CAPEX,kollam

INTRODUCTION

An organization study at Kerala State Cashew workers Apex Industrial Cooperative Society Limited (CAPEX) is a part of our academic curriculum and it attempts to gain a insight into the functioning of the organization through coordination of different departments and this to familiarize us in the original atmosphere. The CAPEX a comparatively new entrant under the public sector, was formed in 1984. The birth of the unit was a salutary one, since it aimed at infusing new life and rigor into a highly labour intensive industry in the private sector employing lakhs of workers, men and women. The birth and growth of CAPEX with the central and state Governments and its achievements during its short span of existence infacts is an inspiring one.

The organization study at CAPEX helped in knowing more about the company the different departments and sections the company is divided into, the delegation of authority and hierarchy. Moreover the study through lights on the various products and production processes together with the company's further plan of expansion. A study on various departments and its functions inorder to gain awareness about an organizational atmosphere. Through this study our attempt is to ascertain where the organization stands with respect to the society and to see whether it has been able to attain its objectives.

OBJECTIVES OF THE STUDY

To get an overall view of the working of Kerala State Cashew workers Apex Industrial Co- operative Society Limited (CAPEX) To understand the role of CAPEX in the Indian Market To study the functioning of various departments To know the SWOT , PEST analysis of the company

Institute of management in Kerala

CAPEX,kollam

METHODOLOGY Methodology used for the study was descriptive in nature. The study was undertaken by personally visiting the various departments of CAPEX. The sources of data for the study were primary and secondary data. PRIMARY DATA Primary data for this study was collected by Formal interviews, discussions with company's professionals, details from the heads of different departments. SECONDARY DATA Secondary data for this study are collected from Journals, Company records , annual reports , books , company publication, research reports etc. SCOPE OF THE STUDY The scope of the study is to understand the functioning of the various departments of Kerala State Cashew workers Apex Industrial Co operative Society Limited (CAPEX). The study aims at gathering a practical awareness of the functions & management of the company. The study covers a general understanding of the organization, its culture, departments, and its business activities. LIMITATIONS

Majority of the employees are busy with their works. Management did not disclose confidential data. Lack of time.

Institute of management in Kerala

CAPEX,kollam CHAPTERISATION
CHAPTER 1 deals with Introduction, Objectives of the study, Methodology, Scope of the study ,Limitations, Chapterisation. CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 deals with Industry profile. deals with Company profile. deals with Organizational structure of CAPEX. deals with Departmental details and structure deals with SWOT , PEST analysis & PORTER'S FIVE FORCE MODEL CHAPTER 7 deals with Findings, Suggestions and Conclusions.

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CAPEX,kollam

INDUSTRY PROFILE

The Indian cashew industry is one of the few industries in the country which is export oriented. Small quantities of cashew kernels were exported from India even before the First World War in 1914. But the real break came when cashew started appearing on the global market towards the middle of 1920's, when packing of cashew kernels on an atmosphere of carbon dioxide were introduced until then, the kernels were packed in wooden cases lined with newspapers. Being highly susceptible to infection, this mode of packing resulted in deterioration in the quality by the time the kernels reached the destination. In the middle of 1920's two countries dominated the trade. This was because in India kernels were introduced entirely from raw nuts grown within the country. It was with the emergence of East Africa as a supplier that trade in raw nuts started. In these days, the cashew industry depends mostly on the raw nuts imported from various African countries The expansion of the global market for cashew kernels in the 1960's promoted India to adopt a systematic and integrated approach towards developing the cashew economy. In the mid 1960's the government launched a cashew development programme and in 1966 a separate Directorate of cashew nut development was established under the ministry of agriculture. As a result, Indian witnessed remarkable expansion in the area under cultivation although the processing industry is still heavily dependent on imported raw nuts Among the Agro-horticultural commodities getting exported from India, cashew ranks second position. During the year 2001-2002, India could export 97550 MT of cashew kernels valued at Rs. 177680 crores. U.S.A, Netherlands, U.K, Japan, U.A.E, Canada, Saudi Arabia, Singapore, Italy, German Fed Republic, Austria, Israel and Spain are the major international buyers of Indian Cashews.

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CAPEX,kollam
India is the largest area holder of this crop. Cultivation of cashew in India confines mainly to peninsular areas. It is grown in Kerala, Karnataka, Goa and Maharashtra along the east coast. To a limited extent it is being cultivated in Chattisgarh, North Eastern States (Assam, Maniour, Trioura, Meghalaya and Nagaland) and Andaman and Nicobar Islands. In the year 2000, the total global area under cashew cultivation was around 40,00,000; while the estimated average productivity was around 510 Kg and total raw nut production was 1.8 million tones. In India, cashew occupies an area of 7.70 lakhs MT and an average productivity of 710 Kg. Of these 2.001 lakhs of the plantations developed from the beginning of the eight plan alone have been with supplier varieties. Apart from the foreign exchange earnings of the industry, it plays a major role in the field of providing employment to a very large number of people both directly and indirectly and it has thus played a very vital role in the economy of the country. It generates employment in the processing and agrarian sector, employing over 3 lakhs persons with 95% of them being women. WORLD SCENARIO The commercial production of cashew seed is done in more than 32 countries of the world. The seed generally prosper in the hot and humid regions of the earth near the equator like in central and South American Zone, Indian and Oceanic Zone and African Zone. The world's total produces around 22.5 lakh tones per annum. Vietnam is the largest producer of raw cashew followed by India and Brazil. India dominates and leads the cashew kernels production list. The world consumption of cashew has ever been rising with time. In 1955 the world production figures for cashew consumption was 125000 tons which rose up to around 1 million tons in 1995 and now it is almost same as the level of production. As it is known as the cashew trade cycle, cashew nut was not indigenous product of the India. The cashew ranks second only to the Almond among the nine Institute of management in Kerala 5

CAPEX,kollam
tree nuts in the world. About 400 years ago, the Portuguese brought it to Goa in India, from Brazil. Indian cashew industry is one of the few industries in the country which is almost completely export oriented. Apart from the foreign exchange earnings of the industry, the major contribution of the industry has been in the field of providing employment to a very large work force. Today the major cashew producing states in India are Kerala, Karnataka, Tamil Nadu, Andra Pradesh, Goa, Maharshtra and Orissa. The major cashew consuming countries in the world leaded by the U.S.A, European Union and India. The trade patterns of cashew in the world suggest that 8 to 9 million cartons of cashews are traded in the world in a year. The main countries that constitute the world cashew exporting list are India (4.5 M.T), Vietnam (2.3 M.T), Brazil (1.75 M.T), Tanzania and Ghana. Indian contributes to over half of the cashew exports. Vietnam gives a tough competition to India in the world market as it is the largest cashew producing nation of the world but still India is ahead in this scenario. Vietnam plans to take over India's dominance till 2010. Due to a large consumption level of this seed in the world, there is a long list of cashew importing countries dominated by U.S. 'India is the largest producer, processor and exporter of Cashew Kernels in the world. Exports of Cashew kernels from India are normally subjected to voluntary control and pre-shipment inspection. Cashew kernels from India are well known for their quality and taste and are well accepted throughout the world. There are regular shipping facilities from India to all Ports of the World. Major shipments in India take place through Cochin Port. Other Ports are Tuticorin, Mangalore, Chennai, Vishakapattanam and Mumbai. Regular service of container ships on available from Indian Ports on India - U.S.A, India - U.K, India-Australia, India-Japan, IndiaMiddle East and India-Singapore routes, Cashew kernels in bulk as well as in consumer packs are available throughout the year from India. INDIAN SCENARIO Institute of management in Kerala 6

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India has always been a major player in the production of cashew. It is the second largest producer of raw cashew in the world but conquers the 1st place among the largest producing countries of cashew kernels and also in the maximum area covered that figures to be 7.70 lakh hectares currently. The country provides with around 55% supply of cashew kernels in the world. The Indian production of cashews contributes to around 4.6 lakhs tons per annum. Cashew made an entry into Indian subcontinent through Portuguese colonists in the 16th century. The climate in the country suited the crop so well that it spread along in all the direction of the continent. India became the leader in the cashew production till in 2002 its dominating position was taken over by Vietnam. The country is still the second largest country producing raw cashew nuts. It is also is the largest country producing cashew kernels, the largest country indulging in the processing of this food product and the largest exporter of cashews in the world. The Indian production of cashews is around 4.6 lakh tons per year. Maharashtra stands 1st among the main cashew producing states in India followed by Andhra Pradesh and Orissa. The country also is the third largest consumer of the food product in the world after United States and European Union as it consumes over 3 million cartons per annum. As India is the largest processor country in the world, it is left with more quantity for exports that also makes it the largest exporter in the world cashew market. It annually exports around 4 million cartons in one year. The major countries that import Indian cashew are

United States of America (43149 tons) Netherlands (18736 tons) United Kingdom (6238 tons) United Arab Emirates (8274 tons) Japan (4685 tons) France (3470 tons) Saudi Arabia (2827 tons) Spain (2648 tons) Russia (1990 tons) 7

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CAPEX,kollam

Germany (1991 tons) Canada (1558 tons) Greece (1859 tons)

India some how imports small quantities raw cashew nuts from the African countries so as to meet the international demand for Indian processed cashew kernels. Cashew industry is directly connected to the growth of the economy as India earns a good amount of foreign exchange by exporting cashews. Cashew ranks second among the horticultural commodities exported from India. This industry also gives employment to around 3 lakh people in the country and the demand for Indian cashews is quite large due to qualitative edge over other countries. Market Influencing Factors

Production fluctuations in the major raw cashew nut producing countries Indirect domestic demand due to the presence of large unorganized sector Government policies

THE MAJOR TRADING CENTERS OF CASHEW IN INDIA ARE

Palasa Kollam Manglore Kochi

STATE SCENARIO Kerala has the largest processing capacity in India, almost 50% of a capacity of one million Metric Tons of raw nuts in 2000. It also exports the highest share of the countrys cashew kernels. Progress on this industry in the 1991s was against a backdrop of Indias growing liberal environment, both in terms of the trade liberalistaion and industrial delicensing, coupled with a fairly steady growth in the production and exports of cashew kernels. However such an environment appears to have legitimized greater information of production and work arrangement in the processing sector of Kerala. Thus we doubt whether any of the large numbers of workers employed in this sector over 90% are women, would have benefited from this Institute of management in Kerala 8

CAPEX,kollam
growth. In some ways the gains made earlier by the unionized labor force and an interventionist state appears to have been reversed. The cashew workers of Kerala are a group whose history and present situation are of relevance to scholars of the humanities and social science for several reasons. During the past six or seven decades, female cashew factory employees have constituted the largest single group of registered workers in Kerala. They have been organized in trade unions since the 1940s and often have been the most militant of all workers, as measured by man-days lost due to strikes. This makes these individuals contrast sharply with the stereotypical depiction of Third World Women as powerless, illiterate victims. The story of the cashew workers in Kerala has been described by some as a story of anti capitalist struggle and success, and by others as a story of victimized women who suffer from ignorance and patriarchal oppression. Both these ways of writing history have their limitations for three reasons: a) only the productive sphere is analyzed; b) womens own voices are not heard; and c) international influences are analyzed exclusively from a materialist and economic viewpoint. In the early 20th century, cashew nuts were processed in peoples homes or on the streets and commonly sold at markets. They were considered to be especially healthy and nutritious and frail people were advised to eat them. In the 1920s, an agent from the American company, General Foods, came to Kerala in order to search for profitable export goods. His attention was drawn to cashew nuts and soon the first shipment of cashew kernels left Kerala. Some British companies also became involved in the business, but before long indigenous men were in majority among the cashew factory owners. The processing of cashews started as cottage production in which entire familiesmen, women, and childrenwere engaged. By the 1930s, production became centralized into small factories. Cashews soon became one of Keralas most important export items. Profits were huge and factory owners were referred to as cashew barons or cashew kings. Exporting cashew nuts was a way for the owners to become rich quickly, while the workers in those early factories lived under conditions that have been described as deplorable and slave-like. Institute of management in Kerala 9

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Male cashew factory workers are generally paid monthly and receive a certain amount of unemployment compensation when factories close seasonally because raw nuts are not available. Women, however, are paid neither by the month, the week, the day, or the hour, but by the piece, and usually receive nothing when a cashew factory closes. Kerala was among the first regions in the country, after South Canada, where cashew processing units emerged. In the 1930s the industry became concentrated in Kollam, in the former princely state of Travancore. Kerala is the main processing and exporting centre of Cashew. In Kerala most of the cashew processing factories are located in Kollam district. The industry provides livelihood for about 6-7 Lakhs of employees and farmers, the Cashew Industry has national importance. In Kollam District alone there are more than 2.5 Lakhs employees directly involved in the Industry, which comes about 10% of the population of the district, out of which 95% are women workers. It is a fact that any amount received by a Women worker will be utilized directly for the benefit of the family and hence the link relating to family welfare is quite clear. Kerala alone produces 80,000 M.T. of raw Cashew Nut every year. The majority of cultivation is in Kannur, Kasargode, Kozhikode, Trichur and Malappuram Districts. The poor earnings and inhuman working conditions in Kollams cashew factories led to the emergence of a trade union movement. The first union formed as early as 1939. And subsequently, unions affiliated to different political parties, in particular the leftwing parties, gained considerable strength. However, the rise in trade unionism has not meant that labour issues are tackled from a gender perspective. Issues such as differences between male and female wages have not been given much attention, despite the fact that women workers believe that they belong the working class and also get involved in collective action. State intervention has been very intense in the Cashew processing sector in Kerala, largely in response to pressures from Trade Unions. Initially the State intervened to enact protective legislation for workers and grant them minimum labour rights given the deplorable conditions in which they work. In 1945 the Government declared Cashew work places as factories even though they did not use power. This Institute of management in Kerala 10

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declaration gave employees considerable obligations, including adhering to stipulated working hours, and paying unemployment compensation, maternity benefit and employees State Insurance, especially if the factories were categorized as Perennial factories. Despite stiff resistance from factory owners in 1956 the Government declared Cashew factories to be perennial. The industry was also brought under the purview of minimum wages Act. An important historical reason for processing capacity being located in Kollam appears to have been the availability of cheap labour. The industry has always been labour intensive, for instance it is found that the number of workers per unit of productive capital in Cashew was 21.32 compared to 2.20 in the cotton spinning and waving, and 2.25 in Coir Spinning and Weaving. Another factor appears to have been the lack of labour legislation and regulations in Travancore. As the processing work required manual dexterity deemed to be most suitable for Female Workers, the industry became highly female labour intensive, the absence of a law governing maternity benefits to Women Workers helped to reduce the financial burden on factory owners. By the 1940s when Kollam was processing 75% of Indias Cashew Kernel exports, only one third of the raw nuts processed came from local sources. There was a set back in the processing sector during the war but the post war period saw rapid expansion of the industry due to high export demand.

COMPANY PROFILE

Kerala State Cashew workers Apex Industrial Co-operative Society Limited (CAPEX) was registered on 09-09-1984 under Kerala Co-operative Societies Act Institute of management in Kerala 11

CAPEX,kollam
1969 as an Apex Society of Cashew workers primary society with Headquarters at Kollam. The main object of the apex society is to organized Cashew Industry in the state on commercial basis, rendering assistance to affiliated societies in the matter of procurement and marketing of kernels and other items produced in the factories of the affiliated societies. All these are done to provide the continuous employment to the poor people engaged in Cashew processing. 95% are Women workers out of which 35% are from backward community. CAPEX is the only co-operative organisation in Cashew processing sector. The employees strength of the 10 Factories is above 5,000. CAPEX is the only largest Cashew processing Unit in the Co-operative Sector under Industries Department, Government of Kerala. An Apex society under the name the CAPEX was formed with the Five member societies and registered as No.IND(ST)12 with Headquarters at Kollam. The board of Director of the Apex Society consists of 11 Directors including the Chairman nominated by the Government. All the major Trade Unions were represented in Board of Directors of the Apex Society, which ensured peaceful labour relation. It provides employment for 5,000 Labourers offering work for 230 days in a year, particularly in a seasonal industry like Cashew Nut. The Kerala Raw Cashew Nut Act of 1981 empowered the Government of Kerala to provide the trade in Raw Cashew Nuts by the State to the execution of all others by procurement and sales thereof at fair price within the State. The CAPEX acted as the sole agent of the Government from 1989 to 1991 and in 1991 the Government decided to resume this policy for a successive fourth year. From 1988 the CAPEX became the authorized agent of the government for the procurement of Cashews.

For a successive period of 5 Years from 1998-2002 CAPEX was authorized to procure Raw Nuts in the State under the monopoly procurement programme. Pricing of Raw materials is decided by the Government year in a year in consultation with the members of the advisory committee formed for the purpose. CAPEX opened 60 drying yards with go downs for the collections, frying and storing of raw Nuts purchased by the sub-agent according to necessity. Each yard was mannered by a Institute of management in Kerala 12

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yard Manager assisted by one or more yard assistant. BUSINESS FOCUS: - Their main business focus is on Cashew Nuts and its exporting. Suppliers: - In Kerala, their suppliers are collection agents from Societies and Business agents. Distribution Network: - The distribution of Cashew Nuts done by CAPEX is mainly through two channels, i.e. the processed Cashews reach the customers through collection agents from societies and business agents. Products : CAPEX used to purchase/import raw nuts and export the Kernels in large quantities. 80% of sales are by way of export. Indian Grade Kernels, Rejection Grade Kernels, Cashew Shell, Cashew skin, Shell Oil etc. are the by products of raw Cashew Nut. CAPEX has a capacity to process 18000 M.T of raw Cashew Nuts per annum. Quality: - Internationally, CAPEX produces good quality cashew nuts. They have a special Quality Checking Departments in each sections (peeling, grading, shelling) that checks and ensures the quality of Cashew Nuts. Social Responsibility: - Provide continuous employment and job security to the workers who were thrown out of their job at the time of takeover, and CAPEX is deeply committed to serve the community.

STRATEGIC INTENT VISION Promoting Kerala cashew kernels globally. MISSION 1. To organize Cashew Industry in the State. Institute of management in Kerala 13

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2. Rendering assistance to affiliated society.
3.

To provide employment opportunities to women.

Present Scenario of CAPEX Installed 13 Electric Burma at 10 factories of CAPEX. As a part of modernization five factories were fully reconstructed and Rejuvenated including installation of new Chimneys, Bathrooms, Roasting Machines, Daycare Centers etc.CAPEX has given continuous working days to the workers during the last year. CAPEX had achieved a Record working days of 210 during the Calendar Year 2008.Computerization of CAPEX Head Office is in full swing and the computerization works at 10 factories is in process. Maximum capacity utilization in factories has been made effective by increasing the employee strength and thus enhanced the Roasting capacity from 35 M.T/day to 54 M.T/day. CAPEX has paid off all the arrears pertaining to the statutory liability like ESI, EPF, RWF, Sales Tax etc. payment of Arrear Salary, Wages and Bonus to workers are paid. In addition to this, pending payments to Raw Nut suppliers were paid who had supplied during the past few years. The 10 Co-operative Societies were affiliated to a Central Society which was named CAPEX. The responsibility of the Central Society was to produce raw nuts, distribute the same to the primaries, get it processed by the primary society, pack and market the processed kernels.

The apex society started with there objective and had been working for the last 13 years. A tin manufacturing unit was also started by CAPEX. The Apex Society could make profits only for 2 years 1990-91 and 1991-92 in its working for the last 15 years. The accumulated loss for the society as on 31.3.2002 was 44.24 Crores of Rupees. The ten Cashew processing factories and one tin factory as a primary society in its fold and 4309 workers including maikads and 264 staffs. The capacity based on the existing strength of workers is to process 60 tones of raw Cashew Nuts on the Institute of management in Kerala 14

CAPEX,kollam
basis of 200 working days in a year, the processing capacity of CAPEX will be 12,000 M.T of raw nuts Per annum. Operation in a global market place require as an undertaking of the needs of global customers and knowledge of competitors addressing similar issues. CAPEX is influencing global marketing strategy and will continue to be an attractive area for continuing growth of the industry. Globalization of products is not possible without modernization of factories. Globalization intensifies with more and more countries and sectors getting swept up in its momentum. CAPEX seeks to enhance Indias state as in the world market, through its belief in total quality management as a strategy not only for strengthening its current position but also for gaining access to new markets. Tomorrows emerging markets are drivers for todays initiatives. Activities of the Societies:- The activities of the CAPEX is purchasing of raw Cashew Nuts from various sources, domestic and from foreign market and get it processed and packed for being consumed either in the foreign or in the domestic market. CAPEX is the only largest Cashew processing Unit in the Co-operative Sector under Industries Department, Government of Kerala. The authorized share capital of the society will be Rs.10, 00, 00,000/- up to 1, 00,000 shares of Rs.1000/- each. Cashew Workers Industrial Co-operative Societies and other Co-operative Societies will be eligible for membership in the society. But they cannot claim admission as the matter of right. It shall be competent for the State to participate in the share capital of the society. The liability of the members shall be limited to the share capital subscribed by them. No affiliated society shall be permitted to transfer or withdraw its share in the Apex Society when its ceases to the society engaged in Cashew Industry either by amending its bye-laws or on account of an order to be wound up. The Society can raise funds from the following sources. Such as Share Capital Borrowings 15

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Entrance Fees Donation Grant Subsidies

Other forms of assistance from State Government The Chairman shall have an over all control in the affairs of the Apex Society and Societies affiliated to it and shall be competent to do such acts as may be necessary for the effective conduct of the business of the federation. The Board of Directors shall be competent to frame regulations for the conduct of the business of the Apex Society consistent with the Act, the rules these under and the bye-laws. Such regulation shall be entered in the minutes book of the Apex Society and shall be reported to the Registrar. The ultimate authority in all matters relating to the administration of the society shall be the general body of the member who shall meet from time to time and at least once in a year to conduct the business of the society. be 3. month. Current position of Factories is in pathetic condition. All factories especially factories at Navaikulam, Perinadu, Chathinamkulam and Perumpuzha are running with pitiable conditions of peeling, factory grading and shelling sheds. The factory shed is becoming worse day-by-day workers are provided with insecure working condition. Most of the factories roofs are heavily leaking and floors are completely broken. The factories are in poor condition because of CAPEX impecuniousness. As a part of modernization, old sheds are demolished and new sheds are constructed according to the rules. Employees are the real asset of an organization. Improved working condition Institute of management in Kerala 16 The executive committee shall have powers delegated by the Board of Directors. The quorum shall At least 3 days notice shall be given for the meeting of the Executive Committee. The Executive Committee shall be convened by the M.D at least once in a

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makes people more motivated and it resulted in improved production. Therefore, it is essential to reconstruct and maintain the existing factories of CAPEX as a part of modernization of factory sheds. OBJECTIVES OF CAPEX To organize Cashew Industry in the State. Rendering assistance to affiliated societies. Procurement & distribution of raw nuts. Measures to promote manufacturing and marketing of Kernels. To ensure continuous inflow of raw Cashew Nuts to our factories. To deliver high quality tropical edible nuts to the world ethically

MAJOR ACHIEVEMENTS From 2008-Ongoing CAPEXA three dimensional changing Phase The changes that recorded in Capex in the last financial year is to be ear marked as a three dimensional change and can be viewed as a revolutionary transformation in all aspects and at all angles. All necessary steps has been taken on war foot basis to reduce loss and to drive on to a road which can take the industry to a better profit making organization with in a short period from now. The whole hearted Support from the Government and the officials together with our immense intense effort for sure will make the organization a result oriented one in the coming years.

Replaced old traditional Bormas at our 10 factories and installed 15Electric Bormas at factories of CAPEX to reduce and nullify the quality loss; and thus to improve profit margin.

As a part

of modernization 7 CAPEX factories were fully

Reconstructed Reconstruction

and rejuvenated including installation of New Chimneys, Bathrooms, Roasting Machines, Day care centers, yards for drying raw nuts etc., works at the rest of the 3 factories are in full swing.

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Turnover of Rs 16 crores (06-07) has been enhanced to Rs. 37 crores during the financial year 2008-2009 and further to Rs.48 crores during 09-10.

Loss of Rs.6.69 Cores in the year 2006-07 had come down to Rs. 4.17 Crores during the audited year 2007-08, and the net loss has touched down to Rs. 3.35 cores during the financial year 2008-09.

Construction of a 11000 sqft Modern flexi packing centre along with fully automated H.O, which got inaugurated on 29-10-2009 was another achievement. Till then Capex was working in a rented building at Kadappakada, Quilon

Maximum Capacity Utilization by increasing Employees strength from 3800 workers in 2007 to 6300 two ways, utilizing the employees in 2010, helped the organization in and by by providing more employment opportunity entire production capacity. of CAPEX Head Office has been completed

Computerization

successfully and the computerization works at 10 Factories is in full swing. After the successful completion of the same, the entire activities undergone at the factories can be monitored and necessary corrections can be advised then and there. Maximum capacity Utilization in factories has been made effective by increasing the Employee strength and thus enhanced the Roasting capacity from 35M.T/day to 54 M.T/day. Highest ever production performance of 11590 Mtns recorded during 2009-10 when compared to 6732 Mtns during the during the financial year 2008-09 . Exploited the foreign markets by fetching with 16 containers during 2008-09, at a better price. Fully automated Export Packing Machine has been purchased and got it 18 previous year, and 2950 Mtns

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CAPEX,kollam
installed at the new packing center at Mundakkal, Kollam. Domestic Market has been explored by introducing new packs of various grade kernels and is participating in trade shows and other festival shows in Kerala State Domestic market will be more and more explored during 2010-11.

We have paid off all the arrears pertaining to the statutory liabilities like ESI, EPF, RWF, Sales tax etc, payment of arrear salary, wages and Bonus to workers. In addition to this, pending payments to Rawnut Suppliers were paid who had supplied during the past few years. All these liabilities were pending for payment long since the new board has taken over of charge.

We were able to procure maximum quantity of Kerala origin raw cashew nuts from Kannur, Malappuram, Kasargode districts and more and more effective steps will be taken to procure the best available quantity of raw cashew nuts from Kerala itself, so that the farmers will be much benefited and will get a reasonable price, moreever they can be protected From being exploited by the middle -agents.

Issued arrear gratuity to the retired workers of Capex from 1998 to 2006 with the funds received from Government of 10&10-11. Kerala during 2008-09, 09-

Roasting and Salting machine has also been installed at the new packing centre at Mundakkal, Kollam to fetch the domestic market to give variety of tastes for Capex Cashews.

During the calendar year 2009 capex has crossed our own previous working day Record of 210 days with 214 days, when compared to 96 days during 2007 and till 30/06/10 we already achieved 136 working days.

Purchased and installed hand operated Cutting Machine to cut raw nuts at 10 19

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CAPEX,kollam
factories of Capex to increase the productivity. Sale of Cashew kernels through Dealers and Franchise had by now brought up the brand image for Capex Cashews.

A project for installing Solar Panels at 9 factories of Capex has been approved by the Government of Kerala with technical assistance from ANERT.

The Electricity tariff plan of all our factories were amazingly alarming. During the first half of 2008, we found that each factory carried a monthly bill amounting to Rs 14000-21000/- .The tariff was then under 6c, 7A in all factories, this was changed to LT4 tariff plan and the bill amount started to Rs 3000 to Rs 4000/month for each factory. Three appointments under the dying in harness has been made fro the long pending list.

PRODUCT PROFILE

PRODUCT SPECIFICATION

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20

CAPEX,kollam

Fig No : 3.1

Table No : 3.1

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21

CAPEX,kollam

Source : - Secondary data

Table No: 3.2

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22

CAPEX,kollam

Source :- Secondary data Table No : 3.3

Source :- Secondary data

Table No : 3.4 Institute of management in Kerala 23

CAPEX,kollam

Source :- Secondary data

Table No : 3.5

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24

CAPEX,kollam

Source :- Secondary data Table No : 3.6

Source :- Secondary data

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CAPEX,kollam ORGANIZATION STRUCTURE

BOARD OF DIRECTORS LIST CHAIRMAN B.Thulaseedhara kurup. MANAGING DIRECTOR Jayachandran R. DIRECTORS Sri.G.Mohan Das IPS Spl.Officer for Cashew. Shri.P.S.Jayanthan Deputy Secretary, finance Department, Govt. Secretariat, Trivandrum Smt.D.Sarala Kumari Addl.Secretary, Ind., Tvm Sri. G.Jayachandran Nair Sri.K.Subagan Sri.K.R.V.Sahajan C.V.Sadasivan

ORGANIZATION STRUCTURE
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CAPEX,kollam

Chairman & Board of Directors

Managing Director

Commercial department
Commercial manager

Production department
Production manager

Personal department

Sales/ marketing department

Finance department

Maintenance department

Personal manager Assistant commercial manager checkers

Consumer sales manager

Finance Manager

Manager (F&M)

Assistant Manager supervisors Sales executive Assistant Personal manager Officer accounts & cash

Assistant Manager

Superintend commercial workers staffs

Technical supervisor

clerks

Assistant personal officer

Superintend personal

Audit wing

Technical staff

Electrical supervisor staffs

Reception

Chart No : 4.1

DEPARTMENTS AND ITS FUNCTIONS

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CAPEX,kollam

The various functions of the organization are carried through various departments; the process of assigning various tasks or activities in the different segments on a horizontal basis is called departmentation. It helps for proper administration of the company. Like any other public sector undertaking the CAPEX has separate departments and separate executive heads for each department. Departments are based on the functional basis. Each department specializes in its own area of operation. The various departments in the CAPEX are; The various departments are,

Commercial department Production department Finance department Personnel department Sales / marketing department Maintenance department

COMMERCIAL DEPARTMENT
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CAPEX,kollam

The commercial department performs the purchase of raw materials and sales of finished goods. There are two departments in the commercial department Purchase department Sales department

Commercial manager

Assistant commercial manager

Superintend commercial

Senior assistant

Junior assistant

Chart No: 5.1

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CAPEX,kollam Purchase department

Purchase department deals with the purchase of raw materials from various sources. In CAPEX, Kollam raw materials are purchased through inviting tenders from suppliers. 100% of the raw materials are purchased from outside suppliers. Production department gives order to the purchase department to purchase raw materials. Before placing the purchase order they have to ensure the quality and quantity need to the purchase. The purchase of raw nuts is subjected to the approval of the Board of Directors, after considering the requirement and finance the Board will permit the Commerce Section to place the purchase order, the purchase can be local or import purchase. Local purchase means the purchase with in the country. Before doing local purchase they specify the quality of raw nuts, quantity required , term of payment, mode of delivery etc. the local purchase mainly made from the southern states of the country. The raw nuts purchase from the country is not sufficient to meet the requirement of the company. So they will import raw nuts from African countries. While importing the raw cashew the mode of payment is through Letter of Credit (LC). As the time of recovering the raw nuts the company officials will inspect the landed weight and landed quantity to ensure that the right quantity is supplied as per the terms and condition. Purchase policy CAPEX has a purchase policy to ensure raw materials in right quantity and quality at right time at right place from a right source. The source of materials is selected by checking the samples collected from different suppliers. Acceptance of sample can be done as per the recommendation from the quality assurance department. If the samples are qualified the criteria the suppliers can be included in the list of qualified suppliers.

Purchase procedure Institute of management in Kerala 30

CAPEX,kollam
All the purchase shall be made by purchase department. Bill of materials shall be given by the production department. Materials intends in forward to purchase department against each project. Order items except capital goods required by various department are intimated to store or who prepares purchase intent and forward the same to giving full specifications, samples of necessary requirements of capital goods is identified in various departments and its sent to purchase department for getting approval from the corresponding authority.

PRODUCTION DEPARTMENT

Production manager

checkers

Factory managers

supervisors

workers

Chart No : 5.2

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CAPEX,kollam

Production is the process of making inputs in to outputs or transformation of raw materials in to finished goods. The CAPEX Kollam produces , Kernels (main product) By products CNSL (cashew nut shell liquid) Skin Shells

PROCESSING IN SIDE THE FACTORY The nuts which are required to be processed at the factory should be dried again for 1-2 days to reduce and maintain moisture level of 7-8 %. The steps involved in the commercial processing are the following

Roasting

Shelling

Borma

Peeling

Grading

Packing

Chart No : 5.3

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CAPEX,kollam

1. ROASTING The roasting is the first step in the production process. The roasting of raw nuts is done to separate shell from the kernel. There are mainly 3 types of roasting viz, dry roasting , bath roasting , and steam roasting. Steam roasting is the most commonly used method by most of the processing units. In this process the raw nuts are roasted at a high temperature and allow cooling for sometimes. 2. SHELLING This is the second step. In this step the roasted nuts are shelled to remove the kernels. This is done by manually. Womens are mainly employed for this job. Some commercial processing units are using shelling machines for this purpose. 3. BORMA Borma is the process, where the shelled nuts are heated in closed electric chamber for about 5 hours. After that allowed cool for sometimes. In all the 10 factories electric borma is using. The purpose borma is for getting crispness to the cashew kernels. 4. PEELING This process involves the removal of the skin from kernel. Peeling is done by using a sharp knife or a bamboo piece. Greater care and skill is required for this process. 5. GRADING The kernels are to be graded according to their size. In the international market bold whole kernels fetch premium price. The white wholes, nuts, scorched whole, splites, dessert pieces ect are some example of processed cashew kernels. The white wholes 180 is denoted as the premium quality in the international market. 6. PACKING After grading the nuts are ready for packing. Domestic standard packing include 20, 40, 100, 250, 500 gms and 1kg. For exporting bags of 20 kg area also been preparing. PRODUCTION UNITS Institute of management in Kerala 33

CAPEX,kollam

The CAPEX, Kollam is having 10 factories; DETAILS OF FACTORIES 1. MANAGER CHENGAMANAD CWICS NO: SOUTHERN IND(Q)346 CHENGAMANAD P.O, KOTTARAKKARA 2. MANAGER ERAVIPURAM CWICS NO: S.IND(Q)350 ERAVIPURAM P.O KOLLAM-691011 0474-2728670 KARA, KOLLAM 3. MANAGER CHATHANOOR CWICS KARAMCODE P.O CHATHANNOOR, KOLLAM 0474-2593283 4. MANAGER ERAVIPURAM CWICS PERINAD CWICS CHEMMAKKADU P.O

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CAPEX,kollam

5. MANAGER KILLIKOLLOR CWICS KALLUMTHATHAZHAM P.O KOLLAM 0474-2711227 6. MANAGER PERUMPUZHA CWICS PERUMPUZHA P.O KUNDARA KOLLAM 0474-2522281 7. MANAGER CHATHINAMKULAM CWICS CHANDANATHOPE P.O KOLLAM 0474-2710884 8. MANAGER ERUVA CWICS ERUVA P.O KAYAMKULAM ALAPPUZHA 0479-2445291

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CAPEX,kollam

9. MANAGER PATHIYOOR CWICS ERUVA P.O KAYAMKULAM -690564 ALAPPUZHA 0479-2435613 10. MANAGER NAVAIKULAM CWICS 28 TH MILES, PARAKUNNU P.O NAVAIKULAM, THIRUVANANTHAPURAM 0470-2692055

PRODUCTION FOR THE LAST EIGHT YEARS Institute of management in Kerala 36

CAPEX,kollam

Table No : 5.1

Years 2003 2004 2005 2006 2007 2008 2009 2010

Total production( tons) 382 932 1168 1087 738 1683 1809 2220

Working days 51 137 176 154 96 210 214 260

Source :- Secondary data

PERSONNEL DEPARTMENT

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Human Resource is considered as the most vital asset of an organisation. It has a well defined employee power. It helps the organisation to perform well in the market. They organize the training programs for workers & managerial staff. The manager human resource department is responsible only for training & development. Personnel officer is the head of the personal department. The personal department deals with recruitments, wages administration, industrial relations, disciplinary activities , trade unions , security , welfare of employees.

Personal manager

Assistant Personal manager

Reception

Assistant personal officer

Superintend (personal)

Senior assistant
Chart No : 5.4

Junior assistant

Recruitment and selection process Institute of management in Kerala 38

CAPEX,kollam
The organization requires adequate human strength for its smooth functioning. The organization work force can be classified into three The Head Office Staff The Factory Staff The Factory Workers The top officials like Managing Directors, Chairman etc are appointed by the Government. Appointment of employees The managing director is directly appointed by the Government. Other employees are recruiting from different sources like Employment exchange Direct recruiting PSC The Board contains a minimum of 10 members; This Board includes The Chairman, Managing director, Government nominees, and representatives of different political parties. SALARY Salary of office staff is according to the scale of pay.ie, Basic Pay + DA. ID cards are maintained for the employees and staff in the organisation. The salary being fixed by a Industrial Related Committee (IRC). This body includes Trade union members Labour commission Representatives from different private companies

Board of directors

The salary has been revised by every 5 years.

HOLIDAYS Institute of management in Kerala 39

CAPEX,kollam
National Festival holidays 13 days per year .Bonus will be given twice in a year. It is paid to the employees as per bonus act 1965.

WELFARE FACILITIES The welfare measures provided by CAPEX are as follows:

ESI Employee Provident Fund( EPF) Gratuity First aid Facilities

WORKING HOURS

The office time 10 to 5 In the factory the workers time 8 to 5 Packing section the workers time 8 to 5 Pension age of employees Here in CAPEX, Kollam the pension age employees is 60 years. TYPES OF LEAVES In head office there are three types of leaves 20 casual leave 20 half pay leave 1/11 earned leave

INDUSTRIAL DISPUTES The conflicts and dispute between employer and employees on any industrial matter are known as industrial disputes. So if there is any dispute arises in the organization it should be solved by the management and the trade unions.

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Punishment of misconduct The employee who is noted for his/her misconduct will receive a notice. Without prior warning he/she should given an explanation to the above mentioned notice within the prescribed time period. If the employees are found to be guilty the Board has full authority to cut off his/her increment or even terminate him/her. TRADE UNION The trade unions in CAPEX are TRAINING Training is very essential for every org. It helps to improve the skill and speed of the workers. It minimizes wastage and mistakes of employees. It improves the production of the organisation. Training also provided in the CAPEX industry especially new machinery / new system is installed. The training is mainly provided by the experienced person. COMPUTERISATION In order to minimize work load & attain maximum efficiency, computer has introduced in almost all areas. Though computer has been introduced no post has been reduced accordingly. Computerization of CAPEX Head Office has been completed successfully and the computerization works at 10 Factories is in full swing. INTUC AITUC CITU UTUC

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EMPLOYEE STRENGTH OF CAPEX

Table No : 5.2

SL NO 1 2 3 4 5 6 7

DEPARTMENTS Shelling Peeling Grading Others Packing Factory clerks CAPEX HO staff Total

STRENGTHS 2898 2074 774 103 55 51 45 6000

Source : - Secondary data

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CAPEX,kollam SALES / MARKETING DEPARTMENT

Marketing means those business activities that are directing the movement of goods and services from producer to the ultimate consumers or users. It is the process of transferring the goods from the point of production to the point of consumption. It is the most powerful managerial function. It is the business process by which products are matched with market and through which transfer of ownership are effected. It refers to all the activities involved in the creation of place, time, possession and awareness utilities. Marketing is one of the fundamental functions which starts not after the production of goods for consumption but well in advance. It is the greatest task of creating, promoting and delivering goods and services to final consumers and business buyers. It has dual objectives-profit making and consumer satisfaction. Marketing manager has also control all marketing and selling activities.

Consumer sales manager

Sales executive

clerks

Chart No : 5.5

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CAPEX,kollam
The activities of the CAPEX is purchasing of raw nuts from various sources, domestic and from foreign market and get it processed and packed for being consumed either in the foreign or in the domestic market. Sales / Marketing officer is the head of the sales department. CAPEX is the leading suppliers of cashew kernels and CNSL( Cashew Nut Shell Liquid). CAPEX promotes all types of sales such as: Export Sales Local Sales Interstate Sales

CAPEX mainly focuses on exporting, but they also sells to exporters and sells in domestic market. They also sell through their Franchises. MARKETING ACTIVITIES Marketing Department : Area of Operation Medium/ Channel Delivery of Products Payment Pricing : : : : : Consisting of Marketing manager and Marketing Assistance. Domestic and International Market. Through wholesale distributors Through our own Trucks or contract Vehicles. Ready payment by way of DD. Production cost plus nominal profit. Competitors price will also be taken Into consideration. Promotional Activities : Damage Handling : Quantity discount and Cash discount. Spoiled/Damaged products will be replaced.

MARKET SHARE At present in domestic segment CAPEX is the brand leader. CAPEX owns 50-55% market share in domestic market sector.

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CAPEX,kollam
Competitors The main competitors are vijayalakshmi cashews, Urban, Alphonsa cashew industries KSCDC etc. Promotional activities Promotional activities includes Advertisements Exhibitions Flux boards

PROMOTIONAL TECHNIQUES Without advertisement, the world will not come to know about better products and its results. Advertisement is therefore must in all aspects at every growth stage of a product. The effectiveness of advertisement gives a master impact at the time of inviting new dealers, retailers and subagents. The customers will be aware of the product, its producers and their quality standards by way of effective advertisement and this will boost up the sales and will pay an effective role at the time of inviting dealers to distribute CAPEX'S various grade cashew kernels of various tastes in different attractive packets of various sizes. An effective, rather aggressive sales team has to be developed to collect market information, reporting it to the Research and Development and to report back to the customers about the changes we had made or about to do.

FINANCE DEPARTMENT

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CAPEX,kollam
Senior manager accounts are the head of the finance department. He looks after budget, audit, finance, stores accounting, costing and traditional accounting aspects. Senior officer establishment deals with loan, salary bonus etc of the employer, accounting section maintains accounts of purchase, sales and expenditure. Cost section prepares cost sheet and evaluate job card. There is an internal audit secto that deals with verification of accounts.

Finance Manager

Assistant Manager

Officer accounts & cash Audit wing

Internal auditing officer

Superintend audit

Chart No : 5.6 Job card

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It is used to calculate the quality of products individual production time. The important registers maintained by the finance are given below; Purchase journals Sales journals Payrolls

Importance of finance Finance refers to money or fund available to a firm. A business needs funds at every step, to start a business, to operate it and occupational therapy expand or modernize its operation. Finance is required to bring a business into existence, to keep it alive to see it growing. The management of finance is essential for the success of the business. In CAPEX there are different types of accounting statements and accounts are prepared and auditing is done annually. Sections of finance department The various sections

Book and budget sales. Priced stores ledger. Costing. Establishment bills payable.

Books and budgets

Collection of accounts from different sections Preparation of trial balance and final accounts Coordination with auditors Helps statutory auditor

Sales Invoice generation 47

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Collection Debtors ledger

Price stores ledger Section is responsible for maintaining accounts for the stores in monitory items. Costing Each product is having a separate section. It sets the cost of that is used by commercial group to add profit to margin to set the price. Establishment This section is responsible for cash disbursement and payment. It handles all the payment said to the employees such as ; Benefits Medical reimbursement Provident fund Incentives Loan and advance etc

Bills payable This section handles the payment to be made to the supplier once the SRV, purchase order, invoice are received, cross verification of the purchase order, terms, quality, and quantity assurance with the SRV and invoice. Once all the claims are found satisfactory, the payment is issued as per the terms. OTHER IMPORTANT FUNCTIONS

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Payment to establishment Wages Salary

Payment to suppliers

Indigenous purchase Important purchase (purchase bills)

Terms of payment for purchase are

Letters of credit Advance(DD) Cash and delivery Site draft, if the supplier is not familiar Performance payment

Service bills This section maintains bills for payment

Internal audit The main functions of internal audit are

Fault recognition Suggestions for improvement Assisting working level people Internal audit conduct its audit once in a year

Accounting conventions The financial statement is prepared under the historical cost convention, on Institute of management in Kerala 49

CAPEX,kollam
accrual basis in accordance with the generally accepted accounting principle. In India the Accounting standards issued by the Institute of Chartered Accountants of India and provisions of the companies act 1956. Fixed assets Fixed assets are stated at historical cost of accusation or constitution. Cost includes all expenses related to accusation and installation of the concerned asset. The main fixed assets of the company are land and building, motor vehicle, plant and machinery, furniture, and fixtures, office equipment, laboratory equipment etc. Excise duty Excise duty should be given in the following manner. DT CST OTHERS -2% -2% -4% SALES TAX -4.04%

Foreign currency transaction Foreign currency transactions are recorded at the exchange rates at which the debits or credits are made b y the bank and net at the rates prevailing on the data on which such transactions takes place as specified in such exchange difference arising out of foreign currency to executives in request of purchase and are not recognized as income or expenses in the period in which they arise.

Revenue Recognition Sales are recognized when goods are supplied and are recorded net of returns, trade discount, rebates and sales tax, interest, income is recognized on a time proportion Institute of management in Kerala 50

CAPEX,kollam
basis. FUNCTIONS OF THE ACCOUNTING SECTION Cash and bank transactions If the amount is less than 10000 settlements are made on cash basis and if the amount is above 10000, the settlement is made by cheque. For every bank payment, it should be signed by Finance Manager. Major Banks The major banks of the CAPEX are SBT, Punjab National bank. INTERNAL AUDIT DEPARTMENT The company has its own Internal Audit Department. In CAPEX Kollam, Internal Audit officer is the head of the Internal Audit Department. Officers and other staff of Internal Audit Department are working under the Internal Audit officer. This Department is responsible for verifying all the books of accounts of the organization. The Audit Department measures examination of the accounts of a business concern by its employees. Especially appointed for this purpose. The internal Audit is devised with a view detect errors and irregularities. Audit standard require the plan and perform the audit to obtain reasonable assurance about whether the financial statement are free of material misstatement. An Audit includes examining on test basis evidence. disclosures in the financial statement presentation. Supporting the amounts and

MAINTENANCE DEPARTMENT
The maintenance engineer handles all matters regarding the civil and electrical Institute of management in Kerala 51

CAPEX,kollam
maintenance are forward to superintend for verification from there to materials manager for sanction and then forward to managing director for final approval. After getting approval from the managing director ,forward back to the maintenance engineer for further action. Letters and other reports are forwarded to the dispatch by the concerned staff if needed to deliver to the concerned destination.

Manager (F&M)

Assistant Manager

Technical supervisor

Technical staff

Electrical supervisor

Chart No : 5.7 CIVIL AND ELECTRICAL MAINTENANCE

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CAPEX,kollam

The note is forwarded to materials manager indicating maintenance for factories or departments. After the site inspection the maintenance engineer enter the details. Maintenance engineer prepares report about the problems and its solutions. The proper estimate is forwarded to managing director. The managing director forwards the report to finance department. The fund for the purpose is forwarded to the MD and the sanction note is forwarded to the maintenance engineer. The quotation notice is issued. Details of vendor responses are taken and the tabulation statement is issued. The vendor is invited for discussion and the report is prepared and forwarded to the MD. Generate order to select the vendor and forwarded through outward section. Prepare the bills for purchase and enter details in a measurement book.

VEHICLE MAINTENANCE

Enter details of vehicle; number, type, date, oil change, quantity, insurance, date, amount, tax date and amount etc. Enter details such as purpose of trip, driver, accompany etc and generate trip book cum log sheet. Prepare an indent slip to driver indicating part of destination, vehicle, number, and kilometer reading. Enter details such as date of refill of diesel, amount ant quantity etc into a diesel register. Regarding the maintenance of the vehicle the trip book cum log sheet, intent for and details for diesel register are forwarded to finance department and then to audit department.

Security

Allocation of duty sites for security guards. Enter details in the watchers dairy. 53

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Generation of report of duty registers for a periods. Generate a report of vehicle transmit on a specific day.

SWOT ANALYSIS

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CAPEX,kollam

STRENGTHS CAPEX is the major cashew exporter in the country Brand image of a government company Monopoly in the field of cashew nut processing Company is working in an eco friendly manner Qualified and experienced human resources Effective internal check system to maintain quality Good industrial relationship Committed and strong manpower

WEAKNESSES

Non availability of raw materials inside the company Lack of capital Political interference Lack of advanced technology Under utilization of plant capacity

OPPORTUNITIES

More demand for the product in developed countries Favorable decisions made by trade unions More marketing opportunities

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THREATS

Competition from other private companies Non availability of local raw nuts Price fluctuations in the market Too much of political influence in management decision making

PEST ANALYSIS
PEST analysis stands for the political, economical, social and technological factors that affect an Organization. PEST analysis is the study about how the various factors such as Political, economy, social and technological issues directly or indirectly influence an organization. To understand the implication of the environment on any industry it is imperative to study the four cardinal influencers on the industry namely Political, Economic, Social and Technological factors. It is rather unfortunate that in India these factors have a rather disproportionate influence on the functioning of a commercial organization. From the days of independence the business environment has been overly regulated by a handful of bureaucrats, middleman, businessmen and politicians. Its only a decide since the country has seen an emergence of a political thought that encourages free enterprise.

POLITICAL Institute of management in Kerala 56

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Government terms and policies: Changes in the Government terms and

policies may affect the smooth working of the company. CAPEX is a Government of Kerala undertaking so the changes in the government policies will affect this organization directly.

Trading policies: Trading policies of the changing Governments will be

different and this will force the company to change their policies and terms. CAPEX mainly focuses on export trading, and also the raw nuts are mainly importing form African countries. Because of these, the changes in the trading policies will affect this organization.

Political Stability: India is a country which has no political stability.

Changing Governments and their political stands will adversely affect the companys stability.

ECONOMIC
Home

economic trends: The change in the interest rate for export and import will

affect the over all cost of CAPEX , because they focuses mainly on export. Another factor is due to unavailability of the sufficient raw nuts from India they importing these raw nuts mainly from African countries. So the changes in the export and import rates will affect this organization.
Taxation

specific to product and services: The change in the taxation policies will

also affect.
Seasonality

/weather issues: Due to changing seasons and weather condition it will

be very difficult to collect the raw materials and will be bought from other sources giving additional money.

SOCIAL Institute of management in Kerala 57

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Consumer attitudes and opinions: Consumers are the ultimate decision

makers, and as a result of their attitudes and opinions on various products their buying habits will also change. Peoples preference to various products will be different.

Consumer buying patterns: Consumer buying patterns will differ according

to the changing economic conditions.

TECHNOLOGICAL

Competing technology development: Technology is developing day by day,

so company should be adopt most advanced technologies. Here in CAPEX they installed electrical Boram and also installed new cutting machine for shelling process so all these technological changes will help them to improve their productivity.

Research funding: A separate fund should be allocated for research and new

product development.

PORTERS FIVE FORCE MODEL

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Fig No: 7.1 The competitive structure of industries is very important. Identification of forces affecting the competitive dynamics of an industry will be useful in formulating strategies. According to Michael porters well known model of structural analysis of industries, the state of competition in an industry depends on five basic competitive forces, viz; Institute of management in Kerala 59

CAPEX,kollam

Rivalry among existing firms Threat of new entrants Threat of substitutes Bargaining power of suppliers Bargaining power of buyers

RIVALRY AMONG EXISTING FIRMS Rivalry among existing competitors is often the most conspicuous of the competitions. Firms in an industry are mutually independent- competitive moves of a firm usually affects others and may be retaliated. Common competitive actions include price changes, promotional measures, customer services, product improvements, new product development, channel promotion etc. THREAT OF NEW ENTRANTS A growing industry often faces threat of new entrants that can alter the competitive environment. There may, however, be a number of barriers to entry. Potential competition tends to be high if the industry is profitable or critical, entry barriers are low and expected retaliation from the existing firms is not serious. Common entry barriers are Government policy, product differentiation, monopoly elements, capital requirements etc. THREAT OF SUBSTITUTES An important force of competition is the power of substitutes. Substitutes limits the potential returns in an industry by placing a ceiling on the price firms in the industry can profitably charge. The more attractive the price performance alternative offered by substitutes, the firmer the lid on industry profits. Firms in many industries Institute of management in Kerala 60

CAPEX,kollam
face competition from those marketing close or distant substitutes.

BARGAINING POWER OF SUPPLIERS The important determinants of supplier power are the following: Extent of concentration and domination in the supplier industry Importance of product to the buyer Importance of the buyer to the supplier Switching costs Extent of differentiation or standardization of the product

BARGAINING POWER OF BUYERS For many industries, buyers are potential competitors. Important determinants of the buyer power, explained by porter are the following

The volume of purchase relative to the total sale of the seller. Importance of the industrys product with respect to the quality of the buyers product or services.

Extent of buyers information The extent of standardization or differentiation of the product Switching cost

PORTER'S FIVE FORCE MODEL

RIVALRY AMONG EXISTING FIRMS Institute of management in Kerala 61

CAPEX,kollam

This force refers to the intensity of competition among the existing players in the industry. High competitive pressure leads to changes in the prices, expansion of the business etc. CAPEX , which operates in the cashew industry

There are many competitors for CAPEX in this industry. All the players in this industry have almost same strategies. There in not much difference in their products. This high competition leads them to think about more value added products.

THREAT OF NEW ENTRANTS

A growing industry often faces threat of new entrants that can alter the competitive environment. There may, however, be a number of barriers to entry. Potential competition tends to be high if the industry is profitable or critical.

Common entry barriers are Government policy product differentiation monopoly elements capital requirements etc.

THREAT OF SUBSTITUTES An important force of competition is the power of substitutes. Substitutes limits the potential returns in an industry by placing a ceiling on the price firms in the industry can profitably charge. The more attractive the price performance alternative offered by substitutes. Here in the cashew industry there is not much difference between the products of the substitutes. Institute of management in Kerala 62

CAPEX,kollam

BARGAINING POWER OF SUPPLIERS Term suppliers comprises of all those sources for inputs that are needed in order to provide goods or services.

Here in CAPEX the raw nuts are mainly importing form African countries. The suppliers bargaining power is likely to be high because. The market is dominated by a few suppliers . There is no substitute for the particular product. The switching cost from one suppliers to another is high.

BARGAINING POWER OF BUYERS The bargaining power of buyers of customers determines how much customer can impose pressure on margins and volumes. Bargaining power of customers likely to be high when ;

They buy a large volume ; there is a concentration of buyers. The supplying industry compromises a large number of small operators. Customer have low margin and they are price sensitive.

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FINDINGS

Most of the posts in the organization are left vacant. There is very good relation between the divisions and between workers and managements. The main advantage of the organization is that they sell the best quality of product. During the study it is found that the kernel price changes considerably over year. It is found that the raw nut price increases at a very fast rate than the kernel price and shelling rate. It was found that there was delay in the payment of pension because Government formalities. CAPEX has appropriate financial resources available from state government.

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SUGGESTIONS

The organisation should recruit and train and fill vacant post by promotion or by employing young employees for the future. Marketing of the product should be widened Purchase only in high quality of raw nut. To overcome imports steps must be taken for cultivation of cashew trees within the state. By avoiding competition among the manufactures of cashew kernels, the kernel price is the National and International market can be raised. The step increase in raw nut price is mainly due to shifting of processing and development of cashews industry outside Kerala and thereby the flow of cashew nuts to other state. Government should take necessary steps to prevent such practice.

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CONCLUSION

The cashew industry is occupying an important role in Indian economy. The future of CAPEX is very bright, provided, of course there are changes in the basic policy of procurement and distribution of raw nuts. The fact that both State and Central Governments are taking urgent steps to promote cashew cultivation on the country, argues well for the future of an industry now mainly dependent upon imports, which are staidly dwindling because the exporting countries too have caught on the idea of processing raw nuts.

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