Page 1 of 41

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 2 of 41

Acknowledgement

I, Riyaz Ahmad (University Roll No.180010420144) would like

to convey my gratitude to the Senior Assistant Professor
and Co-coordinator MBA(IB) Dr. Nazia Jamal of Institute of
Management Sciences, University Campus, University of
Lucknow, Jankipuram for emphasizing on the 6 weeks
Summer Internship Program and giving me the opportunity
to interact with industry professionals.
I would also like to thank Dr. Pravir Shukla, Senior Field
Manager, IFFCO, Lucknow and, Mr. T.K Rajput, Senior
Manager Administration and Mr. Abhimanyu Rai, Senior
Marketing Head for giving me the platform and
opportunity to work in the prestigious institution like IFFCO
(Indian Farmer Fertilizer Cooperative Ltd).
I extend my warm gratitude and regards to everyone who
helped me during my internship.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 3 of 41

OFFICIAL OFFER LETTER

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 4 of 41

TABLE OF CONTENT

IFFCO- A Teasement of Farmers Trust……………………………… 6-7

Executive Summary…………………………………………………… 8-9
Chapter 1 Introduction
1.1 About the Organization…………………………………………. 10-11
1.2 History of Organization……………………………………….…. 11-12
1.3 About the Plants………………………………………………………. 12
1.4 Mission……………………………………………………………… 12-13
1.5 Vision……………………………………………………………………. 13

Chapter 2 Performance
2.1 Sales Performance…………………………………………………… 14
2.2 Financial Performance……………………………………………… 15
2.3 Production Performance……………………………………………. 16

Chapter 3 About the Study (Marketing Cost)

3.1 Definition…………………………………………………………… 17-18
3.2 Objective of Study…………………………………………………… 19
3.3 Data with Specific Analysis………………………………….…. 20-24
3.4 Data Comparison……………………………………………..…. 25-27
3.5 Evaluation of Marketing Activities……………………………….... 28
3.5.1 Warehousing Activity……………………………….……….... 28
3.5.2 Handling and Transportation Activity…………………...…. 29
3.5.3 Benefits to Farmers Activity……………………………….…. 30
3.5.4 Publicity and Sales Activity……………………….…………. 31

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 5 of 41

3.5.5 Administrative Activity………………………………….……. 32

3.6 Top Performing Districts………………………………………… 33-34

Chapter 4 Organizational Structure

4.1 Overview…………………………………………………………… 35-36
4.2 Marketing Division…………………………………………….…. 36-37
4.3 Production Division…………………………………………………… 37
4.4 Diversification and Joint Ventures…………………………….. 37-38

Bibliography……………………………………………………………….. 39
Future Perspective of IFFCO…………………………………………….. 40
Conclusion…………………………………………………………………. 41

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 6 of 41

IFFCO – A Testament of Farmers’ Trust

In the year 1967, around 57 Indian Cooperative came together to

form the Indian Farmers Fertilisers Cooperative Ltd.(IFFCO); A
unique initiative by Indian cooperative envisioned to ensure the
food security for India. Over the past 50 years, IFFCO has remained
committed to this cause by providing world-class soil nutrients and
services to the Indian farmers, empowering them at every step of
the way.
The five state-of-the-art manufacturing facilities in India which
produced 78.70 lakh MT of fertilisers in 2017-18 have contributed
immensely to this cause. These facilities manufacture world class
Nitrogenous and Phosphatic fertilisers along with various types of
specialty fertilisers like water soluble fertilisers, bio-fertilisers and
organic plant growth promoters, which is a step taken by IFFCO in
the direction of the Indian agriculture’s future. IFFCO not only
equips Indian farmers with essential inputs for ensuring food security
but IFFCO is also leading the way for sustainable agriculture.
A dense country-wide marketing network which is powered by a
highly trained sales force has further added to this effort. The unique
distribution network has ensured that IFFCO’s fertilizer reach even
the remotest part of the India through rail, road and sea. In the year
2017-18, IFFCO was able to sell 103.03 lakh MT of fertilizer in India.
Thereby, making in India and making for India.
But for IFFCO the real reason success lies beyond numbers and is
reflected in the development of rural India. For this reason the thrust
has always been in inclusive and holistic development of the Indian
farming community through education and empowerment.
Several development initiatives by IFFCO like CORDET, IFFDC, IKST
and Indian Cooperative Digital platform which is now known as
IFFCO iMandi work specifically in this direction. To provide new
economic opportunities to the farmers in the North-Eastern states,

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 7 of 41

IFFCO formed a joint venture with the Government of Sikkim names

as Sikkim IFFCO Organics Limited (SIFCO).
Due to this unique and inclusive business model that keeps the
farmers first IFFCO has been successful in making a special place
amongst the Indian farming community. For this reason, over the
past five decades’ millions of Indian farmers have placed their faith
and trust in IFFCO and its products, making it the largest fertilizer
institution not only in India but the World. A testament of this trust is
also visible in the growth in membership number of the cooperative
which has catapulted from just 57 in 1967 to around 36,000 at
present.
With a combined group worth of nearly $6 Billion IFFCO is today
counted amongst the biggest and most respected business
institution in the world. The business interests of IFFCO extend
beyond Fertilisers into sectors like General Insurance,
Agrochemicals, Rural mobile telephony, International trading
amongst others. Apart from this, IFFCO also has strategic
investments in Senegal, Oman, Jordan and Dubai for assured
backward supplies.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 8 of 41

Executive Summary
This is the internship report based on the six-week long internship
program that I had successfully completed in IFFCO- Indian Farmer
Fertiliser Cooperative Ltd under Marketing Division from 10.06.2019
to 22.07.2019 as a requirement of my BBA program on Department
of Management, University of Lucknow. As being completely new
to practical, corporate world setting, every hour spent in IFFCO
gave me some amount of experience all the time all of which
cannot be explained in words. But nevertheless, they were all useful
for my career. This report includes how a marketing Department
works, what are the possible divisions and work distribution in various
marketing activities, as well as how to control insubordinations,
compensation and benefits planning for farmers across India.
IFFCO has a proper organized Marketing Department. It maintains
the organizational responsibilities successfully. Six weeks of my
internship program on Marketing Division I have worked with the full.
Within my six-weeks internship around various regular employees.
While my Training, I have been assisted and guided by the senior
field manager of IFFCO whose efforts and guidance allowed me to
compile this report. Different marketing activities and work were
analyzed by me in order to understand how the organization works
in providing the farmers with right amount of fertilisers in the right
time with minimum chances of losses. I have been collecting data
from various authorized societies and sales point about their
performance and compiling them to have an inference of how the
marketing activities are executed. My personal views about the
IFFCO, my value addition to the IFFCO cannot be ignored as it
became an integral part of my upcoming carrier. With limited
knowledge and experience, I tried my best to make this report as
much understandable as possible and translated the real world
data and experience into a document. The various boundaries to
process improvement and maintaining ethical standards in a
corporate environment have also been experienced. But even so,
how those policies and practices are In-Line with the corporate

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 9 of 41

strategy are discussed in this report. Before drawing any conclusion

based on this report it may be noted that the report was prepared
in a very short term and there is lack in elaboration. But still the report
may be useful for designing any further study to evaluate the
marketing activities and understanding the data of the
organization.

CHAPTER 1

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 10 of 41

INTRODUCTION

1.1 About the Organization:

Indian Farmers Fertilisers Cooperative Limited (IFFCO) is one of
India's biggest cooperative society which is wholly owned by
Indian Cooperatives.

Founded in 1967 with just 57 cooperatives, IFFCO is an

amalgamation of over 36,000 Indian Cooperatives with diversified
business interests ranging from General Insurance to Rural Telecom
apart from our core business of manufacturing and selling
fertilisers.
With around 19% market share in Urea and around 29% market
share in complex fertilisers (P2O5 terms) IFFCO is India's largest
fertiliser manufacturer.
The cooperative was ranked 66th on the Fortune India 500 list of
India's biggest corporations as of 2017 with a net worth of $2.3
billion as of March, 2018.

The Managing Director of IFFCO is the chief executive of

institutions and all IFFCO policies, decision and rules and
regulations, regulating IFFCO business and services are the major
responsibilities with the chief executive Mr. U.S. Awasthi is the
present Managing Director of IFFCO. The Head-office of IFFCO is
at New Delhi.
The functional departments at the Head Office are as follows:
 Marketing
 Personnel and Administration
 Marketing Accounts
 Agriculture Service
 Marketing Service and Post Operation

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 11 of 41

 Physical Distribution / Transportation

 Training and Development
 Public Relation
Talking financially the society has recorded an all-time high
turnover of Rs. 27,851.74 Cr and harvested a pre-tax profit of Rs.
1,158.23 Cr during the year 2018-19. It has paid dividends for the
year 2018-19 at the rate of N/A percent of the paid up equity to its
shareholders for the eighth consecutive year.
The Marketing Division of IFFCO has the herculean task of
providing fertilisers to the corners of India, reaching farmers who
live in some of the most challenging terrains and locations in the
world.
The Company owns over 11 subsidiaries and associates around
the globe making an international venture presence along with
many farmer oriented initiatives domestically for their
development.

1.2 History of IFFCO

During the 1960s the cooperative sector in India was responsible
for the distribution of 70 per cent of the fertilisers consumed in the
country. This sector had adequate infrastructure to distribute
fertilisers but had no production facilities of its own and hence was
dependent on public/private sectors for supplies. To overcome
this difficulty and to bridge the demand supply gap in the country,
a new cooperative society was conceived to specifically cater to
the needs of farmers. It was a unique venture in which the farmers
of the country through their own cooperative societies created
this new institution to safeguard their interests.
The number of cooperative societies associated with IFFCO have
risen from 57 in 1967 to more than 39,800 at present. Indian
Farmers Fertiliser Cooperative Limited (IFFCO) was registered on
November 3, 1967 as a Multi-unit Co-operative Society. On the

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 12 of 41

enactment of the Multistate Cooperative Societies act 1984 &

2002, the Society is deemed to be registered as a Multistate
Cooperative Society. The Society is primarily engaged in the
production and distribution of fertilisers. The bylaws of the Society
provide a broad frame work for the activities of IFFCO as a
cooperative society.

1.3 About the Plants:

1. Kalol, Gujarat: Commissioned in 1975 and expanded in 1997,
it produces ammonia and urea.
2. Kandla, Gujarat: Commissioned in 1975 and first expanded in
1981 and again in 1999, it produces NPK (10:26:26), NPK
(12:32:16), NP (20:20:0:13), DAP (18:46:0) and water-soluble
fertilisers.
3. Phulpur, Uttar Pradesh: Commissioned in 1981 and expanded
in 1997, it produced ammonia and urea.
4. Aonla, Uttar Pradesh: Commissioned in 1988 and expanded
in 1996, it produced ammonia and urea.
5. Paradeep, Odisha: Taken over in 2005, it produced
phosphoric acid, sulphuric acid and phosphoric pentoxide
(fertiliser grade)

1.4 Mission:
IFFCO's mission is "to enable Indian farmers to prosper through
timely supply of reliable, high quality agricultural inputs and
services in an environmentally sustainable manner and to
undertake other activities to improve their welfare".

 To provide to farmers high-quality fertilisers in the right time

and in adequate quantities to increase crop productivity.
 To make plants energy efficient and continually review
various schemes to conserve energy.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 13 of 41

 Commitment to health, safety, environment and forestry

development to enrich the quality of community life.
 Commitment to social responsibilities for a strong social
fabric.
 To institutionalize core values and create a culture of team
building, empowerment and innovation which would help in
the incremental growth of employees and enable
achievement of strategic objectives.
 Foster a culture of trust, openness and mutual concern to
make working, a stimulating and challenging experience for
stakeholders.
 Building a value driven organization with an improved and
responsive customer focus. A true commitment to
transparency, accountability and integrity in principle and
practice.
 To acquire, assimilate and adopt reliable, efficient and cost-
effective technologies.
 Sourcing raw materials for the production of phosphatic
fertilisers at economical cost by entering into Joint Ventures
outside India.
 To ensure growth in core and non-core sectors.
 A true cooperative society committed for fostering
cooperative movement in the country. Emerging as a
dynamic organization, focusing on strategic strengths, seizing
opportunities for generating and building upon past success,
enhancing earnings to maximize the shareholders’ value.

1.5 Vision:
To augment the incremental incomes of farmers by helping them
to increase their crop productivity through the balanced use of
energy efficient fertilisers; maintain the environmental health; and
to make cooperative societies economically and democratically
strong for professionalized services to the farming community to
ensure an empowered rural India.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 14 of 41

CHAPTER 2

PERFORMANCE
2.1 Sales Performance
Sales performance is the measurement of sales activity against the
goals outlined in the sales plan of the organization. The simplest
method of tracking sales performance is to establish sales goals for
your organization and for individual products and then evaluate
performance, either monthly or quarterly. Here at IFFCO the sales
performance can be clearly seen for the year 2018-19 which
always shows a slight variation from the previous year or two. To
make the picture clear enough to understand the IFFCO sales
performance is measured upon two broad categories that
include:
 NPK/DAP/SPECIALITY
 UREA
Where all of these are measured in Lakh Metric Ton (MT) as a unit
base. Talking about figures the IFFCO sales performance for the
year 2018-19 for the sale of NPK/DAP/SPECIALITY was 41.36 Lakh
MT (39.95 Lakh MT in 2017-18) and for UREA it was 74.20 Lakh
MT(63.08 Lakh MT in 2017-18) making it a total sale of 115.56 Lakh
MT.

Sales Performance

36%

64%

NPK/DAP/SPECIALITY UREA

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 15 of 41

2.2 Financial Performance

Financial Performance is the process of measuring the results of a
firm's policies and operations in monetary terms. It is used to
measure firm's overall financial health over a given period of time
and can also be used to compare similar firms across the same
industry or to compare industries or sectors in aggregation. It is
general measure of a firm's overall financial health over a given
period of time usually a financial year.
As of our study for the year 2018-19 as mentioned above in the
introduction part the turnover of IFFCO for the respective year
was Rs.27,851.74 Cr which was earlier at 20,787.55 Cr that
indicated a trend in performance within a year. Major increase in
the reserve and surplus of the company that showed an increase
of about Rs.755.59 Cr resulting a net profit of Rs.841.58 Cr.

Financial Performance (Lakh MT)

43%

57%

Turnover 2018-19 Turnover 2017-18

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 16 of 41

2.3 Production Performance

Production Performance is the process of measuring the output of
products been manufactured at IFFCO plants relating to their
targets and actual production. Two main products at IFFCO are
produced at wide scale that includes:
 NPK/DAP/SPECIALITY
 UREA
Where all of these are measured in Lakh Metric Ton (MT) as a unit
base. Talking about figures the IFFCO production performance for
the year 2018-19 for the produce of NPK/DAP/SPECIALITY was
35.87 Lakh MT (37.62 Lakh MT in 2017-18) and for UREA it was 45.62
Lakh MT (41.09 Lakh MT in 2017-18) making it a total produce of
81.49 Lakh MT.

Production Performance (Lakh MT)

44%

56%

NPK/DAP/SPECIALITY UREA

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 17 of 41

CHAPTER 3
ABOUT THE STUDY
MARKETING COST

3.1 Definition
Marketing costs are the all expenses that the company makes to
market and sell its products and develop and promote its brand.
These marketing costs or expenses include expenses incurred to
change the title of goods, promotion of goods, inventory costs,
distribution of goods etc. Marketing costs are generally composed
of two factors- fixed costs and variable costs. The marketing cost is
also used to determine the risk associated with budgets.

At IFFCO, the marketing cost is calculated under various heads

that includes:
 Warehousing Expenses
 Handling Expenses)
 BTF(Benefits to Famers
 Publicity and Sales
 Administrative Expenses
 Total Marketing Cost
 Rebate and Discount
 Average Debt Finance Cost
 Inventory Carrying Cost

Let’s understand each head in-short and individually.

 Warehousing Expenses: These expenses are incurred in order

to store the product at warehouse for a specific period of
time at a specific rent in cases.

 Handling Expenses: This type of expense is incurred when an

activity of loading and unloading, carrying is done or in short
when product are handled from one process to another.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 18 of 41

 BTF: BTF Stands for Benefits to Farmers where the cost of

making farmers aware about the products and expenses on
their training and development is done.

 Publicity and Sales: Advertisements done to promote a

product or a service. Directly these terms are interconnected
where in most of the cases the Sales is directly depended
upon the Publicity and Sales.

 Administrative Expenses: Cost associated with the

administrative activities such as management cost and
salaries of employee office expenses along with expense
related to infrastructure.

 Rebate and Discount: Any discount or rebate given out to

farmers and suppliers regarding their purchases are
calculated under rebate and discount.

 Inventory Carrying Cost: Which represents the cost incurred

over a certain period of time to hold and store its inventory.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 19 of 41

3.2 Objective of Study

The objective of marketing costs under determines the relative
profitability of particular aspects of sales operations. For this study
the objectives are
(i) The marketing head are profitable and which are not
profitable;
(ii) What are the profit contributions of individual sales staff;
(iii) What is the profitability of the various products;
(iv) What is the minimum size of a profitable account;
(v) How small an order can be and still be profitable;
Marketing channels offer the most profit for a given sales volume?
In addition, marketing costs analyzes indicate aspects that may
require management action, but not the nature of the action.
The answers to complex issues requiring cross-analysis of expense
allowances are also proposed. If the different product selling, for
example, are analyzed cross with the costs incurred by the staff of
individual sales, ideas vest over how the sale time must be
allocated between the products. But the point linked to the
improvement of the distribution of the sales time between
products requires other factors among them review, sales
potential for each product in each sales territory. The analysis of
marketing costs also discusses the price discrimination between
products. Above all, an analysis of marketing costs made for this
purpose would be to show that the price difference did not
exceed the difference in selling expenses incurred in servicing two
clients or territories.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 20 of 41

3.3 Data with Specific Analysis

The following sample data is collected and shown here from an
official document as mention in the research and methodology
section of this report and the heads in data are explained in the
chapter 3.1 of this report. A fair idea of how the marketing heads
are determined and reported starting from the Sales figure for
each state moving on further to towards the grand total of the
state Uttar Pradesh.

Variance Actual Budget

10.45
Admin 16.84
27.29
0.17
Publicity and Sales 0.08
0.25
1.16
BTF 2.06
3.22
-19.48
Handling 69.20
49.72
5.80
Warehousing 20.13
25.93
-30.00 -20.00 -10.00 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

Chart 1.1: Marketing Data for Field Office – LUCKNOW FO for the
year 2018-19 (In Lakhs)

SPECIFIC ANALYSIS (Chart 1.1):

The trend for Lucknow where the handling expense was given
highest priority in terms of budget allocation which was set at Rs.
49.72 Lakhs and that actually lead to expense of Rs. 69.20 Lakhs
almost increase of about 150% in overall expense of handling in
Lucknow. On analyzing deep into the causes of such a trending
increase certain points were discovered such as:

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 21 of 41

1. Increase in Transportation Cost:

Certain districts like Azamgarh, Ballia and Faizabad etc.,
enjoy the benefits of having the sale point situated within the
district which provide them less handling cum transportation
cost while other districts such as Lucknow, Orai and
Balrampur etc. have higher transportation cost due to extra
cost involved in transporting the fertilisers from another district
or warehouse to the sale point.

2. Higher Labor Cost:

Developed districts like Lucknow would have higher labor
cost due to high demand for labor’s and increased cost of
living which include food and rents etc. A same labor with
same needs of living i.e. Food, Cloth and Shelter would
demand almost half or less in small districts when compared
to the ones in bigger districts like Lucknow which ultimately
increase the cost of handling activity.
Apart from this the factor of labor charges at night cannot
be ignored as heavy loaded trucks are not allowed to enter
the developed districts like Lucknow before 10 PM which puts
the trucks on the skirts of districts and thus the labor works at
night charging double the rates than usual rates.

3. More Residential Area:

Lucknow has an area of 349 km2 which commercial and
residential purpose which ultimately reduces the contribution
of farming activities within the district thus the handling and
transportations cost gets added up in the total marketing
cost of a district having less agricultural land.is most likely used
as a

4. Unavailability of Trucks:
Trucks are the main modes of transportation when it comes
to transporting the large amount of goods from warehouse

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 22 of 41

to the sales point of a district but for certain districts their

unavailability causes increase cost and excessive time, these
trucks are generally found in transporting raw materials like
cements and maurang etc.

Some other general problems which can lead to such a trending

increase in expense can be listed as:
 Downtime due to equipment damage can have
devastating result.
 Lower unemployment rate coupled with ever-higher hourly
compensation makes it difficult for materials handling
executives to retain best workers.
 When manufacturers don’t have full visibility to their
inventory, they face the problems of either running out of
stock at the wrong time or carrying too much stock and thus
decreasing cash flow while increasing expenses to
warehouse extra materials
 Breakdown in communication somewhere in the process of
ordering and supply

Apart from the handling activity of marketing other activities such

as administrative and warehousing expense does not vary much
but in cases they are related to handling expense which
sometime can directly affect the process and cause sometime
high fluctuations in the variance or the planning of activities.

Talking about the Lucknow Field office for IFFCO the overall
performance was evaluated on a total budget of approx. 242
Lakhs that constituted a sales of 46678.22 Lakh MT with just a
budget allocation of 40000 Lakh MT, which shows the increase
demands and profitability of firm in such cities.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 23 of 41

Chart 1.2: Overall Performance of Sales (in MT) with Marketing

activities for the year 2018-19

SALES (MT) FIELD OFFICE LUCKNOW

2018-19
Budget Actual Variance

50000 46678.22
45000
40000
40000
35000
30000
25000
20000
15000
10000 6678.22
5000
0
Sales

As a final conclusion and overall analysis of the field office

Lucknow the cost was much reduced up to Rs. 69.55 Lakhs which
is a positive sign in planning all the marketing activities and
successfully executing them hence saving the cost and increasing
the profitability of the firm.

Increasing the profitability is not only defined through increase in

sales but also by the effective planning and management of all
the marketing activities where there cost can be strategically
reduced keeping in mind the customer need and putting in the
efforts to retain the customers which acts as the key factor to
increase sales and decrease the cost on marketing because the
retained customers are aware of what they are buying and about
the product benefits.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

 Page 24 of 41

Chart 1.3: Total Marketing Cost (in Lakhs) with Marketing activities
for the year 2018-19

TOTAL COST(IN LAKHS) FIELD OFFICE

LUCKNOW 2018 -19
Budget Actual Variance

300
244.31
250

200 174.76

150

100
69.55

50

0
TOTAL COST

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 25 of 41

3.4 Data Comparison

As discussed in the above section 3.4 about the district Lucknow

we pointed out some of the key reasons in the increase of
handling and transportation expenses but to get further a clear
picture about the cost of marketing as the data and reasons vary
from district to district so for here we are going to compare to
district one with the highest expense and the second one with the
lowest expense from the data provided.

The highest expense for the year 2018-19 of the marketing cost
was in the district BAREILLY FO that showed a negative variance
i.e. extra expense of about Rs 17.6 per MT with an actual expense
of Rs. 331.6 per MT (Budget Rs. 314 per MT) as shown in chart 1.4

Chart 1.4: Marketing Expense of Bareilly for the year 2018-19

MA RK E T I NG E XPE N SE O F BA RE I LLY (YEA R 2 0 1 8 - 1 9 )

PE R MT
BUDGET ACTUAL VARIANCE

TOTAL COST 314 331.6 17.6

The Lowest expense was recorded for MAHOBA District in the year
2018-19 of marketing cost that showed a positive variance i.e. cost
saved of about Rs. 684.02 per MT with an actual expense of Rs
549.67 per MT (Budget Rs. 1233.9 per MT) as shown in chart 1.4

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 26 of 41

Chart 1.5: Marketing Expense of Mohaba for the year 2018-19

MA RK E T I NG E XPE NSE O F MA HO BA DI ST RI CT
(YEA R 2 0 1 8 - 1 9 )
PE R MT
BUDGET ACTUAL VARIANCE

TOTAL COST 1233.9 549.67 684.02

Let’s get deeper into the comparison activity wise for both the
districts and find out the cause and effect on profitability on the
firm due to such fluctuations.

When expenses related to the marketing activities of different

attributes would occur with difference to the actual budget then
these variances are likely to be seen. Mohaba having the
advantage over the labor cost, transportation cost, more
agricultural land and less time period to make a sale which makes
it the most profitable district of Uttar Pradesh for the year 2018-19
despite of having area of 2884 km2 and the district is a part of a
Chitrakoot Division other than having the least population of just
876055 people as of 2011 census with a growth rate of 23% in 10
years which can be calculated to the current population of the
district i.e. 1077547 people approx. which is one of the main
reason why the expense were such low due to demand of people
being less than districts like Bareilly which is a part of Bareilly
Division with an area of about 4120 km2 and a population of
approx. 4448359 with such massive market the expense are like to
fluctuate at a higher trend than normal/budgeted but can be

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 27 of 41

observed that population is not only the factor of such trend but
yes these both districts do have nearly difference of double the
demographics when compared which can be easily concluded
that we can’t ignore the fact of considering the population while
the cost marketing activities are been calculated.

People get product’s like fertilizers at a must affordable cost which

allows them to be consistent with us and brings in the sales. Almost
no transportation cost is being incurred due to availability of
fertilisers and less distance between the sales point and
warehouse which ultimately reduces the handling and
transportation cost.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 28 of 41

3.5 Evaluation of Marketing Activities

Warehousing Activity:

For Mahoba the rack points are absent for which the large
amount of fertilisers are stores for a longer period of time to meet
the demand and save some transportation cost which ultimately
increases the warehousing cost along with this the Bareilly district
having the Plant (Aonla) situated within the radius of about 40Km
approx. which allows the direct transportation of products from
factory to sale point ultimately minimizing the warehousing cost
i.e. less use of warehouse.

Chart 1.6 Indicates the Warehousing cost for Mahoba and Bareilly
in 2018-19 (In Lakhs)

Bareilly Mahoba
30.88

16.37
14.51
13.44

8.56

4.88

BUDGET ACTUAL VARIANCE

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 29 of 41

Handling and Transportation Activity:

In the case of Mahoba the handling expenses are very because

the fertilisers are imported from the nearest districts like Urai etc.
and on demand which included rail transportation and labor
handling cost along with the final cost to transport the good to
sale point including loading and unloading cost ultimately
increasing the cost of handling and transportation in Mahoba
whereas in Bareilly district the transportation cost is very low
because the production plant Aonla is situated too close and
handling expenses are very cheap.

Chart 1.7 Indicates the Handling and Transportation cost for

Mahoba and Bareilly in 2018-19 (In Lakhs)

Bareilly Mahoba
33.02

25.71
25.44
20.88

7.54

BUDGET ACTUAL VARIANCE

-4.83

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 30 of 41

BTF (Benefits to Farmers) Activity:

BTF attribute for both the districts Mahoba and Bareilly remained
equal due to certain events and development programs which
were made by the IFFCO to make people aware about the
products and how they can consume them on the individual
basis, coming on to Mahoba the budget was almost too high
when compared to the actual expense on the cost of activities
arranged and benefits provided to farmers which can be seen
clearly from the graph 1.8 below and in Bareilly the people are
made extra aware and developed because if they get to know
about the product which is easily available and at less cost to
them they would definitely drive sales to the firm which was
understood by the management and which indeed provided the
benefits to the farmers in the Bareilly district.

Chart 1.8 Indicates BTF (Benefits to Farmers) cost for Mahoba and
Bareilly in 2018-19 (In Lakhs)

Bareilly Mahoba
1.25

1.22
1.12

0.84
0.28

0.03

BUDGET ACTUAL VARIANCE

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 31 of 41

Publicity and Sales Activity:

Publicity and Sales are the marketing activity which are done in
the districts where the people are less aware about the products
or a new product is specially made available for that district to
drive sales apart from these two reasons certain reasons also
include variance in sales and performance of the district or to
offer a benefit on certain products to the farmers via schemes etc.
all such factors ultimately give rise the publicity and sales activity.
In Mahoba the budget was set but the actual spent was equal to
zero which means the districts performance is poor and expense
on publicity would not yield any benefit whereas in Bareilly the
expense was again zero but with a strong reason like the location
of an IFFCO plant nearby which makes people aware about
what’s going on and movement activities of transport vehicle
from the outskirts or within the city also make people aware.

Chart 1.9 Indicates Publicity and Sales cost for Mahoba and
Bareilly in 2018-19 (In Lakhs)

Bareilly Mahoba
0.1

0.1
0

BUDGET ACTUAL VARIANCE

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 32 of 41

Administrative Activity:

Bareilly district having more than one district office increases the
cost of administration as more money and consistent efforts are
required to meet and run the field office along with a plant which
makes it a compulsory part of the administration to work and
meet up the requirement of the company with proper quality and
quantity whereas in Mahoba the administrative expenses are less
due to less sales.

Chart 2.0 Indicates Administrative cost for Mahoba and Bareilly in

2018-19 (In Lakhs)

Bareilly Mahoba
47.13

34.98
13.4

12.15

9.31
4.09

BUDGET ACTUAL VARIANCE

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 33 of 41

3.7 Top Performing Districts

When it comes to performance of districts, different factors are

taken into considerations for every different states like geological
conditions and availability of labor, therefore we have listed the
top five districts of Uttar Pradesh on the basis on of:
Sales
Total Expense
Total Marketing Cost
Warehousing Cost
Handling Cost
BTF (Benefits to Farmers) Cost
Publicity and Sales Cost
Administrative Cost respectively.

Top 5 Districts with sales (In MT)

 Allahabad
 Jaunpur
 Gorakhpur
 Sambhal
 Kaushambi

Top 5 Districts with Highest Expense (in Lakhs)

 Sitapur
 Meerut
 Bulandshahar
 Pilibhit
 Shahjahanpur

Top 5 Districts with Highest expense on overall marketing activities

 Etawah
 Shahjahanpur
 Mahoba
 Moradabad

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 34 of 41

 Deoria

Top 5 Districts with Highest expense of Warehousing

 Moradabad
 Shahjahanpur
 Muzafarnagar
 Allahabad
 Bijnore

Top 5 Districts with Highest expense of Handling

 Etawah
 Mahoba
 Deoria
 Shahjahanpur
 Meerut

Top 5 Districts with Highest expense of BTF

 Lakhimpur
 Badaun
 Sitapur
 Allahabad
 Saharanpur

Top 5 Districts with Highest expense of Publicity and Sales

 Bulandshahar
 Lucknow
 Bhadohi
 Mahoba
 Lakhimpur

Top 5 Districts with Highest expense of Administrative Expense

 Hamirpur
 Firozabad
 Meerut
 Ballia

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 35 of 41

 Gorakhpur
CHAPTER 4
ORGANIZATIONAL STRUCTURE

4.1 Overview
Organizational Structure in the sense relates to how an
organization is structured and what hierarchy does it follow to
efficiently and effective carry on it daily business activities. Various
organizations have different structure according to their size and
need, an organization with a more expanded reach and
employability would have a more complex structure when
compared to the one which operated on a limited activities.
IFFCO being the World biggest institutions to produce fertilisers
along with various other subsidiaries in different sectors such as
telephony and general insurance etc., with such wide mode of
operating the organizational structure of IFFCO starts with a
Headquarter situated in (PLACE) under which their exist three main
division namely
 Marketing
 Production and
 Associates and Subsidiaries
Various other divisions are also included in the organization
such as cooperative division but these three main divisions work
independently along with a good coordination among each
other. Marketing Division is concern with activities like
transportation, handling, benefits to farmers, discounts, sales
and advertisement etc. All these activities are monitored and
analyzed in this report in chapter 3 as a primary objective of the
study. Productions division is administered with activities related
to manufacturing and productions from its pants. IFFCO as five
main plants as stated in chapter 1 namely
 Aonla, Uttar Pradesh

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 36 of 41

 Phulphur, Uttar Pradesh

 Kalol, Gujrat
 Kandla, Gujrat and
 Pradeep, Orissa.
And at last but not the least the Subsidiaries division work
completely independently as an expansion source for IFFCO
into the various field but all indirectly related to the benefits
of farmers. Some of the top subsidiaries of IFFCO are listed
below as:
 Indian Potash Limited in India
 Industries Chimques du Senegal, Senegal
 Oman India Fertiliser Company SAOC, Oman
 Jordan India Fertiliser Company LLC, Jordan
 IFFCO Tokio General Insurance Company Limited.
 National Commodity and Derivatives Exchange
 IFFCO Kisan Sanchar Limited
 IFFCO Kisan Logistics Limited
 IFFCO Kisan Special Economic Zone Limited
 IFFCO-MC Crop Science Pvt. Ltd.

To have a further detail overview these marketing divisions of

IFFCO kindly refer to section two of this chapter.

4.2 Marketing Division

The Marketing Division of IFFCO is divided into two broad
categories i.e.
 SO- State Office
 FO- Field Office
Sate Office- State office of IFFCO hold the activities related to
management of marketing activities such as sales, BTF( Benefits
to Farmers), Handling, Warehousing, Publicity and
advertisement etc., within a specific state ad analyzing it

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 37 of 41

discover and improve any faults and errors and take necessary
measures to increase the sales of fertilisers and identify the
promising districts for that state, In India there are total 27 state
office in total.
Field Office- Currently there are 75 Field Office of IFFCO in Uttar
Pradesh and an approx. of 700 Field Office all over India.

4.3 Production Division

Production Division of deals with operations related to
manufacturing and production of fertilisers across the plants in
India and having a monitor on activities related to production
which include demand and supply of produced goods to
districts as per their budget allocation and taking measures to
modify or improve the product or product line. It all starts from
production of fertilisers in the 5 main plants of IFFCO namely
1. Aonla [Located in Uttar Pradesh ]
2. Phulphur [Located in Uttar Pradesh ]
3. Kalol [Located in Gujrat ]
4. Kandla [Located in Gujrat ]
5. Pradeep [Located in Orissa ]

The fertilisers is manufactured in these plants and then transported

to various districts through the rail or road as needed and stored in
respective warehouses which then are supplied to the retail points
for further sale to the farmers.

4.4 Diversification and Joint Ventures

IFFCO has made strategic investments in several joint ventures.
Indian Potash Limited in India, Industries Chimiques du Senegal
(ICS) in Senegal and Oman India Fertiliser Company (OMIFCO)
in Oman are important fertiliser joint ventures. Indo Egyptian
Fertiliser Company (IEFCO)in Egypt, Jordan India Fertiliser
Company in Jordan are under implementation. As part of

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 38 of 41

strategic diversification, IFFCO has entered into several key

sectors. IFFCO-Tokio General Insurance Ltd (ITGI) is a foray into
general insurance sector. Through ITGI, IFFCO has formulated
new services of benefit to farmers. ‘Sankat Haran Bima Yojana’
provides free insurance cover to farmers along with each bag
of IFFCO fertiliser purchased. To take the benefits of emerging
concepts like agricultural commodity trading, IFFCO has
purchased equity in National Commodity and Derivative
Exchange (NCDEX) and National Collateral Management
Services Limited (NCMSL). IFFCO Chattisgarh Power Limited
(ICPL) which is under implementation is yet another foray to
move into core area of power. IFFCO is developing a multi-
product KISAN Special Economic Zone (IKSEZ) at Nellore in
Andhra Pradesh – first of its kind with farmer’s cooperatives as
stakeholders. IFFCO is also behind several other companies with
the sole intention of benefiting farmers. The distribution of
IFFCO’s fertiliser is undertaken through over 39,800 co-operative
societies. The entire activities of Distribution, Sales and Promotion
are coordinated by Marketing Central Office (MKCO) at New
Delhi assisted by the Marketing offices in the field. In addition,
essential agro-inputs for crop production are made available to
the farmers through a chain of 158 Farmers Service Centre (FSC).
IFFCO has promoted several institutions and organizations to
work for the welfare of farmers, strengthening cooperative
movement, improve Indian agriculture. Indian Farm Forestry
Development Cooperative Ltd (IFFDC), Cooperative Rural
Development Trust (CORDET), IFFCO Foundation, Kisan Sewa
Trust belong to this category. An ambitious project ‘ICT Initiatives
for Farmers and Cooperatives’ is launched to promote e-culture
in rural India. IFFCO obsessively nurtures its relations with farmers
and undertakes a large number of agricultural extension
activities for their benefit every year.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 39 of 41

BIBLIOGRAPHY
This report was fully written, compiled and analyzed by me using
various source such as mentioned below which proved to be the
authentic and up-to date apart from these the content was
acquired from various on field societies and farmers using verbal
communications and later on structured to fit best in this report.

Website: www.iffco.in and Wikipedia

Numeric Data: Verbal Communications + Annual Report of IFFCO
for year 2018-19
Elaborative Content: IFFCO at a Glance/ Annual Prospect
(Note: Questionnaire were not used)

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 40 of 41

FUTURE PERSPECTIVE OF IFFCO

The salient features of the 'Vision-2020' document are as under:
 To stand as a Global Leader in Fertilisers production.
 Implement strategies for sustainable development by
reducing Energy Consumption and better Resource
Management.
 Maximizing the synergies of Core Business through
Forward/Backward Integrations.
 Enhancing presence in International markets through
Strategic Joint Ventures and Synergistic Acquisitions.
 Diversification in other Sectors for financial sustainability.
 Promoting Integrated Nutrient Management and optimum
Fertiliser use.
 To help the Cooperative Societies become economically
strong, professionally managed and to equip the Farming
Community with advanced agricultural practices for
improved Productivity, to ensure an Empowered Rural India.
 Achieve Fertilisers Marketing target of 15 million tons per
annum by 2020.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |

Page 41 of 41

CONCLUSION
Despite the fact that 2018 was a year of many challenges, the
IFFCO managed that quite successfully. The year was concluded
with a steady growth and the market share was retained in all areas
of marketing operations. Organization management is confident
about its ability to sustain its earning capacity and maintenance of
asset quality in the coming years. With a view to improving the
quality fertilisers for farmers, transportation management methods
were quite favorable. IFFCO is now applying a new system to serve
the societies and farmers with decisions and monitoring functions.
The organization monitors its exposure to particular sectors of
marketing economy on an ongoing basis. Production and
Management of this organization is pretty efficient and impressible.
From the beginning of the marketing process the system is
sufficiently committed and organized. After demand are created
from various districts across India the IFFCO stocks clearance starts
along with proper method to carry on until the fertilisers reach the
consumer. IFFCO is a world biggest manufacturer of the fertilisers
expanded all over the World., it made a good profit in the years
following its opening in 1967. The organization is better in respect of
other contemporary fertiliser manufacturing
companies/cooperative & currently on the leading position of
fertiliser manufacturing cooperative. Indian Farmer Fertiliser
Cooperative Limited had made an impressive profit of Rs 8.41 billion
in 2018-19. The marketing management system of IFFCO is quite
satisfactory with a low default rate.

SUMMER INTERNSHIP REPORT BY RIYAZ AHMAD |