AN ASSIGNMENT

ON
GLOBAL BUSINESS ENVIRONMENT

Submitted By:
Joshin John
Louis Juvi
Lino Lawrence
The Coir Industry

The history of Coir and its association with the state of Kerala dates back to
the 19th Century. Sandwiched between the Western Ghats on the east and
the Arabian Sea on the west, Kerala is one of the most beautiful States in
India. One of the most commonly seen tropical trees in Kerala is the
Coconut tree. Alleppey (Alappuzha in Malayalam) is the nerve centre of
Kerala's famous Coir industry. Here, one can see coconut husks being beaten
into fibre for making beautiful mats and other coir products. Coir Industry
enjoys the status as the largest Cottage Industry in the State of Kerala, giving
employment to over a million people.

Currently, the global annual production of coir fiber is about 350,000 metric
tons (MT). The world’s top two producers, India and Sri Lanka, accounts for
about 90% of global coir fiber production. Kerala earns foreign exchange of
over 500 crores per year from this industry with a potential for phenomenal
growth.
DC Mills – A Profile

Spanning two decades, DC Mills foray in the coir products exports is a

magnificent example of growth rooted in determination of a management
with a vision seldom seen.
Attentiveness to customer tastes and preferences, commitment to quality,
dedication to timely delivery and extensive range of products make D.C.
Mills the numero uno in floor covering business.
D.C. Mills established in the year 1975 and started manufacturing and
export of Indian Natural Coco fibre Door mats and Floor coverings with and
without latex backing as well as Cocos, Sisal, Jute, Seagrass, and Wall to
wall Carpets. It employs around 1000 employees. In the year 1982 D C
Mills started exporting.

Business Portfolio

Type of business.
DC Mills (P) Ltd. is a manufacturing company. They are into manufacturing
and exporting of coir jute, fibre and bamboo mats.

Product Profile
They are having a wide range of products. They are:

• Washable rugs
• Braided rugs
• Jute rugs
• Sisal rugs
 • Bamboo rugs
• Coir rugs
• Coir mats

Market
The major markets of D C Mills are North America, Middle East and some
European countries. Being an export oriented firm, 60% of the products are
exported to USA, 30% to Europe and 10% to the Middle East. They have
stiff competition from many of the near by companies.

Production
The present production capacity of DC Mills is 75 containers of 40 ft. per
month i.e.; around 2000 tonnes per month.

Production Process:
Yarn is sourced directly from mills/dealers and dyed in the unit where they
have facilities for manual, machine dyeing and lab testing. The yarn is then
issued to the weavers. The stitching and finishing work is done in the units,
which is equipped with imported machines. The finished products are
thoroughly checked and packed as per international standards.
Marketing Strategies
Marketing mix strategies for different product and market

Product strategy
As the products manufactured are entirely exporting, the company looks for
the taste and quality preference of the foreign market. They go on adding
new products to their product line.

Pricing Strategy
The company follows different types of pricing policies. They are
competitive pricing, skimmed pricing and tender pricing.

Promotion strategy
The company does not give much importance to advertisement. They go for
trade fairs and exhibition conducted in various parts of the world and also
through internet. The sales promotion activities include discount to the
dealers, for bulk purchasing beyond a fixed quantity.

Distribution Strategy
The company’s distribution chain is as,
Company  dealer  customer
Also the company has a warehouse in U.K. after getting orders from the
customers they ship the product within 30 days.
Export procedure
On the receipt of order the order sheet is reviewed for quantity and ship date.
Once the order is reviewed, the company expresses its acceptance by
forwarding proforma invoice, where in all details regarding the item to be
produced; price, ship date, etc. This enables the buyer to open letter of
credit.

Terms of payment
There are various types of payment system. They are
1. telegraphic transfer
2. cash against document
3. letter of credit

Terms of shipping
1. free on board
2. cost and freight
3. Cost Insurance Freight

General observations
1. The company is not utilizing its full production capacity.
2. There is no advertisement in the foreign countries.
3. Company is not focusing on local market.
Impact of current global economic crisis on this company.

The export of coir products for this financial year witnessed an increase in
export volume in tonnes. However, growth in rupee terms the export for the
period was less compared to previous year’s figure. The company had a low
unit value realisation and compressed profit margin, cannot absorb the
appreciation of the rupee. Actually, the dollar depreciation against the
rupee’s appreciation has brought the industry to a standstill.

Key Terms
CIF (Cost, Insurance and Freight): - A trade term requiring the seller to
arrange for the carriage of goods by sea to a port of destination, and provide
the buyer with the documents necessary to obtain the goods from the carrier.