.456

3474.42

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Strategic Plans Programmes And Long Term Objectives

Expansion Plans; A proposal suggesting the setting up of a unit extracting, the palm
kernel oil at the factory at Yeroor is submitted to the government. The work cam be
completed within 6 months, once the approval is obtained
Modern Processing Mill; For the processing of fresh fruits bunch (FFB) a mill was
established with the state of the art technology at an outline of Rs. 180.92 crores in the year 1
999. The factory has processing capacity of 20 ton FFB/hr As part of the expansion activity,
company has set Up Qil Palm Seed Garden at Thodupuzha with the financial, assistance of
Central Govt, and State Govt, under the Oil Pal Development Program.
The company had established a modern processing mill to process 20MT FFB/hr
during the year 1998 with a total investment cost of Rs.19 crores. This is the largest oil palm
mill in the country. The company is now able to produce high crude palm oil from the FFB
produced in its estate and also procured from oil palm development programme framers, A
captive a power station is also set up for the generation of electricity. The fibre of palm fruits
is used as fuel, for generation of steam to run turbine generator.
Palm oil form an essential part of oil palm industry. They are located in the close
proximity to plantations because FFB will process soon after harvesting its quality old is to
be obtained.
Oil palm seed garden
Considering the fact that there is a bright future for the development of oil palm in the
country and consequent demand for hybrid seeds, the company has established almost
modern oil palm seed generation centre at the seed garden in Thodupuzha. The production
and sales of hybrid seeds have already been started. This is the premier institution in India
which is capable of producing high quality Tenera seeds. Major chunk of the demand for the
seeds in the country has either been net by import and in view of the commission of the
project, the import of the .seeds can be substantially bring down. Hence the project has a
pivotal role to play for the supply for seeds for the development of oil palm cultivation in the
country. About 5.50 lakhs are produced in the garden, at present. The production of seds can
be increased to 15 lakhs within a span of 5 years. . . .

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Estates
The company has got a total number of 3646 hectares of plantation spread over in 3
estates viz: Yeroor, Kulathupuzha and Chithera all Kollam District. Apart from this for
production of hybrid variety of palm oil seeds, company has set up an oil palm garden at
Thodupuzha with the financial assistance of state governnient and central government under
oil palm development programme. The area in each estate is as follows:
Table 2
Area available in each estates
SL NO

Name of Estates

District

Area in Hectares

Yeroor

Kollam

2029.87

Chithara

Kollam

1225.65

Kulathupuzha

Kollam

390.12

Oil Palm Development Programme (Opdp)

The company is implementing oil palm development programme, centrally sponsored
I scheme to promote cultivation among small for district schemes are being implemented
scheme to promote cultivation among 4 small district schemes are being implemented with
(he following targets. Population of oil palm cultivation among shall and marginal fanners
with a target of JUOOH. Development of oil paim cultivation, in 200 Ha in kariland as
demonstration plot. Three different field, have been identified for the scheme in two districts
of Kottayam and Allapuzha.84.6 has been development under the seheme in kottayam district
participating 137 farmers. Commencement of OPDP scheme.in 2008 in Malabar areas,
especially in Kozhikode, Malappuram and Kannur district. Seed garden at Thodupuzha for
production of hybrid seeds for promoting oil palm cultivation India.
Oil palm is capable of yielding 3.5tons of oil/Ha with good management all most 5-8
times higher than other oil seeds crops give only an average yield of 600kg to 100 kg of
oil/Ha. Hence the potential of development of oil palm is unquestionable. In order to bridge

19

the gap between demand and supply of edible oils cultivation of oil palm was taken up
seriously by Technology Mission and Oil seeds and pulses (TMOP) to attain self reliance in
Govt, of India under TMOP introduced oil palm cultivation through Oil Palm
Programme(OPDP) in the identified potential areas of 11 states under scheme of Oil seeds,
pulses, Oil palm and Maize(ISOPOM).
Oil Palm India Ltd is the nodal agency for the cultivation of oil palm in small and marginal
fanners and under OPDP scheme the centrally sponsored integrated scheme of oil seeds,
pulses, oil palm and maize.

The cultivation of oil palm in the state under the OPDP scheme connected during
1999-2 000 and covered 1300 Ha in 3070 farmers' field. Besides this Govt, of Kerala
accorded sanction for cultivating an area of 576 Ha from the year 2008-2009. In addition to
this Govt, of Kerala
Accorded sanction to cultivate oil palm in 1000 Ha of Northern Malabar Districts
(Malappuram, Kozhikode& Wayand) under this scheme
Table 3
Area Sanctioned for Cultivation of Palm
SL NO

District

Area

Farmers

SC/ST Farmers

Women Farmers

Trivandrum

11.20

Kollam

134.83

371

10

56

Pathanamthitta

311.48

954

152

Alappuzha

126.10

354

64

Kottayam

159.31

281

55

Ernakulam

88.25

279

26

20

Malappuram

63.79

81

18

Kozhikode

176.95

409

62

Wayand

228.08

337

TOTAL

1299.99

3070

61
54

424

Oil Programme; A special hybrid variety of seeding called "Tenera"' required for the
cultivation will be made available to the farmers at a subsidiary rate of 75%.The technical
advice required to find the suitable land and planting the seeding will / be provided. For the
first 4 years, the farmers will be given an amount not exceeding 50% of the cost of cultivation
as subsidy per year as follow:
Table 4
Subsidy given to farmers
YEAR

RS

Year1

4600

Year2

3300

Year3

3500

Year4

4100

Total

15500

The maximum subsidy available to a person should not exceed Rs 75000. ie subsidy
will be available for land up to six hectares only.The company will help to arrange the
rest 50% amount requited for cultivation, as loans from financial institutions.

Kernel oil extraction unit 1; It has been proposed to set up a kernel oil extraction
plant with 1 ton/hr capacity with an investment of Rs 193 Lakhs to. produce kernel oil by

21

processing the kernel obtained frorri palm fruits. Government sanction for the project is
awaited. It is expected that the project can be completed during 2011-12.

Organisation Structure
When we look to this organization we can see it is consisting of different department
and also each department have departmental heads. The service manager is responsible for
dredger, civil and sanitary, water and general transport, workshop, and electrical departments.
The production department is responsible for the department of white cement plam kiln,
packing house, shelcem, lab and quality control. The maintenance manager is responsible for
marketing control, purchase and store.and shelcem department. The finance manager is
responsible for the department of accounts. Finally the secretary is responsible for the time
office, personnel department, medical department, and office and guest house

Departments
The main departments in Oil Palm India Ltd are

Human Resource Development

Finance Department

Production Department

Sales and Marketing Department

Project Department

Estates

Medical Department

Maintenance Department

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Figure 1
Organisation Structure

23

Functional Analysis

Departmentation is the process of grouping activities into nits for the purpose of In
other words, it denotes grouping of related jobs and activities without the principle of
homogeneity over which an executives has authority to exercise and assert.
Every organization needs a well established administrative set up for efficient
functioning. The OPIL has established finance project, human resource development,
commercial and engineering departments are under the supervision of experienced and
competent officers. All the departments are under the control of department heads that are
controlled by managing director.

Material Procurement And Warehousing

Productivity & capacity utilization; The plant has a capacity to process up to 20
tons of FFB/Hr. However; the production of oil various according to the seasons, as oil palm
is a seasonal crop. The period from February to July is a peak season. Then they process up to
1173FFB/ week ton/day of oil \. In the season, ie from August to January the production will
be much less, may be100/month.
Warehouse; The company has got a warehouse for temporarily for producing crude
palm oil before winning the bid for it will collect it here will not more than 500 tons of oil in
the at a time as this will be periodically removed.
Distribution And Inventory Management
The company is not entered in oil refining so that there is always a bulk purchase of
crude oil from the company to other refining companies. There is no intermediary between
the producer and buyer.

Production Department
Production Department is the process or procedure of transforming a set of input like
information, energy etc into a specific set of outputs like product Dropor and service in

24

proper quality and quantity to aclieve the objective of is characterized by tangible outputs,
outputs that customers Consume
Production function is an important function of Oil India It 1. Most of the other in the
enterprise revolve around this function. Therefore it is essential that production function is
managed property so that it may contribute effectively to the objective of the enterprise. The
main aim of the desired goods and service are effectively and efficiently.
The objectives of production management in the company are as follows. .
Primary Objectives

Good quality

Optimum quantity

Appropriate cost

Timing

Secondary Objectives

Machine

Material

Services

Technique

Production Capacity of the Plant

The plant has the capacity to process up to 20 tons of FFB/hr. The production of oil
varies according to the seasons, as oil palm is a seasonal crop. The period from February to
July is peak season. Then they process up to season i.e. from August to January, the
production will be much less may be 100 ton/month thresher machine hw stripping of the
fruitless from bunch. Such conveyors and bucket elevators then transfer the pressing or
extraction station.

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Oil Intraction
The efficient extraction, of crude oil from Tenera fruit has prescribed problems but
this have been overcome by the development of continuous screw press which is new used in
all modern factors.
The fruit from the stripper passes to digesters, which complete the breaking of the oil
with moving arms. Digesters have a capacity of above 3 cubic meters. The fruit mash passes
to the screw presses which press the crude oil out through holes in the side of the press cake.
The pres cake which9 is discharged from the end of the press, contains the fibre and the nuts.
The three products separated in this section are :

The crude oil which consists of water, dirt and palm oil. This is passed to the
purification section.

Nuts : 14% of the FFB is separated by the depericarper and kernel plant for the
recovery of the kernals.

Fibre : approximately 15% of the FFB weight with moisture content of 37 %. The
residual oil content should be between 6% and 8% of oil to dry filers.
The filers should also retain as far as possible the phosphatides and other non,
glycosides impurities. There fibre is conveyed to the extraction section is
important. Unsatisfactory practices such as excessive drainage of the crude oil
before the extraction press leads not Only to purification problems and lasses but also
to the higher absorption of iron by the palm oil.

The importance of reducing the absorption of heavy metal, copper and iron is
indicated by the to box value. For the production of superior quality palm oil stainless steel
moving the wearing parts should be used for extraction units.

Kernel Recoveries
The conditioning of the nuts starts in the sterilizer and the separation starts in the
screw process. After the screw the nuts and the fiber traverse a heated breaker conveyor
which further separates them and remove moisture from the fiber .The fiber and nuts then

26

passes into a pneumatic separating column called the "winnowing column" fitted with IC
damper in operation depending on the number of presses in operation . The fiber is blown
into a cyclone close to the boiler and the nuts which removes any attached dirt or fiber and
tramps from.
The conditioned in nut silos before being cracked centrifugal nutcrackers and mills.
After cracking , the cracked mixture is separated in the double column for dry separating
system or separated in hydro cyclones or clay baths.
These processes are wet. A modern clay bath separator is more efficient than a hydro
separator when processing more than 15% dura material in the cracked mixture: A : of
suitable clay at the of approximately 450 kg to 100'tons of FFB is necessary for the clay,
separator system. Bath systems depend upon the density of the shell being greater than the
density of the shell being greater than the denist of the kernals. The higher yield of palm
kernel compensates the addition cost of clay or kaolin required for the hydro-clay bath;
separate process.
The shell and kernels are washed and the kernels are passed to a kernel dryer to
normalize the moisture content of 7 % so as to minimize the development of FFA during
storage and shipment. It is also advantage to sterilizer the kernels before shipment of storage
with steam at atmospheric pressure.
Kernel plants designed, for Dura derived nuts are not suitable for the processing of
Tenera derived nuts. There have been a number of experimental designs, which have proved
failure. Caution and a wide experience are required in selection the proper equipment and
design for kernel recovery plant.

Plant Gil Purification

The modern purification or Oil clarification station is designed to recover and purify
the crude oil as quickly as possible with the minimum heating and exposure to air. This is to
minimize the damage by the exposure of crude oil to air at high temperature. The major
contribution to poor quality oil is oxidation.
Oxidation measured by the totox value starts whether oil is above 60 degree Celsius
and exposed to air during processing, storage and shipment.

27

Crude oil does vary in compensation and therefore water dilution is a means of
stabilization to provide an accurate consistency of the CPO mixture before the classification.
Departmental Chart
The Engineering Department handles the maintenance activities of the organization, is
head of the department and he is assisted by a manager, a deputy manager managers. There is
several production staff for each estate and factory to working of the company smooth.
The production and processing of raw material which are mainly includes in
production department of Oil Palm India Ltd. Production of raw materials takes place in three
estates namely Chithara, Yeroor and Kulathupuzha. Processing of raw material takes place in
Yeroor mill. In OPIL the raw material is Fresh Fruit Bunch or FFB or Palm Fruit. They
produced the FFB from their own estates.
The workers in the estate are mainly known as cutters and carriers. All cutters are
male workers and the same time all carriers are female. workers, utes have the
responsibility to harvest the fresh fruit bunch and female carriers are collecting the/FFB to
;tfre destination. These FFB's are transported to the Yeroor mill foe the processing, The fruits
are harvesting at the ripen stage and one of the features of this stage is that the fruits becorne
radish is colour. The Palm tree is grown at wet kinds. The palm tree cultivation is based oh
rain feed cultivation
The company had established a modern processing mill to process 20 MT FFb/ hf. A
captive power station is also set up for the generation of electricity. The fibre -of palm fruits
is used as fuel for generation of stream to the turbine generator:..

Production Process
Fresh Fruit Bunches (FFB) harvested from Oil Palm Plantations is highly perishable
and require processing within 24 hours. Delay in this adversely affects the quantity and
quality of palm oil. The process consists of extraction of Palm Kernel pil (PKO) from the
Kernel. In brief the palm oil milling unit operations are as below:

28

FFB Reception
Several modern mills are equipped with the following in the reception area of the
mills

Load cell pit less weigh bridge (Computerized)

Larger loading ramp with hoppers of 16 meter tones capacity per day.

5,7,10 meter tones FFB cage with bogie and wheel span of 800mm gauge.

Cage transfer carriage location at both ends of the railway system

Straight line system with Cage transfer carriage to facilitate-easier operation of the 2dobr sterilizer and shunting of the cages can be handled with the capstan and bollard.

Sterilization
On arrival at the mill the fruit is sterilized. One of the effects of this is to inactive the
fruit enzyme. FFA is virtually stopped. The sterilizer process is done 1.5,2.5.3.5,5,7 and
today 10 tons capacity FFB cages which are pushed into long cylindrical steel vessel with
special, doors and subjected to stream at approximately 3 bar for about one hour. The
objective after harvesting is to sterilize the fruit as quickly as possible with the minimum of
handling and damage. In addition to arresting the development of FFA contact, the sterilizing
of fruit also facilities:
The purification of palm oil by coagulating and mucilaginous matter and thus preventing
the formulation of emulsion during verification of the crude oil.
The extraction of the crude palm oil by freezing the fruits from the bunch stalks
and by breaking the oil cells the mesocarp.
Sterilization is a simple process but it is essential, for the proper Operation of the
mill so that it is done correctly. This operation is the largest user of steam in the mill.
Stripping
After sterilization the sterilized fruit in cages are their winched out of the sterilizer
vessel by tlie arrangement of Bel lard and Winch and their placed in the tippler machine for
emptying the contents of cage onto a scrap type- conveyor.
Sales & Marketing Department

29

Marketing is an organizational function and a set of process for creating,

communicating and delivering value to customers and for managing customer relationships in
way that benefit the organization and its stake holders. Coping with exchange processes calls
for a considerable amount of work and skill. Marketing management takes place when at
least one party to a potential exchange thinks about the means of achieving desired response
from other parties.
Marketing management is the art and science of choosing target markets and getting
keeping and growing customers through creating delivery and communicating superior
customer value. These are no marketing activities going.on at OPIL but only sales. The sales
are done through process of bidding
Sales Procedure At Opil

Tender Invited
Highest Rate ground
Advance Received

Confirmation of Tender
Consignment Note

Delivery Advice
Invoice

Figure 2
sales procedure at OPIL
The computer utilization of the organization is right now just in the developing stage.
The total number of the systems is 14. Out of which 9 systems in Head Office. 2 in estate,

30

niul 3 in the factory. The computers in the head office are inter connected through a LAN
neiwork. The software used for inter connectively. is the Novell Netware. The operating
systems used are Windows 95 and Windows 2000. The administrative screen is Dos based.
Users are given access to the system using a username and password, which are nominated by
the computer operator. Even though the computers within the head office are inter connected,
there is no. connection between the head office, the factory arid the estates. All the
administrative tasks and decision making are one at the head office. Files are manually
brought to head office from estate and the factory which is then entered in the head office.
Computers are used only for correspondence.

Departmental Chart

Senior Manager

Secretary

First Assistant

Draft Man
Figure 3
Departmental Chart
The main product of Oil Palm India Ltd is crude palm oil. So this crude form of palm
oil is sold to palm oil refinery companies. The sales process is done through the process of
auction. The product is sold to the party who had the highest bid. The final decision is based
on bid price.

31

Sales Process:The sales process is conducted in secured steps:The tenders are invited through advertisements in national news papers mostly in English.
The party quoting the highest price is given the sales. Advance is received in advance from
bidders. After this a confirmation of tender is sent to the property. A consignment notice is
sent to the buyer which acknowledges and sends back to the organization. A delivery devise
is issued after this. After this an invoice is generated to be forwarded to the finance
department secured.Tenders are sanctioned by the managing director in the tender register
only after that the sale processes is completed.

The Terms And Conditions Against Sales

I. The sale is ex-factory and the price is to be quoted for delivery to the items at
the factory.
II. The price shall be quoted for unit of one metric tone and shall be firm and shall
not be allowed to be reduced on any account.
III. All taxes, duties, cusses, or any other statutory levies applicable from time to
time shall be extra payable by the bidders.
IV. The quotation shall be accompanied by a closed demand; draft for the following
amount indicated against each item favoring Oil Palm India Ltd, payable at
Kottayam as earnest money deposit.
V. If any breach of breach of terms and conditions/ failure to honour .the
conditions / failure to honour the contractor if any default is committed by the
bidders,, the EMD shall be liable to be forteited and the bidder shall hot be
entitled to raise any claim for the same.
VI. The period of validity of quotations for acceptance shhll be 7days from the date
of opening.
VII. The successful bidders shall b e issued asale letter by the company specifying
the quantity sold and the firm price applicable for the period of delivery.
VIII. The full price of the material with other levies shall be paid in advances by the
success full bidder by demand draft immediately on information from the
company, after which the consignment not is sent
IX. The delivery advice is sent.

32

Delivery Advice:
It contains all the information about the item, quantity and price at the item sold. It
will also specify who and how will arrange the tankers, barrels etc which are necessary for
the transportation.
Three samples of the delivery note should be taken

1st Sample- With the driver of the vehicle

2nd Sample- Send for testing of the sample before taking it from the factory.

3rd Sample - Retained at the factory.

Duties And Responsibilities Of Senior Manager

Responsible for attending to various duties vested in him as company

secretary under the company act 1956 and rules there under.

Responsible for sales for the company product/ materials unserviceable items etc.

Responsible for the purchase of natural material expect engineering stores/ office
stationary after observing formalities.

Functions Of Financial Department

Financial forecasting and planning
Acquisition of funds
Investment of funds
Maintaining proper liquidity
Assigning the chief account officers and others
Accounting of all transactions, cash at bank, sales etc
Checking of wages and salaries
Every employee should use the safety equipment allotted by the management. The equipment
is not allowed to take for personal requirement

33

Duties and Responsibilities Of HRD (Senior Manager)

1. Personal manager shall be responsible for the recruit and appointment of workers,
staff and officers as per procedures laid down by the company.
2. He will arrange for training and manpower development
3. He is in charge of administration of loan, rules, maintenances of leave account,
Holidays working hours.
4. He will handle all disciplinary matters.
5. He will be the controlling officer for the approval of journey performed by his
subordinate staff.
6. He will visit the estate periodically and notice reports...

Finance Department
Finance management is concerned with decision with refused to the sizke size of e.
%ttd composition of asset and the: land and structure of financing. Although the importance
pf finance functions depend largely on the firm.
Financial management is an integral part of the over all management of the firm.
Whenever economic affairs, here progressed beyond .the most elementary 0nditions
production and exchange, system of accounting have appeared! The accumulation of health
and the growth of the capital the expansion of the production and trade must create the needs
for financial information and control; Accounting as a technique of financial reporting is a
reflection of those economic activities. Today accounting as regarded as a language of the
business and investment of administration and commerce.
Finance is in indispensable to facilitate, efficient and effective operations of business'
enterprise. In this content effective finance management holder key to success in today's
highly competitive modern world.

Financial Managers Are Assigned With Fine Roles

Planning of funds, Borrowing costs, Treatment of expenditure, Deferred Tax, Provisions,
contingent liabilities and contingent assets

34

There is an auditing system in the company which consists of two and its every year. They
are as follows:

Internal Audit

External Audit
The external audits are a statutory requirement and the auditors are.appointed by the

controller and auditor general. This is done to check whether every process in the company
compliance to the rules and regulations. After completing the audit process, the report is sent
to the controller and Audit General for his approval.
Budget
Theare three accounting sections at OPIL, namely-Yeroor, Cbithara, Kulathupuzha.
The head quarters of OPIL has been performing at Kottayam. All the operation relating to
accounts" are- done by estate managers and he also done, the budget preparatory based on the
crop study and flower courting Mn the budget preparation,./the manager Will compare the.
previous year budget and estimate the expenditures in the coming year.

Duties And Responsibilities

Finance and. Accounts department of Oil Palm India- Ltd is responsible for: all
financial and accounting matters of the company. They maintain and up keep all books of
accounts and corrected reports: They have responsibilities of maintains and preparation of
budget. Arrangement of statutory auditing and internal auditing, come1 under their preview.
It is their responsibility to ensure the expenditure is with budgetary-provision.

Records Of Transactions
The first step of accounting is the recording of transactions. All transactions- may be
groped as: Regular payments of statutory dues like provident fund, sales tax etc.

Duties Of Department

Overall financial control

35

Monitory decision making in consultation with managing director.

Finalization of accounts

Budget preparation

Control over all matters relating finance in the organization

Accounting Policy
Oil Palm India Ltd has generally mercantile system, of accounting. All items of
income and expenditure are accounted for us and when occurred and ail figures are stated at
their historical cost. Capital work in progress is started at in current during prior to
commissioning including, part payment to contractors. Provision for gratuity is made, on the
assumption that dl the eligible employees of the company retain as on the balance sheet date.
Fixed assets are started at their original cost less depreciation.
The company has been consistency in following written down value method of
charging depreciation. Other accounting practices are constituent with the generally.
Accepted accounting practices observed in plantation industry.

Significant Accounting Policies

1. Basic of preparation of Financial Statements
2. Use of estimate
3. Fixed assets
4. Depreciation
5. Impairment of assets
6. Development of property
7. Investments
8. Current assets
9. Sales
10. Employees Benefits
11. Selling Transaction
12. Payment Transaction
13. Cash Transaction

36

These documents provide written evidence of a transaction has taken place. The correctness
of recorded transaction can be verified at the later state by referring to the concerned source
documents. The verifiable objective for recording the transaction to books of accounts. All
plants have independent account and all are reconciled to head office.

Finalization Of Accounts In Opil

Final account or financial statement of a business consists of trading and profit and
loss account and balance sheet. While trading and profit and loss account is prepared to arrive
the net profit or loss for a certain period, the balance sheet is prepared is to be show the
financial position of business usually on the last day of accounting period: The trading and
profit and loss account is in the nature of an account where as balance sheet is in nature of a
statement. The accounting period of Oil Palm India Ltd is from 1st April to 31st March
onwards. Finalization process starts from 31st March onwards. Finalization of account starts
with the closing in hand and each with preparation of annual report.

Managing Director

Senior Manager (Finance)

Manager (Accounts)

Ministerial Staff
Figure 4
finance department structure

37

Human Resource Department

Personal Department (HRD) plays an important role in the proper running of Oil Palm
India Ltd. Personal management is concerned with the human resource of the enterpriseEveryone from the Managing Director to Chief Executive of the enterprise to the Mechanic,
Sales man or Clerk is personnel and is a part of the human resource of the enterprise. The
primary responsibilities for personnel management must be assumed by top management of
the enterprise. The various aspects of personal function are procurement, development,
compensation and motivation of the personnel. Every manager has some responsibilities
towards bent now it has been recognized that these functions, cannot be the of every line
manager. The personnel manager, organizes the personnel department to very out the
functions entrusted to him. Personnel department develops the source of department selects
the people and helps the
Line managers in rectifying placements in devising a suitable transfer policy.
Personnel department is also responsible for training and development of the employees.
Departmental Chart

Senior Manager

Senior Assistant

Junior Assistant

Office Attendant

Figure 5
Departmental chart of HR departmrnt
All the data of employees of the company are maintained by this department Senior.
Manager (HRD) is the head and he is assisted by ministerial staff.

38

This department mainly deals with the process of planning Organizing, directing, and
controlling the procurement, development, compensation, integration and maintenance of
human resource to the end that individuals organizational and social objectives are
accomplished. HR is the most important assed of modem organization. Itsaims are to bf
people together to develop an effective organization.Human Resource Department is
responsible for maintaining and ensuring the availability of adequate human resource for the
effective functioning. In order to attain the of the organization and division should ensure the
maximum utilization of Human through jobs of employees. Human resource department is
also responsible for the and development of employees through the achievements of their
careers goals.
Functions of Human Resource Department
Employment
Training and Development
Compensation
Integration
Working conditions
Welfare services
Personnel records
industrial relations
Details of employees
Table 13
Strength of employees in Oil Palm India Ltd
SL NO

Category of Employees

2008-2009

2009-2010

2010-2011

2011-2012

Officers

29

29

34

25

Staff

134

134

142

127

Workers

799

789

663

622

962

952

839

774

Total

39

Recruitment Procedure
For recruiting staff at Oil Palm India Ltd is done through internal and external sources

Internal Sources
The internal source of recruitment is done thre
Promotions
Transfers

External Sources
The external sources of recruitment is usually done through outside preview such as
Inviting tenders
Directly made by the company
Kerala Public service commission
Employment exchange
Professional employment exchanges
Advertisement
Notification in company notice board
Here staff selection in the previews of PSC and Employment exchange.
Managers are appointed through professional employment exchange and giving
advertisement in news papers. Factory labors are outside the preview of PSC and they are
appointed directly by inviting tenders through news paper, notice board etc.

Age Limits
The main age limit for direct recruitment to the posts borne on the roll of the company
will be 18 yrs and the maximum age limit unless otherwise specified will be 35 yrs as on 1st

40

January of the year in. which recruitment is effected subjected to the usual relaxation to the
O.B.C, S.C and S.T communities, Ex- sen/iceman etc as in Govt, from time to time.
Selection
Selection process is as follows:
Figure 6
Selection process of HR

Preliminary Interview

Written Test

Employment Interview

Physical/Medical Examination

Job Offer

Employment Contract

41

Various techniques are adopted for the selection of candidate for the post application blank in
the company. Through this process the detailed bio-data of the application is obtained and
this by his educational qualification and previous experience if any can be is a paid that
includes 3 Government Nominees and 2 Board of Director to the employment interview it
there are more candidates. The company is following rule of conducting a medical
examination of the candidate to make assure that he is physically fit. As the organization is a
joint venture of Central Govt and State Govt (public the selection is subject to the reservation
policy of the government

Training And Development

The Human Resource Department of Oil Palm India Ltd is giving periodical training
to their employee.
Training is usually given in 2 forms

In House training (On the Job Training)

Sponsored Training (Off Job Training)

In house training is carried out by:

National. Productivity Council

National Safety Council

Management Association

These training usually given 2 or 3 times in an year. The training conducted in the
organizational itself. The representative of National Productivity Council, National Safety
Council and Management Association is appointing expert personnel as trainees. They are
taking practical and theoretical classes for the employees.

Sponsored Training
This training is usually given to managers and officers, outside the organization, This
is periodically conducted for developing new still and knowledge. The officers and managers
are given training in Malaysia, Nigeria etc. Some authorized institutions are sponsoring this
training.

42

Remuneration And Pre-Requisites Basic Pay

Basic pay fixed for the post and if there is a time scale, the stage is fixed in the time in
the time scale of pay promoted to a higher scale of pay shall draw as pay on the new scale.
incrementIn an incremental scale the increment in basic pay shall occur on the completion of
each specified period of service is provisional, temporary, probationary, officiating or
confirmed.The period of service of an employ spend on an extra-ordinary leave on loss of pay
except sanctioned on medical group will not counter for increment.Increment shall be
sanctioned by M.DThe board on grounds specially recorded may sanction to an officers,
holding a post in a time scale, premature increment with in a scale as a recognition of
outstanding ability at any time and when such premature increment is give the next and when
such premature shall not affect the seniority of any other employ. When occurs and When
payable. When an office is probation , increment will because due only after Completion of
probation.

Contributory Provident Fund

Subject to the provision of the contributory P.F act and rules the company will have a
scheme of contributory.P.F in which the employ contribution will be up. 8 1/3 of the
employment of the employ as defined for the purpose in the E.P.Fact waiving a ceil ling of
Rs 16007-stipulated in the act.

Termination
The company may at any time terminate the service of an officers giving 3 month
notice for the payment of usage in the lien of such notice. The service of probation and a
trainee may be terminated without notice and without assigning any reason thereof.
Resignation
An officer can resign from the service of the company after giving 3 months in writing or on
payment of 3 months' salary lien of such notice.

43

Gratuity
The maximum amount of gratuity payable shall be Rs 36000. The salary for the
purpose of gratuity shall mean, total emoluments of the employ including basic pay and D.A
does not include H.R.A, Bonus, ones times etc. Medical expense reimbursement
The M.D or any officers to who this power is delegated by the M.D may pass bills
produced by the employees who are not covered by the ESI or plantation labor act connected
with medical consultation attention or treatment for Him/her and or any member.
Promotion
All promotions to posts will be strictly, on selection and the same will be made on the
basis of merit and ability. Promotion in the organization, is based on over all assessment.

Seniority

Test

Interview

Attendance

Performance etc
Each of these criteria carries grades of itself. No employee has. right for promotion to

any post solely on the ground of his seniority or in any grade on the- ground of his having is
held additional charge of a post of having actual in the post or Ori any otHer ground. All
promotions to posts will be strictly on selections and the same will made on the basis of merit
and ability. However seniority will be counted when merit and ability ait approximately
equal. An employee who promoted shall be holding post to which he is promoted in, an
officiating capacity for a period up to 6 months on duty, subject- from Time to time by
Personnel Manager or officer authorized by Managing Director.
Welfare Of Employees
In each estate it includes one welfare officer that provides service for the welfare of
employees, the welfare department is functioning by providing medical facilities to-' the
employee in factories and estates , it includes an hospital for this purpose. The hospital
having service of male arid female Doctors and Ambulance service; The welfare department

44

is providing scholarship for the children of staff and lump sum grant, pension gratuity, bonus,
advance, provident fund for employees. The company has provided a school bus for the
school going employee's children.

Holidays
Holidays for the employees of any units the company shall be the same as determined
the workman. There will be in addition to weekly holiday as lactones act/ plantation labour
act. Holiday for the officer at the shall be the same holidays declared by the state government
as holiday Saturday. In addition to that every alternative Saturday shall also holiday for
office.

Travelling Allowances
It is an allowance granted to cover the expense incurred in performing journey in the
interest of the company. No TA wills payable for journey with the head quarters on which
8km from the place of the duty.

Kinds of travelling allowances

T.a by journey by rail

All officers are entitled to 1st class railways fair and employ 2nd class once in a year.

Journey By road

All officers will be allowed mileage at rates as followed by government from time to time for
j ourney in car. For bus fare for the journey will be followed.

Journey by air

M.D and head of the department as the head office and superintends may travel by air
and will be given actual plane fair.

Daily Allowance

The rules for payment of daily allowance shall be decided by the board from time to time.

45

Safety Requirement
1. An employee should report to his / her immediate supervision at the time of an
accident even it is a minor one.
2. An employee is liable to use equipment and dresses and follow the safety
measures taken by the management.
3. The employees are allowed are allowed to do their duty and use machine which are
allotted to them.

Trade Unions
Trade unions in any industry are working for the benefits of its members. Likewise,
an- important role in the implementation of labours welfare the privileges of the workers.
There are 7 trade unions functioning which workers trade union and staff trade union.
Workers trade union are
o Quilon District Plantation workers Union (CITU)
o Kerala State Oil Palm Plantation Labour Congress (INTL'C)
o All Kerala Oil Palm Plantation Workers Union(AITUC)
Staff trade Union are
o Oil Palm Employees Association (CITU)
o Oil Palm Plantation Staff Congress(INTUC)
o Oil Palm India Plantation Staff Association (AITUG)
o Oil Palm Employees Centre

Safety Requirement
1. An employee should report to his/her immediate supervisor, at the time of an accident
even though it is a minor one.
2. An employee is liable to use equipment and dresses and follow the; safety measures taken
by the management.
3. The employees are allowed to do their duty and use machine which are allotted to them.
4. Every employee, should use the safety equipment allotted by the "management. The
equipment is not allowed to take for personal requirement.

46

Leave Joining Time And Holiday

Subject to the provision of these rules the following kinds of leave may be granted to
an employee of the company:
1. Casual Leaved
2. Earned Leave
3. Sick Leave
4. Maternity Leave
5. Extra ordinary Leave
6. Raising of funds
7. Allocation of canings
8. Control of funds
Finance department commits of chief manager, junior manage and office assistant,
The finance department maintains all the accounts of the various department maintains all the
accounts of the various departments in an organization. It is the duty of the

finance

department to receive money and make payments on behalf of the company. It also has to the
Balance sheet and profit & loss account of the company. It also prepares the annual budget
according to which the expenses of the company are monitored. The finance, department is a
vital part in an organization, as without finance the day-to-day activities of the company will
not function in a smooth and rapid way. It is the core of the organization. The cash section
and account section also forms part of the finance department. This recording of day-to-day
transactions^ routine functions like sales tax, payments and receipts of cash cheque etc,
comes under; the preview of accounts section-. The accounts section also undertakes the
employee payroll function. The cash section deals with the disbursements of cash.
In Oil Palm India Ltd, the financial and. accounting activities are controlled by: the
senior manager (finance and accounts) station by the head office Kottayam. The objective; of
accounting is to provide information to its various users, via the management and commerce,
prospective investors, creditors and other by identify relevant data measuring each transaction
v in terms of money and recording the transactions. Finally this data are classified
summarized, interpreted and the result is communicated to interested parties in the form of
report

47

Estates
The department is headed by a senior manager (estates) who is assisted by two
managers, three assistant managersa (estates), two assistant manager (finance and accounts),
two labour welfare officers, ministerial staff and field staff and field staff or workers.The
company has got a total planted area of 3646 hectare of plantation spread over in three estates
viz. Yeroor, Chithara and Kulathupuzha in Kollam.distict. The raw materials, Fresh Fruit
Bunches (FFB), for the production of Palm Oil are cultivated in these three estates.
Figure 7
Departmental chart of Estates Department

Senior Manager
(Estates)

Manager

Assistant
Manager
(Estates)
Field
Assistant
Supervisor

Watcher

Welfare
Officers

Manager

Assistant
Manager
(Accounts)

Assistant
Estates
Field
Assistant

Assistant
manager
(Estates)

Supervisor

Welfare
Officers

Assistant
(Accounts)

Ministerial
Staff

Assistant
Estates
Field
Assistant
Supervisor

Watcher
Ayah

Watcher
Ayah

Workers

Workers

Ayah
Workers

48

Medical Department
Medical department takes care of the health and hygiene of the workers of the
organization. Senior medical officer is the department head and he is assisted by a lady
medical officer and hospital staff.
Functions

Medical department priding medical care to employees and their dependents

Look after the work accident cases and other patients.

This department have the ambulance facility. It necessary the accident or injured
workers may be send to other hospitals for better medical treat

Figure 8
Structure of Medical Department.

Senior Medical
Officer

Junior
Medical Officer

Staff

Staff

Attender

49

Maintenance Department
Maintenance department plant maintain department is responsible for repair,
maintenance, installation of machines, tools and equipments in manufacturing operations,
The department is responsible to eliminate all causes of failure and ensure full useful life in
coordination with daily maintenance completed by operating personnel. Schedules repair,
maintenance and installation to ensure continue product ion operations. Creates and mages
the maintenance and stores budgets, inspects operating machines and equipment

for

conformance with operational standards. Reviews production, quality control, and

maintenance reports and statistics to plan and modify maintenance activities.

Nature Of Maintenance
1. Routine Maintenance
2. Preventive Maintenance
3. Annual shut down Maintenance
4. Statutory Maintenance
5. Break down Maintenance
Maintenance department is highly effective and it is highlighted in the annual
production figures. Maintenance is done on weakly daily and monthly basis. Greasing, oil
checking etc have to be done on all days and can be classified into routine maintenance.
Preventive maintenance like oil replacing has to be done according to the prescribed period in
order to maintain the personal as well as plant safety. Statutory maintenance is done as
defined by the factory act. The, plant will be shut down for a period of .one month for the
annual shutdown maintenance usually this is done during the off season. Break down
maintenance are done whenever necessary

Delay in computerizing the company

As there are fewer chances of promotions, employee motivation is very low

No standard for quality, like ISO, is implemented

Oil Palm is a seasonal product, thus leading to low plant utilization from August
January

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Project Department
Project department is concerned with the development of new projects and research
for it the expansion of the company. It takes necessary step to formulate new plans for the
fulfilment of its vision is to expand the company's horizons. The verification of the viability
of the project and the execution of the same is maintained and controlled by the Senior
Manager project.

Departmental Structure
The department has one senior manager and the manager of OPB. Assistant manager
(estates and assistant manager (OPDP) come under him process. Therefore the selection and
installation of the automatic dilution control is extremely important.

Steam And Power Generator

Utilization of existing energy resources is indispensable not only for large but also for
small production plans, particularly for oil palm mills where between heat and power are
required for the production process which is the pre-for a combined "heat and power scheme"
or commonly referred to as "co-system " solid waste fuel in the form of fuel in the form of
filter and shells, which are by products of the proceed are utilized as fuel for their bailer. This
steam generated is used for the factory purpose.

Steam is required at an appropriate rate of 500 kg/hr/ton of FFB. The water for steam
production is obtained by building two dams across the nearby river. This water is thoroughly
purified in a dematerializing plant passing through two stages known as "Stroke Acid"
containing strong base which removes the ions present in the water. After this the water is
adjusted to a PH value of 8.5 taking care to prevent scale formulations along the internal
tubes and walls of the boiler and this not to damage them.
Steam is generated from the boiler at a pressure of 22kg/cm2 and at a temperature
range of 235 - 265 degree Celsius this pressure and temperature is higher than that required
for the process. First this is expanded in steam turbines. Sterilization of FFB and heating

51

system in the process. The energy released during the expansion of the steam is converted by
the turbines into mechanical power to drive an alternator.

Effluent Control
The total effluent is effluent is approximately 0.8 tones /tones of FFB, which is made
up of 0.15 tones sterilizer content A 0.45 tonnes from the clarifier station, 0.08 tonnes from
the Kernel plant and 0.12 tonnes from the process cleaning. The total liquid effluent will
include the wash water. The effluent is not toxic; but it has a Biochemical Oxygen Demand
(BOD) of above 25,000 which makes it objectionable to dish life when introduced in
relatively large quantities is water Ways acid rivers. The effluent is treated by a process,
which required an area of 4 to 10 hectors. This includes 65-75 days retention time in eight
ponds after which the water is used for irrigation purposes in the estate of the company.

52

Senior
Manager

Manager
(OPB)

Assistant Manager
(Estates)

Assistant
Manager

Ministerial
Staff

Figure 9
Structure of Project Department

Field Staff

53

Organisational Analysis
Swot Analysis

Strength
Their product has very good demand
Dedicated employees are another considerable advantage of the organisation. The company
has got financial reserves. Oil Palm is a highly productive crop. Availability of modern
production technology also helps the company and has got a well-equipped factory. Effective
quality control measures are present in the organisation. Health value of the product is
another advantage. Presence of good infrastructure is also an advantage. Sophisticated
production process emphasizing greatly on quality hence the product quality is outstanding.
OPIL is the leading producer of palm oil in India. It has got very good relationship with trade
unions. New production methods are used by company which results in its better
productivity. Safety measures in factory are having better quality.

Weakness
Insufficiency of land for cultivation of palm has always been a weakness to the organisation.
Deficiency of online business is another disadvantage. Shortage of sufficient manpower is
another problem faced by the organisation. Lack of worker's participation in managerial
decision making results in disputes. Fluctuation in oil price also affects the revenue generated
by the organisation at times. Delay in computerizing the company affects the efficiency. As
there are fewer chances of promotions, employee motivation is very low. No standard for
quality, like ISO, is implemented even though quality is high. Oil Palm is a seasonal product,
thus leading to low plant utilization from August.

Opportunities
The organisation has no direct competitors in Kerala hence there is a monopoly in
production. High demand for palm oil is another opportunity to attain higher reach.
No environmental pollution can also be considered as an opportunity. Oil Palm Development
Programme (OPDP) is another very good initiative which helps the organisation.

54

Government interventions to control palm oil imports will also help the domestic producers
to grow. Consumers like Wipro, HLL etc. are another advantage. National Research centre
and seed production unit produce high yield variety of palm. Worldwide acceptance of palm
oil as a harm less and natural vegetable oil.

Threat
Price of fluctuation affects the sales of the organisation at different times. Pressure by
Malaysia and Indonesia to lift the import barriers might be a threat. Liberalisation of policies
and globalization is another threat to the organisation. Lack of marketing strategies also has
an effect in the sales of the organisation. Government policy at times creates problems to the
organisation. World Trade Organization Agreement on international trade has also a negative
effect. Low tariff rate for import of substitutes of palm oil is one among the threats faced by
the organisation.

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CHAPTER FOUR

OBERVATION AND CONCLUSION

56

OBERVATION AND CONCLUSION

Observation
After analysing data about the organization from various sources certain assumptions can be
made

The organization is in a sound financial position

The organization has an efficient management system.

There is a healthy relation between management and the workers.

The company promotes team activities.

The co-ordination between various department is excellent

Employees of OPIL are involving in various spheres including decision

Training given to officers in Malaysia and Nigeria

The organization is making profit for last 6 years

Suggestions

Lower level employees needs to be motivated, their welfare should be taken care by
the management to ensure their productivity and efficiency

The organization need to adapt more aggressive marketing and advertising strategies
to face the evolving challenges.

Effective use of management information can reduce complex procedure.

Measures can be taken to raise the quality of products.

The control measures using old techniques to know about purity' of fruits and also
crude oil.

The process of communication needs to be more effective within the organization to

bring out the maximum productivity.

Proper guidance should be given to the workers to improve their efficiency.

The company has to make awareness of the schemes and plans to the
employees properly before its implementation.

57

Proper training and counselling should be given to the employees who opted for VRS.
The schemes should be implemented in its right spirit and grace.

Conclusion
The study was done to observe the overall functioning of the organization and to
acquire the practical aspects of day today operation in the organization.
Financial position of the company is good. Employees are enthusiastic and
hardworking about their work and efficient management. The present scenario of Kerala
industrial situation is obtained from the study.
The study reveals the application management principles in OPIL and the experience
at OIL PALM provides a chance to analyse the difference of management theory and practice
The study on Oil Palm India ltd enabled me to acquire in depth knowledge about various
functional areas and practical problems, This study helped me to know about the various
problems faced by the company and how the theoretical knowledge can be applied into actual
situations. The study reveals the consistent performance of the company.

58

BIBLIOGRAPHY

Corporate Author 2012 Annual Report Oil Palm India Ltd, Kottayam,
March 2012.Print.
Corporate Author 2013 Annual Report Oil Palm India Ltd, Kottayam,
March 2013.Print.

Oil Palm India Ltd, Kottayam http://www.oilpalmindia.comAbout OPIL

May2014.Web. 6 May 2014
Oil Palm India Ltd, Kottayam http://www.oilpalmindia.comEstates May
2014.Web.6 May 2014.

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ANNEXURE
P&L STATEMENT AS ON MARCH 2012

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Figure 6 BALANCE SHEET AS ON MARCH 2012

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Figure 7 P&L STATEMENT AS ON MARCH 2013

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Figure 8 BALANCE SHEET AS ON MARCH 2013