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THEORETICAL FRAMEWORK

INTRODUCTION TO FINANCIAL MANAGEMENT:

Finance in the modern business world is regarded as life and blood of a


business enterprise. Finance function has become so important that it has given birth
to financial management as a separate subject. Therefore, this subject is acquiring a
universal applicability.
Financial management is that managerial activity which is concerned with the
planning and controlling of the firm’s financial resources. As a separates activity or
discipline is of recent origin it was a branch of economics till 1890. Still today, it has
no unique body of knowledge of its own, and it draws heavily on economics for its
theoretical concepts.
The subjects of financial management are of immense interest to both
academicians and practicing managers. It is of great interest to academicians because
the subject is still certain area where controversies exist for which no unanimous
solutions have been reaching yet. Practicing managers are interested in this subject
because among the most crucial decisions of the firm’s are those which relate to
finance and un understandings of theory of financial management provides them with
conceptual and analytical insights to make decisions skillfully.
The modern thinking in financial management accords a far greater
importance to management in decision-making and formulation of policy. Financial
management occupies key position in top management and plays a dynamic role in
solving complex management problems. They are now responsible for shaping the
fortunes of the enterprise and are involved in allocation of capital.

DEFINITIONS:
“Financial Management is an area of financial division making, harmonizing
individual motives and enterprise goals”.
-Weston and Brigham
“Financial Management is the application of the planning and control
functions to the finance function”.
-Howard and Upon

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SCOPE OF FINANCE FUNCTIONS:
Three most important activities of a business firm are
 Finance
 Production
 Marketing
The firm secures capital it needs and employ in its activities which generates
returns on invested capital. A business firm is an entity that engages in activities to
perform the functions of finance, production, and Marketing.
The raising of capital funds and using them for generating returns and paying
returns to the supplies of funds is called the finance function of the firm. The main
function of the financial managers is to plan for analyzing and utilizing funds to make
the maximum contribution for the operation of the organization.
It realizes knowledge of the financial market from which the funds are drawn;
it realizes knowledge of how to make sound investment decisions and to simulate
efficient operations in the organizations. A large number of alternate choices involved
in financial decisions. The choices include the use of internal resources, external
funds, and long-term funds.

FUNCTIONS OF FINANCE:
 Investment decisions
 Working capital Management decisions
 Financing decisions
 Dividend policy decisions
 Liquidity decisions
Investment decisions (or) capital budgeting involve the decision of allocation
of capital or commitment of funds to long – term assets that would yield benefits in
the future. Two important aspects of the investment decision are:
 The evaluation of the prospective profitability of new investments.
 The measurement of a cut – off rate against that the prospective return of new
investment could be compared.

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Financial Decision is the important function to be performed by financial
manager. He must strive to obtain the best financing mix or the optimum capital
structure of the firm. The firm’s capital structure is considered to be optimum when
the market value of shares is maintained.
Dividend decision deals whether the firm should distribute all profits or retain
them or distribute a portion and retain the balance. The optimum dividend policy is
one that maximizes the market value of the firm’s shares.
Liquidity decision shows the current assets of the firms and its movement.
Investment in current assets affects the firm’s profitability, liquidity and risk. A
conflict exists between profitability and liquidity while managing current assets. In
order to ensure that neither insufficient nor unnecessary funds are invested in current
assets. The financial manager should develop sound technique.

OBJECTIVES OF FINANCIAL MANAGEMENT:

The financial management is generally concerned with procurement, allocation and


control of financial resources of a concern. The objectives can be-

1. To ensure regular and adequate supply of funds to the concern.


2. To ensure adequate returns to the shareholders which will depend upon the
earning capacity, market price of the share, expectations of the shareholders.
3. To ensure optimum funds utilization. Once the funds are procured, they should
be utilized in maximum possible way at least cost.
4. To ensure safety on investment, i.e, funds should be invested in safe ventures
so that adequate rate of return can be achieved.
5. To plan a sound capital structure-There should be sound and fair composition
of capital so that a balance is maintained between debt and equity capital.

THE CHANGING ROLE OF FINANCIAL MANAGEMENT:


Many things in the contemporary world, financial management has undergone
significant changes over the years. The financial management had a very limited role
in business enterprise. Financial manager is responsible only for maintaining financial
records, preparing reports of the company’s status, performance, and arranging funds
recorded by the company so that it would meet its obligations in time.

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Financial manager as a matter of act was regarded as specializes officer in the
company concerned only with administering sources of funds, he was called upon
only when the company experience the problem of shortage of funds. The
management relates the financial managers to locate the suitable sources of funds and
additional funds. The emphasis on decision-making has continued in recent years.
First there was been increased belief the sources of capital producer the required
accurate measurements of the cost of capital. Secondly, capital has been in short
supplies the old interest in the ways of raising funds. Thirdly, there has been a
continued managerial activity that has led to revealed interests in takeovers.
Fourthly, accelerated progress in transportation and communication has
brought the countries of the world close together. They in turn have simulated interest
in the international finance. Finding the firm’s appropriate role in the efforts, they
solve these problems, demanding on increasing the proportion of these items of
financial manager.

IMPORTANCE OF FINANCIAL MANAGEMENT:


Financial management is of greater importance in the present corporate world.
It is a science of money, which permits the authorities to go further.
The significance of financial management can be summarized as
 It assists in the assessment of financial needs of industry large or small and
indicates the internal and external resources for meeting them.
 It assesses the efficiency and effectiveness of the financial institution in
mobilizing individual or corporate savings. It also prescribes various means
for such mobilization of savings into desirable investment channels.
 It assists the management while investing the funds in profitable projects by
analyzing the viability of that project through capital budgeting techniques.
 It permits the management to safeguard against the interest of shareholder by
properly utilizing the funds procured from different sources and it also
regulates and controls the funds to get maximum use.

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IMPACT OF OTHER DESCIPLINES ON FINANCIAL
MANAGEMENT
FINANCIAL DECISIONAL AREAS:

1) INVESTMENT ANALYSIS
Support
PRIMARY DISCIPLINES
2) WORKING CAPITAL
1. ACCOUNTS
MANAGEMENT
2. MICRO ECONOMICS
3) SOURCES & COST OF
3. MICRO ECONOMICS
FUNDS

4) DIVIDEND POLICY

5) ANALYSIS OF RISKS &


RESULT IN
RETURNS

SHARE HOLDERS WEALTH MAXIMISATION

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INTRODUCTION TO SCRAP MANAGEMENT:
Scrap management is very important in an organization in order to have a
proper rotation of scrap disposal system and to comply with various regulatory on
disposal. The term scrap refers to the bi-product which is having no commercial or
very less commercial value when compared to main product or it can be an outcome
from various utilities placed in a factory and it includes normal waste generated in the
process of production.
Scrap generation, recording and disposal is a common responsibility of
production, engineering procurement and logistics. Scrap not handled properly may
result in financial losses and noncompliance of statutes.
The job of the financial manager is to ensure scrap generated is within
tolerable limits implies input out ratio of production is according to BOM certified by
quality and to ensure scrap yard is managed well and disposal is on time and statues
are complied with.
Although our discussion of Scrap management will focus on the finance
perspective, it is important to understand that how scrap is generated intricacies in
handling the same. Levels of scrap generation actually reflect the efficiency with
which production is made. Scrap management is vital to the success of virtually all
firms. In fact, Scrap management is the key to being a top player in many industries
today including both retailing and manufacturing because of its importance, managers
at all levels, and in all functional areas, are involved management.

Scrap:
Scrap is generated is mainly through the raw materials i.e.; raw materials are
brought to production site in plastic bags, chemicals required for the production were
carried in the tin barrels.
Scrap is categorized in two ways.
1. Type of Scrap
2. Commercial Categorization

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Scrap management:
Manufacturers do not intently produce waste; depending on the industry
manufacturing process scrap is produced. Depending upon the type of scrap produced
it may be recycled or sold as revenue generating product which is non-recyclable.
Sometimes Company has to pay for contracts for disposal of this scrap.
The true cost of waste is not simply the cost of discarded materials - it
encompasses inefficient use of raw materials, unnecessary use of energy and water,
faulty products, waste disposal of by-products, waste Treatment and wasted labor.
The actual cost of such waste for UK companies is typically 4 - 5% of turnover, and
can be as high as 10%.
Scrap management has become a complex area, legally, technically and
commercially. Thus many firms need to identify and contract one or more reputable,
licensed, specialist companies for the disposal of their waste, or discharging their
legal obligations.
A key development in waste management is the focus on preventing the
production of waste through waste minimization and the re-use of waste materials
through recycling. This links directly to procurement issues, where careful selection
of materials, suppliers, process redesign for disassembly and reverse logistics can all
reduce the amount of wastes produced or facilitate recycling and re-use.
After reading this guidance information it is intended that you:
1. Have an awareness of the broad range of environmental issues that might
impact your organization.
2. Have a broad understanding of the key aspects of waste management,
especially the waste management options of reduction, reuse, recycling and
disposal.
3. Can appreciate the financial and legislative importance of managing wastes in
your business.
4. Can identify potential areas within your business that you may be able to
reduce your wastage in production.
5. Can develop a waste disposal strategy for your organization.
6. Aware of the additional sources of guidance and Support that are available to
you.

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What is scrap?
Waste is a wide ranging term encompassing most unwanted materials, defined
by the Environmental Protection Act 1990. Waste includes any scrap material,
effluent or unwanted surplus substance or article that requires disposal because it is
broken, worn out, contaminated or otherwise spoiled. . Wastes are ‘those substances
or objects which fall out of the commercial cycle or chain of utility’.
Scrap is the waste which has no economic value or value of basic material
which can be recovered through recycling.
The Department of the Environment identifies four broad categories of
potential waste:
• Worn but functioning substances or objects that are still useable (albeit after repair)
for the purpose they were made.
• Substances or objects that can be put to immediate use otherwise than by a
specialized waste recovery establishment or undertaking for example ash from a
power station used as a raw material in building blocks.
• Degenerated substances or objects that can be put to use only by establishments or
undertakings specialized in waste recovery. These are always wastes even if
transferred for recovery for value for example contaminated solvents or scrap. Such
substances only cease to be waste when they have been recovered
• Substances or objects which the holder does not want and which he has to pay to
have taken away. If substances or objects are consigned to the process of waste
collection then they are waste but they may not be where they are fit for use in their
present form by another identified person.
Thus organizations may dispose of items of considerable residual value, from
production scrap materials to redundant plant and equipment, which may fall within
the legal definitions of waste and their control regimes.
The Environment Agency is the legal body in England that controls certain
types of waste – known as 'controlled wastes'. These include household, industrial and
commercial waste. Other wastes called 'no controlled' (agriculture, mines and
quarries) are not currently regulated in the same way. Certain wastes are classified as
‘hazardous’ – this is a broad term for a wide range of substances that may have
variable levels of risk. For instance, toxic substances that may cause cancer are
classed as hazardous.

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Fluorescent tubes or cathode ray tubes in televisions are also classed as
hazardous and pose little immediate threat but may cause long term damage over a
Period of time. The Environment Agency identifies waste as any substance or object
that has been discarded, is required to be discarded or is intended to be discarded.

Managing Scrap:
Materials that are re-used are recovered and then used again in their original
form require a controlled process of recovery where contamination and damage can
be minimized. An important element of a reuse strategy must be design for
disassembly and therefore eco design of products takes centre stage, along with the
recovery procedure. The return of products to the original manufacturer ‘product take
back’ to be disassembled is an important element of reverse logistics. Examples of
this include the take back of Kodak’s disposable camera; Canon’s toner cartridges and
Xerox’s photocopy machines. Another example of recycling is that of ‘waste
exchange’ where the firm producing the waste, who would normally have to pay to
have it disposed of, sells or gives it away to another organization, which subsequently
uses it in their own production processes.
Waste management, minimization, energy efficiency, source reduction and waste
exchange can be grouped under the heading of ‘eco-efficiency’. Eco-efficiency is a
catch-all term that appears to have been adopted to express the application of the
‘produce more from less’or ‘use less resources to produce the same amount’
philosophies. The UK Government’s Advisory Committee for Business and the
Environment state that eco-efficiency (along with environmental management
systems and standards) are a necessary requirement in achieving ‘sustainable
consumption’.
A wide range of support materials have been produced to help organizations to
understand and manage their wastes. This paper draws upon many of these and
readers are urged to view these resources directly and to contact the specific agencies
that are in place to support you.
Possible to develop individual strategies to reduce the amount of waste
generated in each category and to arrange to keep waste streams separated where
appropriate, to minimize the costs/maximize the returns on the disposal of

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uncontaminated wastes and to be free to determine the most appropriate disposal route
in each case.
Each operation will differ, but some general categories would include:

General refuse:
Such as the contents of office litter bins. Advantage can be taken of
manySmall-scale or local recovery/recycling programmers: for example, many
vending machine operators will recover polystyrene cups and there are schemes
(through suppliers or via charities) to recover and re-use printer cartridges. Where
possible use should be made of these but this may require the active commitment of
staff.

Paper and paper products:


All organizations produce large amounts of scrap paper, which can be
recycled. It is also possible to encourage the use of ‘both sides of the paper’, to cut
usage. Paper for recycling must be kept clean and dry; it can pose a fire hazard so
consideration needs to be given to safety; and different prices are available for
different grades: off cuts from an in-house print plant, for example, may need to be
kept separate from the daily newspapers. Again, the degree to which this is possible
depends on staff attitudes and the space available

Building/construction waste:
Disposal of this will usually be the responsibility of the contractor. However,
attention needs to be given to the possibility of hazards (especially asbestos),
opportunities for recovery (such as door panels, floorboards, fireplaces which all may
have some value) and the possibility of reusing materials, such as rubble, as hardcore
elsewhere on site.

Special wastes:
Every operation generates some waste that could be classed as special.
Admittedly, someone throwing a half-used bottle of Tipper, or a dead battery, into the
general waste stream is unlikely to attract the attention of the Environment Agency,
but, as a matter of principle, firms should attempt to recover as much of this as

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possible and treat it as Special Waste. Conversely, it is important not to let people
dump general waste into Special Waste containers - hospitals, for example, have been
found to be paying well over the odds for the controlled high temperature incineration
of clinical waste when a substantial proportion of the waste has in fact been coffee
cups and newspapers. There may be other categories.
The important point is to identify what types of waste you are generating, discover
ways of reducing the volumes (and particularly tonnages - merely keeping wastes dry
may have a significant impact on tonnage-based charges) and as far as possible keep
waste streams destined for different disposal routes separate.

Developing a waste management strategy:


A very good starting point is to use one of the Envirowise publications that have
process flow sheets, manuals and training material to facilitate in the development of
your waste management strategy
This next section examines each of these six stages and is based on the material
presented in the Envirowise publication GG414 ‘measuring to manage: the key to
reducing Scrap costs.

Step 1: Accounting for waste


The initial step is to identify how much waste your company is generating and the
costs involved.
• Order the Envirowise video - A Fresh Pair of Eyes: Identifying Waste Minimization
Opportunities (V217).
• Order Waste Wise - Increased Profits at Your Fingertips (IT313), which is an
interactive waste.
Minimization CD-ROM from Envirowise about reducing waste to save money.
• Undertake a simple walk around waste audit –looking at each key area and
identifying what
Wastes exist.
• Examine your utility and other receipts to estimate the costs of waste.
• There is also a free one day Fast Track visit where an advisor from Envirowise will
visit to help you get started.

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• A similar facility is often available from your local ‘green’ business club – look at
your local telephone directory or contact your local Business.

Step 2: Comparing your performance


Use industry guides (such as the Benchmarking guides from Envirowise),
trade association guidance and good practice examples to compare your performance
with others in your sector. Look at the environmental reports published by others in
your sector.

Step 3: Identify Waste Minimization Opportunities


Walk around the site looking for areas where waste is being generated and talk
to key personnel, especially those who operate each stage of the process. From this
practical information, develop a high level plan of ideas to take to senior
management.

Step 4: Commitment to action


When you have made your high level plan, you are ready to present your case
to senior management. Convince them of the potential cost benefits of reducing waste
and
Obtain their commitment to providing the necessary resources for implementing a
waste minimization Action Plan. Start building a team and holding brainstorming
sessions with staff to generate ideas for ways to improve performance and
competitiveness.
Order the following Envirowise publications:
• Waste Minimization Pays: Five business reasons for reducing waste.
• Saving Money through Waste Minimization: Teams and Champions.

Step 5: Taking action to reduce waste


Take your high level plan and turn it into an action plan. Start by identifying
obvious areas of waste reduction where immediate and substantial savings can be
achieved by implementing no cost and low-cost measures.
Order the following Envirowise Publications:
• Finding Hidden Profit - 200 Tips for Reducing Waste.

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• Cutting Costs by Reducing Waste: A self-help guide for growing businesses. Also
look for sector specific guides on particular themes, e.g. water, packaging, solvents, or
specific
Concerns of your industry. Use meters to obtain accurate data and ensure that they are
checked regularly. Implement good housekeeping measures, including a checklist, for
every area.

Step 6: Recognizing success and maintaining momentum


Return to your original assessment and consider your achievements. Feed
these back to staff and senior management. You now have the basis for continuous
improvement and can review your progress at regular intervals.

Top 10 Tips for managing your wastes and developing your waste
strategy:
1. Understand the legal implications of the waste produced in your organization by
identifying the specific legislation that affects you.
2. Look at your general environmental issues – what role does waste play in these?
3. Quantify and identify your waste. Where does it arise and how much does it cost?
Undertake a walk around audit and look at your bills. Using the waste hierarchy,
identify what currently happens to the waste as it arises.
4. Identify a waste management champion or team to drive things forward.
5. Produce an action plan for reducing your wastes.
6. Get commitment from senior management for the action plan.
7. Identify the possible disposal options where you cannot reduce or recycle.
8. Select your waste carriers carefully and make sure your Duty of Care
responsibilities are met.
9. Monitor and review your achievements.
10. Communicate your successes to your staff, senior managers and outside your
organization tointerested stakeholders.

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Generation of Scrap in the company:
Scrap generated in the various departments:

EHS:

Location Scrap Point of Origin

Effluent Treatment Plant Sludge Clarifier, UASBR

Effluent Treatment Plant Compost waste Compost beds

Effluent Treatment Plant Incinerator ash Incinerator

Packing Section:

Scrap Point of Origin

Return Product Packing Section

Damaged Barrels Packing Section

Damaged Cement bags Packing Section

Packaging material like LLDPE Packing Section


Polyliners, Gunny bags, Craft paper bags, cardboard

Scrap, packaging material ,MS scrap, Deal wood Packing Section

Rejected raw materials Packing Section

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ENGINEERING:

Scrap Point of Origin


Used lead acid batteries Fork lifters, fire hydrants, generators,
front end loader, scissors lift, fire alarm
system, UPS...
Used bags(Cement, bed material bio fuel, Packing
bags)
Used Electric Leftovers
cables(Aluminium&Copper)
Waste Oils Transformer
Asbestos Damaged/Replaced roofing, Old
insulation
Cinder 3T boiler
Used containers ,filters, gaskets Packing
All metal scrap, wood, plywood, glass
doors
Coal ash ESP of boiler

PRODUCTION:

Location Scrap Point of Origin


Expeller Palm seeds and wastage Raw material addition

Solvent Extraction Waste Palm seeds,Sludge Soap oil plant


Plant
Refineries Waste water,Sludge(Chemical Oil Refineries
and Biological)
Vanaspati Empty fruit bunches Vanaspati production plant

Packing Empty raw material bags, Packing


Carboys, drums, polythine
bags, Jute gunnies

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HR&A:

Location Scrap Point of Origin

Canteen Food waste Cooking


Canteen Used Uniform, Shoes HR

Canteen Vegetable waste Cutting

Accounting of scrap:
Scrap sales are denoted with the help of sale Patti. Also from the trail balance
sheet we get the scrap sales. After getting the tendering document from the purchase
department then finance department start the procedure of getting software online co-
coordinating departments online according to SOP (Standard Operating Procedures)
then CSL department enters the quantity and rate automatically gets updated and
generates an invoice and this finance department takes this invoice and sends.

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Tendering of Scrap Contracts:
 At First, Process has to identify the scrap generating from different production
departments.
 Then classify these scrap items and sending these scrap quantity details to the
stores departments.
 After this, identify the suitable buyer by the stores department and inviting
quotations from the buyers separately.
 Finally, finalizing the highest quotation received by the buyers and this is to be
approved by the director of 3F Industries Ltd.

Tendering of annual scrap contracts:


After the scrap being identified and categorized according to commercial wise,
then stores department informs the finance department. After getting the rate of
approval from the site director then they inform the purchase department. Then the
purchase department realizes the value of the scrap and gives advertisement in the
newspapers. Tenders file their tendering documents as specified by the company and
finance department gives the value of tax according to the norms and along with the
tender document EMD (Earnest Money Deposit) should be deposited by the vendors.
After realizing the amount by Finance department their tenders are valued. Then the
purchase department analyzes the tenders specified by different vendors and prepares
a document as to which scrap should be issued to which vendor and it is submitted to
the director, through his approval scrap sale letter is issued to the particular vendors,
then vendors who received contracts should deposit some security amount to the
company in the form of drafts. After realization of this amount by Finance department
then only the material is awarded to the vendors. Vendors who don’t get the contracts
get their EMD deposit as soon as their contract is rejected by director. There is
healthy competition between the vendors and majority of them were local vendors
only.

Tendering of Capital Scrap Contracts:


Capital scrap consists of fixed assets items in balance sheets. So tendering of
this capital scrap involves a lot of process. This process is named as ‘Right of
approval business’, this is online process. Examples of these capita scrap were

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Furniture, Air conditioner, Computer etc. Capital scrap is identified with the life time
of asset or due to technology replacement. Sometimes after completion of lifetime for
asset they are being used because of its effectiveness. Once it is identified heads of the
User department and Finance department along with the Site director has to approve
it. After approval then document is sent to Head-Office , then GMS Finance Manager
approves and forwards it to Finance director .After approval from the Finance
Director then document is sent back to the branch site, then tender is posted in the
Papers and the same process done for annual scrap is repeated over here.

Scrap disposal:
Disposal of scrap is primary issue to any company because it involves the
environmental issues as well as safety issues. Non hazardous doesn’t much involve
these issues but it’s very much concerned with hazardous scrap. Disposal of non-
hazardous scrap is done through the tenders. Disposal of hazardous scrap is of three
types:
1. Recycling
2. Money paid by company to vendors for this scrap disposal
3. Money paid by Vendors.

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Coming to recycling, among Scrap present only 5% of scrap was recycled in this
plant. The recycled scrap items were:
1. Bio-hazardous waste
2. Waste water
After processing the waste was sent to ETP, this ETP plant separates sludge,
dust from the waste into solid waste and liquid waste. This solid waste was treated as
manure to the plants and liquid waste i.e.; water is also used for treatment for plants.
Scrap like asbestos, chemicals was disposed by paying respective amount for that
scrap to the vendor who is certified with a pollution control certificate by he
government for the specified regions. Present Vendor for asbestos for GSK plant
Rajahmundry is Ramki and also earth sense Recycle (Hyderabad).
Among the hazardous waste used oils, batteries were sold to certified vendors only
like in case of batteries they sold scrap batteries to Exide and the used oils were sold
to vendors who are certified by the government.

Regulatory requirements for storage and disposal of scrap:


Hazardous Wastes (Management, Handling and Transboundary Movement)
Rules, 2008 have been notified for proper management and handling of hazardous
wastes including e-waste.
As per these Rules, e-waste recycling can be undertaken only in facilities
authorized and registered with State Pollution Control Boards/Pollution Control
Committees. Waste generated is required to be sent or sold only to a registered or
authorized recycler or re-processor having environmentally sound facilities.

Policies and Strategies by government of India:


 Policy Statement on Abatement of Pollution – 1992
 National Environment Policy – 2006
 Charter on Corporate Responsibility for Environment Protection (CREP)
 Registration Scheme for Recyclers/Re-processors and actual users of
hazardous wastes
 Regulatory Frame Work for wastes
 Hazardous Wastes (M&H) Rules, 1989,200,2003
 Bio-medical Wastes (M&H), Rules 1

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RESEARCH METHODOLOGY

TITLE OF THE STUDY:


A STUDY ON SCRAP MANAGEMENT
AT
FOODS FATS FERTILIZERS LIMITED, TADEPALLIGUDEM.

NEED FOR THE STUDY:

Manufacturers do not intently produce waste; depending on the industry


manufacturing process scrap is produced. Depending upon the type of scrap produced
it may be recycled or sold as revenue generating product which is non-recyclable.
Sometimes Company has to pay for contracts for disposal of this scrap.
In fact, Scrap management is the key to being a top player in many industries today
including both retailing and manufacturing because of its importance, managers at all
levels, and in all functional areas, are involved management.

SCOPE OF THE STUDY:

Scrap management is very important in an organization in order to have a


proper rotation of scrap disposal system and to comply with various regulatory on
disposal. The term scrap refers to the bi-product which is having no commercial or
very less commercial value when compared to main product or it can be an outcome
from various utilities placed in a factory and it includes normal waste generated in the
process of production.
Scrap generation, recording and disposal are a common responsibility of production,
engineering procurement and logistics. Scrap not handled properly may result in
financial losses and non-compliance of statutes.

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OBJECTIVES OF THE STUDY:

 To study Scrap management practices of Foods Facts Fertilizers Ltd


Company.
 To analyze Scrap generation types in Foods Facts Fertilizers Ltd Company.
 To analyze the Production Units and scrap items in Foods Facts Fertilizers Ltd
Company.
 To analyze the Scrap generation percentages for different years in Foods Facts
Fertilizers Ltd Company.
 To give necessary suggestions, if any.

METHODOLOGY OF THE STUDY:

DATA COLLECTION:
Primary Data:
Primary data is the first hand information collected, compiled and published
by Organization for some purpose. They are most original data in character and have
not undergone any sort of processing or any other manipulation.
It has been collected through discussion and interaction with employees, executives
from the Finance department, CSL department, Purchase department, OHC
department and EHS department.

Secondary Data:
Secondary data is the data which is already collected by someone
(Organization) for some purpose and are available for the present study. It is collected
from:
 Company’s records
 Files and documents relating to scrap management and sales
 Books, Journals, Websites.

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LIMITATIONS OF THE STUDY:

 The period of the study i.e. 8 weeks is not enough to conduct detailed study of
the project.

 Due to lack of resources it is not possible to collect the entire information in


all area.

 Due to business secrecy only limited information is made available which is


insufficient for an elaborated study.

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INDUSTRY PROFILE

The power and strength of the company depends on how strong and secure it
is on the food front. In trying to achieve this goal, the oil seed scenario in the country
has undergone a substantial charge during the past few years. The country is moving
away from a situation of scarcity and huge import bills to one of self-sufficiency and
possibly even exporting of vegetable oils.
India ranks high among the oil seeds producing countries in the world with
perhaps the largest number of commercial varieties of oil seeds such as ground nut,
rape and mustard, sesame, kardi seed, nigerseed, soya beans, sunflower seeds, linseed,
castor seed, copra, cotton seed and a number of minor seeds of tree origin oil seeds
takes their place, as the second largest agricultural crop, next only to food grains. The
cultivation of oil seeds in India is spread over various states with a distinct regional
pattern covering about 19 to 20 million hectares, which accounts for about 11 percent
of the total land under cultivation in the country.
In India where fats of animal origin such as fish oil are seldom used as
cooking media. The term “vegetable oils” is used as a synonym for “edible oil”.
However it needs to be recommended that there are, on the one hand vegetables oils
such as castor, groundnut and coconut oils, which are finding increasing. Industrial
applications such as in cosmetics, soap making etc… edible oils are a major source of
nutrition for the people in the country. Oil cakes that are by-products of the oil
extraction process are an important source of animal nutrition. They can also be
processed in to protein rich edibles.
India has a highly developed oil based industry employing more than
15million persons. However it remains essentially food oil. Industry accounts for as
much as 83% of the total supply of vegetable oil in the country. The major non-food
users of oil are soap, paint and vanish industries. Faced with major demand for their
conventional products, FMCG majors have been planning their hopes on branded
staple foods to deliver rapid top line extension. Negative growth in the oils and fats
business has been instruments in restraining top line growth for the FMCG.

23
PRODUCTS:
Broadly edible oil or fat products can be categorized as fallows.
Vegetable refined oil
Hydrogenated oil
Bakery fats
Expelled groundnut oil of good quality can be directly consumed. It can also
be refined to have higher purity other oils such as soya has to be refined to make them
edible.
Vanaspati is obtained by hydrogenation of edible oil. It is used as a suitable
for ghee by some segments of sources and also for making sweets, snacks including
biscuits, cakes etc…

CONSUMER AWARENESS AND PENETRATION:


Among FMCG products, edible oils has one of the highest penetration of 98%
in urban as well as in rural areas. Penetration of these entire 3-cooking medium is
very high at 99.8% in urban areas as well as rural areas.
Vanaspati penetration averages 17.4% at all India level, significantly higher at
28.8% in urban areas and 13% in rural areas. It is highest in medium size towns of
0.5-1mm population of 34.3% in metros and towns.
In metros refined edible oil is a relatively popular cooking medium. The per
capita vegetables oil consumption in the country was 7.6kg p.a in 1997-98,
significantly lower than 8.5 kg p.a during 1996-97.

CONSUMER HABITS AND PRACTICES:


Edible oil is consumed in almost every household in one form or the other and
Indian food habits show a strong preference for fried vegetables and several other
snacks.
Traditionally the north and west have been milk surplus regions in the country. This
has led to surplus ghee production in these areas and higher ghee consumption. The
lower ends of the society, which cannot afford ghee, consume vanaspati.
India accounts for 9.3% of world oil seed production. It has the world’s fourth largest
edible oil economy. In 1999, India ranked as the world’s largest importer of edible

24
oils, displacing China. The bulk of edible oil, India imports under the open general
license is RBD palm oil of Malaysian and Indonesian origin.
India is one of the world’s leading producer of oil seeds and oil, contributing
to 9.3% world oil seed production. It produces the largest number of commercial
varieties of oil seeds over nearly 28.4 million hectares of land.
The major edible oils produced in India are ground nut, rapeseed, Soya, cottonseed,
sesame seed, castor seed, sunflower seed, etc. Groundnut was the most widely
consumed and traded edible oil determining edible oil economics, but is now being
displaced by others. India is the world’s second largest producer of groundnut, next
only to china. The government has set up a technology mission on oil seeds, to
increase production of other oil seeds and oil and to reduce dependence on imports.
The strategies followed were to
 Increase productivity with better inputs and practices
 Increase area under oil seed crop
 Encourage winter oil seed crops.

IMPORT OF EDIBLE OILS:


It has not been done away completely, but whenever import is now made is
largely a measure of precaution than out of any composition from 1988-89. The edible
oil imports have been drastically cut down in 1996-97, import total is 3 lakh tones
valued at Rs 250 crores and during the next 2 years it is expected around the same
level. The present import is significantly compared 19.45-lakh tones imported value at
Rs 969 crore in 1997-98.
India has signed a memorandum of understanding with Malaysia for an annual import
of two lakh tones of palm oil for two years. Besides the country is to receive 50,000
tones of Soya been oil from the U.S. as a gift for meeting social objectives. Although
in the context of exceptionally large oil seeds production during the current year, there
is hardly any need for import, the country may avail the option to import for building
a buffer stock to meet the needs of public distribution system during the period.

EXPORT:
Export of oil, oil seed and minor oils are expected to gather momentum
following the announcement regarding the full float of rupee on the trade account,

25
according to the sources in the trade. The present export scenario shows that the trade
is in a beyond mood of achieving a formidable target, with increased export earnings
in the current year. This is basically enacts from bumper oil seeds output of 215 lakh
tones in the offing. This expectation of a bumper crop, moreover has compelled the
union ministry of commerce to raise the current years export target for the oil seeds
from Rs 1250 crore over Rs 1300 crore.
According to the estimates made by the central coordination committee, the
exports of oil mills, oil seeds and minor oils during the current year would be more
than 3.3 lakh tones with a value of Rs 1362 crore as against 30 lakhs tones with the
value of Rs 1043 crore achieved during the year 1996-97 the export of oil mills, oil
seeds and minor oil during the period April 1996 to Jan 1998 stood at over 24 lakhs
tones valued at more than Rs 1000 crores.

CUSTOMER SATISFACTION:
Satisfaction is a person’s feeling of pleasure or disappointment resulting from
comparing a products perceived performance in relation to his or her expectation.
As this definition makes clear satisfaction is a function of perceived
performance and expectations. If the performance falls short of expectation, the
customer is dissatisfied. If the performance matches the expectations, the customer is
satisfied or delighted.

Oil:
Oil is a substance that is in a viscous liquid state ("oily") at ambient
temperatures or slightly warmer, and is both hydrophobic (immiscible with water) and
lipophilic (miscible with other oils, literally). This general definition includes
compound classes with otherwise unrelated chemical structures, properties, and uses,
including vegetable oils, petrochemical oils, and volatile essential oils. Oil is a non
polar substance. The word "oil" is used for any substance that does not mix with water
and has a greasy feel, such as petroleum (or crude oil) and heating oil, regardless of its
chemical structure.

26
Edible Oil:
Edible or cooking oil is fat of plant, animal or microbial origin, which is liquid
at room temperature and is suitable for food use. Some of the many different kinds of
edible vegetable oils include: olive oil, palm oil, soybean oil, canola oil, pumpkin
seed oil, corn oil, sunflower oil, safflower oil, peanut oil, grape seed oil, sesame oil,
argan oil and rice bran oil. Many other kinds of vegetable oils are also used for
cooking. The generic term "vegetable oil" when used to label a cooking oil product
refers to a blend of a variety of oils often based on palm, corn, soybean or sunflower
oils. Edible oil of animal origin is e.g. fish oil. Microbial oil is also encompassed.

Fats:
Fats consist of a wide group of compounds that are generally soluble in
organic solvents and largely insoluble in water. Chemically, fats are generally
trimesters of glycerol and fatty acids. Fats may be either solid or liquid at normal
room temperature, depending on their structure and composition.
Although the words "oils", "fats", and "lipids" are all used to refer to fats,
"oils" is usually used to refer to fats that are liquids at normal room temperature,
while "fats" is usually used to refer to lipids which are solids at normal room
temperature. "Lipids" is used to refer to both liquid and solid fats, along with other
related substances. Fats form a category of lipid, distinguished from other lipids by
their chemical structure and physical properties. This category of molecules is
important for many forms of life, serving both structural and metabolic functions.
They are an important part of the diet of most heterotrophs (including humans). Fats
or lipids are broken down in the body by enzymes called lipases produced in the
pancreas.

Shortening:
Shortening is a fat used in food preparation, especially baked goods, and is so
called because it promotes a "short" or crumbly texture (as in shortbread). The term
"shortening" can be used more broadly to apply to any fat that is used for baking and
which is solid at room temperature, such as lard, but as used in recipes it refers to a
hydrogenated vegetable oil that is solid at room temperature. Shortening generally has

27
a higher smoke point than butter and margarine, and it may have 100% fat content,
compared to about 80% for butter and margarine.
Edible oil consumption since last few years and this is impacting the oilseeds
cropping pattern, imports, exports and inter-state trade. Apart from consumption
pattern, the production is also impacted by change in weather (including monsoon
rains), production cost, minimum support price declared by government every year
and global demand & supply scenario. It is necessary to discuss each point separately
to understand how edible oil scene is changing in the country.

Demand / Consumption:
India’s consumption of edible oil has risen to around 17.5 million metric ton
(mmt) in 2015-16 from 11.6 mmt in 2003-04, compounded annual growth rate
(CAGR) of 4.6% during the period under consideration, according to data available
from the Solvent Extractors Association of India (SEA).
With growing population, India’s demand for edible oil has been rising
consistently with CAGR of 2.7% in the last three years and around 5.5% in the last
five years. Apart from population growth, another significant factor that is impacting
edible oil demand is the increase in disposable income amongst the growing middle
class. This has led to change in the lifestyle, which has increased the consumption of
edible oils.
The growth in consumption may have slowed in the last couple of years due to
slowing economy, but it is not likely that the consumption may stabilize at any level.
Even with current 3-year CAGR of 2.7%, the consumption is likely to cross 21 mmt
by 2019-20. With economic growth expected to improve, the demand may be even
more than current CAGR. A modest CAGR expectation of 4% by SEA shows that the
demand is likely to touch 23 mmt by 2019-2020.

Consumption Pattern:
The major edible oilseeds that India cultivates are groundnut, mustard or
rapeseed, inversed, safflower, sesame seed, soybean and sunflower. Apart from this,
the country also consumes edible oils like cottonseed oil, coconut oil and rice bran oil,
which comes from processing of cotton, copra and rice bran respectively. Palm is oil

28
that is consumed, but it is not cultivated in the country, rather it is imported. Out of
these edible oils, major consumption is of palm, soya and mustard.
Four western India states of Gujarat, Rajasthan, Maharashtra and Madhya
Pradesh, consume one- third of total edible oil consumption in the country. As far as
preference for edible oil is concerned, there has been marked switch from groundnut
oil to cottonseed oil, soybean oil and sunflower oil in these four states. This change
could be attributed to reasons like production cost, availability and other options
available to growers which would increase their income.
In case of groundnut, despite CAGR of close to 21% in minimum support
price in last three years, the production has been falling due to erratic monsoon and
higher production cost compared to options of cotton and soya available to growers.
The production of groundnut has been falling by average 8% since last five years
leading to rise in oil prices. The demand for groundnut for direct human consumption
has increased immensely. This has led to less groundnut being available for the oil
crushing industry, leading to diminishing supply of groundnut oil.
The growth in consumption is also because of availability of palm oil through
imports. Palm oil, being cheapest of all, is widely used for commercial purpose and
by class of people who cannot afford higher priced groundnut, cotton, soy or mustard
oils. Apart from soy and palm, the consumption of cottonseed is also on the rise as the
crop offers higher returns in domestic as well as international markets due to huge
demand from countries like China.

Production:
Despite various incentives offered by government there has not been adequate
growth in oilseeds production. In fact, according to figures available from SEA, the
production of oilseeds has grown marginally by close to 2% from 2003-04 to 2012-
13. As far as production of edible oils from oilseeds is concerned it has shown a
negative growth of 0.6% during the nine-year period from 2003-04 to 2015-16 as
against CAGR of 4.6% in demand / consumption of edible oils. This has led to an
increasing dependence on imports to make up for the shortfall between demand and
supply.

29
One of the major factors that have contributed to fall in production of oil is
shift from crop with higher oil recovery to crop with lower oil recovery. Crops like
groundnut and sunflower has oil recovery ratio of 40% and 30% respectively; while
cottonseed and soybean has oil recovery ratio of 11.5% and 17% only. Surprisingly,
government’s measure to raise minimum support price (MSP) in last few years have
also not yielded desired results. MSP of various oilseeds have risen by 11-21%
compounded annually over the last three years. This growth has been in the range of
7-19% if five-year period is considered from 2007-2008 to 2015-2016.
Within edible oil basket, the production has shifted from groundnut and
sunflower to soybean and mustard. Not surprisingly, demand is the major factor
which is causing this shift in production pattern. Apart from the demand, other factors
like production cost and weather uncertainty have also played their part.

Imports:
India is the top importer of edible oil as its demand far exceeds availability
from domestic sources. The gap between demand and production of oil is widening
and this will continue in the foreseeable future. During oil year 2015 -2016, about
60% of India’s edible oil consumption will be met by imports. Amongst major edible
oils imported, share of palm oil is about 75% because of its abundant and relatively
cheaper supply from nearby origins like Malaysia and Indonesia. Edible oil imports
have grown by around CAGR of 7% during last three years and by 16% in last five
years. From November 2015 to July 2016 in the current oil marketing year, edible oil
imports have risen by 10% to 7.8 million tonne from 7.1 million tonne in the
corresponding period of last year.
The import basket has also seen changes in the last few years. While the share
of refined oil has increased; the share of crude oil is falling; though it still remains at
77%. Similarly, the palm oil imports share has risen; while that of soft oil has fallen.
Reduction in duty difference between crude and refined palmolein and inverted duty
structure by palm oil exporting countries has led to higher imports of refined oil in
India; thereby increasing share of refined oil as compared to crude oil, the SEA said in
a recent statement. According to a report by India Rating, Indian edible oil industry is
set to attract fresh capital investment of Rs 450 crore in the financial year 2016 -17 as
compared to Rs 100.7 crore in the previous financial year and Rs 516 crore in 2015-

30
16. Large producers including Liberty Oil Mills (LOM), Haryana Oils & Soya Ltd
(HOSL) and Rasoya Proteins (RPL) have already lined up investment plans, market
leader Ruchi Soya Industries has focused on consolidation in its business with
increased focus on brand promotion.
“There is requirement of higher working capital for refiners especially on
account of inventory and receivables. This is because, refining unlike trading requires
companies to stock inventory for a higher period (especially raw materials and
finished products). Receivable days are also expected to increase given most players
would be in the process of trying to expand their reach (for both branded and
unbranded products) and would be required to extend additional credit period to their
distributors/customers,” said the report.
RPL, for example, embarked on investment of Rs 400 crore for three years on
capacity expansion of its manufacturing units across Maharashtra.
“With an investment of Rs 400 crore we are planning to expand edible oil and
other business in agri sector. For the first time, we are entering into branded rice
segment with non-basmati rice “Rasoya” brand sale. Also, we are exploring
possibility to set up bran processing unit to produce rice bran oil with raw material
procured from our own mill,” said Prashant Duchakke, Executive Director, RPL.
In addition to set a footprint in rice bran oil, RPL proposes to set up a plant for
manufacturing ethanol from maize and other agro produce due to potential of
increasing demand of the green fuel going forward under the mandatory blending with
petrol, RPL is also looking to set up a large scale rice mill unit for processing of
paddy. Plans are underway to set up two tur dal processing units in Maharashtra to
enter into branded oil segment. Meanwhile, with the 2.5% raised in import duty on
refined oil to 10%, the duty differential between crude and refined oil works out to
7.5%.
The revised import duty structure has widened the price differential between
the landed cost of crude edible oil and refined edible oils once again making refinery
operations economically viable.
Margins for Indian veg oil refineries have improved in the last three months.
According to industry estimates, refineries generate profits of Rs 2-3 a kg on refining
CPO currently from around Re 1 loss few months ago. Consequently, refining units
have increased import of crude palm oil (CPO). In fact, import of CPO in April 2014
shot up to contribute 90% as compared to 76% in January when refinery margins were

31
in contraction. The trend is likely to continue in future as well. Data compiled by the
apex trade body the Solvent Extractors’ Association (SEA) showed India’s veg oil
import 832,760 tonnes, 27% rise from April 2013 and 8% decline from January this
year.
B V Mehta, executive director of SEA, had earlier said, "There is a difference
between Indian and global prices. So, import of crude oil is attractive. This has
affected crushing." Meanwhile, India’s veg oil consumption for kitchen is likely to
increase to 18.1 million tonnes for the oil year 2016-17 (November–October) as
compared to 17.4 million tonnes in 2015-16 of which import share to remain at 65%
in the current year versus 61% in the previous year.

Edible oil scenario in India (million tones):

Particulars 2012-13 2013-14 2014-15 2015-16 2016-17


Oilseed production 32.9 35.7 36.3 36.8 38
Oilseeds crushed 25.1 29.1 28.9 29.2 29.4
Crushed (%) 76.3 81.7 79.4 79.3 77.6
Edible oil production 7.8 8.5 8.1 7.5 7.6
Imports 9.2 8.7 10.1 10.7 11.8
Total supplies 17 17.2 18.2 18.1 19.4
Domestic 15.2 15.7 16.7 17.4 18.1
consumption
Import share 60.8 55.2 60.5 61.2 65.3

32
COMPANY PROFILE

3F industries Ltd, Tadepalligudem is a family owned Organization. It is well


known as “Foods Fats Fertilizers Ltd”. But the West Godavari farmers call it is a
“Tavudu Factory”. This organization is professionally carrying the business activity
by the Goenka family. It is having branches in Chennai, Bombay, Hyderabad,
Kakinada, Calcutta and Baroda.
The journey began with one plant in Tadepalligudem in 1962 and today
Foods Fats and Fertilizers Ltd has matured into a conglomeration of 20 industrial
units spread over 40 acres constantly buzzing with activity and providing employment
to over 630 persons.

Mission:

Safety and quality are wings of our success.

Vision:

To be number one edible oils and specialty Fats Company in the country
targeting to reach 1000 crore people by 2015.

Philosophy of the organization:

The philosophy of the organization 3F Industries is “servicing the society


through the industry”.

Objectives of the 3F Industries:


The main objectives of the organization are:
a) To serve the society through the success in the oil output.
b) The objectives towards organization are:
i) Concern
ii) Commitment
iii) Integrity
iv) Quality
v) To make Food Fats and Fertilizers are business oil through a focus
on satisfying the integrated need of international holders.
33
3F industries have completed 45 years of existence where it has seen lots of ups and
downs. As the company has incorporated its name as 3F industries Ltd, it has given
3F as the brand name to all the products it produces.
The wheel of the fortune has turned a full circle for Mr. B.K.Goenka, the
architect of 3F Industries Ltd. Burma the Goenka family established and respected in
industry and trade.

A NEW ERA BEGINS:


In collaboration with M/S Yoshino Seisakusho Company Ltd, a well-known
engineering house in Japan it is a unique technology for refining high FFA. Rice bran
oil to induce large production of rice bran oil by providing diversified outlets and
better realization to the solvent extraction plants to achieve the potential production of
0.6 million tonnes from the present 0.25 million tones and almost nothing in 1960.

MULTIFARIOUS PROGRESS:
Starting with a solvent extraction plant in 1962. The units have continuously
increased its production capacity year after year.

VARIOUS PLANTS IN 3F INDUSTRIES LTD:


Solvent Extraction:
(Lurgi, West Germany)
Installed and commissioned in 1962 with production capacity 2400 tones pa.
This plant process exclusively for rice bran. Rice bran is tempered and palletized by
the use of hexane, the oil in the bran is extracted. The deoiled bran thus obtained is
packed for export. According to the quality of the oil is extracted is used for edible
and non-edible purposes.

Solvent extraction Plant II:


(Desment, Belgium, India)
Installed and commission in 1972 production capacity 36000 tones PA
process. In thus plant is similar to plant-I however this plant is equipped with
preparatory

34
Solvent- extraction plant III:
Installed and commissioned in 1983 production capacity 45,000 tones pa.
(Fabricated and installed by engineering division of 3F Industries Ltd). This plant is
also versatile to process various seeds oiled cakes and kernels. It is designed,
fabricated by 3F Industries Ltd, engineering division shortcoming of the other plant.
Its uniqueness is the incorporation of minimizes the Hexane loss and facility for low
temperature extraction.

Refinery:
Installed and commissioned in 1965 production capacity 4500 tones pa. Our
refinery is equipped with both batch and continuous neutralizes. Refining process
consists of benumbing, caustic neutralization, Bleaching and deodorization.
Deorderdarised oil is passed through polishing filters and sent to packing section.

Solvent extraction plant (IV):


(Fabricated and installed by oil ex India and their engineering division)
It was installed and commissioned in 1985 with a production capacity of
45000 tonnes per annum. These four extraction plants provide variability of operation
in oil seeds and oil cakes and at the same time has advantages in marketing. The
plants have facilities to process a wide varieties of oil seeds, oil cakes like rice bran,
Soya been, sunflower, ground nut, rape seed, seasame, mangosal, Niger etc.
Due to non-availability of sufficient bran and export-import policies of Indian
government, forced the company to stop two solvent plants.

Fat Splitting plant:


Installed and commissioned in 1967 into a production capacity of 4500 tones
pa. Oil consists of fatty acids and glycerin. It can be separated from the oil by high
pressure splitting under high pressure and temperature, reaction taxes place, slitting
the oil into crude fatty acid and sweet water, which is the dilute from the glycerin, is
obtained.

35
Glycerin plant:
UNIT NO: 1 installed and commissioned in 1967 with a production capacity
of 300 tonnes per annum. Sweet water obtains from the fat splitting plant is set to
multi effect vacuum evaporators, where it is evaporated into crude glycerin. The crude
glycerin is further concentrated, deodorized and bleached to yield refined glycerin.

Hydrogenation plant:
UNIT NO: 1 commissioned in 1979, UNIT NO 2 in 1982 into a production
capacity of 6000 tonnes per annum. Rice bran oil bounds in unsaturated fatty acids to
render this oil suitable for making good quality soaps it has to be hydrogenated for
increasing its melting point. Hydrogenated plants consists of cell house, compressor
room and hydrogenation auto claves. This oil is hydrogenated under high temperature
and pressure using a catalyst. To obtain better products for premium soaps this
hydrogenated rice bran oil is split and distilled to give hardened distilled fatty acid.

Physical Refinery:
Installed in 1986, into production capacityof 9000 tonnes per anum. This is
fabricated by the engineering division of 3F Industries Ltd. The conventional process
of refining consists of specifying the free fatty acid in the oil by the use of an alka. In
physical refining the free fatty acid is directly distilled out under high vacuum and
temperature.

Waste oil recovery plant:


Installed and commissioned in 1986. In this plant waste oil from present
bleaching earth and spent nickel catalyst is recovered.

Vanaspati Shortening:
Production of vanaspati shortening high quality bakery fats, margarine from
refined oils fractionation.
This division produces high quality olives and steering from various edible
fats for use in manufacture of chocolate confectionery and cosmetics leading
manufacturers this yields of activity all over the world are their consumers.

36
“The potential of a seed is not recognized, until one fine day we see it standing
strong, majestic and gigantic as a tree…So true. It’s the tree that captures our attention
and not the seed from which it sprouts!”
Yet, we will fail not to recall the modest start of the 3F group with Foods Fats
& Fertilizers Ltd. It’s a saga of 45 years and the Vision of Mr. B.K Goenka
(Chairman and Managing Director) that has made the 3F group a conglomerate of 20
diversified industrial units.
Starting with edible oil extraction and refining at Food Fats and Fertilizers Ltd
we branched out into multifarious vistas vis-a- vis oil palm cultivation, manufacture
of edible oils and its by-products, bakery shortenings and margarine, specialty fats,
commodity trading, garments, power, etc. Notably, we have emerged as one of the
largest “Bakery fat & Margarine” manufacturers in India and “World leaders in
Specialty fats ( CBS ) Technology.”
With the committed team enterprise of over 1000 employees, the 3F group
steered past the Indian landscape to expand overseas. Our network and goodwill has
been vibrantly growing in countries abroad ever since.

3F INDUSTRIES LIMITEDSpecialty Fats:


Celebrations are never complete without confectioneries. And confectioneries
are incomplete without a kiss of Specialty Fats. The 3F Group has been a silent
partner in sweet moments. Obscure, hidden and yet adding flavor you have relished.
Over 30 years starting from 1975 we have grown hand in hand with the
confectionery industry providing her with exotic fats extracted from Shea nuts, Sal
seeds, Kokum kernel, Mango kernel and Illipe. These products have been tailor-made
to suit the needs of various confectioners. FFF Ltd. Today one of the largest sources
of specialty fats in the world.
FFF Ltd. pioneered in India, the process of both dry fractionation and solvent
fractionation through in-house development of the process technology. We
manufacture world-class Sal, Mango & Shea stearine using modern solvent
fractionation techniques. We also have the capability to produce Illipe & kokum fats
and high quality Palm Mid Fraction (IV-33). These products find extensive
application in the manufacture of cocoa butter equivalents (CBE), which are used in
the chocolate industry. Tailor-made CBEs have functional properties similar to cocoa

37
butter and are far more economical. In combination with cocoa butter it standardizes
product quality and enhances product shelf life. This is made possible by use of
special types of CBE's known as Cocoa Butter Improvers (CBI) which raise the
melting point of chocolate for better storage stability in tropical climates. The
Specialty Fats Division has always observed stringent quality assurance systems in its
processes.FFF is today, one of the largest sources of specialty fats in the world.
Testimony to mark our quality is the continued patronage we enjoy from large
manufacturers of Cocoa Butter Equivalents from Japan, Malaysia, Italy, Holland, UK
& the Scandinavian countries.

Oil Palm:
The Oil Palm Division (OPD) has successfully set up a complete cycle of
operation(s) and moved from the POC (Proof of Concept) stage to Ramp up stage in a
short period of time.

In Andhra Pradesh:
 Operations in 9 Mandals of West Godavari Dist./4 Mandals of Vizianagaram
District with a potential of 40250 ha.
 Nurseries in West Godavari and Vizianagaram Districts 12,500 ha area under
Oil Palm.
 Multiple collection centers.
 10-20 T/hr Palm Oil Mill (Including Production of Palm Kernel Oil).
 Refinery / Fractionation Unit for further processing of CPO&CPKO.
 7.5 Mw power plant based on Palm waste as its fuel.

In Karnataka:
 Operations in 3 district of Koppal,Gadag and Raichur with a potential of
30,000 ha.
 One nursery in Koppal District 2,500 ha area under oil palm.
 Multiple collection centers.
 5 -10 MT FFB/ Hour Palm Oil Mill coming up in Koppal District.

38
In Mizoram:
 Operations in 3 district of Aizwal, Serchhip and Saiha with a potential of
20,000 ha.
 One nursery in Serchhip District.
 In its first year of area expansion covered 500 ha under oil palm.

In Gujarat:
 Operations in 2 distrcts of Surat and Tapi with a potential of 18,400 ha.
 One nursery in Tapi District.
 In its first year of area expansion covered 500 ha under oil palm.

In Orissa:
 Operations in 3 distrcts of Dhenkanal and Jajpur with a potential of 12,000 ha.
 One nursery in Dhenkanal District.
 In its first year of area expansion covered 500 ha under oil palm.

In Tamilnadu:
Government of Tamilnadu has allotted “Toothukudi” district for Oil Palm
Development during 2008. Arrangements are being made for establishing Nursery
and start related operations.

Farmers – Our Partners to Success:


“We look at farmers as our partners to success and we promise”.
 To give them the best quality sapling / best extension practices.
 To ensure quality plantation / best yield at field level.
 To provide training to farmers.
 To look at intercrop in aged plantation – increased income to farmers.
 To be a support to the farmer in his other needs.

39
What the Future Has In Store
A major ramp up in acquiring very good area coverage in the subsequent year(s)

Areas of Operation:
OPD – AP
 Nursery - Dubacherla Village, West Godavari district.
 Mill/Office - Yernagudem village, West Godavari district.

OPD – KARNATAKA
 Nursery - Kinnal Village, Koppal district.
 Office - Koppal Town, Koppal district.

OPD – MIZORAM
 Nursery - Mat Valley, Serchiip district.
 Office - Serchhip Town, Serchhip district.

OPD – GUJARAT
 Nursery - Bhatpur Village, Surat district.
 Office - Vyara taluk, Surat district.

OPD – ORISSA
 Nursery - Krusnakumarpur Khamar Village, Dhenkanal district.
 Office - Dhenkanal town, Dhenkanal district.

OILS AND FATS:


The food we eat is an expression of love. We as the 3F group try to express
this love in different ways. We are with you, right through the day, unnoticed and yet
keeping you in the finest of spirits, body and mind.
Yes, we are with you as edible oils and fats adding flavour to all that you
savour. Be it homemade edibles or bakery products, we add taste to everything you
smack into. Tandul, Palmdelite, Royaldelite, Soyadelite, 3F Sunflower oil and
Surabhi are few of the names dedicated to ensure a salubrious and healthy meal.

40
Hygiene and quality are what we are pledged to and this has made our edible oils a
household name for over 40 years.
Our range of Bakery shortenings, Margarine and Vanaspati are the delight of
bakers and confectioners.
Bakerspet and Bakers Delight for crisp, flaky puffs and croissants. Mello
Margarine, Mello Cream, Golden Spread for soft and fluffy pastries that melt in your
mouth. 3F Vanaspati, Trim and Surabhi for the much relished Indian sweets. All
these, keeping at the fore front of our mind your health and nutrition balance.
For more details on our
 Edible oils
 Bakery Fats
 SERVICE TO SOCIETY
The 3F group is involved in a large way in social service activities the Goenka
family trust runs Arts and Science college for women in Andhra Pradesh and a Higher
Secondary School in Rajasthan. It has a established a boys college in Andhra Pradesh, a
Higher Secondary School in Myanmar and a multistory building in Tamilnadu,
providing accommodation to Tourist’s and Social functions with a library and reading
room. In addition to the above projects the group has also being regularly contributing
to several educational, medical and social service institutions.

ETHICS:
The 3f group is proud of its inherent values, which are, persuade relentlessly
to drive it towards sustainable growth. These values are common language that binds
its entire people.

THE 3F GROUP STANDS FOR…….


 An intrinsic commitment to its people
 A culture of trust, mutual respect, opens communication and transparency of
action.
 Commitment to welfare-driven initiatives that make a qualitative difference to
the lives of marginalized people.
 An environment-conscious group through its eco-friendly units.
 Indian values with a global mind set.

41
COMPANY PRODUCTS:

1. Refined vegetable oil

2. Industrial oil for soap

3. Lubricant and grease

4. Deoiled cakes and extractions

5. Fatty Acid

6. Vanaspati

7. Hydrogenated oils

8. Glycerin

9. Mango pop and manage bar

10. Bhaar

11. High FFA oil.

MANUFACTURE OF QUALITY PRODUCTS :


1. Bakers Pet (Bakery)

2. FFF (Vanaspati)

3. Tandul (Rice Bran oil)

4. Mello (Margarine)

5. Surabhi (Vanaspati)

6. Biscreme (Aerated Shortening)

7. Bakers Delite (Vanaspati)

8. Bahaar (Mango Bar)

9. Sun Delite

10. Palm Delite

11. Golden Spread

12. 3F Glycerin

13. Triffa

42
14. Mello creame

15. 3F Sun flower

16. Royal Delite

17. Trim

Manufacturing of the company:


The 3F Industries Limited is an industry, in which the main production is,
produced oils from rice bran. The oil manufacturing products are two types. They are
 Commercial Oil
 Edible Oil.
Commercial Oil is using in the various soap industry and another industries.
Edible Oil is using in human copying and human being process.

Main Raw Material of the Industry:


 Rice Bran
 Water
 Waste Grass [Packing Process]

Rice Bran is available in the local areas to this industry. Such as available in
nearest places to Akividu, Kaikaluru, Eluru, Tadepaligudem, and Juvvalapalem rice
mills etc., Water resources are available in the nearest Eluru canal. Waste grass in
buying rice grass and by products to the rice industry. This is purchasing by agents
and brokers, this way available in the local area.

43
 Edible Oils

The Products of the organization.


Tandul
Premium quality refined Rice bran Oil
Packing: 1 ltr x 10 pouches, 2 ltr can, 5 ltr can, 15 ltr can, 15 kg
tin.

Palmdelite
Refined Palm Oil.
Packing: 1 ltr x 15 pouches per carton, 15 kg tin.

Royal Delite
Premium quality Refined Palm Oil
Packing: 1 Ltr x 15 pouches per carton, 15 kg tin.

Sunsolite Refined Sunflower oil

Packing: 1 ltr pouch x 10pouches per carton,2 ltr can, 5ltr can

3F Sunflower Oil
Packing: 1 ltr pouch x 10, 1 ltr x 20 pouches per carton.

44
 Bakery Fats

A) Bakery Shortenings and Margarine:

3F Industries Limited has developed a variety of bakery shortenings and


margarine for the bakery industry.
Bakers pet (bakery shortening)
Application: A multipurpose bakery fat which can be used
for breads, biscuits, cream and karris.
Packing:15kg BIB, 15kg tins

Bakers Delite (Bakery Shortening)


Application: Used for making crispy & flaky puffs and
karris.
Packing: 15kg BIB

Biscreme (Aerated Bakery Shortening)


Application: A special product for cookies and the creamy-
centres of biscuits.
Packing: 14kg BIB

Goldenspread (Margarine)
Application: a very popular brand for crispy & flaky puffs
and karris.
Packing: 15kg BIB

Mello (Margarine)
Application: for voluminous and soft cakes, pastries and
plum cakes.
Packing: 15kg BIB & plastic buckets
Mellocreme (Margarine)
Application: used as filling cream and for cake icings.
Packing:15kg BIB

45
B)Vanaspathi:
Made from a blend of vegetable oils, vanaspati is used by the baker, hotelier
and the housewife as a general purpose cooking medium.
3F Vanaspati
Application: A granular all purpose cooking medium.
Packing: 200ml, 500ml 1ltr pouches and 15kg tin

Surabhi
Application: A general purpose bakery fat.
Packing: 15kg BIB &tins,15ltrs BIB, tins & jars

C) Interesterified Facts:
Interesterified Fats are low Trans fats. These are non-hydrogenated blend of
vegetable oils hence are safe for health. Like Vanaspati, interesterified fats are an all
purpose cooking fat. Unlike Vanaspati, these fats are softer in appearance.
Trim
Application: General purpose cooking fat especially for Barathas
& Biryani.
Packing: 15kg BIB

Source: Annual reports of 3F Industries Limited, Tadepalligudem.

OTHERS (Crude Palm, Oil-bulk):


Refined palms oil-bulk; contract farming by farmers. We provide imported seedlings
after acclimatizing know how for growing is provided to the farmers.
Specialty fats:
Refined kokum fat [garcenia]
Sal stearine [shorea robusta]
Produced from forest sources. An important nontimber forest product.
Mango stearine [mangifera India]
Shea stearine.

46
Cosmetic ingredients ---- mango olien
Shea olien.
Refined rice bran oil wax used in various industries like paper coating candles water
proofing floor shoe and furniture polish cosmetics carbon paper printing inks fruit and
vegetable coatings and pharmaceuticals. Rice bran oil wax may substitute wax like
carnauba.
Packing, 25kg in lined paper bags.

Exporters of :-
Indian rice [non-basmati]
De oiled rice bran
De oiled salseed meal -pellets non- dusty.

Importers of :-
Palm oil and its fractions.
Crude sunflower oil
Crude soybean oil
Have sea-worthy bags for unloading from ships when anchored near shallow water
ports. Presence in all minor ports in India. West coast Kochi, Mangalore, East coast,
Gopalpur, Kakinada and Nagapattanam.
Turnkey project - Supplier for double solvent refining of high FFA oils up to
20% such as Rica bran oil, solvent extracted high FFA oils. The refined oil
obtained is of excellent quality as per food standards.

Branch offices:

The registered of the company at Tadepallligudem, West Godavari district.


While corporate office at Chennai. Branch offices at

1. Hyderabad

2. Mumbai

3. Kakinada

4. Baroda

5. Calcutta

47
And departmental offices at Visakhapatnam, Vizayanagaram, Vijayawada,
Calcutta, Nagapattanam, Bangalore, Cochin, etc., to handle to Marketing of the
company products thought out through network whole sellers, agents, and dealers.

ADMINISTRATION AND ORGANIZATION STRUCTURE OF


THE INDUSTRY:
The 3F Industries Limited Industry are under the direct administrative control
of Board of Directors. The Board of Directors under the company’s act 1956
administered the Industry.
The 3F Industries Limited Board of Directors consisting the following
members.

BOARD OF DIRECTORS:

Name Designation
Sri Shiv Bhagavan Goenka Chairman and Whole time Director

Sri Shiv Kumar Jatia Director

Sri Vinod Kumar Saraogi Director

Sri Jivesh Goenka Additional Director

Sri Bharat Kumar Goenka Whole time Director

Sri Sita Ram Goenka Whole time Director

Sri Sushil Goenka Whole time Director

Sri Om Prakash Goenka Whole time Director

Shiv Kumar Jatia Director

Sri Jitendra Goenka Additional Director

Sri Sanjay Goenka Additional Director

Sri Rangarajan.S. Company Secretary

48
ORGANIZATION STRUCTURE:

The General Manager is the main administrating and controlling and head of
the 3F Industries Limited. On behalf of board of Directors under him there will be one
Deputy (Finance and Administration) Five heads of Departments representing the 3F
(FOODS, FATS & FERTILISERS) limited.

DEPARTMENTS IN 3F Industries :
 Personnel department
 Production department
 Marketing department
 Finance department

Manpower position:
To continue the day-by-day operations the company has adopted a systematic
manpower poison.

MANPOWER PARTICULARS:
Category No of employees
Vice president 1
General Manager 7
Managers 11
Deputy Manager 12
Junior officers 65
Workmen 340
Trainees 169
Retainers 04
----------------
Total 609
----------------

49
FINANCIAL RESULTS:
Finance is very much needed to any business so finance is as heart to the
business. The company was incorporated in the year 1960 the original share capital
subscribed is RS 5 lakhs. The present subscribed and paid up capital is RS 8 crores.

BANKERS: -
 State Bank of India [Chennai]
 State Bank of Hyderabad [Chennai]
 Indus Ind Bank ltd [Chennai]
 Bank Muscat International Saog [Bangalore]

Financial performance:
During the years 2000-2001 and 1999-2000, the company was mainly engaged
in trading of imported vegetable oils and achieved a turnover of Rs. 447.44 crores as
compared to Rs. 318.44 crores previous year.
After that in the year 2001-2002 the turnover is Rs 327.25 crores the
decrement is due to Govt. policies imposed lower customs duty on raw oils. Further
export impressive with resumption of rice and other agri-product exports and increase
in the export of specialty fats with Rs 43.31 crores against Rs 4.00 crores.

PROJECTS:
2005-2006, a terminal at Gopalpur in Orissa was commissioned and started
marketing imported oils in the linter lands of Orissa. Major projects like vanaspati
expansion, palm oil plant, solvent fractionation, was purification / refining 2006-2007
palm fractionation plant.
3F Industries Ltd forayed into the branded packaged oil business by launching
Sunsolite, its refined sunflower oil brand. 3F Industries Ltd (3FIL), with a current
turnover of Rs 1,143 crore (on standalone terms), has a pan-India presence in the
extraction and refining of edible oils like sunflower, rice bran, palmolein and palm
kernel.
Sushil Goenka, Director of 3FIL, said the company would utilise the additional
capacity at its refinery near Krishnapatnam port, Nellore, for the production of

50
Sunsolite. The Nellore refinery, set up in 2012-13 with an investment of Rs 200 crore,
is a automated plant with a refining capacity of 100 tonnes sunflower oil per day.
The company is eyeing a 10 per cent share in the sunflower oil market by the end of
the next financial year and was aiming at an annual business growth of 10 per cent.
3FIL intends to cover the entire south India by 2016-17 and subsequently expand to
western and eastern geographies by 2018, helping it to fully utilize its refinery
capacity of 2,500 tonnes per month.

51
DATA ANALYSIS & INTERPRETATIONS

NAME OF THE
SCRAP UNITS 2013-14 2014-15 2015-16 2016-17
5LIT PET BOTTLES
SCRAP TON - - - 0.98
A/C OLD
COMPRESSORS NOS - 14 - -
A/C OLD FAN MOTORS NOS - - 13 -
ALLUMINIUM
TURNINGS KGS - 15 -
ALUMINIUM LETHE
CUTTING TON 0.2 - - -
ALUMINIUM SCRAP TON 1.44 1160.328 4.43 3.31
ASSEMBLED P IV
COMPUTER NOS 1 - - -
BROKEN RICE RAW-
SWEEPINGS MT - 1.14 - -
BURNT PADDY ASH TON 35550.29 31332.85 30618.86 26279.18
C I TURNINGS TON - - - 0.36
CABLE SCRAP TON - - - 1.04
CFB BOXES TON - - - 223.175
CI TUNNINGS TON - - - 0.14
COMPUTER SCRAP TON - - - 0.16
COMPUTER SCRAP
(LOT) NOS - 1 - -
COMPUTER SCRAP
(LOT) NOS - 1 - -
CONDEMED AC
COMPRESSORS NOS - - - 12
CONDEMED AC
MACHINES NOS - - - 2
CONDEMED BAJAJ
CHETAK NOS - - - 2

52
CONDEMED KENITIC
HONDA NOS - - - 1
CONDEMED TVS XL NOS - - - 1
CONDEMED VESPA
VEHICLE NOS - - - 4
CONDEMNED G.I
SHEET NOS - - - 41
COPPER WASTE TON - - - 0.2288
DAMAGED BARRELS NOS - - - 4
DAMAGED CAR TYRES NOS - - 5 -
DAMAGED CEMENT
BAGS BAG - 2444 - -
DAMAGED EMPTY
PAINT TINS NOS 298 357 - -
DAMAGED GUM TINS NOS - - - 80
DAMAGED GUN
METAL SCRAPE KGS - - 177 -
DAMAGED HDPE
FILTER PLATES TON 5.52 - - -
DAMAGED HUSK TON - - - 16.43
DAMAGED JD TYRES NOS - - 3 -
DAMAGED JUITE
GUNNIES TON 137.06 0.114 352487.9 371.28
DAMAGED
M.S.BARRELS NOS - - 29 -
DAMAGED
M.S.BARRELS(180KGS) NOS - - - 38
DAMAGED MAIZE
15969 BAGS MT - 1256.45 - -
DAMAGED MAIZE 2919
BAGS MT - - 336.24 -
DAMAGED
MARGARINE CUPS KGS - 200 - -
DAMAGED MS
BARRELS NOS - 125 - -
DAMAGED OLD TON - - 0.77 -

53
BEARINGS
DAMAGED PLASTIC
TINS TON - - - 0.08
DAMAGED PP BAGS TON 18.24 5 22.254 44.37
DAMAGED RUBBER
BELT TON 1.43 - - -
DAMAGED TINS TON 0.271 6.32 0.044 0.08
DAMAGED WATER
TANK TON - - 0.01 -
DAMMAGE RICE MT - 10 - -
DOT MATRIX
PRINTERS USED NOS 8 - - -
EMPTY WASTE
PLASTIC BARRELS NOS - - - 62
EMPTY BAGS NOS - - - 4100
EMPTY BLEACHING
EARTH BAGS NOS - - 950 -
EMPTY CANS NOS - - 231 -
EMPTY CANS NOS - - - 731
EMPTY CEMENT BAGS NOS - 800 - -
EMPTY PLASTIC TINS KGS - - 320 -
EMPTY WASTE IRON
TINS NOS - - - 700
EXIDE BIG SIZE OLD
BATTRIES NOS - 6 - -
EXIDE SMALL SIZE
OLD BATTRIES NOS - 4 - -
GM/BRASS TURNING
SCRAP TON - 0.18 - -
GRINDSTED PGMS SPV
KOSHER PROP TON 1.5 - - -
GRYSERS(CONDEMED) NOS - - - 6
HDPE BARRELS NOS - - - 6
HEAT TRANSFER OIL LTR - - - 4840
IBC PLASTIC DRUMS
(1000 LTRS) NOS - - - 810

54
IRON SCRAP MT - - 17.095 -
IRON SCRAP MT - - - 3.415
M.S LETHE CUTTING TON 0.52 0.71 - 0.77
M.S.DAMAGED
BARRELS NOS - - 114 -
M.S.DAMAGED TINS TON - 1.02 - -
M.S.OLD BEARINGS TON 0.45 - - 0.47
M.S.SCRAP TON 171.082 260.97 142.525 191.57
M.S.WASTE TINS NOS 340 331 -
MAIZE GUNNIES NOS - - - 597800
MAIZE, DAMAGED MT - - - 2.6
METAL TINS SCRAP NOS - - - 539
MIXED SCRAP(IRON&
PLASTIC) TON - - - 0.6
OIL PP DAMAGED
BAGS TON - - - 1.98
OLD ALLUMINIUM
SHEET TON - 0.44 - -
OLD BATTERIES NOS - - 4 -
OLD COPPER WIRE KGS - - 162.18 -
OLD DAMAGED
CEMENT PIPE NOS - 1 - -
OLD GUM TIMEPLANT
TINS (20KGS) NOS - 174 - -
OLD KEY BOARD NOS 1 - - -
OLD OIL SKIMMERS NOS - 3 - -
OLD RUBBER SCRAP TON - - - 2.36
OLD STABILISERS NOS - - 10 -
OLD TYRES NOS 20 27 50 60
OLD WELDING
MECHINENS NOS - - 8 -
OLD WIPRO 17'TFT
MONITOR NOS 1 - - -
OUTER BOX & CONE KGS - - 170.24 -
P.P.DAMAGED OLD
GUNNIES TON - 4.01 - -

55
PAPER WASTE KGS - 1640 - -
PLASTIC CARBUOYS TON 2.213 0.683 4.563 3.69
PLASTIC DAMAGED
BAGS TON - - - 12.97
PLASTIC DRUMS 200
LTR NOS - - 17 -
PLASTIC EMPTY CANS NOS - - 533 -
PLASTIC TINS (25L) NOS 25 183 - -
POUCH FILLING
MACHINE(NO PUMP) NOS - - - 2
POUCH FILM SCRAP TON - - - 0.28
PP GUNNIES
DAMAGED MT - - - 1.22
PVC SCRAP KGS - - 440 -
S.S. LETHE CUTTING TON 0.05 - - -
S.S.SCRAP TON 1.84 - - -
SAND (WASTE) TON 989.34 821.52 - -
SCRAP NOS - 1 - -
SCRAP TON - - - 3.979
SCRAP PLASTIC CANS NOS - - - 100
SECOND HAND
BARRELS NOS - - 130 -
SECONDHAND RICE
GRADING EQUIP LOT - - 1 -
SLUDGE TON 953.92 1203.64 1973.99 5909.175
SMPS USED NOS 7 - - -
SOYA LECITHIN
POWDER KGS - - - 15
TANKER NO.AP37V 300
(SCRAP VEH NOS - 1 - -
TANKER NO.AP37V 400
(SCRAP VEH NOS - 1 - -
TFT MONITOR USED NOS 1 - - -
TN01Y 7700 HUNDAI
ELANTRA CAR NOS - - 1 -
TUBELIGHT CHOCKES NOS - - - 58

56
UNIVERSAL MAKE
EXPELLER WORMS TON 0.17 - - -
USED ASSEMBLED P
III COMPUTER NOS 1 - - -
USED ASSEMBLED P
IV COMPUTER NOS 1 - - -
USED CELRON
COMPUTER NOS 1 - - -
USED COMPAQ P III
COMPUTER NOS 1 - - -
USED COMPUTERS NOS 2 - - -
USED EMPTY CANS NOS - - - 351
USED EMPTY CANS 35
KG NOS - - - 70
USED EMPTY
CORTONS TON - - - 0.46
USED EMPTY PLASTIC
TONRS NOS - 8 - -
USED HCL P IV
COMPUTER NOS 1 - - -
USED HP P III
COMPUTER NOS 2 - - -
USED P IV COMPUTER NOS 3 - - -
USED PLASTIC BLACK
CANS NOS - - - 123
USED PLASTIC CANS NOS - - - 250
USED POUCHFILMS TON - - - 0.15
USED TINS SCRAP NOS - - - 676
USED WASTE
CORTONS TON - - - 0.77
USED WIPRO 17" CRT
MONITOR NOS 1 - - -
USED WIPRO PIV
COMPUTER NOS 1 - - -
WASTE ALUMINUM
SCRAP TON 0.32 - - -

57
WASTE BLEACHING
POWDER BAGS NOS - - - 300
WASTE BLUE TIN NOS - 258 - -
WASTE BRICK BOXES TON - - - 1.22
WASTE CABLE SCRAP TON - - - 0.72
WASTE CARTON TON - - - 17.64
WASTE CARTON
BOXES TON 34.057 32.37 18.95 1479.54
WASTE CAST IRON TON 17.18 0.034 5.73 0.047
WASTE CHEMICAL
BOXES TON 2.79 - - 320
WASTE COMPUTER
PARTS KGS - 270 - -
WASTE COPPER TON 0.873 0.403 - -
WASTE CORTAN
BOXES KGS - - - 220
WASTE DAMAGED
15KG TINS NOS - - 20 -
WASTE DAMAGED
TINS TON - - - 0.73
WASTE EMPTY
BOTTELS TON 0.55 1.12 - -
WASTE EMPTY
CEMENT BAGS NOS - 1900 - -
WASTE ENGINE OIL LTR - - - 915
WASTE GI SHEETS NOS - - - 177
WASTE GLASS
BOTTELS TON - 1.66 - -
WASTE GLASS
BOTTLES NOS - - 27 -
WASTE GLASS SCRAP TON - - 0.41 -
WASTE M.S BARRELS NOS 150 127 180 160
WASTE PAPER TON - 1.31 - -
WASTE PAPER TIN NOS 1 - - -
WASTE PLASTIC
200KG CANS NOS 7 - - -

58
WASTE PLASTIC
CEMENT BAGS NOS - - - 1000
WASTE PLASTIC TIN
(200L) NOS 15 - - -
WASTE POLYTHEEN
SHEETS TON 0.82 - - -
WASTE POSTER PAPER
ROLL TON - - - 2.57
WASTE POUCH
COVERS TON 0.08 - 2.75 0.19
WASTE TARPAULINE TON 0.298 0.291 - -
WASTE TUBES TON 0.15 - - -
WIDE MOUTH PLASTIC
CARBOUY NOS - - - 1
WOODEN SCRAP TON 5 8.577 6 6.19
YELLOW MAIZE MT - - - 1500.305

PRODUCTION UNITS AND SCRAP ITEMS:

Production units 2013-14 2014-15 2015-16 2016-17

EXPELLER +SOLVENT 13300 11043.31 13548.47 4531.811


EXTRACTION PLANT

REFINERIES 15667.55 14608.28 18507.04 36628.51

PACKING 1900.921 1681.037 1125.786 1119.881

VANASPATI 32835.216 35145.665 36315.361 37229.023

TOTAL 63703.68 62478.29 69496.66 79509.23

59
1. SLUDGE:

Year Sludge (No. Of tonnes)

2013-14 953.93

2014-15 1203.64

2015-16 1973.99

2016-17 5909.18

60
Sludge
6000

5000

4000

3000
Sludge
2000

1000

0
2013-14
2014-15
2015-16
2016-17

INTERPRETATION OF THE DATA OF SLUDGE:


The above table shows the generation of Sludge, which is a major scrap in the
production. As per the last 4 years data, Sludge changed an increasing value of
amounts. In 2013-14, the Sludge generated is more than 900 it shows the main item
production decreased and other side scrap product increased. In 2014-15, the scrap
generation is 1203.64 units, in 2015-16, the scrap generation is 1973.99units. In 2016
- 17 scrap also increased as compare to last years and is 5909.18 units.

61
2. PERCENTAGE OF SLUDGE:

Year Percentage of Sludge

2013-14 6%

2014-15 8.23%

2015-16 10.67%

2016-17 16.13%

62
% of Sludge
20%

15%

10%
% of Sludge
5%

0%
2013-14
2014-150-
2015-16
2016-17

INTERPRETATION:
The main scrap item of production Sludge is producing from Refinery unit in
3f Industries limited. In 2013-14, it is generated 6% but in 2014-15, it is increased to
8.23% from 6%. In 2015-16, it further increased to 10.67% from 8.23. In year 2016-
17, Sludge item generated is 16.13% in the production. Finally it shows the increasing
of production for generating the Sludge item of scrap.

63
3. JUTE GUNNIES:

Year Jute Gunnies (No. Of tonnes)

2013-14 137.06

2014-15 114

2015-16 352.488

2016-17 371.28

64
Jute Gunnies
400

300

200
Jute Gunnies
100

0
2013-14
2014-15
2015-16
2016-17

INTERPRETATION:
Jute gunnies are also the major scrap item of production. As per the above data
in 2013-14, it generated 137.06 tonnes and it decreased to 114 tonnes in 2014 – 15
and again it increased to 352.488 tonnes in 2015 – 16. In the year 2016-17, scrap
generated in the form of jute gunnies is 371.28 tonnes. It shows that the Scrap is
directly proportional to the production.

65
4. PERCENTAGE OF JUTE GUNNIES:

Year Percentage of Jute Gunnies

2013-14 1.030%

2014-15 1.032%

2015-16 2.60%

2016-17 8.19%

66
% of Jute Gunnies
10.00%

8.00%

6.00%
4.00% % of Jute Gunnies
2.00%
0.00%
2013-14
2014-15
2015-16
2016-17

INTERPRETATION:
Jute gunnies are used to carry the Raw material for production and majorly
producing from the Expeller and Solvent Units in 3F Industries Limited.The above
graph shows the percentage of jute gunnies scrap in the last five years. In 2013 – 14 it
is 1.030%, in 2015 – 16 is 1.032% and it is increased to 2.60% in 2016 – 17 and it is
highest in the current year i.e.2016-17 it reached 8.19%.

67
5. BURNT PADDY ASH:

Year Burnt Paddy Ash (No. Of tonnes)

2013-14 35550.29

2014-15 31332.85

2015-16 36018.9

2016-17 26279.2

68
Burnt Paddy Ash
40000

30000

20000
Burnt Paddy Ash
10000

0
2013-14
2014-15
2015-16
2016-17

INTERPRETATION:
The burnt paddy ash is the next major scrap item after Sludge and Jute gunnies
in value of generation. As per the above data, it shows decreasing in nature due to
new technological developments in 3f industries. In 2013 – 14 the scarp is 35550.29
tonnes, reached to 31332.85 tonnes in 2014 – 15, decreasing to 30618.9 tonnes in
2015 – 16 and it further decreased to 26279.2 tonnes in 2016-17.

69
6. PERCENTAGE OF BURNT PADDY ASH:

Year Percentage of Brunt


Paddy Ash

2013-14 44.71%

2014-15 45.09%

2015-16 49%

2016-17 41.25%

70
% Of Burnt Paddy Ash
50.00%
48.00%
46.00%
44.00%
42.00%
% Of Burnt Paddy Ash
40.00%
38.00%
36.00%
2013-14
2014-15
2015-16
2016-17

INTERPRETATION:
The above analysis explains the percentage of burnt paddy ash scrap item
which is related total production units in 3F industries limited. Total percentage of
burnt paddy ash to the total production in 2013 – 14 is 44.71%, raised to 45.09% in
2014 – 15, reached 49% in 2015 – 16 and it sharply decreased to 41.25% in 2016 –
17.

71
7. PLASTIC CARBUOYS:

Year Plastic Carbouys (No. Of


tonnes)

2013-14 2.213

2014-15 0.683

2015-16 4.563

2016-17 3.69

72
Plastic Carbuoys
5
4
3
2
Plastic Carbuoys
1
0
2013-14
2014-15
2015-16
2016-17

INTERPRETATION :
The analysis shows the generation of plastic car buoys, a major scrap
producing after Burnt paddy ash in value. It is 2.213 tonnes in 2013–14, fell sharply to
0.683 tonnes in 2014 – 15, raised to 4.563 tonnes in 2015 – 16, and slightly decreased
to 3.69 tonnes in the year 2016 – 17, is highest in the year 2015 -16 i.e. 4.563 and
lowest in the year 2014 - 15 i.e. 0.683.

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8. PERCENTAGE OF PLASTIC CARBUOYS:

Year Percentage of Plastic


Carbouys

2013-14 0.027%

2014-15 9.83%

2015-16 0.007%

2016-17 0.006%

74
% of Plastic Carbuoys
10.00%

8.00%

6.00%
4.00% % of Plastic Carbuoys
2.00%
0.00%
2013-14
2014-15
2015-16
2016-17

INTERPRETATION:
The above analysis depicts the percentage of plastic car buoys to the total
production. The percentage in 2013 – 14 is 0.027%, raised to 9.83% in 2014 – 15,
0.007% in 2015 – 16, 0.006% in 2016 – 17 among them the highest percentage is
noted in the year 2014– 15 i.e. 9.83% and lowest in the year 2016 – 17 i.e. 0.006%
respectively

75
9. COMPARISON BETWEEN TYPES OF SCRAPS:
(NO.OF TONNES)

Item 2013-14 2014-15 2015-16 2016-17


description

Sludge 953.93 1203.64 1973.99 5909.18

Jute 137.06 114.00 352.488 371.28


Gunnies

Brunt 35550.29 31332.85 30618.9 26279.2


Paddy
Ash

Plastic 2.213 0.683 4.563 3.69


Carbuoys

76
40000
35000
30000
25000
2013-14
20000
2014-15
15000
2015-16
10000
2016-17
5000
0
Sludge
Jute Gunnies
Brunt Paddy Ash
Plastic Carboys

INTERPRETATION:
The analysis shows the scrap generation of sludge, jute gunnies, burnt paddy
ash, plastic carboys. According to the sludge scrap production is increased to 4955.25
from 2013-14 to 2016-17, jute gunnies is increased to 234.22 from 2013-14 to 2016-
17, burnt paddy ash is decreased to 9271.09 from 2013-14 to 2016-17, plastic
carbuoys is increased to 1.477 from 2013-14 to 2016-17.

77
10.COMPARISON BETWEEN TYPES OF SCRAP
PERCENTAGES:

Item 2013-14 2014-15 2015-16 2016-17


description

% of 6.00 8.23 10.67 16.13


Sludge

% of Jute 1.030 1.032 2.60 8.19


Gunnies

% of Brunt 44.71 45.09 49.00 41.25


Paddy Ash

% of 0.027 9.83 0.007 0.006


Plastic
Carbuoys

78
50
45
40
35
30
25 2013-14
20 2014-15
15 2015-16
10 2016-17
5
0
% of Sludge
% of Jute
Gunnies % of Brunt
Paddy Ash % of Plastic
Carboys

INTERPRETATION:
The analysis shows the scrap generation percentages of sludge, jute gunnies,
burnt paddy ash, plastic carboys. According to the % of sludge scrap production is
increased to 10.13 from 2013-14 to 2016-17, % of jute gunnies is increased to 7.16
from 2013-14 to 2016-17, % of burnt paddy ash is decreased to 3.46 from 2013-14 to
2016-17, % of plastic carbuoys is decreased to 0.264 from 2013-14 to 2016-17.

79
FINDINGS

 Generation of sludge, a major scrap item showing increasing trend past 4


years. It was least in 2013-14 as 953.93 tonnes and reached maximum in 2016
-17 as 5909.18 tonnes.
 Percentage of sludge to the refineries for the last 4 years is in increasing trend
showed least percentage in 2013-14 as 6% and 16.13% in 2016-17.
 Generation of scrap in the form of jute gunnies least in 2014-15 as 114 tonnes
and reached highest in 2016-17 as 371.28 tonnes.
 Percentage of jute gunnies showing increasing trend. It has least percentage in
2013-14as 1.030% and has highest in 2016-17 as 8.19%.
 Burnt paddy ash generation is in decreasing trend as a result of changes in
production techniques it was highest in 2013-14 as 35550.29 tonnes and
reached least in 2016-17 as 26279.2 tonnes.
 Percentage of burnt paddy ash to the total production fluctuating from last 4
years. It was least in 2016-17 as 41.25% and highest in 2015-16 as 49%. As a
whole it is varying from 41% - 50% for the period 2013-14 to 2016-17.
 Generation of scrap in the form of plastic carbuoys is in fluctuating trend for
the last 4 years. It has least value in 2014-15 as 0.683 tonnes and reached
highest in2015-16 as 4.563 tonnes.
 Percentage of plastic carbuoys showed highest percentage in 2014-15 as
9.83% and almost generated very negligible when compared to the generation
of plastic carbuoys scrap in the remaining years. But, has least value is 2016-
17 as 0.006%.

80
SUGGESTIONS

 Regarding time management, an employee should be appointed to look after


the schedules of scrap handling with vendors separately and his functions
were:
 Look after scrap time to time.
 Schedule the scrap handling functions timely.
 Code names for different scrap items should be allotted and looked after
properly.
 Better to recheck the code names allotted and prepare a standard code names
set which is very helpful in following and verification in future.
 Also with the help of this, company can clearly analyze sales of individual
items and can form individual trend analysis of each item and take the
precautions needed.
 Research and development department should be strengthen and to be focused
on scrap management.
 All the employees in the company should be aware of scrap management
practices and policies in 3f industries limited.
 Proper communication should be maintained among the various departments
to eradicate ambiguity about quantity of items.

81
BIBLIOGRAPHY

Books & authors:

NAME OF THE TITTLE OF TITTLE OF


AUTHER THE BOOK THE
PUBLISHER
I.M.PANDAY(2004) FINACIAL VIKAS
MANAGEMENT PUBLISHING
HOUSE
PVT.LTD
DR.K.K.VARMA FINANCIAL EXCEL BOOKS
ACCOUNING
ANLYSIS
PRASANNA FINANCIAL TATA McGraw-
CHANDRA MANAGEMENT Hill
PUBLISHING
LTD
M.Y.KHAN,P.K.JAIN FINANCIAL HIMALAYA
MANAGEMENT PUBLISHING
HOUSE

WEBSITES VISITED:
www.fff.co.in
www.wikipedia.com
www.financialdata.com

82