Logistics & Supply Chain Management

Interim Project Report

A STUDY ON SUPPLY CHAIN MANAGEMENT OF

CHEMICAL AND FERTILZER INDUSTRY
Submitted to
Prof. Rajendra Todalbagi

Submitted by
Section A
Group 04

18006 ANURADHA PRADEEP

18032 AMITABH PATHAK

18039 HARSHITA J

18041 MUGDHA JHALDIYAL

18061 SKANDA NARASIMHA M A

18063 SUDARSHAN R N

Batch: 2019-20

15th February 2019

Table of Contents
GENERAL INDUSTRY ANALYSIS .................................................................................................... 1
SUPPLY CHAIN ANALYSIS OF THE INDUSTRY ........................................................................... 1
SUPPLY STRUCTURE ..................................................................................................................... 1
SUPPLY CHAIN DESIGN AND SUPPLY CHAIN OPERARTION ............................................... 2
SUPPLY CHAIN PERFORMANCE.................................................................................................. 4
SUPPLY CHAIN CHALLENGES ..................................................................................................... 5
OPPURTUNITIES FOR IMPROVEMENT ....................................................................................... 6
COROMANDEL INTERNATIONAL LIMITED .................................................................................. 7
INTRODUCTION .............................................................................................................................. 7
COMPETITORS OF COROMANDEL INTERNATIONAL LIMITED ........................................... 7
COMPETITIVE STRATEGY ............................................................................................................ 8
SUPPLY CHAIN STRATEGY OF COROMANDEL ..................................................................... 10
SUPPLY CHAIN DESIGN, PLANNING AND OPERATIONS OF COROMANDEL
INTERNATIONAL .......................................................................................................................... 11
SCOR MODEL ................................................................................................................................. 12
BENCHMARKING FINANCIAL DATA OF COROMANDEL .................................................... 17
GUJARAT STATE FERTILIZERS AND CEMICALS LIMITED ..................................................... 20
INTRODUCTION ............................................................................................................................ 20
COMPETITIVE STRATEGY .......................................................................................................... 21
GNFC SUPPLY CHAIN .................................................................................................................. 22
SUPPLY CHAIN DESIGN, PLANNING AND OPERATIONS OF GUJRAT STATE
FERTILIZER .................................................................................................................................... 23
REFERENCES ................................................................................................................................. 26

i
GENERAL INDUSTRY ANALYSIS
The actual production of all the Fertilizers during the year 2016-17 was 414.41 LMT. The
estimated production of all the Fertilizers during the year 2017-18 is expected to be 462.20
LMT showing an increase of more than 11% in comparison with the previous year. The rapid
build-up of fertilizer production in the country has been achieved as a result of a favourable
policy environment facilitating investments in the public, co-operative and private sectors.

Market Dynamics
The increasing population growth has led to food security concern and increased awareness
among the farmers about the uses of fertilizers. Some of the other factors driving the growth of
the market are high government subsidies and growing investments in the fertilizer indus-
try. There is a shortage of raw materials in the country and the consequent dependency on
imports is leading to volatile prices in the fertilizer industry. However, the new policies will
help in stabilizing the raw material prices during the coming years.

Major companies in the sector include:

 Chemical Co. Limited

 Coromandel International Limited
 Deepak Fertilizers
 Gujarat State Fertilizers
 Indian Farmers Fertilizer Co-operative Ltd
 Nagarjuna Fertilizers and Chemical Limited
 National Fertilizer Limited

SUPPLY CHAIN ANALYSIS OF THE INDUSTRY

SUPPLY STRUCTURE

Supply chain structure in the chemical industry is difficult because of the complexities associ-
ated with this industry.

Conventional manufacturing (discrete manufacturing) uses bills of materials that specify the
parts that go in the final product, assembles the products, and produces lots consisting of dis-
tinct units.

Process manufacturing is different. Process manufacturers use formulas and manufacturing

recipes. They produce goods in batches or a continuous stream. SCP is based on modelling
constraints and key parameters. Chemical industry models are very complex.

1
In the supply chain planning market, the chemical industry often seems like an afterthought.
Certainly, most of the writing on supply chain planning has a distinctly discrete manufacturing
industry flavour to it.

Complex manufacturing is a hallmark of the chemical industry. Typical factories include many
tightly interconnected operating units for blending, separating, reacting and packaging of final
products.

Tanks are used everywhere, within operating units, between units to balance operations, and
for temporarily storing materials, work-in-process, and finished goods inventory. Production
planning solutions must reflect a deep understanding of the product and the manufacturing
processes to ensure that plans are realistic and support stable product transitions. Planning re-
quires an explicit understanding of the complex, non-linear chemical processes occurring
within process units. Complex relationships between raw material variability, operating units
and constraints on product changes must still be thoroughly modelled to develop optimal sched-
ules.

Most SCP suppliers can’t begin to produce high fidelity models of process manufacturing
plants. But in addition to modelling manufacturing, a good supply chain solution needs to also
model demand and inventory. This is important because the central process in supply chain
management is sales & operations planning (S&OP), which is increasingly being referred to as
“integrated business planning” (IBP). IBP balances supply and demand in a manner that opti-
mizes an organization’s key financial goals. Running demand-supply simulations is incredibly
clunky and time consuming at best. But it can be all but impossible for complex chemical
supply chains unless demand, inventory, and manufacturing parameters and constraints are in
one model.

SUPPLY CHAIN DESIGN AND SUPPLY CHAIN OPERARTION

Process industries such as steelmaking and chemicals are increasingly focused on customer
service, but their supply chain practices are designed for low-cost, efficient operations. To align
with today's corporate strategies, they need to match their supply chains to the markets they
serve while improving their demand forecasting capabilities.

1. What is our actual cost-to-serve for each product to each customer?

Different customers, products, service levels and distribution channels contribute dif-
ferent margins; by identifying the unprofitable and low-margin product/customer com-
binations and high-cost processes, you can develop action plans for each in order to
improve your business’ profitability or determine where to send products in periods of
shortage and excess. Cost-to-serve optimization analyses and quantifies all the activi-
ties and costs incurred to fulfil customer demand for a product through the end-to-end
supply chain. It evaluates the thousands of activity-based costing options to identify the

2
 optimal network design, structure and flow to achieve the lowest total cost-to-serve
based on all end-to-end trade-offs.

2. How can we optimize for tax and duties?

For chemical companies, taxes and duties expenses can meet or even exceed total trans-
portation cost. Companies incorporate tax and duty as cost factors along with the tradi-
tional transportation, facility, labour and inventory costs, enabling true global network
optimization. This will include calculating tax and duties based on the selected make
site, zone and ownership of the product, as well as the transfer price and taxable income.
3. Should we start delivering certain customers factory-direct?
Network optimization can help identify strategies for improving sourcing and transpor-
tation strategy based on required service constraints. Understand how to manage chan-
nels such as retail, wholesale distribution, e-commerce, OEM and third-party channels
in order to minimize overall costs while meeting unique demands in each channel. In
addition, supply chain inventory optimization can provide a full inventory plan that
includes optimal safety stock, cycle stock and pre-build inventory.
4. How should we flow each product through the network?
The process of moving products from supply through production and eventually dis-
tributing them out to customers or stores presents myriad choices. The collective set of
these choices make up a product’s flow-path through the supply chain. Using Supply
Chain Design, companies can model these flows to identify total landed cost or total
cost-to-serve for each product, and then model all the alternative flow options using
smart algorithms to determine the best choice.
5. To meet seasonal demand, what products do we pre-build?
Long-term capacity planning can help companies manage seasonality, economic fluc-
tuations and other influences on product demand that place stress on production sched-
ules and overall capacity. Using production modelling, companies can regularly review
demand forecasts as the information becomes available so that they can best balance
limited production capacity with demand volumes that often exceed this capacity. This
requires production strategies such as pre-building of goods or pre-positioning of in-
ventory for certain products so that capacity remains available for the most critical
items.
6. How do we balance production lines?
Even if a company has a manufacturing strategy in place, including location and quan-
tity for each product produced, there are still many tactical decisions that can drive
significant cost savings and operational improvements. Detailed models of the entire
production capacity as a function of the end-to-end supply chain can help a business
determine the production location, timing and quantity of each product throughout the
network to best utilize capacity at the lowest total cost. Modelling results can also de-
termine lot sizing, labour shift allocation, working hours or best utilization of change-
overs.
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 7. Where should we position inventory to achieve desired service levels?
By leveraging inventory modelling and policy design technology, companies can ana-
lyse and properly categorize demand, factor all aspects of inventory for both existing
and new supply chain structures and simulate real-world behaviour to enable true what-
if capabilities. The result is a prescription for the right levels of working capital across
continuously-changing businesses.
8. How do we minimize costs for unplanned shutdowns and transportation asset
shortages?
Supply chain risk management and contingency planning is a key application of supply
chain design. Modelling technology enables companies to create living models of the
end-to-end supply chain to mitigate risks by visualizing current inefficiencies, analyse
the impact of changes to the supply chain through scenario analysis, and be able to react
quickly and intelligently to unplanned events such as fires or floods. Variety of global
risk indices to help companies understand and predict the likelihood of supply chain
disturbances.
9. How do we rationalize our supply chain as a result of a merger or acquisition?
Mergers and acquisitions (M&A) introduce an incomparable number of options for the
design of new organization’s future supply chain. Expanded and sometimes redundant
facilities, assets, suppliers, customers and products make the analysis “pre” or “post”
merger difficult. Companies must utilize models that include all the inter-related oper-
ations and incorporate time and variability to determine the best strategy for combining
multiple organizations.

SUPPLY CHAIN PERFORMANCE

 Manufacturing activities of the chemical industries are slowly moving to low cost re-
gions like Eastern Europe and Asia
 Increased in plant capacity in low cost product have made competition (on the price
front) severe
 There are high operating costs due to security measures for wars.
 Also, the demand is down after the economic downturn hit the Asian region in
1997(This will affect all the stages of the supply chain like retailer, distributor etc)

4
 How should the performance be given current trends?

SUPPLY CHAIN CHALLENGES

Complex manufacturing process:

There are many tightly interconnected operating units for blending, separating, reacting and
packaging of final products

Fluctuating cost:

The prices of commodities like crude oil are constantly fluctuating. This is a major challenge
for chemical industry.

High stakes in quality control:

The chemical industry is highly regulated with strict compliance requirements. Regulatory
body: Global harmonised System of Classification and Labelling of Chemicals.

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OPPURTUNITIES FOR IMPROVEMENT

Digitalisation

Digitalization can improve chemical industry maintenance performance and give companies
who embrace technology a decided advantage in today’s globally competitive environment.
According to a recent MarketResearch.com blog on megatrends in the chemical industry, dig-
ital technology can help chemical companies in many ways

This shows how much of progress can be got with digitalization.

Other areas that need to be improved:

Human error:
Many industrial accidents that occur every year are a result of human error. As of
2009, a major portion of the injuries (74.8%) happened in the industry, according to
the Bureau of Labour Statistics.

Manufacturing defects:

6
 Accidents that occur in a chemical plant can also be the result of a manufacturing
defect. These defects can be present in a piece of equipment or in the materials used

Improper training:

During 2009, 4.3 out of every 100 workers in the industry were involved in accidents.
A large portion of these accidents occurred as a result of improper training of person-
nel.

COROMANDEL INTERNATIONAL LIMITED

INTRODUCTION
Coromandel International Limited is an Indian corporation founded in the early 1960s by
IMC and Chevron Companies of USA. Originally named Coromandel Fertilisers, the company
is in the business of fertilizers, pesticides and specialty nutrients. The company is also in rural
retail business in the state of Andhra Pradesh through its Mana Gromor Centres. Coromandel
International is a subsidiary of both the Muruguppa group and EID Parry, which holds 62.82%
of the equity in the company. The company has eight manufacturing units located in the states
of Andhra Pradesh, Tamil Nadu, Maharashtra, Gujarat and Jammu and Kashmir. Its product
line includes Gromor, Godavari, Paramfos, Parry Gold and Parry Super. The company pro-
duces and sells phosphatic fertilisers of various grades, including Diammonium phosphate and
Single Super Phosphate.
Coromandel was ranked #16 of Business Todays’ 2009 list of the Best Companies to work for
in India. The company confers Borlaug Award for outstanding Indian scientist in the field of
agriculture and environment

COMPETITORS OF COROMANDEL INTERNATIONAL LIMITED

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 Agronomy Company of Canada is perceived as one of Coromandel's biggest rivals. Agronomy
Company of Canada was founded in null, and is headquartered in Thorndale, Ontario. Agron-
omy Company of Canada is in the Agricultural Products industry. Agronomy Company of
Canada generates $1.7B less revenue vs. Coromandel.

Loveland Products is a top competitor of Coromandel. Loveland Products is a Private company

that was founded in 1970 in Loveland, Colorado. Loveland Products operates in the Agricul-
tural Products industry. Compared to Coromandel, Loveland Products has 4,240 fewer em-
ployees.

Agria is Coromandel's #3 rival. Agria is headquartered in Shenzhen, Hong Kong Special Ad-
ministrative Region, and was founded in 2000. Agria competes in the Agricultural Products
industry. Agria generates 47% the revenue of Coromandel.

COMPETITIVE STRATEGY
 ‘Make in India’ policy to incentivize domestic fertiliser manufacturing and improve plant ca-
pacity utilization
 Digitization of the Fertiliser Supply chain under Direct Benefit Transfer to improve stock vis-
ibility and bring transparency in operations
 Agri infrastructure development – Strengthening of Irrigation, cold chain, rural electrification
and digital connectivity to bring structural reforms in rural India
 Doubling farm income by 2022 - Higher Minimum Support Price, price discovery through
electronic markets and agriculture insurance to improve disposable income for the farmers and
support higher agri inputs usage
 By 2022, ~26 Crop Protection molecules are going off patent, which provides significant
growth opportunities for generic manufacturers
 Policy change in SSP mandating marketers to print brand name of the manufacturers on the
bags to promote quality consciousness among consumers
 Entry into bio pesticide business to provide access to US and European markets
Strengths
 Amongst the pioneers and market leaders in Organic Fertiliser, Specialty Nutrients, Phosphatic
fertilisers in India
 Significant presence and brand equity in high agri inputs consuming South, West and East India
markets
8
 Diversified product portfolio with non-subsidy businesses contributing significant share in
Company’s profitability
 Differentiated crop solutions provider with nearly one-third of domestic sales coming from
unique products
 Direct consumer connect through 800 Retail Centers in Andhra Pradesh, Telangana, Karnataka
and Maharashtra offering products and services to around 3 million farmers
 Captive Phosphoric Acid and Sulphuric Acid manufacturing capacity improving the cost struc-
ture of Phosphatic products
 State of the Art R&D facilities for new product development in Nutrient and Crop Protection
space
 ‘Make in India’ policy to incentivize domestic fertiliser manufacturing and improve plant ca-
pacity utilization
 Tax reforms introduced under GST to help in eliminating spurious players, bringing transpar-
ency in operations and benefiting organized players
 Digitization of the Fertilizer Supply chain under Direct Benefit Transfer to improve stock vis-
ibility and bring transparency in operations
 Agri infrastructure development – Strengthening of Irrigation, cold chain, rural electrification
and digital connectivity to bring structural reforms in rural India.

The table below shows the risks associated with the company and how it handles the risk using
a mitigation plan.

9
SUPPLY CHAIN STRATEGY OF COROMANDEL
All imported solid raw materials are transported through trucks and dedicated pipelines are
used for transportation of liquid raw materials (phosphoric acid, Ammonia and Sulfuric acid).
All the solid raw materials are stored in a closed type dedicated storage area whereas the liquid
raw materials are stored in storage tanks.

Functional Areas: Coromandel International limited comprises of four functional areas. They
are:

1. Manufacturing and production

2. Marketing

3. Finance

4. Human Resources

Manufacturing and Production: The main objectives of manufacturing unit of Coromandel

International Limited are

1 To be a low-cost Fertilizer manufacturer

2 Emphasis on safety and environment improvement

3 Trust on energy conservation.

The plant has planned to undertake manufacturing of single super phosphate with estimated
production volume of 0.7 lakh tonnes per annum. The basic raw materials used for manufac-
turing are phosphoric acid, urea and ammonia. They buy naphtha to make ammonia from
HPCL. Rock phosphate is imported from USA and Sulphur is imported from USA and gulf
countries.

Human Resource Department: This department deals with the matters pertaining to managerial
staff and is headed by Asst. General Manager & Regional Head - HR who looks after the mat-
ters like recruitment, career planning, training and development, performance appraisal and
smooth administration of remuneration and policies of all categories of employees of Visakha-
patnam Plant as well as Marketing Branches of in the States Le., Andhra Pradesh, Assam, West
Bengal, Orissa, Madhya Pradesh, and Chhattisgarh.

10
In addition to this the company has maintained a green supply chain system, keeping the envi-
ronmental protection in mind.

SUPPLY CHAIN DESIGN, PLANNING AND OPERATIONS OF COROMANDEL INTER-

NATIONAL
1. Facilities- Coromandel is a flagship company of the Murugappa Group and is a sub-
sidiary of E.I.D Parry (India) Limited which holds 60.59% of the equity share capital
in the Company. The Company operates through two major segments: Nutrients &
other allied business and Crop Protection, offering farming solutions comprising of
Fertilisers, Crop Protection, Specialty Nutrients and Organic compost. The Company
also operates a network of around 800 rural retail outlets under its retail business across
Andhra Pradesh, Telangana, Karnataka and Maharashtra. The Company has 15 manu-
facturing facilities located in Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra,
Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat and Jammu & Kashmir. The Com-
pany’s products are marketed all over the country through an extensive network of
dealers and its own retail centers. The crop protection products are exported to various
countries. During the year, Coromandel acquired the Bio pesticide business from E.I.D
Parry (India) Limited which would enable the Company to gain entry in high growth
bio pesticide segment in Indian, North American and European markets.
The coromandel retail outlets which operates around 800 stores in Andra Pradesh, Tel-
angana, Karnataka and Maharashtra offering the entire range of agri-product and
Fservices to three million farmers .

2. Inventory-The company owns channel inventory and strengthened business processes,

Coromandel expects to sustain its growth momentum for 2018-19. Going forward,
Company plans to strengthen its existing operations and capture new opportunities
through expanding its markets, product & services, business adjacencies and agri tech-
nologies. The assets of the Company, including its plant and machinery, work in pro-
cess inventory and finished stocks are adequately insured against loss or destruction by
fire and allied perils.

3. Transportation and Logistics

Optimisation of rail road transportation-Operations optimisation is the main business
of railways. Both train operators and infrastructure managers create the best solutions
for activities within a given context of infrastructure and rolling stock. Quality is meas-
ured by punctuality and the number of trains running at peak times. Company will focus
on primary markets to reduce logistics cost, improve customer centricity and create
quality awareness through extensive quick test campaigns. To improve efficiency and
throughput in its plants, Business will complete technology upgradation and debottle-
necking the capacities.

4. Sourcing

11
 Long term tie up with Foskor, south Africa and Tunisia supply agreement for ammonia
and sulphur with Mitsui Potash from Canpotex Ammonia from QAFCO, Joint venture
with SQM Chile, a global player in specialty plant nutrition, improving Coromandel’s
sourcing capability, manufacturing and technical knowledge in Water Soluble Fertiliser
Strategic investment in Tifert (in Tunisia) and Foskor (in South Africa) for upstream
integration for Phosphoric Acid sourcing

5. Distribution Network- we have set up our own distribution network in key states and
are steadily enhancing our reach. Direct consumer connects through 800 Retail Centers
in Andhra Pradesh, Telangana, Karnataka and Maharashtra offering products and ser-
vices to around 3 million farmers. he Company has its own corporate internal audit
function to monitor and assess the adequacy and effectiveness of the Internal Controls
and System across all key processes covering various locations.
Coromandel has 4 Fertiliser plants and 4 Crop Protection plants across 5 states in India.

Fertiliser plants at: Kakinada & Visakhapatnam in Andhra Pradesh, Ennore & Ranipet
in Tamil Nadu, Ennore & Ranipet in Tamil Nadu.

Crop Protection plants at: Ranipet in Tamil Nadu, Navi Mumbai in Maharashtra, An-
kleshwar in Gujarat and Jammu in J&K.

Coromandel's marketing branches servicing the farming community across India

are located at:

Hyderabad, Kurnool, Vijayawada and Visakhapatnam in Andhra Pradesh, Bangalore

and Raichur in Karnataka, Trichy in Tamil Nadu, Aurangabad in Maharashtra, Ahmed-
abad in Gujarat, Indore in Madhya Pradesh, Raipur in Chhattisgarh and
Bhubaneswar in Orissa, Kolkata in West Bengal, Ghaziabad in Uttar Pradesh.

SCOR MODEL

The Supply chain operations reference (SCOR Model) model provides a unique framework
that provides a unique framework that links the performance, processes best practices and peo-
ple into a unified structure. The frame work supports between supply chain partners and en-
hances the effectiveness of supply chain management, technology and related supply chain
improvement activities.

SCOR solves the supply chain challenges

 Superior customer service: The SCOR model provides a framework for measuring
and understanding the current supply chain conditions and performance and creates a
foundation for improvement
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 Cost control: SCOR metrics provides the basis of an organization to measure hoe suc-
cessful it is in achieving its desired objectives. SCOR metrics are supposed to be used
in the supply chain performance attributes, making it easier to compare different supply
chains and different supply chain strategies
 Planning and risk management: SCOR helps users establish rules and strategies, as-
sign responsibilities, coordinate responses and monitor current conditions.
 Supplier/ Partner relationship management: SCOR provides a common language
for supply chain classification and analysis. Using a common language and framework
makes it easier for teams to communicate, spends benchmarking efforts and enhances
the evaluation of best practices
 Talent: The SCOR skills management framework complements process reference,
metrics reference and practice reference components with baseline skills, experience,
aptitude and training

SCOR Model in Coromandel Corporation

13
SCOR framework model

14
  Level 1: It defines the scope and content of the supply chain
 Level 2: Here companies will implement operational strategies
 Level 3: It defines the ability to compete successfully in the market
The above process involves raw materials, suppliers, manufacturer, distributor and consumer.
Level 1 to 3 includes the schedule of product delivery, return of material, product verification
and transportation of product.

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The SCOR Model Attributes

Performance attributes Strategic metrics

Customer Reliability Addresses the ability to per-

form tasks as expected. It is a
customer focused attribute

Responsiveness It describes the speed at

which the tasks are per-
formed

Agility This describes the ability to

respond to external influ-
ences and abilities to change

Internal Cost It describes the cost of oper-

ating the process. It is inter-
nally focused attribute

Assets It describes the ability to ef-

ficiently utilize the assets.

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BENCHMARKING FINANCIAL DATA OF COROMANDEL

Industry Fertiliser Sales (in Lakh tons)

Year' Urea Phosphatics MOP
FY 2015-16 320 186 24
FY 2016-17 296 171 28
FY 2017-18 303 175 32

Industry Fertiliser Sales (in Lakh tons)

600
500 24 32
28
400 186 171 175
300
200
320 296 303
100
0
FY 2015-16 FY 2016-17 FY 2017-18

Urea Phosphatics MOP

Industry Phosphatic Performance (in Lakh tons)

Year' Production Imports Sales
FY 2015-16 112 66 186
FY 2016-17 123 49 171
FY 2017-18 129 47 175

17
 Industry Phosphatic Performance (in
Lakh tons)
200
186
171 175
150 66 49 47

100

123 129
50 112

0
FY 2015-16 FY 2016-17 FY 2017-18

Production Imports Sales

Gross Revenue (Rs. in crore)

Year' Rs in crore
2009 9668
2010 6527
2011 7719
2012 9940
2013 8627
2014 9442
2015 11341
2016 11690
2017 10239
2018 11044

18
 Gross Revenue (Rs. in crore)
14000

12000 11341 11690 11044

9940 10239
9668 9442
10000 8627
7719
8000
6527
6000

4000

2000

0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Profitability Trend (Rs. in crore)

Profit after Profit before
Year tax tax
FY 2013-14 345 494
FY 2014-15 403 592
FY 2015-16 358 529
FY 2016-17 477 712
FY 2017-18 659 1003

Profitability Trend (Rs. in crore)

1200
1003
1000
800 712
659
592
600 494 529
477
403 358
400 345

200
0
FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18

Profit after tax Profit before tax

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GUJARAT STATE FERTILIZERS AND CEMICALS LIMITED

INTRODUCTION
Originally conceived and started as a Fertilizer company with an objective of providing agri-
cultural boost to the farmers in the State of Gujarat and at the same time making Gujarat self-
sufficient in fertilizers. Visualising the market pulse well in time, the Company, as a structured
diversification strategy, ventured into the foray of industrial chemicals segment. Having this
objective in mind, Company's integrated complex at Vadodara has been so designed and struc-
tured that it shall be more or less self-sustained by using the by-products generated by its fer-
tilizer group of plants.

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COMPETITOTRS:

COMPETITIVE STRATEGY

1. GSFC could achieve consistent profitability record and it has touched its highest profits
during the period 2001-02 to 2012-13. Its net profit touched ever highest level
of Rs.759 Crores during 2011-12 and the total profit after tax during 2001-02 to 2012-
13 was Rs.3594 Crores, as compared to total profit after tax of Rs. 1166 Crores earned
during the period 1988-89 to 1999-2000.
2. Significantly, GSFC, which was under loss in the year 2001-02 and 2002-03 on account
of various factors, not only turned around but also earned its highest ever profit. Turn-
over per share increased from Rs.255/- to Rs.665/- per share.
3. During this period, GSFC diversified into new chemicals like MEK-Oxime and other
raw materials such as Phosphoric Acid, Potassic Acid, etc. It also diversified and in-
creased significantly its Fertilizers portfolio. Its Fertilizers manufacturing capacity to-
day stands at 1.7 Million Tons. It also added significantly to its wind energy portfolio
which stands at over 150 MW. The total projects invested by GSFC during the period
of Hon'ble Chief Minister is Rs. 8340 Crores.
4. This performance of the company is brought out amply by investments made by do-
mestic institutional investors as well as foreign institutional investors which stands
at close to 40% of its total paid up capital.

STRENGTHS

• Zero Debt Company.

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• Fully integrated Production Facilities.

• Better & efficient Management of Utilities viz. Power & Gas.

• Proper & timely plant Maintenance Schedule.

• Strong Brand Image and Market Network.

OPPURTUNITIES

• Argo products consolidation.

• Exploring tie-ups with countries like Togo, Uganda, Senegal, Canada etc. for consistent sup-
ply of raw material.

• Capacity addition in complex fertilizers.

• Expanding fertilizer business reach through franchise network.

• Trading of fertilizers & techno products to tap growing demands.

GNFC SUPPLY CHAIN

The supply chain of the company has these four processes:

 Production and Sales

GNFC has drawn on the world’s leading technologies and systems for its various produc-
tion culmination of enterprise and initiative, resourcefulness and resolve, technology
at GNFC common vision for continuous growth. GNFC has always shown a dedication to
standards of production and environment safeguards, qualified research acumen,
and 100% capacity utilisation for more than two decades

 Marketing and Distribution

 Material management

GNFC has developed an integrated Materials Management approach adopting latest

management tools. All the related departments are connected through a Local Area
Network, resulting in paperless environment to the extent possible.
The various plants are set up with various foreign technologies and hence we have sub-
stantial imports of machinery and spares. Our goal is to make right quality of goods
available in right quantities at right time and right price from right source.

 Research and Development

22
 Research and Development centre at GNFC was formally set up in 1986. The R&D
centre is recognised by DSIR, Ministry of Science and Technology, Government of
India as an in-house R&D Centre. The R&D centre is spearheaded by highly qualified,
experienced engineers and scientists delivering solutions that are timely, cost effective
and market focused. Creativity & ingenuity are highly emphasized.

GNFC used established community structures in rural India to build linkages within its supply
chain network for neem seed collection (used in fertilisers). Since its inception three years ago,
by collecting over 45,000MT of Neem seeds, more than INR 45 crore income has been gener-
ated for around 4.5 lakh women across 5 states of India

SUPPLY CHAIN DESIGN, PLANNING AND OPERATIONS OF GUJRAT STATE FERTI-

LIZER
1. Facilities- With a market presence exceeding 45 years GSFC has carved out an
irreplaceable image for itself on the Indian marketing scene. Integration of technol-
ogies and brilliant innovative research ensures that the products touch all walks of
life. From household consumer to core industrial consumer, GSFC continuously
fulfils multi-fold needs of the market. GSFC's incessant strive for product diversi-
fication and value addition has created a product mix ranging from more than 24
brands of fertilizers to petrochemicals, chemicals, industrial gases, plastics, fibers
and other products. GSFC has Customer Service Centers both in Agriculture Field
(AD&AS) and Industrial Field (ADC) to disseminate the latest technical knowledge
for efficient use of the Products. Dedicated chemical trading terminal having stor-
age capacity of 15000+ mts at Sikka (Jamnagar) under renovation
2. Inventory- Concentrated effort are initiated to economize the cost, especially lo-
gistic & Inventory management of the company product. With a view to remain
More market centric and large access to the market the effect of inventory perfor-
mance on profitability of the firm. It also investigates the impact of gross margin,
capital intensity, firm’s size and growth on inventory performance.
3. Transportation & logistics- GSFC intends to invite expression of interest from
reputed & professional Transport Contractors to enlist “Registration” for execution
of transport related works handled by Marketing Department at Rozy Port, Jamna-
gar (inside, outside port Limit, & from nearby WH at Rozy/ Jamnagar near wind
mill godown) for Transportation of Neem coated Urea/ Other fertilizers to Various
destinations (depots & WH) at all districts of Gujarat and the state of Rajasthan &
MP. “The list of approved transport contractors” of GSFC for submission of tender
immediately and the rates shall have to be quoted for all the destinations (depots &
WH) without any choice for all the districts of Gujarat and separately for state of
Rajasthan & Madhya Pradesh. Evaluation and empanelment of transporters shall be
carried out on the basis of the details submitted in the application
4. Sourcing-Sourcing and large amount of inputs as most of the raw materials are
sourced directly from large scale manufacturers in India and outside India Sourcing
of Jatropha selections from 4-5 different Argo-climatic Zones sourcing of different
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integrated pest management inputs cuttings as planting material & transplantation
parameters

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5. Distribution Network-
Unit-wise Plant locations
The company units are as follows
Baroda Unit Fertilizernagar, Nandesari Vadodara, fibre unit at Kuwarda and sikka
unit moti khawdi
Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Nagercoil, Nasik,
New Delhi and pune

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REFERENCES

https://www.gnfc.in/neem-project-lecture-atmssrf-chenni.html

http://greenbusinesscentre.com/energyaward2017presentations/General/Coromandel%20Vi-
zag%20Energy%20Summit%20Rev%201.pdf

https://coromandel.biz/AR_DigitalVersion/2017-18/content/garden3/management-discus-
sion-and-analysis.html

https://logisticsviewpoints.com/2017/11/30/supply-chain-planning-chemical-industry/

https://www.llamasoft.com/supply-chain-design-for-the-chemical-industry-datasheet/

https://www.owler.com/company/coromandel

https://www.moneycontrol.com/competition/coromandelinternational/comparison/CI45

https://www.gsfclimited.com/

https://www.lkpsec.com/company/gujarat-state-fertilizers-chemicals-ltd/100690

https://coromandel.biz/.

https://www.gsfclimited.com/.

https://en.m.wikipedia.org/wiki/Gujarat_State_Fertilizers_and_Chemicals.

https://en.m.wikipedia.org/wiki/Coromandel_International

https://www.liaison.com/blog/2017/02/03/deeper-look-chemical-industrys-supply-chain-chal-
lenges/

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