CHAPTER 1

INTRODUCTION

1
1.1 ORGANISATIONAL STUDY
It is the systematic study on the working of the overall organisation. It involves study
of various departments, workforce, department functions and process flow of each
department. A detailed study will help to understand how each department is
contributing towards the achievement of vision and mission of the organisation. It
also includes understanding the major functions of key persons of each department.
An organisational study which aims to familiarize the students with the nature and
function of an organisation in the “real world”.It provides students the opportunity to
know, observe, learn the nature, vision, objectives and functioning of an organisation.
It also enables students to explore issues and problems in an organisational settings,
giving suggestions to sort at these issues that would help the future managers to
face the challenges ahead.
The organisation study is carried out at AVT Natural Products Limited, South
Vazhakulam, which is a public limited company promoted by Mr. Ajith Thomas as
strategic diversification from the traditional plantations business of A V Thomas
group. A V Thomas group came into existence in 1925. AVT Natural Products
Limited, which is based at Cochin, is the largest contract farming in India. Recently
the company has diversified its products into the production of spices, oleoresins,
essential oils, natural food colour and natural extract for the global food ingredients
market.AVT Natural Products Limited operates in the segment of oleoresins/extract
colour and flavours. The company has highly advanced facility in house to develop
superior quality planting materials. The organisational study has been carried out to
get an understanding of the functioning and structure of the organisation.

2
OBJECTIVES OF THE STUDY

 To familiarize the students with a business organisation to relate theory

with practice.
 To familiarize the students with an organisational structure and its
functioning.
 To familiarize them with the different departments in the organisation
and their functions and activities including departments documentation .
 To conduct a SWOT analysis of the company.
 To enable the students to understand how the key business processes
are carried out in an organisation.
 To understand how the information’s are used in organisation for
decision making at various levels including data flow diagram .

 To study the financial performance of the organisation by doing

financial analysis.

METHODOLOGY
Primary Data : Primary data are collected through direct interviews, interaction and
observation.

Secondary Data : Secondary data are collected from magazines, journals, annual
report and internet.

SCOPE
The study intended to attain a first-hand experience of the overall running of an
organisation. A detailed analysis of each of the activities performed by the
departments is beyond the scope of the study. It also provides a chance to see
practical constraints faced by managers while putting theory into practice.

3
LIMITATIONS

 It has chances of guarded and bored responses from the employees.

 The busy schedule of departmental heads restrict the collection of detailed
information.
 A deep study of each and every department in the organisation is not possible.
 Lack of adequate knowledge about organisational function.
 Individual and sociability bias.
 Situational factors.

4
 CHAPTER 2

INDUSTRY PROFILE

5
2.1 INDUSTRY PROFILE

The story of Indian spices dates back to 7000 years into the past, India is known as
the “home of spices”. There is no other country in the world that produces as much
kind of spices in India. The climate of the country is suitable for almost all spices. The
history and culture of Indian spice is probably as old as human civilization itself.
According to the International Organisation of Standardization (ISO) the “spices and
condiments” applies to the natural plant for vegetable products or mixture thereof in
whole or ground forms, as are used for imparting flavour aroma and for seasoning of
goods.

Spices constitute important group agricultural commodities, which are virtually

€indispensable in the culinary. For India, spices are important commercial crop of the
point of view of both domestic consumption and export. Besides, huge quantities of
spices are also been consumed within the country for flavouring foods and also used
in medicine, pharmaceutical, perfumery, cosmetics and several other industries. The
Vedas, Bible and Quran are well replete with reference, discrete or indirect to Indian
Don spice is the Rig Veda ( around 6000 BC ) and 3 other Vedas – ( yajur, sama and
atharva).

There are several spices grown in different parts of the world and around 50 spices
are grown India. The spices that India can offer in abundant quantities are pepper,
ginger, turmeric, chilly, cardamom, celery, fenugreek, fennel, cumin, dill, coriander,
cinnamon, cassia, clove, nutmeg and mace. Major spices of export are pepper,
cumin, cardamom, ginger, turmeric and chillies. Among the spices exported pepper
has the leading position in terms of both quantity and value released. The Aleppey
green cardamom is considered as the best grade available in the world.

Today the Indian spices hold the same smell. Within the past 1 decade, the
international trade in spices has grown by leaps and bounds. An estimated 5,00,000
tons of spices and herbs having value of 1500 million US $ are now imported globally
every year. An impressive 46% of supply comes from India. In the recent year, export
of Indian spices has been taking giant leaps. The Indian export of spices

6
has crossed the 450 million US $ mark during 1999 – 2000 and has reached 468
million $.

India’s exports of spices extracts have shown spectacular growth attaining over 50%
of the global market within a short span. Over the past decade, Indian spices industry
has made quality, the cutting edge of its global game plan. From the traditional
commodity exports Indian spices have evolved into a state of the art industry by
absorbing technology, developing value added products identifying niche markets.
The Spices Board of India (Ministry of Commerce, Government of India) is the apex
catalyst of these dramatic transactions. The Board has been with the Indian spice
industry every step of the way. The board place a far reaching role as a
developmental, regulatory and promotional agency for Indian spices.

2.2 ROLE OF SPICES

Spices are well known as the appetizers and reconsidered essential in the culinary
art all over the world. They add tang and flavour to the food. Some of them also
process antioxidants pr5operties, while others are used as preservatives in some
foods like pickles and chutneys, etc.

Some spice also process strong antimicrobial and antibiotic activities. Many of them
possess medical properties and have a profound effect on human health for instance,
spices intensify salivary flow. They clean the oral cavity from food adhesion and
bacteria.

2.3 INTERNATIONAL TRADING SPICES

Spice trade has always major economic importance through the human history. The
international trade in various forms of spice has grown tremendously in last decade.
According to Indian estimate, 85% of the international trade in spice is dried and is
used after cleaning but without future processing. Pepper is one of the most valuable
spices in the globe trade. Countries including China, India and Indonesia are
emerging as the leading spice trader.

7
  EXPORT

Export of spice oil and oleoresin from India had been increasing every year. Spice oil
and oleoresin are exported to about 18 developed countries in the world. It may be
noted that the share of oil and oleoresin in total earnings from spice export from India
is increasing. USA is the major importer of oil and oleoresin from India accounting
total exports. UK, Canada, Switzerland, Japan, Singapore, Netherlands, Spain and
Israel are some of the importers of spice oil and oleoresin from India.

 IMPORT

Through Indian manufacture of spice oil and oleoresins are suited in the land of
spices certain spices are to be imported because of their high yield, for example the
yield of Indian pepper is lesser than Srilankan variety. The same in the case of
nutmeg and mace, clove son the other hand are not grown in quantities enough to
meet the requirement in India. They are hence imported to into India due to the
demand for clove oil in foreign markets.

 MARKET OUTLOOK

In all developed countries, there is a powerful lobbying against all synthetic food
colours and flavours since it may cause health problems. Since the quality of
essential oil being subjective, there should be a direct contact between buyer and
seller for fixing quality standards.

In small markets producers deal directly with flavour/perfumery house, agent, actual
users etc. The recent development in spice oil production is the microencapsulated
spice oil and oleoresins, sterilization oil where a problem. Bacterial contamination
has emerged as a serious problem since radiation was not allowed.
Microencapsulation of the oil and oleoresins at an economic price can solve this
problem. By encapsulation of oils we can avoid oxidation of spices, which has also
been a major problem. Through our oil are almost up to mark of British oils in quality
we c\have to go to a long way to improving packaging and overall presentation of the
product.

8
In the UK Indian food are becoming more and more popular. This means that the
demand for spice and spice products may go up in the coming years. Of late there
has been new development in the Cola industry cardamom colours which is made by
incorporating cardamom oils. The particulars have a linking towards cardamom
flavour, which is used abundantly is coffee flavoured with cardamom commonly
known as Arab Coffee.

2.4 INDIA’S SHARE IN GLOBAL SPICE MARKET

Spice derivative can be categorized into spice oil, oleoresins and essential oils. The
demand for spice derivatives is also increasing due to hygiene, standardization and
consistently factors. India contributes nearly 70 % to the world spice derivative
market. It exports largely to USA, UK etc. Indian southern states including Kerala,
Karnataka and Tamil Nadu provide concentrated oils and oleoresins focus in
perfumery, pharmaceuticals, food processing and chemical industry.

 KEY INDUSTRY TREND

There had been a substantial increase in as us fresh herbs and spices owing to an
increased demand in the hotel industry. change of consumer towards lending a
healthy life style has increased the use of herbs/natural spice for natural flavouring.
Use of spice derivatives like essential oils are being widely used internationally in
food and beverages industries for flavouring and programmes. The global demand of
spice has increased due to :

 Increase in demand and consumption of ethnic food.

 Introduction of flavoured coffee. Tea related drinks in the beverage industry.

A sharp growth in the processed food consumption increase in the demand for
natural fragrance for various health therapies.

2.5 INDIAN SPICE INDUSTRY

India has traditionally been known for its spice and cutlery herb production. It is the
largest spice producing and consuming country. Its strategic location, climate
condition, advanced production process and availability of cheap labours make it

9
advantage for the producers to ensure large scale production of quality spices and
herbs. The booming global spice markets posse’s good opportunity for the Indian
spice industry to provide quality spices at competitive prices.

India faces big competition from China, Malaysia and Pakistan n terms of pricing of
the product. Manufactures should therefore ensure consistency in supply, product
quality, pricing and marketing strategy to increase the share in export producers are
incorporating latest methods and technologies to ensure higher quality of spice and
herbs. India is one of the prime exports of pepper, chillies, turmeric, seed spice and
spice derivatives to the rest of the world. USA, EU, Japan and Srilanka import their
Indian spice in large volumes.

 TECHNOLOGY

Spice oils are usually extracted by steam distillation while oleoresins are obtained
through solvent extraction. Indian manufacturers either use the technology developed
by them or technology developed by Central Food Technological Research Institute
(CFTRI) Mysore. The industries started on late 1970s has now possessed adequate
technological standards and contribute a major share in Indians spice expect
earning.

SCFC system is a modern technology of making oils or through carbon dioxide

processing. The system provides a modern cost effective technology for value
addition in processing for various commodities like spices. SCFC is a two step
process, which use carbon dioxide as the solvent above its critical pressure and
temperature for extraction of various natural materials. This technology is preferred
worldwide for commercial extraction because of offers.

 PRODUCTION

There are about 24 companies engaged in producing spices oils and oleoresins.
Most of them are located in Kerala. The total production of this ranges from 2500 –
3000 tons per year. The total annual installed capacity of firms is about 4000 tons.
The several, manufactures are now expanding this product line to include more spice
or production at full capacity and this current capacity utilization varies from an
insignificant level of 60 – 70 % of the total installed capacity.
10
  GOVERNMENT POLICY

The Ministry of Commerce has given timely support for the study progress of the
industry, which culminated in the leadership in supply of oils and oleoresins in the
world market. Self certification of essential oils and oleoresins facilities free flow of
export. For import Government lays duty from other countries for extraction purpose.
The Government also stimulates time limit for re-export.

2.6 MAJOR SPICE EXPORTED

Table No. 1

Chillies 33%
Seed spice 22%
Turmeric 14%

Spice oil and

oleoresin 8%

Pepper 7%
Fenugreek 1.2%
Ginger 2.7%

Tamarind 0.9%

fennel 1.1%

Cardamom 1.2%

11
 CHAPTER 3

COMPANY PROFILE

12
3.1 HISTORY

The seeds of A V Thomas group of companies were planted when Mr. A V Thomas
purchased grasslands in a place named Pasuparai in the state of Tamil Nadu in 1925
and planted tea sapling. On purchasing this estate, Mr. Thomas floated the Highland
Produce Company Ltd in 1926. There after he floated various companies under his
management. The first company was A V Thomas and Company Ltd. After this, at
different locations in Kerala a number of companies were formed under his
leadership. This leads to the formation of an empire.

3.2 AVT NATURAL PRODUCTS LIMITED (AVT NPL)

The AVT Natural Products Limited started its operations by establishing 300 tons per
day soya beans extraction plant in Pandurna, Madhya Pradesh, which produce high
quality of soya bean oil and de0 oiled cakes. The oil is used as raw material by the
domestic vegetable oil industry while the cake was mainly exported abroad. In 1994,
AVT NPL setup its second extraction unit at Vazhakulam near Alwaye in Kerala.

The AVT Group of companies after 85 years of operation has significant presence in
India’s agribusiness sector including plantations, agro processing, plant
biotechnology and natural food and feed ingredients. AVT NPL is 100% Export
Oriented Unit located in Kochi, Kerala the spice capital of the world. AVT NPL is a
member of A V Thomas group of companies with interest in plantations, leather
goods, tissue culture and medical diagnostics. AVT NPL is one of the largest
contracting farming companies in India with proven capabilities in backward
integration. There are two companies under the spice project, AVT NPL and AVT
McCormick in 1994.

AVT NPL is ISO 9002 certified and products are Kosher certified. AVT NPL holds a
dominant share of the global marigold flowers, cultivated through 30000 farmers in
five different states in India, because of the direct operation by the companies own
13
agricultural staffs AVT NPL has been able to meet the required quality of marigold
food grade oleoresin.

3.3 AVT GROUP - BUSINESS UNIT

 Plantations : 15000 Acres(6070.28 HA) of Tea, Rubber, Coffee, & Spice

Plantations in South India (5 companies)with 10 processing factories
 Consumer Products: Tea, Coffee & Spices. One of the largest and popular
brands in south India.
 Leather Goods: AVT Leather manufactures a wide range of leather goods for
well known brand names in the USA, Europe, The Far East & Australia.
 Medical Appliances: Manufacture & Marketing of Rush Foley Catheters and
distributes range of Imported Products in India
 Biotechnology: L.J. International Ltd. – Plant Tissue Culture. Product range
covers more than 70 products comprising of Flower, Fruit, Forestry, Foliage
and Medicinal plants which are exported to several countries in the Americas,
Europe, Africa, the Far East and Australia
 Commodity Exports: Export of Spices, Natural Rubber, Coir Products &
Food items.
 Logistics: Licensed Custom Agents, Air & Sea Cargo agents, Ware Housing.
 Trading & Agencies: Building materials, Rubber chemicals etc.
 Food & Feed Ingredients – AVT Integrated Spice Project
o AVT Natural Products Limited
o AVT McCormick Ingredients Pvt. Limited

AVT NPL is a member of A V Thomas group of companies with interest in

plantations, leather goods, tissue culture and medical diagnostics. AVT NPL is one of
the largest contract farming companies in India., with proven capabilities in backward
integration. There are two companies under the spice project, AVT NPL and AVT
McCormick in 1994.

AVT NPL is ISO 9002 certified and products are Kosher certified. AVT NPL holds a
dominant share of the global marigold flowers, cultivated through 30000 farmers in
14
five different states in India, because of the direct operation by the companies own
agricultural staffs AVT NPL has been able to meet the required quality of marigold
food grade oleoresin.

3.4 BOARD OF DIRECTORS

Boards of directors are the most important factor in the organisation. AVT NPL
has a strong and efficient director board. They are very careful about the activities
executed in the organisation, and also took proper decisions at proper time.

Table No. 2

Chairman Mr. Ajit Thomas

Directors Mr. M A Alagappan
Mr. P Shankar IAS
Mr. Habeeb Hussein
Mr. A D Bopana
Mrs. Shanthi Thomas

PLANT LOCATION

1. Mysore Trunk road, Puduvadavally, Sathyamangalam, T N

2. Harikura Village, Honavally, Tiptur Taluk, Tumkur Dist
3. Vazhakulam Marampally PO Aluva, Kerala
4. Nayanappalli cross, Bisibanepalli(Via), Hindapur, A P

SUBSIDIARY COMPANIES

1. AVT Natural Pvt ltd, 17 Philip Street, #05-01, Grand Building Singapore
2. Heilong Jiang AVT Bio-Products LTD SHUANG YASHAN STATE FARM ,
baoshan Dist China
3. REGISTERED OFFICE:
64, Rukmini Lakshmipathy Salai , Egmore Chennai-600008

3.5 MAJOR DIVISIONS

15
  Agro operations
 Dehydration unit
 Solvent extraction plant

3.5.1 AGRO OPERATIONS

Agro operation includes field extensions and commercial activities. The areas of
operation include Sathymangalam in Tamil Nadu, Hindapur in AP and Thiripur in
Karnataka. The field extension activities include developing new farming area. The
distribution of item for farming through farmer service centre which have been set up
in the major procurement area with an interest to provide better service to farmers.
The commercial function includes the follow up or the next stage of extension
function. It involves collection of flowers from farmers, and transport to the
dehydration unit. Commercial executives, commercial coordinators and commercial
assistants carryout the commercial function.

3.5.2 DEHYDRATION UNIT

The dehydration unit is situated near to the agro operations in Sathymangalam,

Hindapur, in addition to this there is a dehydration centre for chilly at Byadgi in
Karnataka. The first phase of production is carried out in these units before the
dehydrated flavours and brought to the solvent extraction plant.

3.5.3 SOLVENT EXTRACTION PLANT

Solvent extraction plant is situated at Vazhakulam. It is one of the largest continuous

extraction plants in the world. It also has a batch plant, a pilot plant and a distillation
facility. The plant is divided into following areas.

 Pre treatment area

 Solvent extraction area
 Finished goods section

The processing capacity of the plant is 6500 Kg per annum. It has a processing area
of 2000 square meters.

16
  BUSINESS PROFILE

The company is in business of “ solvent extraction “ comprising of marigold

oleoresins, food/spice oleoresins and value added tea while marigold and tea
operations are based on long term supply agreements through strategic alliances.
Spices oleoresins have a well diversified product port folio.

2.6 VISION, MISSION AND VALUES

MISSION

 We will be a global leader in marigold extracts through a fully integrated

supply chain with excellence in plant science and agricultural logistics
management.

 We will achieve growth and stability in performance by diversifying to value

added natural ingredients for synergistic business segments through
development of product research and technology base.

 We will bring in highest level of efficiency, traceability, food safety and quality
in the supply chain through contract farming.

 We will establish brand quality for natural ingredients through development of

consumer marketing skills.

 We will comply flawlessly with ever changing international statutory

regulations for our business segments.

 We will consistently add value in our business to deliver superior returns to all
stakeholders – consumers, employees, shareholders, suppliers, and society.

VISION

 To be a global leader in enriching lives through natures on ingredients as food,

nutrition and medicines for mankind.

17
  Provide total customer satisfaction through continuous improvements in
products, process and services.
 Develop and motivate employees through ongoing HRD programmers.

VALUES
 Constantly strive for value in whatever we do.
 Belief in ethical business and transparency.
 Encourage individual excellence and foster environment for team work.
 No short cuts – never sacrifice long term for short term.
 Know the business environment, product and customers well – update
knowledge.
 Respect the neighbourhood and individuality of each customer, supplier, and
employee.

3.7 AVT GROUP OF COMPANIES AT A GLANCE

Table No. 3

Sl.No. Unit Year Activity

1 The high land produce company 1925 Tea & Cardamom

ltd
2 The midland rubber produce 1934 Tea cardamom & Rubber Exports
company ltd
3 AVT and company ltd 1935 Trading exports and manufacturing

4 The kalpatta estate ltd 1936 Tea & Cardamom

5 The Rajagiri rubber produce 1937 Rubber, coffee &cardamom

6 The Nelliampathy tea produce 1941 Tea & coffee export

company ltd

7 The shevaroy estate ltd 1943 Tea, coffee, cardamom & edible oil
export
8 Neelamali agro Industries 1946 Tea trading & export
18
 9 AVT investment ltd 1976 Financial and Investment company

3.8 MAJOR AREAS OF BUSINESS

AVT group of companies have stepped into various areas of business. The divisions
in the AVT group are:

Figure No. 1

Leather goods
Tea Plant Bio
Technology

Coffee & Rubbers

Spices
AVT GROUP

Agro chemical Commodity

Export

Agencies Oil &

Extraction
Project
Engineering

19
3.9 MAJOR CUSTOMER OF AVT NPL

The main customer of AVT NPL is KEMIN industries USA. They have different units
in Asia, USA, Europe.

3.10 SHARE VALUE OF THE COMPANY

 Equity share of Rs. 10 each of 7990000

 1000-12% redeemable cumulative preference shares of rs. 100
 30,00,000- 7% redeemable cumulative preference shares of Rs. 10 each
 Now the equity shares market value is,
BSE 388.65
NSE 375.00

3.11 MARKET POSITION OF THE COMPANY

On the total of its operational fielded, AVT fine dominated upto 60-70% on marigold
extracts from the country.

AVT Natural Products Limited, which is based at Cochin, on the largest contracts
farming in India.

AVT Natural Products is the largest exporter of marigold oleoresins in the world.

3.12 COMPANY BANKERS

 Bank of Baroda
 State Bank of India
20
  South Indian Bank

3.13 AVT HIGHLIGHTING FACTORS

Table No. 4

Specification Oleoresin
Paprika
Product range Spice oleoresin
Natural food colours and essential oils
Technical details Manufacturing facility with latest
technologies and imported machinery.
Agro processing facility and
Competitive edge backward
integration
Capacity One of the latest continuous extraction
plant for oleoresins
Asia, America, Europe, North
Export market America
and South America

 MARKET POSITION OF THE COMPANY

On the total of its operational field, AVT fine dominates up to 60- 70% on marigold
extracts from the country an 3-4% of the spice extract from transparency.

Encourages individual excellence and foster environment for team work no

shortcuts never sacrifice long term for short term know the business environment,
customers and product well up to date knowledge.

 CODE OF ETHICS
 100% compliance with law
 Protection of the property information and confidentiality of information
 Prohibition against insider trading
21
  Giving and receiving gifts of certain values
 Policies regarding records retention and e-mail access
 Policies of improper or questionable payments

3.14 ACHIEVEMENTS AND AWARDS

The company has won the following awards for its performance :

 SME of Emerging India Award in fierily competitive category of FMCG, Food

and Agro Business sponsored by CNBC TV 18, powered by CRISIL, and
ICICI bank for significant value created by it for all its share holders.
 Kerala State Productivity Council Award for overall performance of the
company. The company has bagged this award for the second time.
 Kerala State Pollution Control Board Award for SMEs for being environment
friendly.
 FACT, M.K.K Nair Memorial Productivity Award 1998-1999

3.15 QUALITY CERTIFICATES

 ISO 22000
 Certified as spice house by the Spice Board of India
 Kosher certified
 GMP (Good Manufacturing Practices)
 American Institute of Banking International, USA (AIBI), 1999 “Superior”
rating in 2002, 2003, 2004, 2005 and 2006.
 2001, 2002 and 2005 “lab of the year” for micro technology world wide
 McCormick vender certification 2000

3.16 THE MAIN CONTRIBUTIONS OF AVT TOWARDS THE SOCIETY

 Yearly financial assistance offered to the panchayath for the polio eradication
programs.

22
  Free weekly medical check up and assistance provided to the rural community
by AVT NPL at Sathymangalam.

 AVT has numerous facilities in the education sector by providing basic

amenities like computer, laboratory equipments etc. for the students of the
neighbourhood schools.
 Giving employment to the local people in the unskilled areas.
 Cash awards have been endowed on the top ranking in the financial year of
their schools.

3.17 ORGANIZATIONAL STRUCTURE

Organisational structure is the basic frame within which managing decisions takes
places. Structure is the pattern in which various parts or components of the company
are interrelated or interconnected. Organisational structure is the pattern of
relationship among people in the organisation. Design an organisational structure is
considered to be a matter of choice among number of alternatives.

ORGANISATIONAL STRUCTURE

Figure no. 2

23
 Board of Directors

Chairman

Managing Director

VP (Operations) VP(Sales&Marktng) GM-HR VP(Finance&Syste

m

Manager Manager Assistant VP

Finance

Senior Executive Assistant Manager Senior Executive

Junior Executive Executive Accountant

Manager Finance

Assistant Manager

Executives

Assistant VP Senior Manager GM-Purchase GM (R & D)

Manager(ESD) (Production)

Manager Senior Assistant Mngr Mngr Manager

Executive Manager (procur (purch
ement) ase)

24
Supervisor Executives

Exctve Asst.
(procur Mangr
Technicians Supervisor ement) (Purch
ase)
Assistant Chemist
Manager

Chemist Assistant
Chemist

CHAPTER 4

FUNCTIONAL DEPARTMENTS

25
4.1 DIFFERENT DEPARTMENTS IN AVT NPL

i. Human Resource and Administration Department

ii. Purchase department
iii. Sales and marketing department
iv. Finance and system department
v. Engineering department
vi. Quality control & assurance department
vii. Production department
viii. Research and development department

4.2 HUMAN RESOURCE AND ADMINISTRATION DEPARTMENT

Personal management refers to a set of programs, activities of functions designed of

carried out in order to maximize both employee as well as organisational
effectiveness.

Personal department of AVT NPL view people as the most important source of asset
to be used for the benefit of organisation and society. The human resource
philosophy of the management aims at formulation of policies that promote neutrality,
mutual respect, mutual rewards and mutual responsibilities.

26
DEPARTMENTAL STRUCTURE OF HUMAN RESOURCE AND
ADMINISTRATION DEPARTMENT

Figure no. 3

GM(HR & Administration)

Manager

Asst. Manager

Executive

HR Asst.

OBJECTIVES OF HR DEPARTMENT

 To provide adequate training to all employees and to ensure that they are
aware of their role in the organisation.
 To ensure workforce recruitment in all departments.
 To ensure that productivity of the employees are improved by way of training.
 To ensure that no man lost days to industrial urgent.
 To provide the welfare activities for the workers.
 Establishment of industrial relations.

POLICIES OF HR DEPARTMENT

27
  Decisions regarding the working hour, Leave rules, Healthcare policies
etc.

 Provide rest room facilities during intervels.

 Annual medical checkup for all employees working in a finished goods

area. Employees will be identified by photo identity card.

FUNCTIONS OF HR DEPARTMENT

Figure no. 4

Recruitment Induction Training &

Development

Performance Compensation
HR
Appraisal &
Benefits

Welfare Activities Man power Promotion &

planning Demotion of
employees

RECRUITMENT

The purpose to meet the additional workforce which arise due to increase
additional work capacity and situations to select best talent. The HR department
from department source biodata , placement cells or employees referrals and the
data bank conducts the recruitment. Biodata are the reviewed and those satisfied
the competencies shortlisted for the test or interview.

SELECTION

The selection of trainees, workers and executives are different.

Selection of trainees and employees

28
  Shortlisted candidates for trainees and employees called for a written test.
 Initial interviews conducted by the superiors

Permanent vacancies candidates further shortlisted for the second interview

Selection procedure for executives

The shortlisted candidates called for the personal interview with the GM, HR and the
concerned department head. The candidates shortlisted has to take for interview with
the vice president operations. The selected candidates are given offer letter has to be
acknowledged by the candidates need to undergo medical examinations in a hospital
specified by the company and allowed to join if he/she medically fit.

The appointment letter will be issued to the employee within a month of joining
depending on qualification and the previous experience of the employee is in
sufficient the company will be placed on the training also.

INDUCTION

The purpose of induction is to induct personnel into the organisation and to

familiarize with the functions of various departments. The employees is given
induction schedule based on which he/she understand the basic functions of relevant
departments management trainees are introduced by one day induction on
completion of the induction a report is submitted to the concerned department head
and GM, HR and administration, induction report is speaks as a personal life of the
employee.

TRAINING AND DEVELOPMENT

The purpose is to list activities relating to employees and measuring the

effectiveness of the training. The training needs specified on the appraisal complied
together and programmers designed to meet requirements. It was done together with
the help of the concerned department head and the HR department. Theinformation
is complied and a training calendar is prepared before the month June of every
general programmes addressing the specification of the training calendar.

29
Trainings are scheduled as per the training calendar. After each training a feedback
are collected from employees. After three months from the date of training, as done
by the department head that interviews trainees calendar of the programmer and
sent it back to HR department.

PERFORMANCE APPRAISAL

The purpose to evaluate the performance of each employee during the year and to
identify required for the further improvements appraisal form. At the ending of training
and probation period, the employees performance are evaluated. Overall
performance found to be good he/she is placed in the probation and confirmation and
is communicated in writing.

PROMOTION AND DEMOTION OF EMPLOYEES

The promotion is based on the performance of managers and for the workers based
on experience and promotional policy.

AVT NPL promotional policy:

The policy promotion from one grade to another and to the next higher grade. An
employee completing 5 years regular service in a particular pay scale will be
promoted to the next scale in the same category. All the promotion will be effective
from April 1 of the year after workers complete 5 years of regular service. The above
will not be given to the workers if.

 He has not worked for 240 days in a calendar year, in case the
promotion will held for a year.

 Any punishment awarded for domestic enquiry proceedings for

misconduct in such case and eligible will not give promotion or a period of 2
years from the date of punishment.

30
MANPOWER PLANNING

In AVT NPL management has done effective manpower planning. Manpower

planning is concerned with the determination, of quality personnel required in an
organisation. Management is very friendly with their subordinates. It will create a
healthy atmosphere and giving motivation to the employees.

TYPES OF LEAVES

a. Casual leave : 12 days per year, this will not extend.

b. Sick leave : 9 days per year can accumulate 3 years cannot enhance it.
c. Privilege leave : for every 20 days, one day will grant as privilege leave.

EMPLOYEE SECURITY SCHEMES

 ESI
 Family planning scheme
 Employee welfare fund

SHIFTS

There are three shifts in AVT NPL they are

First shift : 7.30 am to 3.30 pm

Second shift : 3.30 pm to 11.30 pm

Third shift : 11.30 pm to 7.30 am

INDUSTRIAL RELATIONS

The management has recognised the association of employees by the name of AVT
NPL employee union. The management and union has entered into a long term
th
settlement on 19 august 2002, to establish fair work standards and conditions to

31
maintain harmonious relationship between workmen and the company, to provide
collective bargaining to prevent strikes, lockouts and showdowns to maintain
effective and uninterrupted operations and thus ensuring optimum quality NPL
maintaining good HR among the employees. Consistently maintains teamwork inside
the factory.

COMMUNICATION

Communication provides internal information service perhaps in the of staff news

papers or magazines, hand out, booklets, videos. The internal communications done
through telephone, e-mail etc. Meetings are conducted and minutes are recorded
and kept for future reference. HR departments and other department heads discuss
department meetings, open house with all employees and top management for
sharing the status of the business, welfare and related matters with selected
employee group. In house magazines are introduced as a part of the internal
communication.

ATTENDANCE

Attendances of executives are recorded by using punching machines and the

attendance register for other employees working in the company.

BONUS

AVT NPL provides attendance bonus. An employee having monthly attendance of

minimum of 22 days is attendance bonus.

COMPENSATION

The current compensation package is one of the best in the industry and is adequate
to retain the best resources. Salary is paid monthly which is inclusive of various
allowances applicable to each grade. There is specific salary scale for each grade of
employees. Management compensation includes Basic + HRA + Children education
+ conveyance allowance company card.

TRADE UNIONS IN AVT NPL

32
CITU,INTUC,AITUC

WORKERS PARTICIPATION IN MANAGEMNT

Worker participation in management enables both the management and workers to

share and exchange their point in the process of joint decision-making. In AVT NPL
management give opportunities to employees for express their idea, opinions and
suggestions.

NUMBER OF EMPLOYEES IN AVT NPL

Table no. 5

Employees Number
Executives 48
Non-executives 72
Apprentice
trainees 63
Contract workers 300

JOB RESPONSIBILITY OF HR PERSONNEL GM-HR AND ADMINISTRATION

 Workforce planning and forecasting based on the business plans and

employee turnover.
 Training needs analysis, coordination of internal and external training
programmers.
 Performance appraisal
 Grievance redressed by chart investigation and through department leaves.
 Maintaining work plan discipline through employee counceling or by
disciplinary actions against wrongfull employees.
 Negotiation with representative trade unions.
 Laison with government bodies like labour departments as local bodies.
 Continuity of annual revision, promotion and incentives.
 Recommendation of need based welfare machineries.

33
MANAGER HR:

 Assisting GM, HR and administration in human resource planning and

operation, recruitment and selection.
 Maintaining data bank industries new recruitment coordination with employees
union.
 Annual revision, promotion, incentives etc.
 Organisational welfare activities.
 Salary appraisal by maintaining statement attendance.
 Maintaining updated HR details, training details ,training records, monthly
statements, organisational celebration.

SELECTION PROCESS

Figure 5

Preliminary Interview

Application Form

Selection Test

Selection Interview

Physical Examination

Reference Check

Final Approval

Employment

34
4.3 PRODUCTION DEPARTMENT

PRODUCTION
Production is the creation of goods and services. It is converting the inputs in
the form of row material, machinery, men and money into output , i.e, goods
and services.Withthe help of certain production process. Production function is
the most important function in an organisation around which other activities of
an enterprise via. Marketing, financing, purchasing, personnel etc revolve.

DEPARTMENTAL STRUCTURE OF PRODUCTION

Figure no. 6

Vice President (Operations)

Manager (Production)

90 Assistant Manager Production

80
70
60
50 East

40 Executive
West
Staff
30 North
20
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Supervisors

Technicians

35
The production department is headed by the Wise President operation and it includes
production manager, assistant production manager, executive, 1 executive, 3
supervisors , 40 technicians and 150 contract workers. AVT NPL has a flexible
extraction facility with large continuous extraction plant that can process upto 40 tons
of raw materials per day, medium sized batch plant that can process about 7 tons of
raw materials per day and small pilot plants can process just 15 kg per day. These
varying according to the customers demand and order.
Chlorinated solvence are never used for the spice oleo extraction. Only food safe
solvents like hexane, acetone, ethanol, methanol, ethyl acetate and water are used
for extraction.
The plant designed to follow all the food safety norms. There are clearly specified
rules for movement of man, materials, finished products and waste to avoid cross
contamination at all stages. The companies well designed process flow makes sure
that the manual handling is only at the feed point. The area is well covered and
protected from any infestation.

PRODUCTON PLANNING AND CONTROL (PPC)

The main function of PPC is arranging for raw materials and effective shipment
based on the business plan for the year. Business plan from the top management
gives the details of processing, raw materials and packing required finance required
etc.
Two types of planning are done separately for marigold and spices. For marigold the
production manager in consultation with the Asst. VP finance makes the plan for the
month whereas the spiceproduction planning is done as per the sales and order
requisition (SOR) from the sales and marketing department. SOR gives the details
like the name of the products and its specification, quality required, packaging,
conditions, mode of transport, agreed price etc.

36
Production plant is divided into following areas:

Pre-treatment area : In the pre-treatment area , the marigold meal and other spices
are palletized. There are different pelletizes for marigold and spices.

Solvent extraction area : Here the extraction process takes place. The extraction is
takes place based on the type of raw material . the solvent extraction area are
divided into three;
 Continuous extraction area
 Batch extraction area
 Pilot extraction area

Finished goods section area : In this area the final stage is take place, where the
materials (products) are packing after quality checks and locked with finished
materials and ready distribute to the customer.

PRODUCTION PROCESS

Figure no. 7

Marigold/Spice

37
 Silaging
Silaging

Pressing
Pressing

Shredding
Shredding

Drying
Drying

Grinding
Grinding

Pelletizing
Pelletizing

Solvent Treatment
Solvent Treatment

Evaporation
Evaporation

Stripping
Stripping

Finishing And Blending

Packing And Storing

PRODUCTION PROCESS

38
The production process of the AVT NPL is the collected marigold flowers and spices
are silage in the hydration unit and send to screw press. The pressed flowers or
spices are then shredded and dried. After drying, they are grinded to the meal. The
meal is brought to the solvent extraction plant in 50 km bags.

The process from pelletizing is take place in AVT NPL Vazhakulam unit.

PELLETISING

The pelletizing is take place in pre treatment area. The workers put the meal (raw
material) to the conveyer then flaking and cracking is take place, then that meal
pellatizes in pellet mill.

Pelletizing : Is the process of compressing or molding a material into the shape of a

pellet.

Faking : This process is mainly to break of longer portions into smaller flakes. It is
done using a closely spaced roller. The material is send from the top and the rollers
crush the material between them, thus separating them into flakes and ready to
pelletize. Pelletizing is done ina pellet mill, where meal is then pushed through the
holes and a pellet die and exit from the pellet mill as pelleted meal.

SOLVENT TREATMENT

The pelletized meal travel through screw conveyor to FBC (fluidised blood
compressor), there the solvent solvent extraction takes place in FBC. (Hexane
solvent is added in marigold, ethylene solvent is added for chilly) the solvent are kept
in solvent vessels fixed in and near to the plant.

EVAPORATION

After solvent treatment, the next process is evaporation. It is take place with the help
of evaporator most of the active ingredients in the oleoresins are temperature
sensitive and so that rising film evaporator and falling film evaporator used for this
process to avoid the losses. In this process the solvent evaporated from the meal.

STRIPPING

39
After evaporation, the xanthophylls (evaporated meal) are the further evaporated, this
process called stripping , in which the solvent contents remaining are also removed
to xanthophylls.

FINISHING, BLENDING AND PACKING

The stripped product is crude oleoresins that collected toa blender. After quality
checks the oleoresins collected to 200 g mild, steal dreams with epoxy coating.

The shelf life of this products is 36 months from the date of manufacture when stored
at room temperature in room containers, away from direct heat and light and not
under humid conditions.

Facility and infrastructure for safety :

 Dedicated warehouse for raw material, in process material finished goods,

packing material to prevent any cross contamination.
 Designed room to keep clean chemicals and pest control chemicals and pest
chemicals away from the processing area.

 Designated place to keep the returned goods and damaged goods.

 Designated area to keep hazardous chemical engineering spares.

Pest control :
 Bait station for rodent control
 Pheromone traps and the fumigation for insect control
 Electric fly traps for fly control
 Warehouse fumigation at regular intervals
 Fogging in crack and services

WOKING CONDITIONS IN AVT NPL

AVT NPL provides good working condition to the employees. So, they feel more
comfort. The company maintains an environment friendly atmosphere. It gives
freshness in the mind of their employees.

40
WASTE DISPOSAL

The solid wastes are used as the fuel for boilers and liquid wastes are purified using
ETP purification. The effluent treatment plant consists of collection tank, safe tank,
and aerator tank and clarifier. The waste water is properly treated before let out.
Monthly returns pertaining to water consumption and analysis, report of raw materials
and treated effluent are send to the Pollution Control Board. The water treatment
plant is setup for the priorities of water used for various purposes. Water is obtained
from the nearby pond and is pumped to the collection tank. From the collection tank
the water passes through the sand filter and softer, the water is used for all domestic
purpose in the plant and office.

4.4 SALES AND MARKETING DEPARTMENT

DEPARTMENTAL STRUCTURE OF SALES AND MARKETING DEPARTMENT

Figure no.8

41
 Managing Director

VP Sales and Marketing

Marketing Manager

Sr. Executive

Jr. Executive

Sales and marketing is the integral function of the company. This department
handles the distribution of the products in the international market. The distribution is
done through direct shipment except in the European market, where the company
ahs few agents. Through the high quality of the product that AVT NPL supplies, the
image of the company in the world market is that of an extremely quality conscious
and prompt supplier. The sales and marketing department helps in maintain a good
image and broadening the market horizons. All these are achieved by effective
promotional activities. This is done through horizons. All these are achieved by
effective promotional activities. This is done through taking part in international food
and spice festival. The company has no direct connection with the customers since
there are direct no outlets for the company.

PRODUCTS OF AVT NPL

AVT NPL is an ISO 9002 certified company, which produces the best quality spice
oleoresin and marigold oleoresin from its 100% export oriented unit for highly
competitive world market of USA, EUROPE and other Asian countries.

42
Product profile of the company are :
 Marigold oleoresin
 Chilly oleoresin
 Ginger oleoresin
 Turmeric oleoresin
 Pepper oleoresin

Major competitors:

The main competitors of AVT NPL are :

 SYNTHITE INDUSTRIES LTD
 KANCORE LTD
 AKEY LTD
 ENJAYES INDUSTRIES LTD

Main Customer :

Kemin industries is a nutritional ingredients manufacturer headquartered in Des

Moines, Iowa. R.W and Mary Nelson founded it in 1961. It was initially called
“Chemical Industries” - and was a family effort based on developing innovative
agricultural products and marketing them throughout the Mid-Western United States.
These early products included mold inhibitors and flavours and grew to encompass a
full line of ingredients for animal feeds. The name Kemin was adopted in1968. Dr.
Chris Nelson is the current CEO of Kemin Industries. Today Kemin has over 1000
employees and offices in 60 countries.

Payment Collection :

The payment collection of sales is made through BANK OF BARODA, payments

collected within 45 days after ales.

Promotional Activities:

The company is trying to make awareness among the representatives of other

international companies about the advantages of using natural ood products by

43
participating in international food exhibition and spice festivals. The company is also
giving their products advertisements in the food magazines for the promotion of their
products. Customer’s visits to the company are also another sales promotion
technique.

Distribution :

AVT NPL is a 100% Export Oriented Unit, so the distribution is done through direct
shipping.

4.5 FINANCE AND SYSTEMS DEPARTMENT

DEPARTMENTAL STRUCTURE OF FINANCE AND SYSTEMS DEPARTMENT

Figure no. 9

Managing Director

44
 Finance Manager

Asst. Finance Manager

Sr. Executive

Jr. Executive

Finance department is headed by Vice President Finance and assisted by Finance

Manager, Assistant Manager and an Executive at factory level and comes Vice
President responsible for accounting, financing and costing systems, senior
executive systems, accountants for assistance. Apart from this function, the
department has to work hand with HR department in connection with disbursement of
salary, allowances and grievances. The department consists of accounting, financing
and costing.

Finance department is one of the important factors, which provides access to all
resource for being employed in manufacturing and merchandising activities. Financial
management means keeping sufficient balance of money to meet the daily
requirements. This department monitors the day-to-day financial activities and guides
the management in the right direction and forecast the profit and growth of the
organisation.

Financial management deals with the pricing of the product or raw material. The
finance department issues the pricing list of the materials instructed by the customer
and if the customer is satisfied with the price shown by the AVT NPL then only the
work orders are issued.

45
Source and application of fund is for purchasing assets, payment to farmers for
collecting raw materials, compensation to employees... are the main application of
fund. Main source of fund is sales, sale of equity shares etc...

Payments for purchasing raw material are made by direct payment to farmers.
Payments received from customers are done through Bank of Baroda.

Salary payments made to employees are through bank accounts and for contract
employees is direct payment through contractors.

Functions of the finance and administration department are as follows:

 Fixing the sales budget based on the department function.

 Consolidating the individual department budget and getting the

approval of the chairman.

 Submitting the monthly information system to the management i.e, the

estimated budget versus the actual budget, day to day transactions.

 Preparing the profit and loss accounts, balance sheet for the stationary
and internal purpose.

 Apart from this function, the department has to work hand with HR
department in connection with disbursement of salary, allowance and
grievances.

RAISING OF FUNDS

Figure no. 10

46
 Secured Loans Reserves and Surplus

Raising Funds

Unsecured Loans Deserved Tax

CAPITAL STRUCTURE

Table no. 8

Paid up capital 7%
Reserves surplus 43%
Secured loans 44%
Unsecured loans 2%
Deserved tax 4%

4.6 ENGINEERING AND SERVICE DEPARTMENT

DEPARTMENTAL STRUCTURE OF ENGINEERING DEPARTMENT

47
 Figure No. 11

VP Operations

General Manager

Sr. Executives

Supervisors

Technicians

In engineering department different units in three secions are headed by Deputy

Manager engaging services and report to the Vice President. This department is
divided into three sections based on the function namely; mechanical, electrical and
utility.

ENGINEERING DEPARTMENT FUNCTIONS

Figure No. 12

48
 Mechanical Section Electrical Section Utilities Section

 MECHANICAL SECTION

Mechanical sections undertake repairs and maintenance of all machine and also
take care of preventive maintenance. Modification of existing machineries are
allocating as per the requirement in production department. The production
department issues job requirements form because of which engineering department
initiates action.

 ELECTRICAL SECTION

Electrical department utilize power from KSEB through 11 KV substations. Two 350
KV AVG/ ADG sets are used when KSEB supply is not available. This department
also undertakes routine maintenance of electrical circuit equipment like LAN cabling.
In addition to preventive maintenance to avoid break down. Also attempt to
government inspection work with two technicians each staff and supervisor in a
general shift. They also undertake various energy utilization studies to ensure
optimum usage of power. This includes power supply calibration of all machines
operating and maintaining equipments in the coling tower and chilling unit. In the
certain situation like energy shortage time the KSEB do not provide supply due to
peak time requirements. Diesel is obtained from Indian Oil Corporation on monthly
basis. Diesel is stored in underground tank. This department prevents break down
and interruption to production.

 UTILITIES SECTION

Utility department consists of four first class boiler operators in this staff category and
four technicians. This department is mainly responsible for generation of steam under

49
pressure. These are two boiler of tones capacity for each. This steam conveyed
through insulted pipeline for production.

This department consists of four production of the effluent treatment plant, process
and distilling of water is treated as per pollution control system.

The effluent treatment plant consists of collection tank, safe tank, an aerator tank and
clarifier. The wastewater is properly treat before let out monthly return pertaining to
water consumption and analysis, report of raw materials and treated are sent to the
pollution control board. The water treatment plant is setup for the priorities of water
used for various purposes. Water is obtained from the nearby pond and is pumped to
the collection tank. From the collection tank the water passes through the sand filter
and softer. The water is used for all domestic purpose in the plant and office.

PROCEDURE OF WORK

Concerned department in consultation with the engineering department give the job
description. On the job, description is prioritized after completion for is prepared for
work than cannot be undertaken the factory premises are given to external agencies.

4.7 QUALITY CONTROL & QUALITY ASSURANCE DEPARTMENT

DEPARTMENTAL STRUCTURE OF QUALITY CONTROL & QUALITY

ASSURANCE

50
 Figure No. 13

GM,QA & QC

Manager

Asst. Manager

Executive

Chemist

Attender

This department is responsible for quality control of production from purchase to

finished goods. These facilities are to get a good image in the market. They used
international standard testes pungency solvent reside pesticide reduce colour value.

Advanced equipments like HPPC, GC are used. The total commitments are quality
safety extensive quality system and processing operations. The most modern
analytical lab closely monitor quality test for a flotoxins PPB (parts per billion) level.
HPCC gas chromatograph and spectrometer fully fledged instrumentation for
physical, chemical microbiological and micro sanitary, standard analytical procedure
conformed to ASTA/OAC/EU/ISO guidelines.

MAJOR QUALITY ASSURANCE POLICY & METHODS

HACPP-( hazard analysis & critical point policies)

 Delivering constant and high quality natural plant extracts

51
  Meeting and exceeding the consumer expectations
 Ensure full safe product by implement good manufacturing practice right
through the processing step from raw materials and finished products.
 Motivating employees training, development, and effort for production of
environment in its operation.

GLASS POLICIES

 AVT NPL is natural production processing industry manufacturing spice

oleoresins, food flavour, natural antioxidants etc. AVT NPL is committed to
avoid contamination due to breakage of glass by preventing any unauthorised
glass usage.

 Ensuring classification of glass used in the processing area into four

group based crystals how essential for processing by ensuring adequate safe
guard to address food safety.
 Progressively moving towards reduction in processing area.

4.8 PURCHASE DEPARTMENT

DEPARTMENTAL STRUCTURE OF PURCHASE DEPARTMENT

Figure No. 14

52
 GM,QA & QC

Manager

GM,QA & QC Manager

GM,QA & QC Manager

The purchase department in AVT NPL headed by GM purchase and assist by

managers. The department ensures that it intense and use the best of materials
appropriate to the needs. The department has two sections;

PURCHASE DEPARTMENT

Figure No. 15

Purchase Dept

Purchase Dept Procurement Dept

PURCHASE DEPARTMENT

The purchase department takes care of all the capital purchase, which involves
machinery, spare parts, coils and lubricant, chemicals and stationary materials. This
section consist manager purchase and purchase assistant to assist him.
53
The user department send material requisition format to stores department. Then the
stores department has to send the material indent (MI) to purchase department. After
getting the MI, the purchase department will see whether it will be approved or not.
After the valuation the purchase order is raised and purchase are made.

Duties and Responsibilities of Purchase Manager in AVT NPL are the following :
 Overall responsibility of the purchase activity
 Price monitoring
 Timely supply arrangement of materials
 Purchase bill verification and recommending payment
 Maintenance and control of the stock register

PROCUREMENT DEPARTMENT

This department takes care of consistent and on time supply of raw materials as per
the requirement of production and planning department. To develop raw supplier and
new source of raw material to get the cost advantage to the organisation the
department ensures that vendor and evaluated to maintain the quality of the raw
material being supplied by them. The GM procurement is responsible in ensuring
evaluation and approval of vendor for the raw materials. The approved vendors
monitored by the massage for the supply of raw materials made by them.

The raw materials are collected directly from the company’s loyal farmers, then that
transfer to the dehydration units in particular states and the dehydrated material is
bring to the extraction plant in Vazhakulam.
The raw materials bring to the extraction plant in Vazhakulam is 3 or 4 days in a
weeks by trucks. At a time, they bring 40 to 80 tons of raw materials according to the
demand. The raw materials packed in 50kgs bags. The purchase department
maintains stores and go down of raw materials. The main raw material of the
company is dehydrated marigold. Dehydrated pepper, chilly, ginger and turmeric are
the other raw materials. The raw materials are stored in go down in the company. It
has the capacity to store 25 metric tons at time. It is maintained in international food
and safety standards.

PROCUREMENT PROCESS CHART

54
 Figure No. 16

Farmers

Executives

Godowns

Plant

Finished Goods

Agents

Customers

4.9 RESEARCH AND DEVELOPMENT DEPARTMENT

DEPARTMENTAL STRUCTURE OF RESEARCH AND DEVELOPMENT

DEPARTMENT

Figure No. 17

55
 Vice President (Operation)

General manager (Research & Development)

Manager (Research & Development)

Chemist

Assistant Chemist

The research and development is headed by Vice President Operations, Assisted y

by General Manager Research and Development, Executive R&D, Chemist R&D and
Lab Assistants. The main areas of specialization are new products development and
continuous improvement of products. R&D is an inherent feature of the company’s
operations which enables the company to prove talent enveloping natural extracts
and formulations. R&D departments involves in natural products meet specialised
customers need in full-fledged lab. R&D was given a special thrust and several new
and value added products are developing in research and development department.
Decolorized and pesticide free paprika, oleoresin, chromo shrimp, rosemary oil etc.
AVT NPL believes in novelty and offers customer newer and specialized products.
Keeping in mind the salient requirements of the customer and specific country laws
about Aflotoxins lotions and pesticide residues they Endeavour to meet these
specializations through in-house developed processes. As a result, AVT atural has
been developing in-house separation technology that has been used to produce
oleoresin paprika with absorbance ration of more than Aflotoxins free and pesticide
reduced oleoresin capsicum etc. AVT NPL also has wide range of flavours extracted
from different spice both green spices as well as roasted giving the product a rich
56
enhanced flavour. R&D centre is well equipped with an array of sophisticated modern
analytical instruments like GCs, HPLCs, HPTLC, GC- MS, spectrophotometer etc. To
scale up new processes and products from lab to commercial scale, company has
invested in pilot plant facilities for extraction/isolation, crystallization, column
chromatography, reverse osmosis, specialized tea processing machinery, spray
drying, microencapsulation etc. Current focus is on carotenoids, natural antioxidants,
speciality colours and flavours, value added teas, dietary fibers, phytochemicals and
beadlet technology.

Equipments of research and development department:

 HPLC (High Performance Liquid Chromatography) with cobra and florescent

detector for Aflotoxins and ETQ residue analysis.
 CIO spectrometer for regular analysis is of active ingredients and GCMS ( gas
chromatograph with mass spectrum) of 15000 components.
 HPTLC
 GC-MS
 Spectrophotometer,etc...

4.9 RESEARCH AND DEVELOPMENT (R&D)

Table No. 7

Specific areas of Research and The company is focusing on three areas

Development of R&D.
(a)Planting material development
(b)Development of new crops
(c)New product development
57
Benefits of R&D Superior planting materials seed will
benefit farmers by way of increased
yields and there by improving the net
farm returns.

Future plan of action The focus would be on seed

development for the new generation of
marigold. In addition, the focus shall be
on new crop development for the
Artemisia and introduction of new
products.

58
 CHAPTER 5

INTERDEPENDENCE OF DEPARTMENTS

INTRODUCTION

All the business activities that go in a business are interdependent and work together
to create value for the customer and wealth of the business. The different
departments of the business are interdependent, that is, they rely on each other and
work together to achieve the objectives of the business. Within a business it is the
role of management to coordinate all the organisational departments and ensure that
they work together for the overall success of the business. These departments
support the main goals of the business. They are very dependent on each other, and
59
is very important to understand the interrelationship between them. The way that one
functions might decide to achieve its goals could affect the whole business, so
considerable cross- functional coordination is required.

In AVT NPL there is a functional interdependence between different departments as

different functions communicate with each other in order to meet the business aims
and objectives.

Human Resource department is directly related to all the other departments as it

controls all the manpower requirements in the organisation.

Production is the functional area where the raw materials are converted into finished
products through a series of production process. It is done by keeping quality
conscious in mind. The quality control department ensures the quality right from the
procurement of raw materials, at each stage of production and just before packaging.
Production department also functions by collecting information both from materials as
well as marketing department. Production department checks the quality of the raw
materials and if it does not meet the standards report it to the purchase department.

The marketing department is related to the HR,Finance and store departments.

When the required products are available in the stores for the dispatch, the
marketing department dispatches the items as per the order. After the delivery of
goods, marketing department prepares the bill and give to the salesman.

The interdependence of purchase department with the production, finance, quality

control and HR department is necessary as it deals with products, its quality,
payments and manpower. They check the quality of goods before dispatch.

The interrelation of finance department is between materials, production, marketing

and purchase, store quality control and HR departments. In addition to the major
functions of budgeting, rising funds internally and from financial institutions and
utilization of funds for growth of performance. It deals with all the internal and
external cash and payment transactions.

Quality control department, materials department and production department are

interdependent of each other. Quality inspection begins right from the procurement of

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raw materials. The raw materials are purchased and tested for quality to make sure
that they are according to the standard. Quality is checked at each stage of
production either by the quality controller or the worker itself.

The interdependence of departments in AVT NPL is depicted as follows:

INTERDEPENDENCE OF DEPARTMENTS

Figure No. 18

QA & QC PRODUCTION
DEPARTMENT DEPARTMENT

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Purchase Department FINANCE

DEPARTMENT
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 CHAPTER 6
ANALYSIS WITH SWOT

6.1 SWOT ANALYSIS

Swot analysis is a strategic planning method used to evaluate the strength ,

weakness, opportunist , and threats involved in a project and identifying the internal
and external factors that are favourable and unfavourable for achieving that
objective. The technique is credited to Albert Humphrey who led a research project at
Stanford University in the 1960’s and 1970’s using data from 500 companies.

6.1.1 STRENGTH

 ISO 9002 certification, ISO 9001-2008 and ISO 22000-2005

certifications.
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  Kosher certified
 GMP certifications
 Backward integration pr5ogram
 Largest producers of marigold extracts established in the world
 Well established abroad markets
 Draw synergies from AVT McCormick in the area of food safety
 Highly efficient research and development department
 Contract farming in 35000 acres with 30000 farmers
 24 hour working plant with 15100 metric ton extraction capacity
 100% export oriented unit

6.1.2 WEAKNESS

 No direct connection with end customers

 Common people have less awareness about oleoresin
 Most of the employees are contract workers
 There is no domestic market for oleoresin
 Maintaining a single product until till recently
 Office executives have workload because of full time working

6.1.3 OPPORTUNITIES

 Growing demand for natural products

 Chances of diversification
 Growing market in different parts of the world
 Chances for the domestic market operations

6.1.4THREATS

 Mass production by China and Peru

 Domestic competition
 Unable to meet the demand due to scanty rainfall
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  Presence of well established competitors in the market
 Seasonal variations may affect raw materials production and procurement.

6.2 PORTER’S FIVE FORCE MODEL OF AVT NPL

Figure No. 19

Bargaining
power of
customers

Bargaining Competitive Threat of

power of rivalry within an substitute
suppliers industry products

Threats of new
entrants

6.2.1 BARGAINING POWER OF CUSTOMERS

Spices are used throughout the world and buyers need to have an immense
knowledge about the market since, there are wide range of spices classified into
different varieties depending on their characteristics and most of the buyers get
information to make their purchase decisions through market committee w5ebsi5tes
and also collect additional information from the local market with the help of their
representatives. There is additional information available on the websites of Spices
Board (Spices Board of India) about different varieties and availability of spices
based on different locations. Since they have less control over the forces and

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because of the raised demand for the organic spices they have very less bargaining
power over the suppliers and since demand is high the cost of switching very low.

6.2.2 BARGAINING POWER OF SUPPLIERS

Spice industry requires large inputs of labour, raw materials and services. The cost of
these inputs can have a significant effect on profitability. Whether the strength of
suppliers is weak, moderate or strong depends on how much bargaining power they
can exert. As a result they have some flex in determining product pricing, delivery,
and distribution. In this sector some suppliers are smaller and do not have much
power over the pricing and distribution of their products. However in this sector most
of the suppliers are farmers and local market agents. They get the information from
newspapers and other forms of print media and also from the audio and video media.
They have very high bargaining power as the concentration of suppliers is high in
local markets. They have less threat to the market.

6.2.3 THREAT OF NEW ENTRANCE

Spice industry is a high competitive industry. Even though the initial capital
investment is not very high the risk for new entrants. Sound experience and customer
data base is a major barrier to entry and lack of management skills and lack of
knowledge of products and market information are the key barriers to entry. The
company’s reputation and trust also plays important role building long term
relationship with the buyers and also because of the high concentration of the
suppliers exporting the same goods usually competition in high and local politics also
have a significant effect on markets. Technology (Chemical Labs) is very important
as there is a growing demand for pesticide free spices having a product testing lab
will be an added advantage in this sector to produce a value added product. In
addition, there are several other barriers such as availability of labour. Hence, there
are fewer chances for the new entries in this industry and the risk is very high.

6.2.4 THREAT OF SUBSTITUTES

Spices are the key ingredient in most of the cuisines strictly need the uses of specific
spices. Although there are no natural substitutes to spices there are few substitutes
like the use of Artificial or Synthetic Flavours which give almost the same taste of the
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spices but, due to the health awareness most of the people now a day’s inclined
towards the use of authentic natural, organic spices over synthetic spices. Organic
spices boomed in present market and hence the demand has increased for
production of organic spices. More broadly, other forms of products can be
considered as substitutes. Some might argue that the growth in use of readymade
food products pose a threat to the market, but this seems unlikely given the target
market.

6.2.5 INDUSTRY RIVALRY

Recently the domestic and international spice industry is witnessing a remarkable

growth attributable to the variations in the lifestyle patterns of the consumers
worldwide. Application of spices worldwide. Application of spices in various industries
like pharmaceutical, medicine, beverages and food processing made consumers to
incline more towards them, which in turn increased global demand of spices and
culinary herbs.Developing countries like India, China and Indonesia are the prime
producers and traders of a variety of high quality spices (mostly organic) in the world.
Most of the domestic and international trade takes place in the dried form.
Culinary herbs are the other natural products consumers are most attracted to these
days. The market of these products is constantly growing with the major suppliers
from India to USA and EU. A sound knowledge of the methods and processes
involved in the production of herbs and spices is always required for a labour
intensive industry like this.

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 CONCLUSION

The AVT group of companies after 85 years of operation has significant presence in
India’s agribusiness sector including plantations, agro processing and plant
biotechnology natural food ingredients. The study was carried out inorder to analyse
and understand the functional areas of the organisations. It is having well structured
departments which are functioning effectively. The unique strength of AVT NPL is
that it is the largest producer of marigold extracts in the world. New frontiers of
science and technology. Spice technology will play a dominant role in the future of
spice industry. There is an urgent need to do more research and popularization of the
use of the traditional spice in India for Ayurveda and for cosmetic industry.
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The company which is completing sign in the international market for its business in
all aspects of its operations. It is maintaining a very standard better than other global
competitor in utilization of resources, man, machine and raw materials. The company
is upgrading its operations to keep up of demands from the global market.

AVT is fulfilling its set objectives and making its mission possible. The company is
leading for bright and prosperous future.

BIBLIOGRAPHY

REPORTS AND PERIODICALS

 Annual reports of AVT NPL, South Vazhakulam ,Aluva

 Broachers pampers of AVT NPL, South Vazhakulam, Aluva Books:

 Sashi.K.Gupta(2006),Organisational Behaviour,New Delhi

 Monal Arora(2005), Industrial Relations,New Delhi

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  V.S.P Rao(2016), Human Resource Management,Pune

Website :

www.avtnpl.com

www.kemin.com

www.wepedia.com

www.marigold.com

www.infoshine.com

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