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IMPORT OF ROCK PHOSPHATE
Submitted in partial fulfillments of the requirements of Post Graduate Diploma in Business Management Programme By:
CHANDNI JAIN 2007-09 (FT-07-540)
I would like to express my gratitude to all those who gave me the possibility to successfully complete my summer internship project. I want to thank the fertilizer department of MMTC Ltd. for giving me permission to commence this project in the first instance, to do the necessary research work and to use the departmental data.
I am deeply indebted to my supervisor Mr. Alok Singh, Senior Manager, MMTC Ltd. whose help, stimulating suggestions and encouragement helped me in all the time of research and for writing this project report.
I would also like to thank Mr Gaurav Kataria, Deputy Manager, MMTC Ltd. and Mr. Neeraj Vats, Purchase Manager, Rapid Engineering Company Pvt. Ltd. for their on-time guidance and sharing their indepth knowledge on imports.
I am very thankful to my mentor, Mr. Rajiv Kumar, Faculty of IILM, Graduate School of Management for his consistent support and interest that he has shown in this project.
This project could not have been possible without help from my father. support and valuable hints and for clearing things out in difficult times. Sonali Singh for their help. CHANDNI JAIN (PGDM 07-09) IILM-GSM 4 .Last but not the least. Atish Vishal and Ms. specially Mr. I would like to thank my family and friends.
Only about 35% to 40% of the requirements of raw material for phosphatic fertilizer production are being met through indigenous sources and the rest is met through import in the form of rock phosphate. 5 .PREFACE As a leading player in fertilizers and fertilizers raw material. Sulphur. Rock phosphate. through planned forward integration of its import activities and direct marketing of Urea. I carried out a search process and tried to look into the various options available for MMTC to start the imports of rock phosphate. SSP and other farming and agricultural inputs. MMTC Ltd. DAP. has become a major fertilizer marketing company in India. In India the economy being predominantly based on agriculture. phosphoric acid and direct fertilizers. the fertilizer production plays a pivotal role. MOP.
6 . which was discontinued after 1992 when the import of rock phosphate was decanalized under Mr. ManMohan Singh as the finance Minister.This project will enable MMTC to once again start the import of rock phosphate.
...17 1..6 Competitors…….4 Modes of payment……………………………………………….4 Financial profile…………………………………………………….......1 Demand and production………………………………..…………………...60 Part 4: Conclusions…………………......…....5 Products……………………………………………………………….....3 Ownership patterns……………………………………………..64 7 .TABLE OF CONTENTS Part 1: COMPANY INTRODUCTION 1......3 SWOT Analysis……………………………………………….....35 Part 3: ANALYSIS 3.28 2..14 1.2 Objectives……………………………………………………………....24 Part 2: PROJECT 2.....27 2..40 3.46 3.11 1.1 About the company………………………………………………10 1.13 1.2 Import Scenario…………………………………………….1 Statement of Problem……………………………………...62 Part 5: Recommendations…………………………….29 2....3 Import Procedure………………………………………………….....2 Company History…………………………………………………...
.70 Annexure-III.75 8 .Part 6: Annexure Annexure-I………………………………………………………………………68 Annexure-II…………………………………………………………………….72 Annexure-IV……………………………………………………………………73 Annexure-V……………………………………………………………………..………………………………………………………………….74 Bibliography………………………………………………………………….
COMPANY INTRODUCTION 9 .
is a leading international trading company with a turnover of over US$ 5 billion. giving MMTC a global market coverage. which includes a wholly owned international subsidiary in Singapore. MMTC is the largest non-oil importer in India. Its vast international trade network. one of the two highest foreign exchange earner for India. spans almost in all countries in Asia. MMTC. Africa. Europe. It is the largest international trading company of India and the first Public Sector Enterprise to be accorded the status of "FIVE STAR EXPORT HOUSE" by Govt.ABOUT THE COMPANY Established in 1963. of India for long standing contribution to exports. Oceania and Americas. Following are the major heads under which MMTC works: • Minerals • Precious Metals • Metals • Coal and Hydrocarbons • Fertilizers • Agro Products 10 .
COMPANY HISTORY INDUSTRIAL RELATIONS Cordial and harmonious industrial relations continued to prevail in MMTC Ltd. MANPOWER The aggregate manpower of the company as on 31st march 07 stood at 1997. TRAINING Aiming towards further enhancing/upgrading the skills of employees in the fast changing business scenario. Voluntary retirement schemes were offered which was availed by 4 officers of the company. Joint Consultative Machinery(JCM) meetings were held with the apex forums of employees for arriving at amicable decisions on personnel issues besides encouraging them for active participation in management. with no-man days being lost during the year. 11 . 1801 employees were imparted training during the year through programs organized with in-house expertise as well as external resources from renowned institutions/organizations in different spheres of company’s activities.
12 . to directors. and customers or the community in general. globally interactive & internationally reputed organization. The company is committed continuous development. the Vigilance Group of MMTC carried further its focus on system improvement and preventive vigilance. employees. suppliers. CORPORATE GOVERNANCE Corporate Governance is an area of major significance for all those who are affected by organizations in some way. whether as investors. adoption dedication towards the best corporate governance practices.VIGILANCE To enhance the goodwill & confidence emanating from value based business practices and for strengthening the company as a professionally managed.
535 0.01% Total 5.000 100% 13 .65.66% 3 325 0.33% Indian Promoters .00.31. of shares held Percentage of shareholding 1 Promoters Holding - 4.OWNERSHIP PATTERN Category No.1 lakh including NRI shareholders 2.96.600 99.540 0.LIC Mutual Fund Other Bodies Corporate 3.President of India including his six nominees holding one share each 2 Institutional Investors .00.00% 4 Individual holders having share capital upto Rs.
The net profit earned by your Company recorded a growth of 17% over previous year and is the highest profit earned by the Company since inception. putting considerable pressure on margins. The other trade related earnings contributed Rs. This noteworthy performance is despite intense competition faced by the Company in all its trade activities -.both the highest ever performance in last 44 years. 233016. which was responded to through growth in core operations by competitive offering of products bundled with efficient services as also by successfully tapping new areas of business by innovative value addition. This ever-best business turnover since MMTC's inception in 1963 includes Exports of Rs. aggressive marketing efforts and better utilization of available resources. 34131 million and imports of Rs. 445.both from local as well as International players.FINANCIAL PROFILE According to the 44th Annual Report 2006-07. the company achieved its Highest ever business turnover of Rs. 186074 million -.13 million. The highlights of the performance during 2006-07 are summarized below:14 .23 million during 2006-07 registering a growth of 42% over the previous year.
skills to predict emerging trends and its ability to act and respond promptly. The factors attributing to the noteworthy performance of the group include MMTC’s expertise in bulk handling. domain knowledge. Over the years the group has developed an excellent and sustained network with overseas suppliers and customers besides maintaining long-lasting relationships. 22634. In 15 .44 million representing an impressive growth of over 66%.Exports Imports Domestic Other trading Earnings Net Sales/ Trading Earnings Trading profit Profit Before Taxes Profit After taxes Dividends (i) Interim Dividend on Equity Shares (ii) Proposed Dividend (iii) Dividend Tax Reserves and Surplus 2006-07 34131 186074 12811 445 233461 2497 1893 1268 125 123 39 8321 (Rs in million) 2005-06 29254 117858 16512 310 163934 2218 1679 1083 125 125 35 7833 FERTILIZER/FERTILIZER RAW MATERIALS The fertilizer group of MMTC surpassed its best ever performance during 2005-2006 and contributed a turnover of Rs. hands on experiences and expertise.
which is dependent on various factors like monsoon. policy etc.fertilizer trade. this wealth of domain knowledge and relationships shall be the prime factor for group’s growth in future. For the year the company has planned for further increase in business volumes by tapping these emerging opportunities which will be further increased due to enhanced focus of government on agricultural sector besides normal monsoon expected during current year. Govt. 16 . The consumption of fertilizers is growing in India leading to increased shortfall between consumption vis-à-vis indigenous productions resulting in increased volume of imports.
MMTC’s mineral sales are on FOB basis only. manganese ore. Feldspar. With its comprehensive infrastructural expertise to handle minerals. MMTC could withstand the stiff competition in the world market but its 17 . India’s first Super Star Trading House continues to be the country’s leader in mineral exports for four decades now. Bentonite. Quartz or silica sand. through a wide network of regional and port offices in India. Garnet sand. Gypsum. Bauxite. quality control to guaranteed timely deliveries of minerals from different ports. Talc. The main items of trade of MMTC is iron-ore. the company provides full logistic support from procurement. During the last decade. MMTC has won the top export award from Chemicals and Allied Products Export Promotion Council (CAPEXIL) as the largest exporter of minerals from India for the 13th year in a row. Barytes.PRODUCTS MINERALS MMTC is major global player in the minerals trade and is the single largest exporter of India. and others which include Mud Chemical. MMTC Limited. Chrome ore. Kaolin(China Clay). as well as international subsidiary. Vermiculite.
exports and domestic retail trade. expanding extensively its infrastructure facilities and expertise in mineral operations and by attaching utmost care and importance to its trade commitments as also the quality of service and products. is India’s Premier bullion trader. enlarging its product range. handling more than 100 MTs of Gold & 500 MTs of Silver. The precious Metals Division has consistently contributed considerable proportion of the total turnover of the company. MMTC’s Precious Metals Division is in to a range of activities covering imports. 18 . MMTC imports and supplies bullion to exporters under various provisions of Foreign Trade policy. Different schemes being followed are as under: • On Loan • Outright Basis • On Replenishment basis Exporters wishing to avail gold on Loan Scheme from MMTC need to be registered by submitting information in the prescribed format.continuous and persistent efforts in diversifying its markets. PRECIOUS METALS MMTC Ltd.
pig iron. An initial deposit of 20% of the notational price declared by MMTC will be made with registration. . steel items.India’s Largest Trader of metals. Its metals division imports and exports non-ferrous metals. Delivery charges and MMTC’s service charges etc. Gold would be delivered to an authorized representative of the exporter against payment of the differential if any. CIP.Applications for outright purchase have to be submitted along with the notational value of gold intended to be purchased by the party and BG for custom duty. of actual and notational value. Delivery would be against the price fixation payable along with fixing commission. The quantity of Precious Metal booked shall be equivalent to the Precious Metal content in the exported product and the admissible wastage. non-ferrous metals scrap and iron and steel scrap etc. Exporters wishing to avail gold I replenishment basis from MMTC need to register themselves with their application in prescribed format. Delivery of gold would be made against receipt of full payment together along with interest. METALS MMTC Ltd. Industrial raw materials. MMTC’s share of imports in India’s import of refined non-ferrous metals in terms of value is about 20% 19 .
Noble metals and ferro alloys • Pig Iron.9% purity) Mercury (min. Slag. CC rods Aluminium (min.995%) Lead Ingots (min. 99. 99. 20 .80% purity) (Squares 4”X4”. 99.97%) Tin (min. COAL AND HYDROCARBON Coal and Hydrocarbon is identified as one of the core areas of business for MMTC and Steam coal is identified as a thrust product for import. 99. 99. CRGO and steel items. 99.95%) Zinc Ingots Spl.70%) Zinc Ingots High Grade (min. HG (min 99.MMTC imports following metals as per LME deliverable specifications and also Npn LME grade material according to the requirements of our customers: • Base Non-Ferrous Metals: Copper (min.9% purity) • Industrial Raw Materials.65% purity) Silicon (Grade 4-4-1 and 5-5-3) Magnesium (min. Cathodes. uncut Briquettes. Steel scrap. Ferro Nickel etc) • Minor Metals : Antimony (min. HR coils. 99. The above turnover is comprised of mainly LAM COKE. Coking Coal and steam coal. 18390 million in 2004-05.90% purity) in the form of Wire bars. 99. The Coal and hydrocarbons business has achieved a turnover of Rs.85% purity) Nickel min 99.
which gives MMTC complete control over trade logistics. A quantum jump both in value and quantity of coking coal and non-coking steam coal – total 5 million tons valued at Rs.During 2004-05. port and shipping operations. offering value added products range and customer base. List of suppliers whose credentials are established are also updated from time to time. expanding extensively its infrastructure facilities. using its expertise in trading by attaching utmost care and importance to its trade commitments as also the quality service and product.19 million tons of coking Coal. O. 21 .50 million tonnes of LAM COKE and 1. • Elaborate infrastructure facilities for bulk handling with arrangements for rail and road transport. MMTC transacted a business of around 1.2500 Million – is expected during 2005-06. MMTC withstood the stiff competition due to its continuous and persistent efforts in diversifying its markets.39 million tons of stream coal. which make it a strong player in this sector. warehousing. They are retained by MMTC for sourcing. are: • Strong business relationships with the leading coal mines and reputed suppliers of various coal and hydrocarbon products. Certain specific strengths of MMTC.
It tries its best to secure competitive prices through bulk buying. through planned forward integration o its import activities with direct marketing of urea. It is one of the world’s largest institutional buyers of the fertilizer. is one of the largest importers of fertilizers in India. Rock Phosphate. It imports finished fertilizers. MMTC has become a major fertilizer marketing company in India. MMTC has strong links with state marketing agencies. MMTC has established itself as a trusted and reliable supplier of fertilizers with major consumers in India. Sulphur. MMTC has so assiduously built over the last four decades. DAP. fertilizer intermediaries and fertilizer raw materials. procuring and distribution of fertilizers in India and in neighboring countries. The volume of trade in fertilizers today stands over one million tones. As a leading player in fertilizers and fertilizer raw material. MMTC has a leading edge in sourcing. SSP and other farming and agricultural products 22 . • Importing non-coking steam coal continuously for the power plants under long-term contracts FERTLIZERS MMTC Ltd. It basically imports in bulk.• One of the biggest international traders in bulk in the country. MOP. The result of a very high reliability and the resultant reputation.
AGRO PRODUCTS MMTC Ltd. MMTC Ltd. with its comprehensive infrastructural expertise to handle agro products. Items of Trade 1) 2) 3) 4) 5) 6) 7) Wheat Rice Maize Soyabean Meal Sugar Edible Oil Pulses COMPETITORS 23 . quality control to guaranteed timely deliveries of agro products from different parts of India through a wide network of regional and port offices in India and its contacts abroad. is a global player in Agro Trade. provides full logistic support from procurement.
STC imports bulk commodities for Indian consumers as per the demand in the domestic market. urea. By virtue of infrastructure and experience possessed by the corporation. SSP. Having been set up in 1956. The organization has grown with MOP to AS. DAP. (IPL) IPL has completed more than 50 years in fertilizer trade in India. handling. IPL has equity partners from private. public and cooperative sector of fertilizer industry. The organization was set-up for import. RP. gypsum and cattle feed.The State Trading Corporation of India Ltd. (STC) STC is a premier international trading house owned by the government of India. it plays an important role in arranging import of essential items into India and developing exports of a large number of items from India. the corporation has developed vast expertise in handling bulk international trading. SOP. today it trades with almost all the countries of the world. Understanding the need of farming community 24 . Indian Potash Ltd. Though dealing largely with the East European countries during the early years of its formation. promotion and marketing of potash in the entire country.
25 .and assisting them to enhance prosperity has been the driving force behind IPL’s sales promotion and extension activities.
PROJECT ROCK PHOSPHATE STATEMENT OF PROBLEM 26 .
As a result. trading houses like MMTC. But after decanalization.f 1st March’ 92.The import of rock phosphate was decanalized w. OBJECTIVES 27 . many foreign trading houses with good reputation and having operations in many countries. MMTC was the only largest trading house authorized to import rock phosphate and had the entire market share. wants to once again start its imports due to the increasing demand of rock phosphate. The present scenario is such that there are a large number of players like small trading houses.e. So the task is to look into the possibilities of imports of rock phosphate in order to meet the growing demand of this fertilizer. Before that period. A large number of firms began to import rock phosphate in bulk. which had abruptly stopped the imports of this fertilizer. the monopoly which was enjoyed by MMTC could no longer exist. MMTC lost its business as far as rock phosphate was concerned and it had to stop the imports immediately. MMTC. govt.
we will try to find out the feasible options of the countries from where we can import.Following are the objectives of this report • To make a list of all those companies outside India those are ready to export rock phosphate in bulk. IMPORT PROCEDURE 28 . then how much quantity has been imported in the past? • Who are the major exporters of rock phosphate and how much have they supplied in India in the past? On the basis of this data. • To examine the historical data for the demand of rock phosphate in India and to check the projections of the demand of rock phosphate. If not. Also to see whether the production meets the demand of rock phosphate.
MMTC quotes global tenders. they receive bids either directly from suppliers or their agents which are doing their business in other countries. rock phosphate) from buyers. Then. At MMTC. who list their specifications and other requirements of rock phosphate. I looked into the complete procedure for importing goods to India. MMTC. MMTC takes either 98% or 100% advance payment from the buyers before they get into the import procedure. is a government trading house and acts as an intermediary between the buyer in India and the seller in some other country. 29 . basically.Importing is not just understanding the past scenarios but is a lot more than that. MMTC receives the request of goods (in our case. The complete procedure is as follows: Firstly. A number of formalities have to be fulfilled in order to receive the imported good here in India. On the basis of the requirements of the buyer.
comparative statements of the bidders is made. we receive the Performance Guarantee (PG) Bond from the suppliers. Next. This bond can be invoked at any time in case of any discrepancy in the transaction process. Then MMTC contacts the suppliers with their own terms and conditions. we open the letter of credit (L/C) and the vessel is nominated. Performance sometimes bank guarantee upon to to bonds: execute to Exports bonds ensure are duly due called guaranteed by the bank. Next. The comparative statement is then presented to the Sales/Purchase Committee (SPC) of MMTC. The SPC then shortlists and approves certain suppliers from the comparative statement hence created. They are then considered for allotment on the basis of the prices quoted by the suppliers. MMTC opens the tenders and once they are successful. The exporter has to furnish guarantees MMTC performance. Once we receive the PG bond. which stays with us till the whole transaction is completed. Letter of credit: A letter of Credit is a signed instrument and an undertaking by the bank of 30 .
MMTC to pay the seller in some other country a certain sum of money on presentation of documents evidencing shipment of specified goods subject to compliance with the stipulated terms and conditions. Loading takes place at the suppliers end. A commercial invoice is primarily used to calculate tariffs. 31 . • Certificate of origin: It is an instrument which establishes evidence on origin of goods imported into any country. Documents are negotiated against the L/C. MMTC gets the shipment advice from the suppliers. acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery. • Bill of Lading (B/L): It is a document issued by a carrier. The following documents are necessary: • Commercial invoice: It is a customs declaration provided by the person or • Corporation that is exporting an item across international borders.
dry and free of previously shipped cargo. • Certificate of cleanliness of holds: This certificate ensures that the holds are clean. • Load Port draft Survey Report Other documents which may/may not be required: • Beneficiary Certificate of inspection • Certificate of quality. MMTC gives the documents to the buyer who then produces these documents at the clearance and hence gets the possession of the goods. Documents are in the name of MMTC and are endorsed to the buyer. Then. quantity & total value • Stowage plan MMTC then releases the payment as per the L/C. The clearance is done by the buyer himself. Original documents are released by MMTC’s bank after full payment. 32 .• Certificate examination of inspection: of the This is by a a certificate declaring the result of an goods recognized independent inspection body which is a guarantee for the importer that the goods are of right quality.
which a company in India has to pay at the customs office once the products have entered India: 1) Custom Duty (as per the product) 2) Educational Cess on CVD……………………………. The custom duty is different for different products. The custom duty on rock phosphate is 12. by the customs authorities of a country to raise revenue and/or to protect domestic industries from more efficient or predatory competitors from abroad.This is the entire procedure for the imports. 4% Custom Duty Custom duty is the tax levied on imports. and sometimes on exports as well.5% 33 ... DUTY TO BE PAID: Following are the certain duties. 2% 3) Sec and Higher Educational Cess on CVD…… 1% 4) Customs educational Cess…………………………… 2% 5) Customs Sec and Higher Educational Cess…. 1% 6) Additional Duty…………………………………………….
all other taxes levied on the goods entering India are constant.Barring Custom duty. MODES OF PAYMENT 34 .
CONSIGNMENT SALES This is a method in which the exporter sends the product to an importer on a deferred payment basis. It is best used in cases involving an increasing demand for a product for which a proportioned stock is required to meet such need. This method is rarely used between unrelated parties. MMTC buys from other countries only when they have an Indian buyer who has made full or 98% advance payment for the goods to be imported by MMTC. Nonpayment payment imports could tie up limited credit facilities and create liquidity problems for many exporting companies.The rapid growth and expansion in the global trade cannot be sustained without efficient or and delays timely in payment for arrangements.: independent importers and exporters. MMTC acts as an intermediary between the seller in some other country and the Indian buyer. that is. in MMTC no dealing is done on consignment basis. for e. However.g. CASH IN ADVANCE 35 . The ideal payment method is one that protects the contending interests of both the buyers and sellers. the importer does not pay for the merchandise until it is sold to a third party.
Refer to annexure for a draft of L/C. 36 . MMTC does not go for advance payment in cash because they deal in bulk. It is often referred to as a documentary credit. The seller assumes no risk of bad debt and/or delays in payment because advance payment is precondition to shipment. Cash in advance is sometimes used between related companies. LETTER OF CREDIT A letter of credit is a document issued by a financial institution which provides an irrevocable payment undertaking to a beneficiary against complying documents as stated in the credit.This method of payment requires the buyer to pay before the shipment is effected. Again. documentary letter of credit or simply as credit. DISCREPANCIES: of credit or Discrepancies other occur when documents Most submitted contain language or terms different fro the letter some apparent irregularity. discrepancies occur when the exporter does not present all the documents required under the letter of credit or because the documents do not strictly conform to the L/C requirements. It is also common to require money in advance for samples.
There are three kinds of discrepancies: ACCIDENTAL DISCREPANIES: These are discrepancies that can be easily corrected by the exporter (beneficiary) or the issuing bank. Such discrepancies include typographical errors, omission to state the L/C number, errors in arithmetic, and improper endorsement or signature on the draft. MINOR DISCREPANCIES: These are minor errors in documents that contain the essential particulars required in the L/C and can be corrected by obtaining a written waiver from the buyer. Such errors include failure to legalize documents, nonrepresentation of all documents required under the L/C, and the discrepancy between the wording on the invoice and the L/C. MAJOR DISCREPANCIES: These are discrepancies that fundamentally affect the essential nature of L/C. Certain discrepancies cannot be corrected under any circumstances: presentation of documents after the expiry date of L/C, shipment of merchandise later than the specified date under the L/C. AMENDMENT OF L/C: (ANNEXURE II) Amendment requires the approval of the issuing bank the confirming bank (in L/C, or expiration of L/C. However other major discrepancies can be corrected by the amendment of the
case of a confirmed L/C), and the exporter. Examples of discrepancies that can be amended include presentation of an incorporated bill of lading, a draft in excess of the amount specified in the credit, and making partial shipments not allowed under the credit. Discrepancies that can be corrected must be rectified within a reasonable period of time after shipment and before the expiry of the letter of credit.
DEMAND & PRODUCTION
8 5203.8 2669.4 4018.3 2931.3 The drive into biofuels production by countries is pushing the demand for rock phosphate.5 2976.2 4797.6 4382.8 4124.6 4112.3 4623. YEAR 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 DEMAND('000 TONNES) 3221 3321.2 2843.7 2897. The increasing demand for this fertilizer can be easily seen by the following chart 40 .The following table depicts the demand of rock phosphate (In thousand tones) in India from 1990-2007.9 4214.7 5543.8 3913.
the demand for rock phosphate has been increasing steadily. Following are the already existing reserves in India: 1) RAJASTHAN • Jhamarkotra • Maton. we observe that the demand has been increasing since 2002 though it had experienced a dip in the previous years. Udaipur • Kanpur. Jhabua 41 . distt. Udaipur 2) MADHYA PRADESH • Katamba distt. Now let us look at the production of rock phosphate within India. distt. But after 2002.DEMNAD DEMAND( in thousand tonnes) 6000 5000 4000 3000 2000 1000 0 19 90 -9 1 19 92 -9 3 19 94 -9 5 19 96 -9 7 19 98 -9 9 20 00 -0 1 20 02 -0 3 20 04 -0 5 20 06 -0 7 Series1 YEAR If we observe the graph which depicts the demand of rock phosphate over the years in India.
Following is the total production of rock phosphate in India in thousand tones.2 610.1 483.2 509. 1) UTTAR PRADESH AND UTTARANCHAL a.8 400.2 475. distt.2 438. Sonrai – Lalitpur distt. Cherty carbonate • Hirapur Chattarpur – sagar distt. Dehradun b.7 513.2 406.9 393.5 565.7 361.6 372. Maldeota. Durmala.9 613.8 447.7 385. YEAR 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 QUANTITY('000 TONNES) 584 477. c.5 42 . distt.
DEMAND Vs PRODUCTION QUANTITY in thousand tonnes 6000 5000 4000 3000 2000 1000 0 1991-92 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 2000-01 2001-02 2002-03 2004-05 2005-06 1999-2000 2006-07 1990-91 1992-93 2003-04 DEMAND PRODUCTION YEAR Though the production has started growing since 2004 but it has not been able to meet the growing demands of this 43 .PRODUCTION QUANTITY in thousand tonnes 700 600 500 400 300 200 100 0 -9 9 -0 3 -9 1 -9 3 -9 5 -9 7 -0 1 19 98 20 02 -0 5 20 06 19 90 19 92 19 94 19 96 20 00 20 04 -0 7 PRODUCTION YEAR The production of rock phosphate in India has not been much. There has been sharp increase and sharp decrease in the production over the years.
rock phosphate needs to be imported and that too in large quantities. PROJECTION FOR THE DEMAND Following is the demand projections for the next 4 years: QUANTITY( '000 YEAR 2008-09 2009-10 2010-11 2011-12 TONNES) 6380 6680 6980 7290 44 . Though the production has start since 2004 but it has not been able to meet the growing ver increasing demand.fertilizer. There has been sharp increase and sharp decrease in the production over the years. So. in order to meet the eThe production of rock phosphate in India has not been much.
MMTC must import rock phosphate. so fertilizer requirements have to be met. Since we cannot increase the production within the country. 45 . it would be beneficial for the country if we import from other countries. Since India is mostly a agriculture based country. In order to keep up with the growing demand of rock phosphate.PROJECTION OF DEMAND QUANTITY in thousand tonnes 7400 7200 7000 6800 6600 6400 6200 6000 5800 2008-09 2009-10 2010-11 2011-12 YEAR PROJECTION OF DEMAND We can very clearly see that the demand is likely to increase linearly for the next few years.
MMTC had put a break in the import of rock phosphate because they had started loosing their business. As a result. After decanalization of rock phosphate. due to the growing demands of rock phosphate and its limited supply within our country. MMTC wants to once again start its business in rock phosphate. However. large quantity of this fertilizer needs to be imported. as we have just seen. The first five major producers of rock phosphate are: China USA Morocco Russia Tunisia 46 .IMPORT SCENARIO As we have just seen that the production of rock phosphate within the country is unable to meet the demand requirements of the fertilizer.
The other producers of rock phosphate are Syria Indonesia Egypt Brazil Israel Jordon South Africa 47 .
US marketable rock phosphate production and reported usage dropped to their lowest points since 1965. CHINA China is the leading producer of rock phosphate.1 Mt in 2005. This is due to the closure of one mine situated in US.WORLD PRODUCTION '2007 UNITED STATES AUSTRALIA BRAZIL CANADA CHINA EGYPT ISRAEL JORDON MOROCCO RUSSIA SENEGAL SOUTH AFRICA SYRIA TOGO TUNISIA OTHER COUNTRIES UNITED STATES In 2006.1 million metric tons (Mt) compared to 36. however the United States remained the world’s leading consumer and importer of rock phosphate. Production was 30. The production of rock 48 .
phosphate in china in 2006 was 30. the production in 2006 and 2007 has almost been the same with minute differences in some cases: 49 .700 thousand tonnes which increased to 35000 in 2007. The data can be summarized in the following table: COUNTRY UNITED STATES AUSTRALIA BRAZIL CANADA CHINA EGYPT ISRAEL JORDON MOROCCO RUSSIA SENEGAL SOUTH AFRICA SYRIA TOGO TUNISIA OTHER COUNTRIES TOTAL 2006 30100 2300 5800 550 30700 2200 2950 5870 27000 11000 600 2600 3850 1000 8000 7740 142000 2007 29700 2200 6000 500 35000 2300 3000 5700 28000 11000 800 2700 3800 1000 7700 8000 147000 We can clearly see by the following line graph that.
Imports of rock phosphate by India from 1998 to 2006 is given below: 50 . now we will look into how much these countries export to India.W O R L D P R O D U C T IO N 40000 35000 30000 25000 20000 15000 10000 5000 0 ST AU ATE ST S RA LI BR A AZ CA IL NA DA CH IN EG A YP ISR T A JO EL R MO DON RO CC O RU SS S SO ENE IA UT GA H AF L RI CA SY RI A TO OT G HE TU O R NI CO SIA UN TR IES QUANTITY 2006 2007 UN IT E D C O U N TR Y After we have taken a look at the production on other countries.
AFRICA SYRIA ISRAEL 1998 20 1224 403 76 347 NIL 72 19 144 303 182 1999 244 1753 216 136 469 NIL 62 NIL 183 188 93 2000 1175 1924 270 112 313 NIL 158 33 196 99 34 2001 1964 1963 138 103 353 NIL 101 14 137 48 113 2002 783 2524 628 63 320 NIL 343 204 49 14 16 2003 431 1713 699 89 33 NIL 191 411 12 NIL NIL 2004 385 2516 976 22 26 NIL 572 348 NIL NIL NIL 2005 137 2301 1134 NIL NIL 143 428 673 NIL NIL NIL 2006 NIL 2334 1272 NIL NIL 367 511 718 NIL NIL 120 (The above values are in thousand tonnes) If we look at each country separately and compare them on the basis of the quantity imported over the years.COUNTRY CHINA JORDAN MOROCCO NAURU SENEGAL ALGERIA EGYPT TOGO S. we will get the following graphs: 51 .
China does not seem to be a good option. Since the imports have been decreasing over the years. So we cannot ignore that fact. However its production is the largest in the world.CHINA'S IMPORTS 2500 2000 1500 CHINA'S IMPORTS 1000 500 0 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 QUANTITY in thousand tonnes YEAR We see that the imports from China have been on the diminishing side and became completely zero in 2006. 52 .
we can consider Jordon to be an option but it is not definite whether it will help or not.JORDON 3000 QUANTITY in thousand tonnes 2500 2000 1500 1000 500 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEAR JORDON The imports from Jordon have been both increasing and decreasing over the years. MOROCCO 1400 1200 1000 800 600 400 200 0 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 QUANTITY in thousand tonnes MOROCCO YEAR 53 . Since it has been increasing in the last two years.
Morocco ranks third in the world production of rock phosphate. There are large reserves of the said fertilizer in Morocco.There is a sharp increasing pattern in the imports of rock phosphate from Morocco. It may help India fulfill its need for the fertilizer. no rock phosphate has been imported from Nauru. therefore this country must definitely be explored for rock phosphate. a declining pattern in the imports from Nauru. Besides. NAURU 160 QUANTITY in thousand tonnes 140 120 100 80 60 40 20 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEAR NAURU We can clearly observe. Since 2 years. 54 . in the above graph.
SENEGAL 500 QUANTITY in thousand tonnes 450 400 350 300 250 200 150 100 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEAR SENEGAL Similarly. the imports from Senegal in the period from 2002 have taken a steep decrease. ALGERIA 400 QUANTITY in thousand tonnes 350 300 250 200 150 100 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEAR ALGERIA 55 .
it increased by almost 2. nothing much can be said about this country. We can try the imports from here as after 2005.5 times the exports in 2005. which started its exports to India only in 2005. 56 . There has been a sharp increase and a sharp decrease every consecutive year. Maybe the increasing trend continues over the years. EGYPT 700 QUANTITY in thousand tonnes 600 500 400 300 200 100 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEAR EGYPT Egypt has been quite unpredictable with its exports to India. the imports have been increasing quietly sharply.However find it comes to Algeria. But Egypt has large number of reserves. Infact.
TOGO 800 QUANTITY in thousand tonnes 700 600 500 400 300 200 100 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEAR TOGO Togo has shown a remarkable increase in the export of rock phosphate to India over the years. Though the production of rock phosphate in Togo isn’t very high. but maybe India is one of the biggest importers of rock phosphate and the trend may continue in future. SOUTH AFRICA 250 200 150 SOUTH AFRICA 100 50 0 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 QUANTITY in thousand tonnes YEAR 57 .
the value has been zero. SYRIA 350 300 250 200 150 100 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEAR SYRIA Syria again has been showing a consistent decline in the export of rock phosphate to India. the export to India has taken a declining slope. QUANTITY in thousand tonnes 58 . Infact.Though South Africa has got considerable production of rock phosphate. Since 2003. it has been completely zero since the past 4 years.
Thus the import from Israel is likely to increase QUANTITY in thousand tonnes 59 .ISRAEL 200 180 160 140 120 100 80 60 40 20 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 YEAR ISRAEL The exports from Israel to India have suddenly risen after 2005 after a deep decline over the past few years.
there are no shortage of funds for it to import large quantities of rock phosphate Large number of buyers and suppliers. Once MMTC has a large number of buyers and sellers. There is no maximum limit on the size of order acceptance. No shortage of funds.SWOT ANALYSIS (with respect to the fertilizer industry of MMTC) STRENGTHS • Wide network of sales offices spread all over India . Since MMTC is a large company which is financed by the government of India. Because MMTC is a trading house it can attract a large number of buyers and sellers and hence will lead to an increase in its market share. It has offices in all the major Indian cities and also has operations in all the major Indian Ports. • • • • 60 . low cost. Low price. it can buy rock phosphate at a much cheaper rate as compared to other individual buyers. Flexibility in order acceptance. It can cater to any kind of order size according to the requirements of the customer.
It chose not to keep up to the growing demand. such as shipment cost. If this happens then MMTC will loose its business and may hence have to suffer losses. MMTC abruptly stopped the import of rock phosphate fearing that it will lose majority of its market share. other costs. WEAKNESS • Lack of proactive approach. etc will also be lower. There is a drastic change in the scenario which existed in 1991 and the present scenario. After decanalization of rock phosphate.Also. Since. proper contacts. MMTC has not been into the business of rock phosphate after 1991. Limited contact. MMTC has a lot of opportunities to have access to more markets in other countries and hence increase its profits and revenue. 61 . it no longer has full details. Many NGOs these days are inspiring farmers to use organic foods as fertilizers. • OPPORTUNITIES • With the growing demand of rock phosphate in India. THREATS • Shift to organic foods as fertilizer.
However. it is a favourable destination for importing rock phosphate with respect to India’s demand. So. the imports from Togo has also gone up remarkably even though its production isn’t very high. nothing concrete can be said about these three countries. therefore. So.CONCLUSION Keeping in mind. • Algeria is one country which has recently started exporting to India and that too in large quantities. all that we have analyzed so far. 62 . • Imports from Jordon. • Since. As a result. Egypt and Israel have experienced an alternate upward and downward shift. we can conclude the following: • The imports from Morocco have gone up tremendously over the years along with the fact that Morocco is one of the largest producers of rock phosphate. Togo is an excellent place to start with. it means that majority of Togo’s rock phosphate is exported to India. there is no harm in importing from these 3 countries. Algeria can also be taken into consideration.
India does not import from that country. this cannot be the only reason because India does import some other items from US. However. 63 . • With United States being the second largest producer of rock phosphate.• Even when China is the biggest producer of rock phosphate. its exports to India have gone down drastically. However. These were some of the conclusions which could be understood by the analysis done in this project. the large reserves of US cannot be ignored. it is necessary to continue this relationship for the benefit of our country. Reasons behind this have to be well understood to start the imports from the biggest producers of rock phosphate. Since India and China are on good terms with each other politically. One reason behind this can be that there is a huge distance gap between India and US.
we mean that MMTC should be present in all aspects of this business namely exploration. MMTC is the largest international trading company of India. If MMTC becomes an integrated player. By integrated player. It has a vast international network. 64 . then it can produce rock phosphate at a much cheaper rate which will be beneficial both for the company and for the economy of India. production and finally marketing of rock phosphate. However it does not produce rock phosphate. rock phosphate is an essential fertilizer in a agriculture dominated country like India. mining. Following are the strategies which can be adopted by MMTC: INTEGRATED PLAYER It would be highly fruitful for India as well as for the company to produce rock phosphate within our country.RECOMMENDATIONS Since. MMTC must start its imports as soon as possible.
in the report. it has a good marketing capability. we have seen that the production of rock phosphate is mainly in the regions of Rajasthan. INVESTMENT IN PRODUCTION PLANTS Previously. This can be done in the following ways: 1) Set up a plant 2) Acquire an already existing plant 3) Have a stake in the plant as a promoter or as a joint venture MMTC can think of setting up a plant in India or abroad on its own. it does not have any control over any other activities regarding rock phosphate. However. In India. Madhya Pradesh and Uttar Pradesh. Acquiring an already existing plant is a feasible option available to MMTC so that they can have a stake in the 65 . if it wants to set up a plant then it needs to make huge investments. MMTC can very easily make an investment in producing rock phosphate. However it will take a lot of time to set up a plant.Since MMTC is a trading company. It can raise money using the goodwill and its reputation as an internationally renowned trading company.
the latter are already bound by the order they 66 . a large number of small players came into the picture. MMTC can acquire 1-2 such players in this segment. This will ensure business in adverse times. The acquisition could be in India or in abroad. As far as fertilizers are concerned. Since they take advance payment from their buyers. MMTC can enter into joint ventures with companies in Morocco and Tunisia. LONG TERM CONTRACTS WITH BUYERS MMTC should try to go into long-term contracts with its buyers. After the decanalization of rock phosphate in India. These companies are high in the production of rock phosphate. It can give financial aid to an already existing company in the form of a joint venture. in their metal business. Also they have entered into joint ventures for the import of jewellery. This purpose can be achieved by MMTC if it becomes partner for an upcoming project by an existing player or be a partner to its expansion. MMTC can enter into contracts with their already existing reliable buyers in India itself. MMTC already has joint ventures with big names such as TATA steel.production activities. The third way to be in production is as that of a promoter or joint venture partners.
place. Once they enter into contract. 67 . it will benefit both the buyer as well as MMTC.
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Origin Criterion (see notes overleaf) 9. For Official Use 8. name. Marks and 7. address. Goods consigned to (Consignee’s name. Means of transport and route (as far as known)…………………… 5. description of goods 4. address. country)………………… 3. Goods consigned from (Exporter’s business. (Combined declaration and certificate) Issued in……………………………………… (country) (see notes overleaf) 2. Tariff 6. Number and date of invoice 72 . Gross weight or other quantity) 10.ANNEXURE III CERTIFICATE OF ORIGIN 1. country) Reference No. Number and Item numbers of kind of Number packages packages.
..11 OTHERS 27 0.. and that they comply with the origin requirements specified for goods exported to ………………………………………………..55 73 .11.. Place and date.. on the basis of control carried out hat the declaration by the exporter is correct. signature and stamp of certifying authority ANNEXURE IV FOREIGN EXCHANGE EARNINGS AND OUTGO EARNINGS OUTGO Rs. Place and date.. (importing country) ……………………………………………….. In Million $ Million EXPORTS 34342 758... Declaration by the exporter: The undersigned hereby declares that the above details and statements are correct.54 IMPORTS 184360 4072.... signature of the authorized signatory ………………………………………………………………….6 INTEREST 61 1..... In Million $ million Rs. that all the goods were produced in ……..35 OTHERS 25 0. (country) Certificate: It is hereby certified..
75 167 2389 2250 2000 1831 2166 HIGH (Rs.01 Source: Fertilizer Statistics 2006-2007.3 2337.7 2740 2700 2394 2599 74 .TOTAL 34369 759.1 764. Fertilizer Association of India ANNEXURE V MARKET PRICE DATA MONTH APRIL(2006) JULY(2006) AUGUST(2006) SEPTEMBER(2006) OCTOBER(2006) NOVEMBER (2006) DECEMBER(2006) JANUARY(2007) LOW (Rs.14 TOTAL 184446 4074.) 531.7 2700 2707.) 637.
com/ec-market/rock_phosphate. www. Fertilizer Association of India BIBLIOGRAPHY www. 43rd Edition.psranawat.com www.htm 75 .phosphatefertilizer.FEBRUARY(2007) MARCH(2007) 2013 2031.K.mmtclimited.org/non_metalic/rock.05 2600 2736 Source: Fertilizer Statistics 2006-2007.html http://www. by R.ec21.com http://www.com Custom Tariff of India (2007-08).Jain.elwataneya.
com/minerals/world-rock- phosphate-producers.indiandata.mapsofworld.usgs.html#1 1 http://fieo. http://minerals.com/import_procedures. http://www.pdf.org/origin. Practices and Procedures: By Belay Seyoum 76 . 52nd Edition.html Finance of International Trade in Gulf. By Ahmed AlSuwaidi Export-Import Theory. Fertilizer Statistics 2006-2007.gov/minerals/pubs/commodity/ph osphate_rock/mcs-2008-phosp.html http://www. the Fertilizer Association of India.
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