An Internship Report on

Mangalore Chemicals and Fertilizers Limited

Submitted By

Hariprasad

4MT19MBA25

In partial fulfilment of the requirements for the award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

INTERNAL GUIDE

Surjit ram

Department of Business Administration

MITE, Moodbidri.

Department of Business Administration

MANGALORE INSTITUTE OF TECHNOLOGY AND ENGINEERING MOODBIDRI (An

ISO 9001:2015 certified institution)

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 Declaration

I, HARIPRASAD, hereby declare that the organisation study report entitled a report on
Mangalore chemicals &fertilizers Ltd. is prepared by me under the guidance of Mr Surjit Ram,
Department of Master of Business Administration, Mangalore Institute of Technology and
Engineering, Moodbidri

I also declare that this organisation study report is towards the partial fulfilment of the
university regulations for the award of degree of Master of Business Administration by
Visvesvaraya Technological University, Belgaum.

I have under gone organisation study for a period of 4 weeks. I further declare that this report is
based on the original study undertaken by me and has not been submitted for the award of any
degree/diploma from any other University/Institution.

Date: Hariprasad

Place: 4MT19MBA25

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 Acknowledgement

I, Hariprasad wish to express my deep sense of gratitude to all the concerned people who have
helped me, to complete this report successfully.

I am very thankful to Visvesvaraya Technological University, Belgaum for this wonderful

opportunity to undertake the organisation study as a part of the fulfilment of Master of Business
Administration degree.

I express my special gratitude and thanks to Mr. Surjit Ram , Department of Business
Administration, for her valuable guidance and encouragement while doing this report.

Hariprasad

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 DISCLAIMER

The enclosed document is the outcome of a student academic assignment and does not represent
the opinion / views of the university or the institution or the department or any other individual
reference or acknowledgement within the document. The data and information studied and
presented in this report have been accessed in good faith from secondary sources /web sources /
public domain including the organisation website solely and exclusively for academic purpose
without any consent / permission express or implied from the organisation concerned. The
author makes no representation of any kind regarding the accuracy adequacy validity reliability
availability or completeness of any data/ information here in contained

Date : Hariprasad

Place : 4MT19MBA25

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 Table of Content

Chapter Page No.

Title
No.

Introduction about Organisation 6-7

1
Industry Profile 7-10

2 Organization profile: 11-20

2.1 Back ground 11

2.2 Nature of business 11-12

2.3 Vision mission, quality policy 12

2.4 Product profile 12-17

2.5 Ownership pattern 18-20

21
2.6 Achievement

22
2.7 Future growth and prospects

3 McKinsey’s 7S framework and Porters 5 forces model 23-34

4 SWOT Analysis 35-37

5 Ratio Analysis 38-43

6 Learning experience 44

Bibliography 45

Balance sheet of the company 46-47

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 CHAPTER :1

INTRODUCTION OF ORGANIZATION AND INDUSTRY

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Mangalore Chemicals and Fertilizers Limited (MCF) is a subsidiary of Zuari Fertilisers and
Chemicals Limited, an Adventz Group, led by Chairman Saroj Kumar Poddar which holds
54.03% equity shares. Adventz group, is an Indian conglomerate with global ambitions that
participates in and contributes to India's economic growth and prosperity through transformational
change. The Group is partnered by world leaders in various areas of enterprises and has significant
presence in agriculture, engineering & infrastructure, real estate, consumer durables and services
which are the key drivers of the Indian economy.
MCF is the largest manufacturer of chemical fertilizers in the state of Karnataka. The factory is
strategically located at Panambur, 9 km north of Mangalore City, on the banks of the Gurpur River,
along the National Highway 66, opposite to the New Mangalore Port Trust.
MCF is an ISO 14001 and OHSAS 18001 certified Company.
The main products are Urea, Di-Ammonium Phosphate (DAP), NP 20:20:00:13, Ammonium Bi-
Carbonate (ABC) - Food grade, Sulphuric Acid, Speciality fertilizers and Nutrient products
consisting of Water Soluble Fertilizers, Micronutrients & Soil Conditioners and Sulphonated
Naphthalene Formaldehyde (SNF), an industrial product.
While fertilizers and Plant Nutrient products are marketed in Karnataka, Kerala, Tamil Nadu,
Andhra Pradesh, Telangana and Maharashtra, the food grade ABC used mainly in Confectionery
Industry and SNF used in the construction industry are marketed Pan India as well as in the
international market. The requirement of power for the production facility (process plants) is met
by a Captive Power Plant. Ammonia & Phosphoric Acid, the raw materials required for DAP & NP
production are imported.

Industry profile

Indian Chemical Industry is one of the oldest industries in India, which contributes significantly to
the industrial and economic growth of the nation. Since the Indian Chemical Industry has
numerous forward and backward linkages, it is called the backbone of the industrial and
agricultural development of the country and provides building blocks for many downstream
industries.

The Indian Chemical Industry has witnessed robust growth in the past decade and has been
ranked 6th largest in the world and 3rd largest in Asia according to Invest India: Investment
Promotion and Facilitation Agency. It is expected to register a growth of 13-14% over the next 5
years while petrochemicals have registered a growth of 8-9% over the same period. and the Indian
chemicals industry is projected to reach $ 304 by 2025.

The government recognizes the Chemical Industry as a key growth element of the Indian
Economy. In the Chemical Sector, the Indian Government allows 100% FDI. The manufacture of
most of the chemical products is delicensed except life hazardous. Its share in the manufacturing
sector GDP is ~16% and the Government has a target to increase it to at least 25% by 2025.

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The Indian Chemical Industry is the largest consumer of its products, consuming 33% of its output.
With promising growth trends in the Chemicals Industry, this internal consumption is also set to
rise.

Indian Chemical Industry’s main growth segments are Petroleum and Petrochemicals, Chlor-
Alkali, Pesticides, Specialty Chemicals, and Pharmaceuticals & Bulk Drugs.

Petrochemical Industry mainly comprises of Polymers, Synthetic Fibers, Fiber Intermediates, and

Plastic Processing. They find wide application in domestic as well as industrial sectors.

The Indian Petrochemical Industry originated in the 1970s and saw rapid growth during the 1980s
and 1990s. However, it faced setbacks in 2008 due to a surge in prices of crude oil. Growing at
a CAGR of 10%, the Petrochemical Industry in India is likely to reach USD 100bn by 2022.

The Chlor-alkali Industry is the oldest and largest segment of the inorganic Chemical Industry. It
comprises of Caustic Soda, Liquid Chlorine and Soda Ash. Globally the size of the Chlor-Alkali
Industry is 170mn tones (USD 70bn). The size of the Indian Chlor-Alkali sector at 7mn tones is
4% of the World Market.

The global consumption of Chlorine in 2009 is estimated at 55mn tonnes. Chlorine is used in the
manufacture of Paper and Pulp, Ethylene Dichloride (EDC), which is used for producing Polyvinyl
Chloride (PVC), manufacture of chlorinated Paraffin Wax, Fertilizers and Pesticides. India has
more than adequate capacity to meet domestic demand of both Caustic Soda & Chlorine.

Soda Ash is used as a raw material for a vast number of key downstream industries such as Soaps,
Detergents, Glass, Silicate, Specialty Chemicals. Increasingly it is being applied for climate change
mitigation and environmental management applications such as Flue-gas Desulphurization and
mitigating the impact of acid rain on inland water bodies.

There are five manufacturers of Soda Ash in India, having installed capacity to the extent of
3.16mn tonnes. Of these, four are located in the state of Gujarat and one in Tamil Nadu. The main
reason for the concentration of Soda Ash facilities in Gujarat is the availability of key raw
materials, salt, and limestone.
th
India is the 4  largest producer of Pesticides after the USA, Japan, and China. India is the
3rd largest producer of Pesticides in Asia. The Indian Pesticides Industry has been growing at 8-
9% per annum over the past five years.

Specialty Chemicals are the relatively high value, low volume chemicals are known for their end-
use applications and/or performance-enhancing properties. In contrast to base or commodity
chemicals, Specialty Chemicals are recognized for ‘what they do’ and not ‘what they are’.
Specialty Indian Chemical Industry growth typically follows the growth of major key end markets.

Pharmaceuticals and Bulk Drugs: Large scale chemical production of APIs (Active

Pharmaceutical Ingredients) was started by the national sector in the mid-1970s which accelerated
in the next decade.

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Today, India is in a position to meet three-fourths of its requirement of Bulk Drugs and almost
entire requirement of formulations. From a turnover of INR 100mn in 1947, drug production today
is worth approximately INR 280,000mn (USD 6.5bn).

Numerous initiatives have been proposed in the 12th five-year plan (2012-2017) to boost the
growth of Indian Chemical Industry including:

 Set-up of a technology up-gradation fund of USD 80mn which will make the industry greener
and more intolerant towards environmental pollution.
 Proposal to establish an autonomous USD 100mn Chemical Innovation Fund to encourage
commercialization efforts for innovations.
 Providing incentives for the use of bio-based raw materials which will alleviate the chances of
a chemical disaster.
 Regulatory support against cheap imports to allow the domestic market to flourish without too
much pressure.

While the Government has surely been supporting Chemical Industry in many ways, it is still a
challenge for the Government to boost the growth for Chemical Industry due to the increase in
environmental concerns. Nonetheless, the future of the Indian Chemical Industry seems
encouraging.

CURRENT SCENARIO

Indian chemical industry came into limelight in 2014 when China pollution control measures and
environmental issues started cropping up. Initially, supply disruptions in China made Indian
counterparts the alternate supplier for global MNCs which needed seamless supplies for their
global operations. Alternately, cost escalations across products with consequent rise in product
prices benefited financial performance of the Indian companies, thus generating and allocating
capital for expansions. Looking back, since 2014 Indian chemical companies’ financial
performance has improved drastically, simultaneously attaining a ‘reliable’ supplier status among
MNCs and foreign customers.

The industry, which was barely trying to stay competitive, received a lifetime elixir not only to
survive but also to thrive with better prospects. Currently, analyzing the Chinese situation, after-
effects over the past 4 years, and the state of Indian chemical industry, we believe that the Indian
chemicals industry is at “India Chemicals 2.0.”

This phenomenon can be acknowledged as the understanding of the Indian industry on the
opportunities created due to Chinese issues and is well positioned to tap these opportunities
through multiple levers such as foreign customers’ confidence, growth in domestic consumption,
better pricing and margins, thereof, increased capacities, compliance with environmental
regulations among others. We, thus, believe that the Indian chemicals industry is at the next phase
of growth, which shall continue over the next decade.

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The next decade for Indian chemical industry growth is also echoed by the Indian government
through initiatives such as ‘Make in India’ and larger focus on developing and promoting
Petroleum,

Chemicals, Petrochemicals and Investment Regions (PCPIRs). This confidence can be ushered by
bold projections stating that the Indian chemicals market valued at ~US$ 163 billion in FY18 (with
specialty chemicals share at ~US$ 32 billion) to almost double at US$ 304 billion by FY25.

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 CHAPTER:2

ORGANIZATION PROFILE

1. BACKGROUND :

Mangalore Chemicals and Fertilizers Limited (MCF) is a subsidiary of Zuari Fertilisers and
Chemicals Limited, an Adventz Group, led by Chairman Saroj Kumar Poddar which holds
54.03% equity shares. Adventz group, is an Indian conglomerate with global ambitions that
participates in and contributes to India's economic growth and prosperity through transformational
change.. The operations are managed by a team of highly dedicated and experienced professionals.
The factory is strategically located at Panambur, 9 km north of Mangalore City, on the banks of the
Gurpur River, in front of the New Mangalore Port. The plant is well connected, both by rail and
road. The West Coast National Highway (NH-l7) from Kochi to Mumbai separates MCF from the
New Mangalore Port. The New Mangalore Port is an all-weather port capable of handling ships up
to 30 feet draft. Naphtha, Fuel Oil, Ammonia and Phosphoric Acid - the main raw material are
obtained through the port.
The design and engineering of the Ammonia/Urea plants was done by Humphreys & Glasgow
Limited, London, a leading international firm in the fertilizer field and their associates, Humphreys
& Glasgow Consultants Pvt. Ltd., Bombay. (The firm is now merged with Jacobs Engineering,
USA). The Phosphoric plant is designed and engineered by Toyo Engineering Corporation, Japan.
PDIL and Furnace Fabrica the Indian firms were involved in the construction of ABC and SAP
respectively.
Manufacturing both nitrogenous and phosphoric fertilizers, MCF has an annual manufacturing
capacity of more than 2 million metric tons of ammonia an 3 million metric tons of urea. The
company sells its products (including specialty fertilizers) under the Mangala brand
The Company has capacity to manufacture 2,17,800 MT Ammonia (intermediate product),
3,79,500 MT Urea, 2,55,500 MT Phosphatic Fertilizers (DAP & NP 20:20:00:13), 15,330 MT
Ammonium Bi-Carbonate (ABC) and 33,000 MT Sulphuric Acid (SAP) annually. . The design and
engineering of the Ammonia/Urea plants was done by Humphreys & Glasgow Limited, London, a
leading international firm in the fertilizer field and their associates, Humphreys & Glasgow
Consultants Pvt. Ltd., Bombay. (The firm is now merged with Jacobs Engineering, USA). The
Phosphatic plant is designed and engineered by Toyo Engineering Corporation, Japan. PDIL and
Furnace Fabrica the Indian firms were involved in the construction of ABC and SAP respectively.

The construction work started with the first pile driven on October 15, 1972 by the then Chief
Minister, Shri D. Devaraj Urs.

2. NATURE OF BUSINESS:

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Mangalore Chemicals & Fertilizers (MCF) is a big part of India's growing agricultural industry. It
manufactures the chemical fertilizers such as Mangala Urea, Mangala DAP, Ammonium Bi
Carbonate, Mangala 20:20:20:13, Sulphuric Acid etc and also imports some trading products from
outside and being sold here in India. And also from August 2010, it produces SNF liquid and
powder used in the construction, chemical industry for manufacture of super plasticizer.
3. VISION MISSION :

Vision

To be the one-stop solution for the farm economy

Mission

To create value for farmers and stakeholders by providing integrated agri solutions to all farm
needs.
4. Quality Policy

To provide best quality of fertilizers to farmers to achieve agri-solutions and to provide a superior
products than what others have been offering. The fertilizers consistently meet the needs of the
customers and establish a value added relationship, ensuring total farmers satisfaction.

 We follow the corresponding regulatory requirement fee application

 We define the quality of our products & services taking into account the business
consideration
 We employ appropriately trained and quality-conscious personnel
 We act in an environmentally sound manner and behave responsibly towards society
 We set quality standards by integrating our suppliers into the overall supply chain.

5.PRODUCT PROFILE:

The main products produced by Mangalore Chemicals and Fertilizers Limited here are as follows:

Mangala Urea –

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 it is a synthetic organic compound containing 46% nitrogen in amide form which is available in
the form of white solid prills free flowing for easy application. Urea is packed in moisture proof
high density poly ethylene bag which is 50kg. It is the cheapest nitrogenous fertilizer and being
less acidified, it is suitable for P soils.

Mangala DAP –

DAP contains the second most important primary nutrient element, phosphorous besides
nitrogen,which is available in free flow granular form for differentiation with other low analysis
compound fertilizers, DAP granules are coloured with black. Granules are stronger, harder and of
uniform size. it is packed in 50kg HDPE bag.

Ammonium Bi Carbonate-

It is a food product with 99.8% purity on dry weight basis. It is white crystalline product. Being
very hygroscopic, it is packed in a air tight, laminated HDPE bags of 25kgs. It is used as
ingredient for fire extinguishers, dyes and pigments, degreasing of textiles, cooling baths,
pharmaceutical industry etc

Mangala 20:20:00:13 –

It contains 20% Nitrogen & 20% P2O5. It also contains 13 % Sulphur, a Major Secondary plant
nutrient. Granules are uniform and light grey in colour and it is packed in a 50kg HDPE bag.
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Sulphuric acid –

It is colorless, nonflammable liquid.Sulphuric acid (H2SO4) monohydrate is very hygroscopic.

Used as an intermediate for manufacturing of phosphatic fertilizer. It is Transport by road tank
truck.

ChemCF NL - Sulphonated Naphthalene Formaldehyde Liquid- ChemCF NL is an aqueous

solution of Sulphonated Naphthalene Formaldehyde, Sodium salt polymer. It is an excellent
dispersing agent. It is a powerful water reducing element in Concrete Admixtures. Engineered &
designed to offer wider tolerances in formations of admixture manufacturing. Compatible with
most of the additives used in admixture formulations which helps in producing versatile
applications. Supplied in Bulk Tankers of 10 t, 16 t & 20 t capacity. It can also be supplied in
customized pack size in HDPE barrels or jerry cans.

ChemCF NP –

Sulphonated Naphthalene Formaldehyde Powder- ChemCF NP is a Sulphonated Naphthalene

Formaldehyde (SNF) poly - Condensate product. It is a powerful water reducing agent used for
concrete and cement grouts. This is an excellent dispersing agent. Designed to offer wider
tolerances in formulations for concrete admixture manufacturers. It is compatible with most of the
additives used in admixture formulations. It helps in producing concrete with various unique
properties. Packing – Supplied in customized pack sizes of 25 kg and 40 kg HDPE bags.

Some other products are as follows

Mangala MOP-

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Contains 60% Potash (K). Till now the most widely used K fertilizer available in white and reddish
crystalline form which is packed in 50 Kg HDPE Bag.

Speciality fertilizer - Speciality fertilizers are high analysis totally water soluble fertilizers. These
are available in mono, double and multi nutrient combinations. They are available in liquid and
crystalline forms and can be applied to plants through soil application (broadcasting), fertigation or
foliar application to maximize fertilizer use efficiency and crop productivity, minimize production
cost and to improve quality of crop and its produce

 Mangala Bio20 & Mangala 3X –is a highly concentrated emulsion containing macro and
chelated micro elements suitable for foliar spray and fertigation.
 Mangala Calmax - Mangala Calmax is a fully water soluble fluid emulsion product
containing high level of calcium and balanced range of micro nutrients.
 Mangala Sulphomex - Mangala Sulphomex is a clear solution containing water soluble
sulphur and nitrogen.
Fertigation Products - This comprehensive range of powder formulations is manufactured only
from technical grade raw material and blended to exacting quality standards. These ranges of
products may be used in all fertigation systems to provide a balanced nutrient programme
containing NPK, magnesium and essential microelements.
The products are fully water soluble.

 Mangala 18-18-18+2Mgo+TE –

18:18:18 has immediate beneficial effect on plant growth.

 Mangala 19-19-19 –

19:19:19 application stimulates with immediate effect plant growth and development.

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Soil Conditioners - In the changing agriculture scenario, where the fertile and productive land area
is shrinking due to unscientific and surfeit use of chemicals and fertilizers, there is an urgency to
correct the soil condition to suit for modern agriculture.
Soil conditioners are termed as materials which when added to the soil help in improving or
maintaining its physical conditions with improved physical and chemical health of soil that
resultantly improve biological health. In the Integrated Nutrient Management approach, soil
conditioners are integral part of the agronomic package.

 Mangala Setright for Alkaline Soils - Mangala Setright for Alkaline Soils brings down
the pH of alkaline soils and neutralizes the adverse p. Mangala Setright for Acidic Soils
brings increases the pH of acidic soils and neutralizes the toxicities.It improves physical
and chemical health of the soil.
Organic Products - The productivity of Indian soils has drastically come down. This has
necessitated increasing the productivity per unit area per unit time. This is becoming difficult as the
soil health has deteriorated alarmingly. One of the main reasons of this is the ever reducing soil
organic matter content. Improving the soil organic carbon content by application of suitable
organic matter and manures is the only option. For realising the benefit of application of organic
matter, the product should be well decomposed and of good quality. Moreover, if the product can
offer more benefits to the farmer than a mere organic manurial value, it is then the farmer realised
more value for money.

1. Product Range : Bulky Organic Manure

 Mangala Bio Gold –

Mangala Bio–Gold is a well decomposed organic matter fortified with neem cake, castor
cake, pongamia cake and vermicompost.
 Mangala Gold –
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 Mangala Gold is an organic product containing humic substances in the form of humic
acid, fulvic acid and humin.
 Mangala Neem Organic Manur –

Mangala Neem Organic Manure is a good quality neem product in the form of cake, pellets
and powder.
 Mangala Organic Granules - Mangala Organic Granules is an organic product containing
bio-available amino acids, carbohydrates, seaweed extracts, herbal extracts and nutrient
elements with bentonite material as the carrier.
 Product range - concentrated organic nutrient product
 Mangala Megacal - Mangala Megacal (G) is a gluconate product produced by
fermentation process and contains high levels of calcium, magnesium, boron with other
nutrient elements and is available in granular as well as liquid forms.

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6. OWNERSHIP PATTERN

Shareholding belonging to the category : "Promoter and Promoter Group"

Name of the Shares pledged or otherwise

Total Shares held
Shareholder encumbered

As a % of % of As a % of
grand total Total grand total
Number Number
(A) + (B) + shares (A) + (B) +
(C) held (C)

ZUARI AGRO 64,028,36 54.03 6402836 100 0

CHEMICALS 2 2
LIMITED

GAURAV 150,000 0.13 0 0 0

AGARWALA

Akshay Poddar 1,062,644 0.9 0 0 0

Jyotsna Poddar 100,000 0.08 0 0 0

MCDOWELL 1,257,186 1.06 0 0 0

HOLDINGS LIMITED

ADVENTZ FINANCE 810,000 0.68 0 0 0

PRIVATE LIMITED

UNITED 0 0 0 0 0
BREWERIES
HOLDINGS LIMITED

KINGFISHER 0 0 0 0 0
FINVEST INDIA
LIMITED

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Shareholding belonging to the category : "Public and holding more than 1% of the Total No.of
Shares"

Shares as % of
Total Shares
Name of the Shareholder Total No. of
held
Shares

Bodies Corporate 6,328,923 5.34%

RECOVERY OFFICER I DRT II 17,940,205 15.14%

RELIANCE CORPORATE ADVISORY SERVICES 3,245,158 2.74%

LIMITED

Clearing Members 99,812 0.08%

HUF 804,908 0.68%

INVESTOR EDUCATION AND PROTECTION FUND 2,479,681 2.09%

AUTHORITY MINISTRY OF CORPORATE AFFAIRS

Non-Resident Indian (NRI) 493,893 0.42%

Trusts 638 0%

Societies 50 0%

Director or Director's Relatives 255,968 0.22%

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Share Holding Pattern in (%)

Standalone March 2020 December 2019 September 2019 June 2019

Promoters 56.88 56.61 56.61 60.07

Pledged 94.99 89.44 73.63 76.06

FII/FPI 0.11 0.17 0.17 0.72

Total DII 25.06 26.58 26.55 23.02

Fin.Insts 0.19 0.29 0.22 0.25

Insurance Co 0 0 0 0

MF 0.01 0.11 0.11 0.11

Others DIIs 24.86 26.18 26.22 22.66

Others 17.96 16.65 16.68 16.2

Total 100.01 100.01 100.01 100.01

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7.AWARD AND RECOGNISION

From the year 1996-97, the company’s performance dramatically improved with higher levels of
production in all the plants. In fact, the rated capacity of Urea was manufactured for the first time
in 1996-97 since commissioning in 1976, a singular achievement.

The company has received the following awards:

• FAI Award for 'Improvement in overall performance of a Company’ for three consecutive
years 1996-97, 1997-98 and 1998-99.
• Letter of recognition in 1997 from Directorate General of Factory advisory Services and
Labour Institutes (DGFASLI) for maintaining good safety and occupational health standards.
• MCF received the ‘Honest Taxpaying businessmen’ award from Commercial Taxes
Department, Mangalore Division, a unique initiative taken by Government of Karnataka to
honor the prompt Tax payers. Mr. P. C. Jain, Senior Vice President (Works), MCF,
Mangalore, received the award in a felicitation function held at Mangalore on 18th March
2005.
• MCF has been awarded the prestigious certificates on 1. Environment Management System
conforming to ISO 14001:2000 in 2003 which was updated to latest version ISO 14001:2004
in 2005 and 2. Occupational Health & Safety Management System conforming to OHSAS
18001:1999 standard in 2005 which was updated to latest version OHSAS 18001:2007 in
2008.
The certificates were awarded by DET NORSKE VERITAS (DNV), the Netherlands, a global
certifying agency
• FAI Environmental Protection Award in NP/NPK Fertilizer Plants for the year 2009-2010 and
2010-2011.
• FAI Special Environmental Protection Award instituted by the Fertilizer Association of India
(FAI) for the NP/NPK fertilizer plants excluding captive acids category for the third
consecutive year (2010-2013).
• MCF has been conferred "First Runner-Up" award for the year 2012-13 by All India
Organization of Employers (AIOE) for excellent track record in maintaining harmonious
industrial relations and for best IR practices during the last few years

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8. FUTURE GROWTH AND PROSPECTS

 The demand for both Nitrogenous and Phosphatic fertilizers in India is increasing steadily,
and expected to grow at a compounded annual rate of 4%. Unfortunately, due to the
unfavorable fertilizer policy of the Government, domestic production is almost stagnant.
The demand supply gap is widening and the supply deficit has to be met from imports.
 Company is striving hard to grow future by way of cutting its costs and improving
efficiencies, wherever possible. It is also looking for diversifying into other products that
are synergistic with the existing operations. In addition, company started imports of DAP
and specialty fertilizers and major thrust has been given to maximize trading operations and
focus on Integrated Nutrient Management Business.

 Company is looking for diversifying into other products that are synergistic with the
existing operations.

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 CHAPTER :3

MC KENSY’S 7S FRAMEWORK

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The 7s Framework was developed by consultant company called Mckinsey in the late 1970s to
help managers address the difficulties to organizational change. The 7s model is a tool for
managerial analysis and action that provide a structure with which a company is considered and as
a whole, so that the organization organizations problems may be diagnosed and strategy may be
developed and implemented

The 7S model can be used in a wide variety of situations where an alignment perspective is useful,
for example to help,

 Improve the performance of a company.

 Examine the likely effects of future changes within a company.
 Align departments and processes during a merger or acquisition.
 Determine how best to implement a proposed strategy..

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1. Structure:

Organization structure defines the authority responsibility and relationship in the organization. A
good structure in the organization rings co coordination between various departments of the
organization.

Organization structure at Mangalore chemicals and Fertilizers Ltd is clearly defined it shows
formal division of the company into various departments and duties and responsibilities of each
and every employ. The structural design and responsibilities of every individual and they are
assigned according to the functional requirement. MCF has a Flexible organization structure which
enables changes.

Table 2.3. Top Management of the Company

Name Designation

Mr.Arun Duggal Chairman / Chair Person

Mr. N. Suresh Krishnan Managing Director

Mr. Prabhakar. Rao Director(Works)

Mr. Vijayamahantesh Khannur Company Secretary

Mr. T M Muralidharan Vice President Finance

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Figure 2.2: Organization Structure of the company

CHAIRMAN BOARD OF
DIRECTORS

MANAGING DIRECTOR

V.P. (FINANCE) COMPANY V.P. (MARKETING) DIRECTOR (WORKS)

SECRETARY

MARKETING. WORKS ESTABLISHMENT

FINANCE SHARES ISSUE MANAGEMENT
ACCOUNTS LEGAL COMPANY
BUDGET LAW BOARD
MATTERS INDUSTRIAL
TAXATION CORPORATE
MANAGEMENT
SYSTEMS LIAISON PURCHASE OPERATIONAL RELATIONS
COMMITTEE
OFFICE,

DELHI
PUBLIC RELATIONS ADMINISTRATION

V.P (MER) V.P (OPERATIONS) V.P (H.R)

The chairman is Mr.Arun Duggle . The Managing Director of MCF is Mr. N. Suresh Krishnan
who is the supreme authority. The structure is divided into 8 departments namely Finance,
Marketing, Information, Legal, Projects, Production, Human resource Management. These are
further divided into several categories based on activities carried out. These include material,
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company secretary, administration, maintenance engineering, business development, support
services and many others.

2. Skills:

MCF possesses labor forces with various skills. The company encourages and provides training for
development of skills depending on whether the employees is at the operating level or at superior
level.

MCF expects all its employees to be experts in particular area. All employees are trained in order
to improve their skills so as to help them to maximize their overall efficiency and productivity.

The personnel and Administration department will keep updating technical and professional skills
of the employees in order to change the organization out door to bring changes in the attitude and
develop good organization culture.

Here skills are divided into two categories:

 Managerial Skills
 Technical Skills

3. Style:

Style refers to the cultural style of organization and managers behave in achieving organizational
goals.MCF follows particular style of management. The management of MCF encourages the
employees to participate in decision making. They constantly try to improve interpersonal
relationship and team building. The authority responsibility is clearly defined. Managers provide
enough flexibility to the employees in caring out their work.

MCF considers human resource is main resource. The management of the firm believes that the
profitability and potential for growth depends on the aptitude, resourcefulness, integrity, courage
and dedication of the employees at all level of the organization.

4. Staff:

Staff means that the company has hired able people, trained them well and assigned them to the
right jobs, selection, training, reward and recognition, retention, motivation and assignment to
appropriate work are all key issues.

MCF considers employee as its most important assets. The company prefers candidates with good
communication skill, aptitude and competitive skill’s. MCF gives important to physical skills of
the staff and also physical total skills of the staff to the organization. It encourages staff to be more
creative and innovative. MCF gives training to all level of employees based on the requirement and
performance evaluation which is conducted every year.

MCF consists of 6 types of employees they are

 Regular employees

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  Temporary employees
 Contract employees
 Workman
 Trade apprentices
 Management trainees

The numbers of employees in the organization designations of the employees are given below

Table 2.4: Details of Staff

Management Staff Workman

Area of Operation
Corporate Office at (Bangalore) 118 19
Work office at (Mangalore) 229 355

Total 417 374

Table 2.5: Designation wise details of Staff

Designation Held Total no

Managing director 1
Director (works) 1
Vice president 2
Senior Vice president 2
General manager 5(3+2)
Deputy general manager 11

5. Strategy:

Strategy refers to the systematic action & allocation of resources to achieve the company’s aims.
The integrated vision and direction of the company, as well as the manner in which it derives,
articulates, communicates and implements that vision and direction. It can also be defined as the
choice of direction and action that the company adopts to achieve its objectives in a competitive
situation. It is the first step that a company has to take in leading its organization to the ladder of
success.

Strategy followed by MCF ltd for safety of environment, personnel safety, and health:

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EFFLUENT TREATMENT AND DISPOSAL (ENVIRONMENT):

With the aim of ensuring minimum disturbance to the ecology all possible disposal systems in
number of chemical plants in India and abroad have been studied and suitable system has been
designed and built in consultation with specialist in effluent treatment and allied engineering
activities.

A urea hydrolyser stripped unit, at a cost of Rs 8 crores was added in 1990 to threat the effluent
from the urea and ammonia plants and outlet water from the stripper is reused as cooling tower
make up. Suitable modification have also been made in the urea plant to substantially bring down
the noise and air pollution level during plant start ups

A 500 meters long effluent discharge pipeline has been laid under the sea for discharging rain
water collected in water pond (inside the premises) during the monsoon As a good corporate
citizen the company gone beyond mealy complying with the pollution control norms.

6. System:

System refer to the formal processes and procedures used to manage the organization, including the
management control system, performance management measurement and reward systems,
planning, budgeting, resource allocation systems, information systems and distribution systems.
These systems include core process system and support systems.

A. CORE PROCESS SYSTEM:

The core process systems include primary activities like product development and demand
management and other fulfillments.MCF develops new products and tests them in the market in
order to know the demand for the product. While introducing the new product in to the market it
conducts tests and market researches. And depending on the result of test market and market
research production will take place.

B.SUPPORT SYSTEMS:

The various supporting systems include human resource, capital resource, intimation resource and
control systems. The performance of company is very progressive. The capital of the company
increased with a strong financial discipline. The working capital management could be efficiently
managed. MCF is smoothly doing the costing, payroll activities and maintenance of personnel and
production budget. Production capacity of the industry has increased since 2000-2003 and has
achieved 380000 MT productions. Production capacity has been increased to 340000 to 380000
MT per annum.

7. Shared Values:

It refers to the core or fundamental values that are widely shared in the organization and serve as
guiding principle that are important. These values have great meaning because they focus attention
and provide a broader sense of purpose. Values are things that you would strive for even if they
were demonstrably not profitable. Values act as an organization’s conscience, providing guidance
in times of crisis.

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MCF follows 5S of Japanese concept for Housekeeping they are:

a) Sorting out
b) Systematic arrangement
c) Spic and Span
d) Serene Atmosphere
e) Self Discipline

a. SORTING OUT:

Arranging things based in order. This process include three important steps

 Checking around the work area and deciding necessity of each item
 Separate each item on the basis of Rework able and rejected items
 Rework the rework able items and disposed off the rejected items

b. SYSTEMATIC ARRANGMENT:

Once of the things are sorted keep them systematically in order to have traceability. In the simple
words it means placing things in such away that they can be easily reached whenever they are
needed. This can be done with the help if following 2 steps,

 Items are placed in prefixed locations.

 All items are labeled properly in order to make sure that items can be clearly identified.

c. SPIC & SPAN:

Keep things clean and polished, no trash or dirt in the work place. It include keeping everything
arranged and always ready to use.

d. SERENE ATMOSPHERE:

It means even a clean work place with proper selection and proper arrangement. It also means that
maintain cleanness after cleaning perpetual cleaning.

e. SELF DISCIPLINE:

It mainly includes “Individual commitment”. Everyone should be disciplined to follow the rules
and maintain standard while working.

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 PORTERS FIVE FORCES MODEL

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The global chemical industry is undergoing rapid change. Both demand and consumption of
chemicals are shifting eastwards as new manufacturing facilities come up and China’s
consumption levels rapidly increase. New production capacities are being developed in the Middle
East and in other non-traditional areas.

How does all this impact the incumbent chemical companies? What are the challenges they face
and are there some preemptive measures that they can take to protect their business?

It could be useful to carry out an analysis using “Porter’s 5 Forces.” The model, named after
Michael E. Porter, an American academic and a professor at the Harvard Business School, is useful
in determining an industry’s weaknesses and strengths.

The following section of this blog post classifies the threat from the five forces as HIGH,
MEDIUM, and LOW.

Force #1 – competition – HIGH

The chemical industry is intensely competitive. There are large numbers of manufacturers, each
vying for a share of the market. In the US alone, there are over 10,000 firms producing in excess of
70,000 products. It is extremely difficult for a manufacturer to differentiate itself from its rivals.

Many chemicals are commodities which are sold purely on the basis of price. The high level of
competition can drive prices downwards and firms have to look at ways to provide value-added
services if they want to have better price realizations.

The main competitor of mangalore chemicals and fertilizers ltd

 Agro Phos India ltd.

 Aries Agro ltd.
 Basant Agro Tech (India) ltd.
 Bharat Agri Fert &Realty ltd.

Force #2 – threat of new entrants – MEDIUM

Traditionally, the chemical industry has been dominated by players in Europe, the US, and Japan.
But the rise of manufacturers in hydrocarbon-producing areas is changing the pattern of global
chemical production.

These new producers could possibly pose a greater threat to the incumbents in the years to come.

 Potential entrant in this sector are various companies like Monsanto and Syngenta who
feels that rural market still not penetrated to a considerable extant
 Second set of potential entrants are retailers like GODREJ ADHAR and HARYALI
 KISAN BAZAR who as of now are retailing the products but are planning of backward

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Force #3 – bargaining power of customers – HIGH
Buyers for the fertilizers sector are FARMAR . And the government controls the price fixation of
certain product where the pricing is very low the cost of the production is not met

 Spectrum of substitutes available to the farmers is very large

 There are myriad organisation in the sector i.e. Public, Private and co-operatives
 Since the buyers are from the rural areas of the society they can impose pressure on the
government organisation to provide subsidies.

Force #4 – Bargaining power of suppliers – LOW

As there are thousands of suppliers, their bargaining power is severely limited. Buyers can log on
to a B2B portal and obtain details and quotations from companies across the world.

Despite this, it is still possible for some suppliers to retain a hold over certain customers. A client
that requires a niche product may have only a limited number of suppliers to choose from. The
consumption volumes may be too low to justify the setting up of additional manufacturing facilities
by other suppliers.

 Public sector companies approximately cover 35%of the market share some of the
companies are NFL, FACT,SAIL, NLC, PPL, HFC, etc.
 Cooperative fertilizer companies covers 2%of market share some companies like IFFCO
and KRIBHCO
 Private companies covers 63% of market share some companies are Oswal . TATA,
Indogulf , Chambal , Sreeram, Nagarjuna etc.

Though the majour chunk of the market share is occupied by the private companies the government
organization exercise certain power over the buyers by providing subsidies on fertilizers

Force #5 – Substitute products – MEDIUM

Although it is possible for chemical suppliers to develop substitute products to offer to customers,
it can be a difficult task to do this. It requires a strong R&D department as well as a high degree of
knowledge of the client’s processes.

However, a supplier who can manufacture a new low-cost product that is a viable option for the
customer can gain a significant competitive advantage

The substitutes for the products are

 Bio Fertilizers
 Manures E.g. : FYM, Cattle dung etc.
 Green manure E.g. Vegetable and Household waste
 Vermi compost

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Substitutes are taking the place of chemical fertilizers at a very fast pace for the following
reasons:-

 Reduces expenditure on chemical fertilizers

 Increase crop yield
 Increase soil microbial activities
 Enhance overall soil fertility
 Tolerant to low pH and high salt
 Contains and produces growth promoting substances
 Increase germination of seed

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 CHAPTER: 4

SWOT ANALYSIS:

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It is an auditory of an organization and its environment. It is the analysis of the strength, weakness,
opportunities and threats of the organization. Strength and weakness are internal to the
organization and opportunities threats are external to the organization.

STRENGTHS

It is about what advantages the company has over others and what the company can do better than
anyone else. The strengths of MCF are:

 The plant is well situated. That is it is well connected by the port, railways and
also the national highways.
 Captive power plant is advantage indigenous power generation in firm itself in
farm. Thus providing uninterrupted power supply.
 4 P’s of marketing i.e. Product, Price, Place and Promotion is completely
followed here.
 First preferences are given to the farmers of the Karnataka and also include other
states like AP, Kerala and Tamil Nadu.
 Products are made available at the right time by the suppliers present in various
places.
 The products of this company carries with it with a very strong corporate image
 Effective employee
 Economies of scale due to optimum utilisation of capacity
 Strong financial positions

WEAKNESS

Weakness in better terms is referred to as what the company could improve upon, what it

should avoid and what the people in the market likely to see as weakness.

MCF has some weakness in the following areas-

 Uncertainties of weather and rainfall, i.e. the sale of the product depend on the
weather conditions required for the growth of the crops.
 The prices for the goods are fixed by the Government.
 Sometimes government fixes the prices of products. It may not touch the cost of
production.

OPPORTUNITIES

Opportunities are external advantages which are beneficial to the company.

Some of the opportunities of the MCF are-

 Since sales depends on the weather conditions, if the weather conditions are
favorable then the sales will also increase resulting in decreased cash sales/

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  There is a great demand for fertilizers and unused land asset and hence plans are
being made for diversification.
 Increased and well established network can help in capturing the market if the
marketing strategies are innovated.

THREATS

Threats are the obstacles which the company faces by the external environment in its

process of development.

 The plants are 33 years old which is above the normal life of 15 years.
 Cut throat competition from the other competition like
MFL - Madras Fertilizer Ltd
SPIC – Southern Petro Chemical industry
 Foreign products pose a threat to companies product
 The company faces government restrictions at production level. Even though the
company is capable of producing more it is subjected to certain restrictions.
 Pollution control norms laid down by the government are getting more stringent
which may affect production section in future.

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 CHAPTER: 5

ANALYSIS OF FINANCIAL STATEMENT

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Current Ratio:

The current ratio is a liquidity ratio that measures a company’s ability to pay short term and long
term obligations. To gauge this ability the current ratio considers the current total asset of a
company. (both liquid and illiquid) relative to that company’s current total liabilities.

Current ratio = current asset/ current liabilities

Table -5.1: Current ratio

the amounts are in lakhs
Year Current assets Current liabilities Ratio

2018-2019 2,24,252.64 2,11,343.83 1.061

2019-2020 2,09,227.05 2,00,824.73 1.042

Source: Balance sheet of the company

Figure –5.1: Current ratio

current ratio
current ratio
1.06

1.04

2018-19 2019-20
Source: Table –5.1

Current ratio gives the idea about the company’s ability to pay back the liabilities with its assets .
It roughly measures company’s financial health. The above table and graph shows the current
ratio of company. Industries current ratio is decreased 2018-19 to 2018-20. The above table
shows current ratio is 1.061 and 1.042 respectively for the financial year 2018-19 and 2019-20.
The current ratio shows little decreased in the second financial year. The low current ratio
suggests that company is utilising its current assets efficiently or working capital well.

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Quick ratio:

The quick ratio is a measures of how well a company can meet its short term financial liabilities
also now as the acid test ratio it can be calculated as follows

(Cash + marketable securities + accounts receivables)/current liabilities

Quick ratio=quick assets/current liability

Quick ratio= (current assets-inventory)/current liabilities

Table - 5.2: Quick ratio

the amounts are in lakhs

Year Quick assets Current liabilities Ratio

2018-2019 1,70,380.14 2,11,343.83 0.81
2019-2020 1,84,615.66 2,00,824.73 0.92
Source: Balance Sheet of the company

Figure - 5.2:Quick ratio

quick ratio
quick ratio
0.92

0.81

2018-19 2019-20

Source: Table - 5.2

The quick ratio helps us to know the companies short term liquidity with its most liquid assets.
The ideal ratio is 1:1 The above table shows Quick ratio is 0.81 and 0.92 respectively in the
year 2018-19 and 2019-20. The Quick ratio is much more increased by 2018-19 to 2019-
2020financial year ratio.

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Absolute Liquid Ratio:

Absolute liquid ratio relates cash, bank and marketable securities to the current liabilities. It
means absolute liquid assets worth one half of the value of current liabilities. Are sufficient for
satisfactory liquid position of a business.

Absolute liquid ratio=absolute liquid assets/quick liability

Where absolute liquid assets = cash +bank +marketable securities

Table - 5.3: Absolute liquid ratio

the amounts are in lakhs

Year Absolute liquid assets Current liabilities Ratio

2018-2019 4961.48 211343.83 0.024
2019-2020 23059.11 200824.73 0.115
Source: Balance Sheet of the company

Figure - 5.3: Absolute liquid ratio

absolute liquid ratio

absolute liquid ratio
0.12

0.02

2018-19 2019-20

Source: Table - 5.3

In the above table and relevant chart indicate absolute liquid ratio. In sound business generally
0.5:1 is considered as standard ratio. The above table and chart shows function in absolute liquid
ratio in 2 years. In the year 2018-19 and 2019-2020 ratio is less than the standard ratio that is
0.024 and0.115 respectively, it indicates that firm does not have sufficient absolute liquid assets
to meet it’s liquid liabilities

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Current Asset Turnover Ratio:

Current asset turnover ratio measures the value of a company sales or revenues
generated relative to the value of its assets. The asset turnover ratio can often be used
as an indicator of the efficiency with which a company is deploying its assets in
generating revenue.

Current Asset turnover ratio = net sales/current assets

Table - 5.4: Current asset turnover ratio

the amounts are in lakhs

Year Net sales Current assets Ratio

2018-2019 307363.76 224252.64 1.37
2019-2020 271084.42 209227.05 1.30
Source: Balance Sheet of the company

Figure 5.4: Current asset turnover ratio

current asset turnover ratio

current asset turnover ratio
1.37

1.3

2018-19 2019-20

Source: Table - 5.4

The above table shows Current asset turnover ratio 1.37 and 1.3 respectively in the
year 2018-19 and 2019-20. The Current asset turnover ratio is not much decreased in
the 2019-2020 financial year ratio.There is no such standard or ideal ratio, so higher
the ratio means higher the efficiency. We can also tell that higher the ratio means we
can sell more products with less investment

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Working Capital Turnover Ratio:

Working capital turnover ratio is a ratio which measures how efficiently a company is
using its working capital to support a given level of sales also referred to as net sales to
working capital it shows the relationship between the funds used to finance a company’s
operations and the revenue a company generates as a result.

Working capital turnover ratio= net sales /

working capital Working capital = current

assets-current liabilities

Table - 5.5:Working capital turnover ratio

the amounts are in lakhs
Year Net sales Working capital Ratio
2018-2019 307363.76 12908.81 23.8
2019-2020 271084.42 8402.32 32.26
Source: Balance Sheet of the company
Figure - 5.5:Working capital turnover ratio

working capital turnover ratio

working capital turnover ratio
32.26
23.8

2018-19 2019-20
Source: Table - 5.5

The above table diagram shows Working capital turnover ratio is 23.8 and 32.26
respectively by the year 2018-19 and 2019-20. It tells when the ratio is higher, the
lower is the investment in working capital and the greater are the profits.The
Working capital turnover ratio is much more increased by the 2018-19 to 2019-20
financial year ratio.it shows the investment is low and the profits are also high. So the
solvency and the operational efficiency is good.

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LEARNING EXPERIENCE:

The organization study of Mangalore Chemical &Fertilizers Ltd (MCF), has given me the
opportunity to gain valuable industry related experiences that would allow me to expand
my career option. It has been a great learning experience. The study was through online,
but I gained a lot of knowledge about MCF. My four weeks of organization study was
very useful and educative one. I learned the amount of hard work that goes into the
organisation running smoothly and efficiently.

I have understood various product and service produced by MCF and how the work flow
takes place in that company. I also learned how company offers comprehensive
engineering and distribution project in the domestic and international market. The
guidance support and useful suggestions provided by my project guide helped me to
successfully complete this organization study

Overall it was a good experience for me to learn and improve my knowledge

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BIBLOGRAPHY

Website use for the study

www.magalorechemicals.com

www.moneycontrole.com

www.bseindia.com

www.economictimes.indiatimes.com

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Balance Sheet aS at March 31, 2020
as at as at
not March 31, March 31,
es 2020 2019
aSSetS
non-current assets
Property, plant and equipment 3 60,575.47 61,247.53
Capital work-in-progress 3 4,646.97 3,418.08
Intangible assets 4 177.94 90.41
Intangible assets under development 4 - 39.03
Financial assets
(i) Investments 5 - -
(ii) Loans 6 905.05 782.06
(iii) Others 7 20.36 15.29
Income tax assets (net) 23.04 246.73
Other non-current assets 8

4,733.69 1,726.77
71,082.52 67,565.90
current assets
Inventories 9 24,611.39 53,872.50
Financial assets
(i) Investments 5 0.10 -
(ii) Trade receivables 10 144,630.65 156,448.07
(iii) Cash and cash equivalents 11 21,299.40 4,164.72
(iv) Other bank balances 12 1,759.71 796.76
(v) Others 7 4,147.16 890.63
Other current assets 8

12,778.64 8,079.96

209,227.05 224,252.64
total assets

280,309.57 291,818.54
eQUItY anD lIaBIlItIeS
equity
Equity share capital 13 11,854.87 11,854.87
Other equity 14

42,703.38 37,661.32
54,558.25 49,516.19
liabilities
non-current liabilities
Financial liabilities
(i) Borrowings 15 22,367.98 27,032.32
(ii) Others 16 275.66 546.19
Provisions 17 1,413.75 1,624.64
Deferred tax liabilities (net) 18

869.20 1,755.37
24,926.59 30,958.52
current liabilities
Financial liabilities
(i) Borrowings 19 121,177.78 139,314.13

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 (ii) Trade payables 20
Total outstanding dues of micro enterprises and small 456.29 287.58
enterprises

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 (iii) Others 16 17,364.03 17,971.60
Other current liabilities 21 3,567.48 1,782.27
Provisions 17

1,192.30 1,046.75
200,824.73

211,343.83
total equity and liabilities 280,309.57
Summary of significant accounting policies 2.1
291,818.54

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