Beruflich Dokumente
Kultur Dokumente
Submitted by
ANOOP MOHAN
Regn No: 211210
June 2011
1
DECLARATION
Place: Pullikkanam
Date Name: ANOOP MOHAN
2
Certificate on DCSMAT Letterhead
CERTIFICATE
Institution
Faculty Guide Seal Principal
Date:
Place: Pullikkanam
_______________________________________________________________________
_
Examiner I Examiner II
Signature Signature
Name Name
Date Date
3
Certificate from the Company
4
ACKNOWLEDGEMENT
ANOOP MOHAN
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CONTENT
6
CHAPTER 1
INTRODUCTION
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INTRODUCTION
1. PRIMARY DATA
• Company websites.
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CHAPTER 2
INDUSTRY PROFILE
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The tea industry in India is about 172 years old. It occupies an important
Place and plays a very useful part in the national economy. Robert Bruce in
1823 discovered tea plants growing wild in upper Brahmaputra Valley. In
1838 the first Indian tea from Assam was sent to United Kingdom for public
sale. Thereafter, it was extended to other parts of the country between 50's
and 60's of the last century. However, owing to certain specific soil and
climatic requirements its cultivation was confined to only certain parts of the
country. Tea plantations in India are mainly located in rural hills and
backward areas of North-eastern and Southern States.
12
There was an inherent growth in export earnings from tea over the years. Till
70s’, UK was the major buyer of Indian tea Since 80s’ USSR became the
largest buyer of Indian tea due to existence of the trade agreement between
India and erstwhile USSR. USSR happened to be the major buyer of Indian
tea accounting for more than 50% of the total Indian export till 1991.
However, with the disintegration of USSR and abolition of Central Buying
Mechanism, Indian tea exports suffered a setback from 1992-93. However,
Indian Tea exports to Russian countries recovered from the setback since
1993 under Rupee Debt Repayment Route facilities as also due to long term
agreement on tea entered into between Russia and India. Depressed scenario
again started since 2001 due to change in consumption pattern, i.e. switch
over from CTC to Orthodox as per consumer preference and thus India has
lost the Russian market. Another reason for decline in export of Indian tea to
Russia is offering of teas at lower prices by China, South Asian countries
like Indonesia and Vietnam.
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CHAPTER 3
COMPANY PROFILE
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COMPANY HISTORY
India being one of the largest producers and exporters of tea in the world
represents a unique model of plantation agriculture. HUL controls nearly
40% of packed tea market in India followed by TGB with a market share of
21% . Traditionally, Indian tea was rated as one of the best in the world and
therefore, was enjoying a good export market. But since last few years, the
tea industry has been in a perilous position with excess of production,
declining prices for its producers and severe competition from the rest of the
world.
The rising cost of production with falling prices made big tea companies sell
the plantations and exit from tea cropping activity. While HUL sold its tea
plantations to some private parties, TTL in their South Indian Plantation
Operations (SIPO) in Munnar followed a unique model of selling the
plantations to the employees of the company. A few years back in 2005, the
company had carried out the employee-buy-out (EBO) leading to the birth of
Kanan Devan Hills Plantations Company (P) Limited (KDHPCPL), which is
considered as a milestone in the history of tea plantations in India. Nearly all
13,000 employees of the organisation became the shareholders of the new
company.
15
The company funds important initiatives and activities of the High Range
Wildlife and Environment Preservation Association, evolved specifically for
a comprehensive environment management and sustainable development, of
the High Ranges. All the officers of the company are members, and selected
few are designated as Honorary Wardens of specific areas under their
operation.
The efforts taken by the association in protecting the flora and fauna of the
High Ranges is a well recognized fact by the state forest officials, to the
extent that, even today the Eravikulam National Park, an environmental
hotspot is under the joint management of the association and the Kerala
Forest Department. The company also has undertaken extensive shola
regeneration and rejuvenation programmes to maintain the eco balance of
the area.
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MISSION OF KDHP
VISION OF KDHP
VALUES OF KDHP
To conduct our business with complete transparency while aiming for
treating people with care and compassion
KDHP NEWS
The KDHP news is the in house magazine of the company which is
published twice in a year.
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Chundavurrai
Gunderale
Gundumallay
Letchmi
Madupatty
Nullatani
Nyamakad
Arivikad - ODX
Chittavurrai – ODX
Chokanad - CTC
Chundavurrai-ODX
Devikulam-ODX
Gunderale-CTC
Gundumallay-CTC
Kadalaar-ODX
Kalaar-CTC
Kanniamallay-CTC
Letchmi-CTC
Madupatty-CTC
Periavurrai-CTC
Thenmallay-ODX
Vagavurrai-CTC
Yellapatty-ODX
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KDHP SALES OUTLET
Tea products
Dry fruits
Grape seed
Chocolate preserves
Spices
Rose oil
Almond
Cashew
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NON TEA OPERATIONS OF KDHP
The company is also having some non tea operations which include:
Tea museum
This is the country’s first ever tea museum; located at KDHP’s Nullatanni
estate in Munnar. The thousands of tourists who visit Munnar for sightseeing
can carry home impressions of the distant past of this tea planting district in
Idukki’s high ranges. The aim of the tea museum is to depict the growth of
these more-than-a-century-old tea plantations, from the rudimentary tea
roller to the present fully automated tea factory of Madupatty. It also gives
firsthand knowledge to tourists about tea processing and the operations that
go into the making of black tea.
Aromatic plants
On the anvil is a foray in the field of rasing various aromatic plants. The
company is in an advanced stage of propagating rose, geranium, Rosemary,
Chamomile, Clarysage, Cypruss, Acacia and Eucalyptus, Globulous and
Citradora plants for extraction, distillation and sale.
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Sales outlet
The first one being attached to its corporate office displays the company’s
extensive line of products for purchase. Its location with plenty of parking
makes it a convenient shopping outlet for visitors and tourists. The sales
staff with their thorough knowledge of the products can help the customers
with their choice, from a wide product range that include Variety of tea like-
Orthodox, CTC, Green, Organic, Flavored, White Tea etc. The other outlets
are located at Rajamallay one of the major tourist attractions in Munnar and
at Madurai- the Temple City in Tamil Nadu.
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ORGANISATIONAL STRUCTURE
BOARD OF DIRECTORS
MANAGING DIRECTOR
MD SECRETARIATE
KALAMASSERY PLANT
QUALITY CONTROL DEPARTMENT
KALAMASSERY PLANT
RESEARCH AND DEVELOPMENT DEPARTMENT
KALAMASSERY PLANT
PURCHASE & LOGISTICS DEPARTMENT
KALAMASSERY PLANT
HUMAN RESOURCE DEPARTMENT
KALAMASSERY PLANT
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CHAPTER 4
PMS AND EBO
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EMPLOYEE BUY OUT (EBO)
Elaborating the above, the owners may be forced to sell the company due to
any of the following reasons – retirement, realization of investment,
divestment, and business in distress or privatization. An EBO might also be
carried out through an Employee Share Ownership Plan (ESOP) or might
result in a cooperative or a private limited company. The study supports
many arguments in favor of an EBO. First, the fact that the employees have
a share in the company’s success leads to increased motivation and morale
of the employees. Second, equally happy would be the existing owner of the
business on selling the business to people who have been a part of the
business and are most likely to continue with the company’s traditions.
Third, the workforce and the status quo
of the company are maintained, eliminating the uncertainty arising from
selling the business to an outside party. Fourth, an EBO is also socially
supportive, in the sense that wealth is spread across a larger number of
people. The system can also raise more equity which would result in the
transaction being less dependent on external debt financing.
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Forms involving worker directors, collective wage earner funds and worker
cooperatives fall within this category. Second, participation is viewed as a
term to represent the processes and institutions which involve subordinate
employees in one or more aspects of organizational decision-making like
simple information giving or joint consultation and regulation. Third, it may
denote a distinct evolutionary development to promote greater employee
influence within the organisation. The tangible dimension of participatory
management includes parameters like productivity, quality of product,
turnover rate, absenteeism rate and labour management dispute rate.
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CHAPTER 5
MANAGEMENT STRUCTURE
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PARTICIPATORY MANAGEMENT STRUCTURE AT KDHP
The new company had adopted a unique model which is the first of its kind
as far as the plantation sector in the country is concerned. The notion of
participatory management was embedded in the very objectives, vision and
mission statements. The specific objectives for the functioning of the
company include providing employees a better understanding of their role
and importance in the working of the company, to involve all levels of
employees in the decision-making process whereby a sense of ownership is
fostered and their urge for self expression is satisfied.
This seems to be a radical shift from the past where the management of tea
plantations witnessed hierarchical top-down approach. What gave KDHPCL
a truly participatory nature were facts like 68% of its shares held by nearly
12,441 employees, a workers’ representative and a staff representative on
the board of directors, and several advisory and consultative participatory
management committees – comprising a cross section of employees – at
every level of functioning of the company. Most of the estates, under the
Tata’s, had been run by estate managers who in charge were responsible for
the management of plantations of TTL. But under KDHPCL, the
management plan was bottom up diverting from the traditional top-down
approach.
27
The functions of DAC include monthly work planning, manpower
deployment, adherence to field policies, review of efficiencies, material
requirement and the follow up on action plan. In addition the DAC would
discuss on certain aspects of welfare and safety measures ensuring
continuous water supply, sanitation, other income generating opportunities,
etc. Similarly, the FAC was held responsible for making fortnightly work
planning, manpower deployment, and update on material requirement for the
factory, review the efficiency parameters and ensure that standardization
norms such as HACCP are adhered to. The DAC/FAC was to coordinate
with joint estate/factory consultative Committees.
28
These two consultative committees would report to the CMC which would
comprise directors representing the workers/supervisors/non-staff/staff and
heads of key departments like sales, tea production, industrial relations (IR),
finance and non-tea production. The CMC comprised 11 members. One
director from workers/supervisors, two directors from management staff,
two tea production heads, one sales heads, managing director, one IR head,
one non-tea production head, one finance head and one director from
staff/non-staff. The term of office is for three years. The CMC met once in a
quarter to study operational results and advise on the overall performance of
the company. The CMC had to advise the company on all matters
concerning the working of the industry in the fields of production and of
employee welfare and to advice on any other matter referred to it by the
JECCs and the JFCCs. However, larger issues like wages/salaries,
allowances, etc, are outside the purview of discussion in these meetings.
Other than the committees set up for the routine functioning of the
plantations and the factories, the CMC appoints 16 sub-committees to set up
for diversification and meeting special purposes which comprised members
at all levels of employment. This provided for direct representation of
problems in those areas in the CMC. The records of the meetings of all the
committees were well maintained and monitored and were scrutinized by the
higher authorities at every stage of functioning. The system thus provided
for participatory management, but with a hierarchical accountability.
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CHAPTER 6
DEPARTMENT PROFILE
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TEA MANUFACTURE DEPARTMENT
The operations and the production of all the 16 factories i.e., 7 orthodox and
9 CTC factories fall under this department.
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FIELD DEPARTMENT
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MARKETING DEPARTMENT
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This is the legal department of the company and deals with legal, land and
other legislation at all level with the government. The functions of the
department are:
Handling of all land matters concerning TGB and KDHP
All civil, criminal and such others cases related to KDHP
Land survey and area certificate preparation
Preparation of deeds and agreements
All central excise matters pertaining to the company
Factory license renewal
Renewal of petroleum license
Management of staff profession tax
All matters relating to patent application, weights and measures,
pollution control acts and rules
Matters relating to high range estate schools
Panchayat building tax and plantation tax
Insurance matters relating to all the estates
Road tax remittance, company vehicles checklist
KDHP house cash transactions
KDHP house employees leave register
Forest passes application and all connected works
Filing of Kerala payment of wage returns
Kerala factories half-yearly returns and applications of any
amendments
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SYSTEMS DEPARTMENT
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ENGINEERING DEPARTMENT
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MD’S SECRETARIAT
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PURCHASE AND LOGISTIC DEPARTMENT
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CHAPTER 7
CORPORATE SOCIAL RESPONSIBILITY
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CORPORATE SOCIAL RESPONSIBILITY
KDHP Company has always strived through its endeavors to make a
positive contribution by engaging and supporting a wide range of Socio
Economic, Educational, Sports and Health initiatives in the community that
it operates. Responsibility towards the society is one of the key objectives of
the company, a fact that is evident from its mission statement. Apart from
ensuring that it strictly abides with all statutory and welfare measures as per
provisions of the various enactments applicable to the plantations, the
company has provided welfare schemes on its own like, free electricity for
certain category of employees, assistance for procuring LPG connection,
Fuel Subsidy, facilities for cattle rearing, land for maintaining Kitchen
garden, free issue of hot tea at the work spot, sanitation workers for cleaning
the surroundings of housing provided and a whole lot of other facilities for
sports, recreation and cultural activities. Welfare of the employees of the
company has been one of the core values that the company has always
believed in.
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The company has always played a supportive role towards their activities by
giving them guidance and providing training facilities. The company
provides free schooling up to primary level for the children of the
employees. Apart from this, it extends its appreciation for meritorious
students through rewards and felicitations every year. As part of its
recruitment policy, the company absorbs qualified children of its employees.
The company has introduced the KDHP Scholarship, which is given to the
student achieving the highest marks in twelfth standard exams from the
KDHP family. The dedicated welfare wing of the company helps employees
to avail scholarships promoted by various bodies like UPASI, Tea Board etc
for their children.
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CHAPTER 8
ENVIRONMENT AND SUSTAINABLE
DEVELOPMENT
47
ENVIRONMENT AND SUSTAINABLE DEVELOPMENT
The company has put in many efforts to preserve the ecosystem of the place.
People are educated on energy efficient practices in factories and in the
households of the employees. The company took over electricity business
from TTL with effect from 1 July 2007 and since then has been distributing
electricity. The company took several initiatives to reduce electricity
distribution loss and improve quality of electricity to distant factories. The
consumption of power and fuel per unit of production reduced from 0.8
units/kg of tea in the earlier system to 0.74 units with the new company.
There were efforts to convert all the incandescent light bulbs into compact
fluorescent lamps (CFLs) which consume 75% less energy than the ordinary
bulbs. The company actively supports the High Range Wildlife and
Environment Preservation Association (HRW and EPA) which plays an
active role in preserving the natural heritage of the Kanan Devan Hills and in
protecting the environment and wildlife conservation of the area. The fuel
plantations (eucalyptus grandis) have been raised by the company to meet its
thermal energy requirements in the high range factories and fuel requirement
of the employee households.
The Eravikulam area was under the control of the erstwhile Kanan Devan
Hills Produce Company Limited and maintained as a wildlife reserve by
the Company for the endangered Nilgiri Tahr, well before the concept of
Wildlife sanctuaries and National Parks came into force. This area was
handed over to the Government of Kerala in 1971. Before the land use could
be changed and such a rich biological hotspot misused, the timely
intervention of the HRW&EPA, enabled the area to be declared as a wildlife
sanctuary in 1975.
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CHAPTER 9
SWOT ANALYZIS
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SWOT ANALYZIS
STRENGTH
WEAKNESS
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OPPORTUNITIES
THREATS
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CHAPTER 10
CONCLUSION AND RECOMMENDATIONS
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CONCLUSION AND RECOMMENDATIONS
The EBO and the resultant participatory management system at Tata Tea’s
southern operation in Munnar emerged as a solution to the long-standing
crisis in the tea industry. Tata’s like the HUL wanted to walk out of the
plantations operations and focus on the branded tea business. Participatory
management through the buy-out of the company shares and forming a new
company by the employees was seen as an amicable solution. The transition
was however not without efforts of the management staff of TTL.
The fact that such a huge number of employees could be convinced, though
with initial apprehension, to become the shareholders of the company
demonstrates the effectiveness of the communication cascade undertaken by
the company staff. By facilitating the formation of KDHPCPL, the company
claims to have ensured the long-term economic sustainability and better
living conditions for its workers. This was also a radical shift from the past
where the management of Tata Tea witnessed a hierarchical top-down
approach. However, while speaking of the successful years of the company
and the factors behind them, it is also essential to examine the sustainability
of such models in plantation agriculture. It is essential to note that the timing
of formation of KDHPCPL itself was quite favorable. That was the time
when global markets for tea also witnessed a recovery.