Kamadhenu Coconut Industries

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A

Report on

Corporate Exposure Learning at Kamadhenu Coconut Industries

Submitted By

Mr. Navaneeth

(4NM11MBA87)

Under the Guidance of

Internal Guide External GuideProf.Sandhya Rao Mrs. Subha N

Assistant Professor PartnerJustice K. S. Hegde Kamadhenu Coconut IndustriesInstitute of Management KundapuraNitte Udupi

Submitted in partial fulfilment of MBA course toN.M.A.M. INSTITUTE OF TECHNOLOGY

(An autonomous Institute under VTU, Belgaum)

Department of Studies in Business Administration

(Justice K.S. Hegde Institute of Management)NMAM Institute of Technology, Nitte

OCTOBER 2012


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CERTIFICATE

This is to certify that Mr. Navaneeth is a bonafide student of Master of Business

Administration Course of our Institute affiliated to Vishweshwaraya Technological

University, Belgaum. This report on, Corporate Exposure Learning at Kamadhenu

Coconut Industries is prepared by her under the guidance of Prof. Sandhya Rao, Assistant

Professor, Justice K.S. Hegde Institute of Management, in partial fulfilment of the

requirement for the award of the Degree of Master of Business Administration of

Vishweshwaraya Technological University.

Place: Nitte Head of the DepartmentDate: Business Administration

Place: NitteDate: Principal

Valued by

Sl. NO Name of the Examiner Signature Date

1.

2.
http://www.google.co.in/url?sa=t&rct=j&q=vishweshwarya&source=web&cd=1&cad=rja&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.vgi.ac.in%2F&ei=T2dPUOriGcrwrQe60oCACw&usg=AFQjCNEr2iVEPOLFUqeaXTxZOs5vY_JR5Qhttp://www.google.co.in/url?sa=t&rct=j&q=vishweshwarya&source=web&cd=1&cad=rja&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.vgi.ac.in%2F&ei=T2dPUOriGcrwrQe60oCACw&usg=AFQjCNEr2iVEPOLFUqeaXTxZOs5vY_JR5Qhttp://www.google.co.in/url?sa=t&rct=j&q=vishweshwarya&source=web&cd=1&cad=rja&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.vgi.ac.in%2F&ei=T2dPUOriGcrwrQe60oCACw&usg=AFQjCNEr2iVEPOLFUqeaXTxZOs5vY_JR5Qhttp://www.google.co.in/url?sa=t&rct=j&q=vishweshwarya&source=web&cd=1&cad=rja&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.vgi.ac.in%2F&ei=T2dPUOriGcrwrQe60oCACw&usg=AFQjCNEr2iVEPOLFUqeaXTxZOs5vY_JR5Q


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CERTIFICATE BY THE GUIDE

This is to certify that the CEL Report on Corporate Exposure Learning at Kamadhenu

Coconut Industries is prepared by Mr. Navaneeth (4NM11MBA87) in partial fulfilment

of the requirement for the award of the degree in Master of Business Administration as per

Visvesvaraya Technological University under my guidance and supervision. This is also to

certify that this CEL report has not been submitted to any other institution or university for

procurement of any degree or diploma.

Place: Nitte Prof. Sandhya Rao(Internal Guide)

Date: Justice K.S. HegdeInstitute of Management

Nitte


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DECLARATION

I hereby declare that this project report entitled Corporate Exposure Learning at

Kamadhenu Coconut Industries is the result of my original work under the guidance of

Prof. Sandhya Rao, Assistant Professor, Justice K.S. Hegde Institute of Management, Nitte, in

partial fulfillment of the requirement for the award of Master of Business Administration

(MBA) degree ofVishweshwaraya Technological University. The Project Report has not

been submitted before to any other University or institution for the awarding of any degree or

diploma.

Place: Nitte (Navaneeth)Date:
http://www.google.co.in/url?sa=t&rct=j&q=vishweshwarya&source=web&cd=1&cad=rja&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.vgi.ac.in%2F&ei=T2dPUOriGcrwrQe60oCACw&usg=AFQjCNEr2iVEPOLFUqeaXTxZOs5vY_JR5Qhttp://www.google.co.in/url?sa=t&rct=j&q=vishweshwarya&source=web&cd=1&cad=rja&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.vgi.ac.in%2F&ei=T2dPUOriGcrwrQe60oCACw&usg=AFQjCNEr2iVEPOLFUqeaXTxZOs5vY_JR5Q


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Acknowledgement

This project bears the imprint of many persons without the help of whom, I would not have

been able to fulfill the task. First and foremost, my sincere thanks to Prof Sandhya Rao,

Justice K.S.Hegde Institute of Management whose valuable guidance has enabled me to

complete this study. Its my pride and privilege to thank Director, Dr. K. Sankaran, Justice

K.S.Hegde Institute of Management, Nitte for letting me as a part of this prestigious college

and for all the help and assistance extended to me during the course of my study in the

college.

I am always thankful to the Managing director and staff of Kamadhenu Coconut Industries

for providing me with necessary information, assistance and support required in the

preparation of the report.


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Table of Contents

CHAPTER TITLE PAGE NO

1 INDUSTRY PROFILE 1-7

Food Process Industry in India 1

Coconut Industry in India 3

Recent Changes in Coconut Industry 5

Challenges faced by the industry 7

2 COMPANY PROFILE 8-15

Background Inspection of the company 9

Nature of the Business 9

Vision, Mission and Quality Policy 10

Product and Services 10

Areas of Operation 10

Ownership Pattern 10

Competitors Information 10

Infrastructural Facilities 11

Achievements/Awards 11

Work Flow Model 12

Future Growth and Prospects 15


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3 7 S MCKINSEYS Framework 16-22

Structure 17

Skill 18

Style 19

Strategy 19

System 20

Staff 21

Shared values 21

4 SWOT Analysis 23-26

Strength 23

Weakness 24

Opportunities 25

Threats 25

5 Summary of Annul Report and Financial Analysis 27-32

6 Learning Experience 33-37

Annexure

Bibliography


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List of Tables

5.1 - Table of Fixed asset and Sales along with its Fixed asset ratio.

5.2Table of Sales and Capital invested along with its ratio.

5.3 - Table of Sales and Debtor + Bills receivable with its ratio.

5.4Table of Sales and Avg. Current asset with its ratio.

List of Graphs

5.1 - Graph of Sales and Fixed asset.

5.2 - Graph of Sales and Capital invested.

5.3Graph of Sales and Avg. Current asset.


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Executive Summary

India is a developing country where industries play a very important role in the economic

development of the country. There are many industries which mainly depend on the

agriculture for their raw material needs such as sugar, jute, textile, handicraft, paper,

vegetable oil, rice industry, coconut industry etc. There are lot of problems and challenges

faced in these industries for making a profitable business. The Indian food market is

approximately Rs 2,50,000 crore ($69.4 billion), of which value-added food products

comprise Rs 80,000 crore ($22.2 billion). Despite food production in the country that is

expected to double by the year 2020, not much attention has been given to the growth of this

vital industry, with no standard publication highlighting the importance of this sector.

The objective of this study was to know the market standing of Kamadhenu Coconut

Industries in terms of financial position and good will. It is also aimed at studying the

response of the company to the suppliers and customers problems. To understand the rapport

of the company with the suppliers and employees. In addition to this it is also intended to

understand thebuyers behaviour and their expectations from the Company when it comes to

selling of a particular product. It is also intended to study the policy of the company along

with its strategy in selling of the products. In addition to this the areas have been noted where

the company can give emphasis due to which there can be a substantial increase in the output

as well as the customer interaction. It may also help in quick and efficient ordering and

delivery process. The SWOT and McKinseys 7s Frame work model was analysed on the

Firm so as to get a better insight into the Firms performance and the improvements that can

be focused on for higher profit margin. It also helped in analysing the strengths and

opportunities compared to its competitors.

The technique employed for this study was that of primary data collection. All the employees

and the company management were consulted in this regard, and all the required information

was collected from them. The companys financial data was studied and analysed, based on

the data , the liquidity position and the financial position of the company are determined. This

gathered information about the company helped in analysing the goodwill and the activities

conducted by the company regarding CSR. In addition to that it helped in getting the required

information regarding the company profile. The data collected also gives the problems faced

by them and the solutions they found. This study also showed the various problems that the


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industry and the Firm in particular is currently facing and may face in the future. It showed

the true picture of how difficult it is to start a Firm in the rural area and make it a profitable

venture.


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Chapter 1

Industry Profile


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INDUSTRY PROFILE

India is a developing country where industries play a very important role in the economic

development of the country. There are many industries which mainly depend on the

agriculture for their raw material needs such as sugar, jute, textile, handicraft, paper,vegetable oil, rice industry etc.

With the overwhelming successes of the Green and White Revolutions, India is now fervently

poised for the Food Revolution that will ensure agricultural diversification and large

investments in food processing. The entries of multinationals, aggressive rise of commodity

branding and low cost of technology are changing the economics of the Indian food industry.

The rise of aggressive regional players making forays into categories where entry barriers are

low and a boom in Indian FMCG markets and the rising need for these products are the key

reasons for this growth in food business.

Indian agriculture is in the throes of a paradigm shift, thanks to the structural changes in the

Indian economy. With the country achieving self-sufficiency in grains production, emphasis

has changed from subsistence farming to commercialization, opening up vast opportunities

for value-addition, packaging and exports, with a strikingly high level of technological

involvement.

The holistic concept of food security, however, has two dimensionsavailability of food and

access to food. While the former has been achieved, the same is not the case with the latter.

Despite bumper crops, distribution of food grains continues to be faulty almost 30% of the

food produced in the country is wasted. In such a scenario, it is important to reorient

historical agricultural policy frameworkfrom managing shortages to promoting efficiencies

and value addition. Moreover, there is a need to increase the range of foods available to

improve overall nutrition. The benefits in terms of health, vitality and productivity are

obvious, and cannot be underestimated.

Food Processing Industry in India

The Indian food market is approximately Rs 2,50,000 crore ($69.4 billion), of which value-

added food products comprise Rs 80,000 crore ($22.2 billion). Despite food production in the

country that is expected to double by the year 2020, not much attention has been given to the

growth of this vital industry, with no standard publication highlighting the importance of this


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sector. The food industries include food processing, bakery, confectionery, dairy, meat &

poultry, fruits & vegetables, fisheries (including aquaculture), food ingredients, grocery

retail, packaging, alcoholic beverages, soft drinks and bottled drinking water, canning, fats

and oils, filters and filtering materials, flavours and flavour enhancers, nutrient additives,

frozen food/refrigeration and thermo processing, among others.

With food production expected to double by 2020, large investments are already going into

food and food processing technologies, skills and equipment. The issues and events in this

sector, are mentioned below.

The food processing industry is witnessing a 20% annual growth rate and,consequently, the demand for processed foods and beverages in the country isconstantly on the rise. There are 300 million upper-and-middle-class consumers of

processed and packaged food in the country.

Processed foods are primarily derived from agricultural commodities, which oftenincur multiple taxes at various stages. This multiple taxation has a cascading effect on

prices. Moreover, there is a wide variation in the level of taxes across states, which

creates a barrier to the free flow of materials from the farm to the factory and

ultimately to the consumers.

Post-Green Revolution, it is essential that agricultural research reoriented to addressnew challenges. As the existing crop seeds have reached yield saturation, there is an

urgent need to evolve transgenic varieties through the application of biotechnology,

RNA use, and molecular biology. These varieties should have high yield, short

maturity, pest and disease resistance, stress tolerance, and wider adaptability.

With the help of indigenous breeds improvement programme, nutritional research andimproved cost-effective vaccine programmes, India has achieved the distinction of

being the highest milk producing country in the world. Similarly, with processes in

place to improve quality of marine products for internal and export markets, India is

the seventh largest producer of fish in the world and is ranked second in inland fish

production.

Special foods are available for every patient today, be it hypertension, diabetes,obesity, or even weight reduction. For instance, diet food and nutraceuticals are the

latest fad. The market for sugar-free confectionery and snack products is growing

steadily. Motivated by a desire for maximum indulgence coupled with a wish for


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calorie control and health benefits, consumers are increasingly choosing sugar-free

and sugar-reduced products.

Packaging of food products has become important in order to ensure safety andhygiene and to eliminate the possibility of adulteration. In some cases, more than 50%

of the price of a product goes towards packaging. Good packaging will greatly

catalyze the development of a food-processing sector. However, packaging industry is

yet to achieve international standards in the country.

Coconut Industry in India

The coconut crop is grown in 12.5 million hectares of land which constitutes about 0.7% of

net crop area of the world. The crop is grown in the coastal lowlands of continental south

Asia and spread along the Indian and Pacific Ocean. The cultivation is mostly done by small

and marginal farmers. According to FAO statistics 2007, about 57.9 billion nuts were

produced, which was equivalent to 7.3 metric tonnes of oil. The coconut oil ranks sixth

among the eight major vegetable oils of the world. India contributes about 15.46 % in area

and 21% in terms of production of coconut in the world. The coconut crop is grown in

eighteen States and three Union Territories covering an area of 1.935 million hectares of land,

with a production of 12,833 million nuts in the country. The major coconut crop acreage is

concentrated on the West Coast region of the country comprising the states of Kerala,

Karnataka and Maharashtra, followed by East Coast of Tamil Nadu, Andhra Pradesh, Orissa

and Pondicherry. The coconut cultivation areas are also traditionally located in the coastal

region of Gujarat, Goa, West Bengal, Islands of Andaman & Nicobar and Lakshadweep.

About 90% of the area of coconut cultivation and equally the same percentage of production

of coconut are from the four southern states, viz. Kerala, Karnataka, Tamil Nadu and Andhra

Pradesh. Kerala is considered as the land of coconut and holds the key for the development ofcoconut production and marketing in the country.

In the present scenario, the trend in processing of coconut products is slowly setting in the

country, but the domestic market is not ready to lift the coconut in product form. Moreover,

the coconut processing industries have to compete with the international market players in the

world market. Consequent to the globalization of Indian economy, the domestic coconut

market economy has also been pushed towards a situation of competition, where coconut oil

had to compete with the other low price vegetable oil and fats in the international market. In


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spite of the changes in international and domestic market, the price of coconut oil has been

steadily increasing since 2002, and reached to record level of Rs.7224 per quintal at Kochi

market. The price of milling copra in Alleppy market was also recorded at the premium price

of Rs.4893 per quintals and the price of ball copra was at Rs.7500 per quintal in Tiptur

market in the month of December, 2004. This favourable market behaviour appeared to have

been due to culmination of concentrated efforts of the implementing agencies, developmental

policy of the Government to provide minimum support price to copra and coconut oil and the

future trade.

Karnataka accounts for 15% of area under coconut cultivation and 10% of total production of

coconut in the country. Coconut is the second largest and important horticultural crop of the

Karnataka state, occupying 31% of the total area under horticultural crop. The crop is grown

in all the districts of the state. The total area under coconut in the state is around 3.33 lakh

hectares and the annual production of coconut is 1754 million nuts. The productivity of

coconut in the state is considered as lowest when compared to the other neighbouring states.

Nearly 60% of the coconut produced in the state is utilized as raw nuts for domestic culinary

purposes, social cultural and religious purposes. About 25% of the nuts are converted into

edible ball copra, desiccated coconut powder and the remaining 15% is utilized as tender

coconut for drinking purpose. Prominently, 6070% of the arrival of coconut is sent to other

states i.e. Uttar Pradesh,Punjab, Maharashtra, Rajasthan, Madhya Pradesh, Jammu &

Kashmir, etc., about 60% of coconut production in Karnataka is used in domestic items and

remaining is dried as copra, most of the copra arriving to the markets is dispatched to other

states, where the Karnataka copra is in great demand. The coconut utilized for commercial

product preparation is only to the extent of 35-40%, while 55-60% is consumed for food and

beverage purposes. Milling copra continues to be the major coconut product in Mangalore

market. Whereas Arisikere and Tiptur markets cater to the ball copra which is sent to north

India. Maddur market is mainly trading the tender coconuts which are sent to other states for

consumption of tender coconut water.

The trade in tender coconut in the state is very popular, as tender coconuts have fairly good

demand in most of the cities apart from the demand from the upcountry buyers. It has been

observed that along the busy state highways and national highways like BangaloreMysore,BangalorePune, etc, temporary retail sales outlets for tender coconut have been established


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at different points to meet the demand of tourist and other travellers. A large number of cycle

hawkers are also involved in the retail selling of tender coconuts. Tender coconuts of Tiptur

Tall variety is normally used for this purpose.

The coir industry is an important cottage industry in the rural areas of the State, providing

gainful employment to many villagers. There are 330 units registered with coir board,

manufacturing coir products in Karnataka which are located in Tuymken, Chitoradnya,

Bangalore, Hassan, Mandya. Out of these 330 units, 50 units are fibre extraction units, 30

units make curved ropes and 30 units make yarn, remaining units are manufacturing coir

products.

Major coconut production in the country primarily is in demand from consuming states for

traditional products viz. matured nuts, tender coconut water, coconut oil, desiccated coconut,

oil cake and coir products. Nearly 90 percent coconut production is directed for traditional

use in domestic markets. The most important traditional commercial product traded in the

country has been the coconut oil. Therefore, the demand and supply of this single coconut

product determines the price of raw coconut. Moreover, the market share of coconut oil both

in domestic and export market is declining due to tough competition, especially from palm

and soybean oil prices. Diversification efforts made by coconut oil industries have yielded

limited success. In the process of diversification and product development, to bring new

coconut products in the market, strategic market research is essential. Besides, coconut oil

and oil cake, the coconut processing industry traditionally has been confined to copra

production, manufacture of desiccated coconut, coir and coir products only. Because, the

coconut processing sector remained confined to these traditional products, it has been

observed that inspite of commendable achievements made in enhancing the production and

productivity of coconut, the processing sector could not make much progress in the direction

of diversification and value addition to coconut products. The processing determines effective

utilization of harvested produce and the quality of the end product, which ultimately affect

the consumption and acceptance of the product.

Recent Changes in Coconut Industry

With the advent of modern technology and for faster development of coconut sector in thecountry, product diversification, value addition and by-product utilization have gained


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importance. To create demand for new products and by-products in domestic market, and to

ensure their supply throughout the year. Further, the cost of production of the traditional

coconut products in the country has been so high that price wise, the Indian coconut products

are less competitive in the global market. Its contribution to export market has therefore been

insignificant except the coir and coir products.

In the process of diversification and product development, more than 50 value added coconut

products have been developed in Asian and Pacific countries for domestic as well as export

market. Though actual data about these products could not be obtained, some of the important

products which have received consumer acceptance in the country are coconut cream,

coconut milk, coconut water and nata-de-coco which has also gained expanded market in

Philippines and Indonesia. Pre-packed tender coconut water in sachet is produced by number

of countries and has gained popularity. Philippines is even producing and exporting coco-

chemicals viz. fatty alcohol, fatty acids. These products could be promoted for wider and

global acceptance through concerted efforts and aggressive market strategies by APCC

countries.

The marketable value added products includes packed tender coconut water, coconut milk

and milk based products, coconut chips, coconut based dairy products, desiccated coconut,

coconut water based products, snowball-tender-coconut, vinegar, coir based products,

coconut shell and coconut wood based products. Other products, which are being subjected to

research and development, are organic food, oleo chemical, bio-diesel, bio-lubricant and

cosmetics. Some of these products viz. coconut milk, coconut cream, spray dried coconut

milk powder, vinegar, packed tender coconut water, snowball-tender- coconut and virgin-

coconut-oil have been produced on commercial scale. Besides, coconut biscuits, coconut

chips, coconut based sweets and coconut chutney like traditional convenience products, using

indigenous technology were already in the market. The Government of India, through the

Coconut Development Board made strategic efforts and motivated entrepreneurs industrialist

and artisans to exhibit their products in national and international trade fairs and exhibitions,

to get better access to up country markets. Coconut shell and wood based products viz.

handicrafts and utensils certainly have aesthetic utility and value. It has been observed that

these products have good demand for export too.


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Challenges faced by the industry

The following are the major problems faced by Indian coconut industry:

Low farm productivity due to mono-cropping practice, poor genetic makeup andnutrient deficiency of the soil, etc.

Post-harvest losses due to quality deterioration of copra in storage and transport,insect infestation, poor copra making practices and lower oil recovery due to

harvesting of immature nuts. As per the survey conducted by Department of

Agriculture, Kerala Agriculture University and the Central Plantation Crop Research

Institute, the annual loss due to mite infestation in Kerala alone is estimated at

Rs 5000 million. Kerala is the major coconut producing state, accounting for about 45

per cent of total production.

Price instability due to increasing competition from substitute oils especially frompalm and soybean both at the domestic and international markets.

Relative unremunerativeness of coconut farming being a predominantly monocrop. Tenurial arrangement as a hindrance to increased investment in coconut culture. Decline in coconut hectarage due to land conversion into commercial and industrial

purposes.


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COMPANY PROFILE

Name : KAMADHENU COCONUT INDUSTRIES

Date of Incorporation : 13th March 1994

Founder : Mr. K. Govind Rao

Present Managing Director: Mr. K. Nagaraj Rao

Location : Haladi Road,

Koteshwara-576222

Kundapura Tq.,

Karnataka.

Employee Strength

Male : 35

Female : 30

No. of Products : One

Product : Desiccated Coconut Powder

Bankers : K.S.F.C

State Bank of India

Corporation Bank

I.C.I.C.I Bank


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a) Background and Inception of the CompanyKamadhenu Coconut Industry is established by Mr. K. Govinda Rao on 13th March, 1994.It

was inaugurated by Mrs. Manorama Madvaraja, former MLA,Udupi. Industrial location of

Kamadhenu Coconut Industry is opposite to industrial area. It is 1km away from Koteshwara.

This industrial plant is located in one acre of land.

The initial investment on the plant and machinery was Rs. 15 lakhs out of which 75% was

provided by K.S.F.C. as loan and rest 25% from land and property. This industry is covered

over an area of one acre land whose value is estimated to be Rs. 4 lakhs, which is owned by

proprietor Mr. Nagaraj Rao. On 10th April 1998, ownership of the industry was transferred

from Mr. K. Govind Rao to his son Mr. K. Nagaraj Rao. He then transformed this company

to partnership firm; he has taken his wife Mrs. Shubha as a partner of the industry. They

share the profit in the ratio of 1:1. Mr. Nagaraj manages the firm and he is paid the

remuneration as a working partner cum manager for his work.

This industry has three main departments namely machine department, production

department and finance department. This industry has 8 office staff, 5 supervisors, 12

machine operators and 42 labours working for the factory. The strength of labour has

increased from 20 to the current strength of 65 over the years. Over the years, the facilities

and the infrastructure facilities has been improved in the company and more and more trained

and efficient labours are being recruited to better the productivity and efficient managing of

the firm.

b) Nature of Business CarriedKamadhenu Coconut Industries looks after the diversification of product along with

marketing scope. Marketing scope of industry is at outside Karanataka and north India where

the availability of raw coconut is very rare. The products produced in the company are used

for domestic purpose, for day to day consumption and for business i.e. for bakery product,

dry food etc. The main industrial customers are Parle,Britannia, Ravalgon,Barrys etc. The

local sale is done at the site of the company. The outside orders are received by phone, Fax

etc. These orders are delivered by hired Lorries and through professional courier and DTDC

courier etc. The company takes the liability for the damages occurred during the

transportation.


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c) Vision Mission and Quality PolicyThe Company is bound to produce and provide quality products for the utmost satisfaction of

its employees and its customers. The Company aims at improving the living conditions of the

employees along with the society it is situated in. The Company has provided clean drinking

water, clean and hygienic work place, housing facilities, vehicle facility etc. for its

employees. The Company has contributed to society and welfare of the people living around

it in various forms such as giving funds in the form of sponsorship to various competitions,

Sports, Games, and educational Purposes etc.

d) Products/Services ProfileThe product produced by the company is pure white desiccated coconut powder. They also

produce the by-products such as coconut shells, coconut husk and waste copra. Most of the

by-product is disposed off in the local market. Only the desiccated coconut powder has high

demand in north India and major MNCs when compared to the local market. The orders are

received through fax, telephone or mail while the delivery is done on time through the

delivery trucks or through courier for small orders.

e) Area of OperationThe marketing width is too much in north India when compared to local area .This is mainly

attributed to the fact that the raw materials are abundantly available in local market when

compared to north India. The Company is wisely using this opportunity for their advantage.

The company supplies 90% of the desiccated coconut power to north India and 10% to the

local market. The main marketing places are Mumbai, Delhi, Gujarat, Rajasthan etc.

f) Ownership PatternWhen the company was incorporated, it was single ownership, later in 1998 the ownership

was split between two people namely Mr. K. Nagaraj Rao and Mrs. Shubha, his wife, for

profit sharing purpose. They share the profit in 1:1 ratio and Mr. K. Nagaraj Rao who is the

working partner, well receives the remuneration for the same.

g) Competitors Information

The firm is facing competition from local coconut industries which produce similar products.The major competitors are Ganesh Kalpatharu Coconut Industries, Swastik Coconut


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Industries and a firm by Mr. Prabhakar Naik. These firms are located in Kundapura and

Udupi Tq. Ganesh Kalpatharu Industry was incorporated in 1982, it was the parental

company of Kamadhenu Industry before the split took place in 1992. The working style and

the methods of production are similar to that of the Kamadhenu Industry as both had same

management practices previously. They pose serious threat to the labour turnover in the

region and they have the intention of dominating the entire industry in the region. The second

major competitor is Swastik Industry which was established recently and also has the same

production capacity as Kamadhenu Industries. All the three firms are situated in close

proximity and all these firms have the advantage of being near NH 66 which is the main

connecting highway for Mumbai and other north Indian places. As these firms are located

close to each other, the labour migration from one firm to another has increased over the

years which have become a major problem in this part of the region.

h) Infrastructural FacilitiesIndustrial location of Kamadhenu Coconut Industries is opposite to the Koteshwara

industrial area. It is kilometre away from Koteshwara city and NH 66. This firm is located on

one acre land and has good road, water and power supply facilities. The other facilities which

are provided by the firm are clean drinking water facility, clean and hygienic work place for

its employees. It also provides safety measure and housing facilities for its employees. It

provides them with pick up and drop facilities along with rest room in the firm for male and

female workers separately. The firm has a good contact with transport agency for supplying

its finished products to its customers and also to get the raw materials from the supply

location. The Firm also has well maintained godown facility for storing the raw materials

and finished products. The firm also has separate phone lines and fax lines for receiving the

orders through phone and fax. The financial accounts are maintained in computers and the

production process are mechanised and modernised for the safe and efficient production.

i) Achievements/AwardsThe Firm has been involved in many CSR activities in a local level for which its managing

director has been recognised and awarded by the local authorities, which inturn has helped to

the improve the goodwill of the Firm at the same time has brought in feel good factor in the

employees.


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j) Work Flow Model

The workflow model of desiccated coconut powder production involves several stages, out of

which a few stages require the aid of machines and rest has to be done manually. The major

steps in production of desiccated coconut powder are.

Raw Coconut

Husk Removal

Shell Removing

Peeling

Washing

Crushing

Drying

Shifting

Weighing

Packing


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Raw Coconut

Raw coconut are ordered and procured from the rural areas which are nearby the Plant. The

rates of these coconuts are decided on the market rates and some time on the standard rates

pre decided. They are collected at a convenient area such as collection point from where it is

transported back to the plant for transformation purpose. These coconuts form the basic

ingredient or raw material for the manufacturing of desiccated coconut powder.

Husk Removal

It is the first step of the production process. In this process, coconut husk is removed from the

raw coconut manually. The collected husk is stored separately for selling and this forms the

by product of the manufacturing process. This later is sold off to the coir industries nearby.Then this coconut is transferred to the next process.

Shell Removing

This is the second stage of the production process, wherein the process of removing the

coconut shells without damaging the inner part of the coconut is done manually with the help

of small hammers. This process requires experienced workers as there is a chance of cuts and

wounds during this and also for the intention of minimising the wastages during this process.After removing the shell the coconuts are transferred to the next process.

Peeling

In this process shell removed coconuts are sent for peeling off the red thick skin covering it.

This is done with the help of peeling blades used by skilled workers. Here experienced labour

is needed to avoid any accidents and wastages. Such peeled coconuts are sent for the next

stage of processing.

Washing

In this process the peeled coconuts are put into a washing tank after which they are broken

over and washed properly with clean water. This process is repeated thrice before it is sent to

the next stage. Here clean water is used and the coconut is broken into small pieces so that

the water inside the coconut could be drained off and cleaned properly. Such cleaned pieces

of coconut are sent in for the next round of processing.


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Crushing

This is the most important step in the production process. Machines are used for this purpose.

Here the machines are of grinding type. The cleaned coconut pieces are put into this grinding

machine where they are grinded dry and converted into fine coconut powder. Thus obtained

coconut powder is sent for further processing.

Drying

In this process big dryers are used which dries the powdered coconut obtained from the

previous stage. This dryer has six compartments arranged horizontally. The crushed powder

is put in the top compartment and is passed through the other five layers at an interval of 15

to 20 minutes each. This movement through the layers is done with the help of geararrangement.

The capacity of each compartment is about 6 buckets of coconut powder. Here the drying is

done by passing hot air through the chambers at a constant temperature of 90 C. This hot air

in the chamber can be provided either by electric heater or by burning firewood at the bottom

of the chamber. Thus heated powder is collected in a aluminium tray kept at the bottom. If

the powder is not dried completely then the whole process is repeated till the required level of

dryness is obtained. Then the dried powder is sent to the next level for further processing.

Shifting

This is a process where the powder is purified manually with the help of filtering machine or

shifters. There may be a chance that some impurities may have been added in the drying

process due to the machine impurities or other factors, so as to remove this, shifting process

is used. Then the powder is passed on to the next level.

Packing

From the shifting process the finished output is got which is ready for packing. It is the last

step of the production process. At this stage desiccated coconut powder is packed in 1kg bags

after weighing on weighing machine. Then such 25 bags will be packed in a single sack. The

mouth of the sack will be stitched by Reva machine, and then the sacks will be kept in the

godown for dispatch.


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k) Future Growth and ProspectsIn recent years consumers are becoming more health conscious and diet based mentality.

They are moving towards more health oriented products rather than taste oriented. This give

an edge for this coconut based industries which are health and nutritious in terms of health.

Consumers would prefer coco based products such as biscuits, bakery products etc. This

would increase the consumption of desiccated coconut powder in the near future. This in turn

would give a bright growth prospective for the firm and industry as a whole.

Currently the industry is facing an acute shortage of labour, but considering the fact that there

are a lot of R&D work being conducted for mechanisation of the process, the things looks

bright. This industry not just increases the wealth but also helps the farmers become more

agro oriented as it would provide good returns for lesser investment. This will increase job

opportunities and would contribute to the growing economy. Such firms can even go public

for raising funds and expand their units where there are abundance of raw materials and

labour. There is a vast undiscovered potential in this industry which could be tapped into and

greater profits could be made over the years.


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McKinseys 7s Frame Work

The McKinsey 7S Framework is a management model developed by well-known business

consultants Robert H. Waterman, Jr.and Tom Peters (who also developed the MBWA--

"Management By Walking Around" motif, and authoredIn Search of Excellence) in the

1980s. This was a strategic vision for groups, to include businesses, business units, and

teams. The 7S are structure, strategy, systems, skills, style, staff and shared values.

The model is most often used as a tool to assess and monitor changes in the internal situation

of an organization.

The model is based on the theory that, for an organization to perform well, these seven

elements need to be aligned and mutually reinforcing. So, the model can be used to help

identify what needs to be realigned to improve performance, or to maintain alignment (and

performance) during other types of change.

Whatever the type of change restructuring, new processes, organizational merger, new

systems, change of leadership, and so on the model can be used to understand how the

organizational elements are interrelated, and so ensure that the wider impact of changes made

in one area is taken into consideration.

OBJECTIVE OF THE MODEL (To analyze how well an organization is positioned to

achieve its intended objective

Usage

Improve the performance of a company Examine the likely effects of future changes within a company Align departments and processes during a merger or acquisition Determine how best to implement a proposed strategy

The Seven Interdependent Elements

The basic premise of the model is that there are seven internal aspects of an organization that

need to be aligned if it is to be successful

Hard Elements

Strategy Structure
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SystemsSoft Elements

Shared Values Skills Style Staff

McKinseys 7s Frame Workof Kamadhenu Coconut Industies

Structure

The Firm is a partnership Firm where in there are two partners. Mr. K. Nagaraj Rao is the

main and working partner where as Mrs. Shubha wife of Mr. K. Nagaraj is the profit sharing

as well as inactive partner. Mr. Nagaraj Rao manages all the Firms affairs and is rightly paid

Partners

Profit Sharing partnerManaging Partner

Production

Foreman

Supervisor

Workers

Finance

Chief Accountant

General

Secretar Staff

Workers


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the remuneration for the same. There are three main wings under the Working/Managing

partner, namely Production, Finance and General wing.

The production wing has a Foreman under who there are Supervisors who supervise the

production process done by workers under them. Its a unilateral arrangement and has a well

defined arrangement for the flow of command. This leads to least confusion and better

organizational efficiency. The other wing is the Financial wing which consists of a Chief

Accountant who looks after the entire financial statement of the Firm and also the investment

decisions or suggestions for the same. The other wing is the General wing which has the

employees such as office staff, secretary, drivers, security personnel etc. All are under direct

command of the manager and are guided and instructed by manager himself. As the Firm is

small there is less confusion in the flow of command and is well maintained. In future, when

the firm grows big there has to be separate departments for HR as well. Now the HR

department is looked after by foreman who acts as the human resource manager of the firm

according to the factory law.

Skills

Kamadhenu Coconut Industry usually goes for an informal way of recruitment. Here

personnel are recruited by manager cum owner Mr. Nagaraj based on some recommendationsfrom relatives or known people. A minor verification of the qualification and eligibility is

done over here and are recruited. The vacancy arises only in the case of resignation, death

etc. While recruiting manager keeps in mind the age of the personnel recruited, their working

ability, their willingness and necessity to work. Here the salary expected is also taken into

account along with minor enquiry of background and health conditions. For the accountant

post minimum qualification is B.Com and for supervisors its PUC and above. For the

working class as such there is no educational qualification.

There is no training department as such in the firm. Here the training of the personnel

recruited takes place on the site. Here they learn work by working under experienced workers

and later when they retire or get promotion or leave the company, these recruits take their

position. There is a strong need for establishing a well defined training unit in the long run

when the company grows to a large unit. And also by having a well defined training unit,

they can produce quality output along with minimal accidents in the Firm. The skill training

and upgradation is the need of the hour if the Company has to make competitive edge in themarket.


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Style

Kamadhenu Industry practices top down approach of decision making. Here the authority of

decision making lies with the manager cum owner. But while taking any decision he consults

the seniors in the organization along with his relatives and known persons who are close to

the firm. Here the command flows from top to bottom and is a vertical downward manner.

Entire decision is made by the manager and only small decisions pertaining to the day to day

operations regarding leave of the labourers, maintenance of the machines etc. are taken by

supervisors of the firm.

The pricing decisions of the raw materials that is at what price it should be bought and the

prices of the finished products that is at what price it must be sold is usually done by the

manager in the company meeting which is usually held once a month. There in this meeting

the views of all the company senior workers are taken on all the aspects effecting the

production and supply of the products and based on this the pricing decision is made. As the

company structure is lean and is not a public company, the manager enjoys the authority to

take any decisions regarding the pricing and investment of the firm.

Strategy

The main strategy the firm adopts in terms of efficient production and having minimum

wastage is by having unique wage payment system. Here the firm adopts two types of wage

payment namely Time Wage System and Piece Wage System.

Time Wage System

Under this method wages are paid on the basis of time spent on the job irrespective of the

amount of work done. The unit of time may be a day, a week, of fortnight or a month.

In Kamadhenu Industries some labourers, who are engaged indirectly in the production

process are paid wages on a monthly basis according to their part of the work. Labourers

working near machines who look after the maintenance of the machines and the supervisors

looking over the work done will be paid in this system. In this system the wages are

calculated as below

Total Wages = Hours of work * Rate per hour.


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Simple Piece Rate or Straight Piece Rate System

Under this method, remuneration is based on the amount of the work done or output of the

worker. One unit of output is considered as one piece and a specific rate of wage is paid per

piece. This industry adopts the piece time rate system to the labourers who are engaged in

husk removing, shell removing and red skin removing process. Here the wages are paid

according to the amount of work done by the personnel. Greater the number of pieces

produced by a worker, higher will be his earnings. It is given as below

Earnings = Number of units of product * Rate per unit.

The firm enjoy several advantages due to the adoption of these methods in the wage payment.

Some of advantages are

Calculation and payment of wages will be simple. Need of less supervisors and hence cost of supervision is low. The method is just and fair to all without any differences of opinion. It increases the overall efficiency and productivity of the firm. Ambitious and efficient workers are provided ample opportunity to utilise their talent

and increase their earnings.

System

The system followed in the firm regarding the supply of the finished products is of First In

First Out principle (FIFO). The orders which are placed by the customers are executed in the

order of their receiving. There is no skip or jump in the order for any reasons or for any

consumers. Here when the orders are placed they are given a unique order number which will

be in sequence so that the customers can track their orders. All the orders will be executed

sequentially and this method of the firm has gained a wide appreciation from its customers.

This is also one of the reasons for the customers being long standing with the firm. Here the

orders are placed either through the mail, e-mail, telephonic or through face to face meeting.

Once the orders are confirmed there will be a computer entry made to it as to what is the

order number, person ordering it along with address, date of order, quantity of order, date of

delivery needed and its current status. Later this order sheet is sent to the productionsupervisor and based on this the production process is estimated and produced. The packed


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and marked sacks of the final products are then dispatched to the respective addresses either

through courier for small quantity or through the transport vehicles for large consignment.

Such a systematic process helps the firm to maintain a good rapport with its customers and

also help it to estimate the required product and raw material estimates.

Staff

Staff constitute the important part of any organization. If they realise their responsibilities and

powers properly, it can lead to synergy in any organization. Here in this Firm, the following

personnel are recruited and given the necessary powers.

Manager He is also the owner of the firm. He enjoys the ultimate power in terms of

decision making and enjoying the profits got out of the same. He is unquestioned and issupreme in this firm. He takes care of all the decision making and order finalization and

pricing decisions in the firm.

SupervisorsThey receive the directions from manager and act according to it. They also

give directions to their subordinate workers working under them on day to day matters. They

are also given the freedom to take decisions regarding the day to day actions and other

maintenance works in the firm.

WorkersThey are assigned certain work by the supervisors or directly by the manager,

which they have to do with the satisfactory level expected out of them. They dont have any

decision making power as such other than that is required for their assigned task.

Accountants They look after the financial affairs of the company. They give the

suggestions regarding the financial decisions and investment decisions to the manger. They

also take care of the financial data preparation and also annual audit in the firm.

Foreman They are just below the managers in reporting. They are placed high in

production unit and they take all the decisions regarding the production and they are given

the authority to take decisions on leave matters of their subordinates. They also supervise the

working of the supervisors and other workers in the organisation.

Shared Values

Firm is keen on maintaining quality output; it strives in all ways possible for maintaining

good employee and customer rapport. It gives utmost importance to quality of products and


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its customers satisfaction. For achieving this, it provides required facilities for its employees

so that they help in producing the required level of productive efficiency and quality of the

product. The following are the facilities provided for employee satisfaction

Drinking water facilities Clean and hygienic work place Safety measures to avoid any accidents Housing facilities for the employees who come from far off places There is provident fund facilities for its employees Rest room for male and female workers separately Firm provides pickup and drop facilities for its employees.

Along with its employees satisfaction, the firm is keen in providing contribution to the

society as well. The firm has contributed to society and for the welfare of the people living in

it by providing funds to sponsoring various competitions, sports, games, educational purposes

etc. organised by various NGOs and local authorities.


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SWOT ANALYSIS

SWOT analysis (alternately SLOT analysis) is a strategic planning method used to evaluate

the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in

a business venture. It involves specifying the objective of the business venture or project and

identifying the internal and external factors that are favourable and unfavourable to achieve

that objective. The technique is credited to Albert Humphrey, who led a convention at the

Stanford Research Institute (now SRI International) in the 1960s and 1970s using data

from Fortune 500 companies.

Setting the objective should be done after the SWOT analysis has been performed. This

would allow achievable goals or objectives to be set for the organization.

Strengths: characteristics of the business, or project team that give it an advantageover others

Weaknesses (or Limitations): are characteristics that place the team at a disadvantagerelative to others

Opportunities: external chances to improve performance (e.g. make greater profits) inthe environment

Threats: external elements in the environment that could cause trouble for thebusiness or project

Identification of SWOTs is essential because subsequent steps in the process of planning

for achievement of the selected objective may be derived from the SWOTs. First, the

decision makers have to determine whether the objective is attainable, given the SWOTs.

If the objective is NOT attainable, a different objective must be selected and the process

repeated.

Users of SWOT analysis need to ask and answer questions that generate meaningful

information for each category (strengths, opportunities, weaknesses, and threats) in order

to maximize the benefits of this evaluation and find their competitive advantage.

SWOT of Kamadhenu Coconut Industries

Strength

Kamadhenu Coconut Industries produce good quality of desiccated coconut powder.They have given utmost importance for their production process and the quality of
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output got out of it. They have never compromised on the quality aspect over the

years when compared to price.

More than 85% of the raw materials are gathered from the local area and from thepermanent suppliers which have reduced the cost of transportation and the danger of

scarcity of commodities. It has also ensured a continuous supply of raw materials

even in the case of crisis.

The efficiency of the firm is good when compared to others. The wastage is minimalin the production process as experienced employees are hired and also to the fact that

the husk and the shell of the coconuts are used for the drying machines for heating.

The available labour is mostly locals which makes the wages cheaper and also thepickup and drop facilities more convenient and cheap.

Good water and power facilities to the Firm has made the production process easierand economical.

The Firm is connected to NH66 with good road facilities. It also has a local bus stopin front of the Firm which makes it easier for transportation of raw and finished

products along with labour movement.

The Firm has the advantage of being near the post office, bank, courier drop spots etc.which makes it more cheaper to access.

The Firm also has the advantage of good and stable and unilateral management whichmakes the Firm more effective and profitable.

Weakness

The scarcity of labour in the region and also the increasing wage rates of experiencedlabourers decrease the profit margin.

There is no much local market available for the desiccated coconut powder. The Firm doesnt have a website of its own through which it could have got orders. It is located in not so accessible kind of a place which makes its customers life

difficult.


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It doesnt have the mechanised process for production of desiccated coconut powder. It doesnt have standard quality control mechanisms.

It lacks training department for the newly recruited personnel.

Opportunity

The labour turnover could be reduced by providing some additional facilities andbenefits for them.

It can have its own R&D department for the advancement in the production process. It can install advanced machinery for production purpose. It can go for E-marketing by launching its website and other mailer facilities. It can open units where there is abundance of labour and raw materials. It can go for acquisitions of the nearby weak firms which has adequate labour but no

orders for production.

It can seek the opportunities in the far northern regions for the desiccated coconutpowder.

Threats

There is stiff competition from the nearby firms which are into production of similarproducts.

Now a day the farms are being converted into site, which shows the negligence offarmers in this part of the region. This can lead to shortage of raw materials in thecoming days.

It also faces threat from the policy changes from the government. It faces a threat of shortage of labour which may be due to the migration of labours

from this firm to others on account of better benefits provided there.

They also face a threat of being out dated due to non mechanisation of their firm.


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They also face threat from the robbers, who try to steal the raw materials stored in thegodown.

They also face shortage of power which is becoming a major problem in this part ofthe region.


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FINANCIAL AND RATIO ANALYSIS

Ratio analysis

Ratio analysis is a form of analysing the companys strength in the market by using the

various statistical data available from its balance sheet. There are various ratios which can be

calculated and which tells us about the various performances of the company in various

fields. They are as follows

Fixed turnover ratio:

This ratio measures the productivity of fixed asset. This ratio indicates to what extent the

fixed assets of the concern have contributed to sales .A high ratio indicate a high degree of

efficiency in fixed asset utilization and low ratio reflect inefficient use of fixed asset.

Fixed asset turnover ratio= sales /average fixed Asset.

Table 5.1 Fixed turnover ratio

YEAR Sales(Rs) Avg. Fixed

Asset(Rs)

Fixed Asset turnover ratio

2007 97,78,750 22,32,546.19 4.3800882008 1,01,42,650 24,64,499.12 4.115501

2009 1,03,07,350 23,97,846.90 4.298585

2010 93,54,318 22,64,678.08 4.130528

2011 99,45,550 39,15,811.47 2.539843


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Graph 5.1

From the above graph, it is evident that over the years there has been almost a constant fixed

asset turnover ratio. This indicates that the fixed asset has been contributing well for the sales

over the years. It can be observed that in 2011 it has dipped to 2.53 which is due to high

investment in fixed assets in this year compared to sales. This clearly shows that the firm is

having stable sales compared to the fixed assets. This is a clear indicator to show that

company has a very good long term prospects.

Capital turnover ratio

Capital turnover ratio is the ratio between sales and proprietors fund.

Capital turnover ratio=sales/proprietors funds

Table 5.2 Capital turnover ratio

YEAR Sales(Rs) Capital(Rs) Ratio

2007 97,78,750 15,49,868.98 6.3094042

2008 1,01,42,650 15,49,868.98 6.5441983

2009 1,03,07,350 15,49,868.98 6.6504653

2010 93,54,318 15,49,868.98 6.0355540

2011 99,45,550 15,49,868.98 6.4170262

Sales(Rs)Fixed Asset turnover0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2007

2008

2009

2010

2011

Sales(Rs)

Avg. Fixed Asset(Rs)

Fixed Asset turnover ratio

Year


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Graph 5.2

It can be seen that over the years the company has maintained a constant capital turnover

ratio. This shows that for every rupee invested by the investors, the Company is able to

generate six times the revenue over the years. It is also evident that the Company is having

good liquidity as well in the market.

Debtor Turnover Ratio

It shows how quickly receivable or debtors are converted into cash. In other words, the debtor

turnover ratio is a test of the liquidity of the debtors of a firm. The liquidity of a firms

receivable can be examined in two ways: i) debtor/receivable turnover ii) average collection

period.

The debtor turnover shows the relationship between credit sales and debtors of a firm. It is

calculated as

Debtor turnover = Total Sales/(Debtors + Bills Receivable)

The liquidity of the firm is also calculated by the average collection period of debts. It is

calculated as

Average collection period = Months in a year/ Debtor turnover

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2007 2008 2009 2010 2011

Sales(Rs)

CAPITAL(Rs)

Year


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Table 5.3 Debtor Turnover Ratio

YEAR Sales(Rs) Debtor + Bills

Receivable(Rs)

Debtor

turnover

ratio

Averagecollectionperiod

2007 97,78,750 28,64,012.1 3.414353 3.51457

2008 1,01,42,650 29,66,695.1 3.418838 3.50996

2009 1,03,07,350 37,09,562.93 2.778588 4.31874

2010 93,54,318 69,38,449.22 1.348185 8.90085

2011 99,45,550 34,30,094.91 2.899497 4.13864

The above table shows that during the initial years the credit sales was more so the liquidity

position of the firm was not that good. But over the years the firm has improved on this

aspect and due to this the liquidity of the firm has also improved. This is a must for any

company as they are non performing asset and they have to be recovered fast so that they can

be invested in better ways so that it yields returns.

Current Asset turnover ratio:

This ratio measures the productivity of current asset. This ratio indicate to what extent the

current asset of the concern have contributed to sales. A high ratio indicate a high degree of

efficiency in current asset utilization and low ratio reflect inefficient use of current asset.

Current asset turnover ratio= sales /average current asset.

Table 5.4 Current Asset turnover ratio

YEAR Sales(Rs) Avg.

Current

Asset(Rs)

Current Asset turnover ratio

2007 97,78,750 4596868.16 2.127263

2008 1,01,42,650 5046557.8 2.009815

2009 1,03,07,350 6432001.78 1.602510

2010 93,54,318 9646540.7 0.969706

2011 99,45,550 5697824.55 1.641735


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Graph 5.3

The above table shows that, in the initial years the current asset turnover ratio was healthy

and was above 2. But in recent years the current asset turnover ratio has dipped to a greater

extent. This means in the recent years the current assets are more than in the past years. The

best current asset turnover ratio is the one where it is above one. In recent years it has been

constant and the Firm has tried to better utilise the current assets for improving the sales of

the Firm. But still it is not able to meet its past performance.

Inference from the Financial Analysis

The fixed asset turnover ratio was good over the initial years. For every rupeeinvested in the fixed assets, 4 rupee was the returns. This shows that the company is

able to invest in long term assets and its at a high range when compared to the

normal investment portfolio. This is a healthy sign for any firm.

Capital turnover ratio is high in the range of 6 rupee. Every firm is expected toproduce a high capital turnover ratio. It means that for every rupee invested the firm is

getting a high returns and this also shows that the firm is having a very healthy

financial position.

In recent times the firm is able to have a low debtor turnover ratio. This means thatthe receivable are being recovered faster in recent years than in the past. This also

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2007 2008 2009 2010 2011

Sales(Rs)

Avg. Current Asset(Rs)

Year


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shows the good liquidity position of the Firm and also the healthy financial position of

the firm.

In recent years, the current assets have increased when compared to the past. This isevident from the current asset turnover ratio. In the past it was good but in the recent

years it has dipped to a greater extent. This shows that the current asset is being

depleted in the Firm.

From the above ratio analysis it is evident that the Firm is having a good liquidityposition and financial position and profitability of the firm is good.


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LEARNING EXPERIENCE AT KAMADHENU COCONUT INDUSTRIES

As a part of curriculum activity of MBA course, we are suppose to expose ourselves to

working environment of any organization and study the application of management aspect in

such organisation. Hence the objectives of the study are

As my academic requirement, it is necessary to get practical training as a part offulfilment of masters degree in business management.

To get practical knowledge about the working of a manufacturing enterprise. To know the application of human resource and marketing in production. To know the management practices that is applied and practices in the organisation. To make suggestion and recommendation to interested persons for the improvement

of their activities.

To create curiosity among people to know what is unknown.Over all Kamadhenu Coconut Industries is a well maintained and managed firm in terms of

operation and production process. It is managed by an able administrator and the employees

of this Firm have reacted positively for all the decisions taken by the administrators of the

Firm. There has been year on year growth in the Firm even though there were several

problems faced by the Firm over the years. The problems of the Firm over the years havebeen positively addressed and have been solved to a greater extent. The employees in the

Firm are dedicated and are professionally oriented towards their work. They have a well

maintained client base and have maintained good rapport with their clients over the years.

The Firm has a good marketing and supply unit. They have even good transport facilities

along with good machinery and electronic equipment. Though the Company is well equipped

with better infrastructure and operations, still it is facing problems such as

In recent times there has been a dip in the quantity and quality of the raw materialsthat are being supplied to the Firm. This is attributed mainly to the increased

competition in the region and also the fact that several farmers are migrating from the

cultivation of coconut to better and economical agro products. This has affected the

quality of finished products to a greater extent over the years.

There has been frequent fluctuation in the raw material prices which will in turn affectthe prices of the finished products to a greater extent and will effect the profitability

of the Firm.


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The major problem in the coastal region is of power. There has been acute shortage ofpower in this region which has affected the productivity of the industries to a greater

extent. Although the generators are being installed in most of these industries, it is not

economical to use them for production as the cost of diesel is too high when

compared to the price of the finished products.

One of the major problems faced by this Firm is that of labour. This Firm isfrequently facing problem of labour absenteeism and labour iteration.

The Firm is also facing the problems of frequent breakdown of machinery due tocontinuous production. And also the fact that having a standby machine is expensive

in terms of production cost makes the condition even worse.

The Firm is also facing problem of being outdated in terms of machinery andtechnology used in the firm. The machines used in this Firm are very old and modern

machines have not yet been installed.

There has been a decrease in the sales over the years due to the stiff competitionprovided by the competitive firms.

The Firm is also facing the problem of shortage of working capital. There is also an unfavourable market conditions and also the transportation cost over

the years has increased to a greater extent which has brought down the profitability of

the Firm considerably.

The salary/wages is increased on the basis of experience and not on the basis ofefficiency. This has lead to discouragement of the young and energetic employees in

the Firm. This is also one of the reasons for high employee turnover.

Limitations

The project was to be done in the limited period of time. The Owner was not willing to

provide the exact information about the product like the exact profit they get from it. So the

extent of information provided in the industries is very less to go in detail. There were also a

lot of financial data which the owner was reluctant to share with.

SUGGESTIONS

Although the firm is a well maintained one, there is lot of scope for improvement in terms of

technology and process involved in production. By implementing these suggestions, the Firm


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can hope to achieve new heights and better profitability. Some of the important suggestions

are

Modernisation of technology and machinery is the need of the hour. By replacing theold and outdated machines and process with new machines, the productivity as well as

the profitability of the Firm can be increased.

The Firm should take proper precautions for the maintenance of the machines andshould try to replace the old machines which consume huge capital for their repair.

The annual repair charges of the machines are becoming more and more burden on

the balance sheet.

For better competition in the market, the Firm must adopt suitable advertisingstrategies, so that it can effectively compete with its rivals. It must go for E-marketing

and intensive marketing strategies for gaining an advantage over its rivals.

It must try to widen the local market for its products. For this it must advertise, thevarious uses and nutritious values and advantages of desiccated coconut powder in

local newspapers and other media.

The Firm must provide canteen facilities to its employees. There are many employeeswho come from far off places and work in the Firm. For their convenience, the Firm

must provide quality canteen facility to its employees which would take care of theirfood needs.

Try to improve the rapport with its clients and customers. As there is a hugecompetition in the market, the Firm must try to attract more clients and at the same

time, it must try to retain the existing client by giving better quality services and some

additional benefits for their buy.

The Firm must also give additional benefits to its employees so that it can reduce thelabour turnover.

The Firm must also launch its own website so that it can take orders online and alsogive information about the Company through electronic media.

The manager may also go for adding some new partners so that they can finance theFirm for its expansion and also to meet its working capital deficit.

The Firm should go for some quality check certifications, so that it can highlight itwhen it is being represented in some national level conferences.

The Firm should also try and install new and automated quality control mechanism sothat it can have a consistent quality of its output at a lesser cost.


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There is a need for establishing R&D unit along with the training unit to research andtrain the new joiners.

There is also a need for more standardisation of wage system in the Firm so thatlabour turnover could be reduced.

There is also a need for the Firm to get represented itself in some national andinternational conferences, so that the Firm gets highlighted and it can expand its

operation.

Better and clear policy must be formulated in terms of wages and other matters whenthe Firm thinks of expansion.

CONCLUSION

Ever since the incorporation of M/S Kamadhenu Coconut Industries by late Mr. K. Govinda

Rao, the Firm has strived for providing excelling quality products to its clients and customers.

Currently Mr. K. Nagaraj Rao who has taken over from Mr. Govinda Rao has sincerely tried

to maintain the same service to his clients and customers. The Firm believes that good quality

product can be produced only when there are satisfied employees working for them. For the

same reason the Firm and its management gives utmost importance to the employees and

their fulfilment of needs.

In Kamadhenu Industries, 75% of the production purpose is done manually and rest 25% is

mechanised. This shows that the Firm provides a wide opportunity for providing employment

to the local population. It is also contributing in a large way for the well being of the people

in that region by providing them employment and other monetary benefits in the form of

donations to the sports, games and other educational activities.

North Indian regions provide the major market for the Firms products. About 90% of the

Firms products are supplied to the north Indian regions and only 10% get sold in the local

market. This clearly shows that desiccated coconut product has a high demand in the north

Indian regions. This can also be for the fact that the availability of coconut and coconut

products are in scarce in those regions.

There many improvements that can be brought about in the Firm in all aspects.

Implementation will not only improve the quality of products, but also will improve the

profitability of the Firm to a greater extent. There is a wide scope for expansion of this Unit if


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they could counter attack the problems such as labour and capital. This industry as a whole

will have a better growth opportunity in the coming days.

Kamadhenu Coconut Industries

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Transcript of Kamadhenu Coconut Industries