ABOUT THE STUDY

OBJECTIVES OF THE STUDY The main objective of the project is to make an overall study of the organizational framework of FACT LTD and the various functions and inter dependence of different departments. The other objectives include:1. To have a clear knowledge of what an organization is. 2. To reinforce the theoretical knowledge acquired in terms of applications 3. To know about the various products and projects of FACT 4. To gain knowledge about different departments of the organization and the functions. 5. To know about the market share 6. To analyze the current financial position 7. To identify the SWOT of FACT LTD METHODOLOGY OF THE STUDY Observation By observing the general surrounding, the functional process, interactions of employees etc. Work site and plants were visited were the actual process of production and activities of various departments were seen and understood. Data collection Direct method Through Interview & discussion

We interacted with the employees and understood the work and responsibility carried by each of them. This helped us to understand the various department and their functions clearly. Further discussion with them revealed some key functions and process carried by each department and the departmental interdependence. Indirect method Literature review Companys internal records, Publication, Annual report, Journal, statutory report, website (official site & others). The data collected companys departmental manual added key information to this report and help us to understand the process carried by each department in detail. Annual reports are used as statistics to reveal the present scenario of the organization. Previous report on organizational study formed basis for shaping this report. Data Authentication The process chart prepared for each department was given to the respective department heads for correction. The rough report prepared was also given to the organizational guide for correction.

LIMITATIONS OF STUDY Time was a major limiting factor. Secondary data available from company manuals were outdated (the manuals are being updated).

Lack of co-operation from certain departments due to their work load and maintanence.
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HISTORY OF THE ORGANISATION

The birth of FACT emerged out of a crisis situation that guided the enlightened perception of a far-sighted visionary. The crisis was that the land had been losing its fertility through long years of repeated cultivation. The organic manure that we were putting back in the soil was hardly adequate to replenish the soil or to correct the imbalance in the fertility status of the land under cultivation. Drastic measures where needed to replenish the fertility. And thus begins a tale of initiative, enterprise, innovation and adventure, unheard in the annuals of industrial developments in India. It was conceived by the foresighted statesman and administrator, Sir C.P. Ramaswamy Iyer, the Dewan of Travancore (Kerala in older days was known as Travancore). THE FERTILIZERS AND CHEMICALS TRAVANCORE LIMITED- popularly known as FACT, was indeed a revolution when it was established as the first large scale fertilizer factory in the country. Since then, it has played a major role in creating fertilizer consciousness among our farmers, and giving a positive direction to the modernization of agriculture in India. And that, of course is an interesting story- a story of never ending challenges and constructive responses. During the 2nd World War, there was an acute shortage in the supply of food all over the world. The 1940,s were a time of critical food shortage in our country. The traditional approach to cultivation was not of much help in finding a solution to this problem. Hence, the search for a long term solution led to the introduction of fertilizers in our agricultural scenario. And when it came, it did through the vision of Dr. C.P. Ramaswamy Iyer, the Dewan of the former Travancore State, who mooted the idea of increasing food production by the application of fertilizer as a long term solution to food
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problem. To give concrete shape to his idea, he sought the help of Seshayee Brothers, one of the most popular industrialists at that time for making a fertilizers company. And Indias first large-scale fertilizer plant was set up in 1944 at Udyogamandal on the banks of the river Periyar in Eloor panchayat in the Kerala State. Sri. N. Gopalaswami was appointed as the first Chairman of FACT. The new venture of course had to go through many teething troubles. For instance, the raw materials necessary for the production of ammonium salts were not available in the state. But this deficiency was overcome by adopting a revolutionary method known as the FIREWOOD GASIFICATION PROCESS. However, initial difficulties notwithstanding, the plant at Udyogamandal went into commercial production in 1947, with the slated capacity to manufacture 50,000 tons of Ammonium Sulphate (10,000 tons of N). This was followed by the production of SUPERPHOSPHATE in a new plant with a capacity of 44,000 tones. A sulphuric acid plant of 75 tons per day was also installed which was considered large going standard at that time. Meanwhile the inner dynamics of FACT was finding another expression in the formation of new unit with the help of the State Government and Methur Chemical & Industrial Corporation Ltd., for the production of caustic soda which later become todays Travancore-Cochin Chemical Ltd., a Kerala Government undertaking. This indeed was a big leap forward as it replaced all the imports of that product, saving a considerable amount of foreign exchange. FACT was the first to use its byproduct, chlorine, as hydrochloric acid to produce Ammonium Chloride. These by-products produced by FACT paved the way for setting up of other industrial units around the FACT complex viz. Hindustan Insecticide Ltd., Indian Rare Earth Ltd., etc. In the late 50s, the Udyogamandalam Division launched its first expansion with an outlay of
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Rs. 3 crores. Highlights of the period were the installation of two plants to produce Phosphoric Acid and Ammonium Phosphate. The second stage of expansion involving Rs. 2 crores saw the replacement of the Firewood Gasification Process and the Electrolytic Process by the Texaco Oil Gasification Process for which a new plant was set up. FACT became a Kerala State Public Sector Enterprise on 15th August 1960. On 21st November 1962, the Government of India became the major shareholder. The 2nd stage of expansion of FACT was completed in 1962. The 3rd stage of expansion of FACT was completed in 1965 with setting up of a new Ammonium Sulphate Plant. FACT has been a pace-setter in marketing evolving a continuous and comprehensive package of effective communication with farmers and promotional programs to increase the fertilizer consciousness among our farmers. In fact, FACT was the first fertilizer manufacturer in India to introduce the village adoption concept since 1968 to improve agricultural productivity and enhance the overall socio-economic status of farmers. FACT has a well organized marking net work, capable of distribution over a million tones of fertilizers. With the licensing of Cochin Division in 1966 FACT further expanded and by 1976 the production of sulphuric acid, phosphoric acid and Urea was started. In 1979 Production of NPK was commercialized. The technical knowhow that FACT had obtained in the commissioning of various plants within the company was decided to be used as a separate entity and the result of this is the FACT Engineering and Design Organization more popularly known as FEDO. Established in 1965, FEDO has expertise ranging from pre-project surveys and project implementation.

The plant maintenance division within FACT was later transformed to FACT Engineering Works or FEW and started its operation in 1966 mainly dealing with modern fabrication and project construction works for both inhouse and external projects.

ABOUT FACT
MISSION OF FACT To function as a dependable and globally competitive producer of fertilizer and other allied products and to develop self reliance in the field of engineering and technology, especially in the field of fertilizers, chemicals, petrochemical, oil & gas industries. VISION OF FACT To emerge as a leading company in the business of providing quality agriculture and industrial inputs and providing engineering services for industrial and infrastructural facilities. CORPORATE OBJECTIVES 1. To be of service to the nation and to contribute effectively to its economic well being and growth through the production and marketing of fertilizers and chemicals and through the acquisitions/development and dissemination of engineering technology know-how and skills. 2. To sustain and improve its pioneering role in the development of indigenous engineering and technology through research and development. 3. To improve productivity and maintain high standards of quality and adopt effective measures for controlling cost and minimizing dependence on imports. 4. To ensure for its customers the availability of its products and services on reasonable terms, for its shareholders a fair return on capital invested and, for itself, development of adequate internal resources for continual growth and expansion.
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5. To actively work for rural uplift through guidance, advice and service to the farmers in co-operation with all other agencies working for agriculture development and allied activities. 6. To develop, train and maintain a team of motivated and disciplined personnel with required skills and abilities, and to encourage innovation and to create a condition for their functioning and career development so as to improve their overall quality of life. 7. To project a favorable image of the company and its operations, in the society in which it operates, amongst its customers and suppliers and amongst the public in general. 8. To continuously plan its future operations for sustained growth and stability for meeting the needs of the country. CORPORATE GOALS 1. To achieve a net profit of 200 crores per year with a turnover of Rs.2100 crores by the year of 2010 2. To focus on cost reduction and technology up gradation in order to become competitive in each line of business. 3. To constantly innovate and develop new products and services to satisfy customer requirements. 4. To invest in new business lines, where profit can be made on sustainable basis over the long term. 5. To compete through speed, agility and flexibility in recognizing and capturing opportunities in existing markets. 6. To invest sufficiently to stay in the game but avoid premature commitment

OWNERSHIP PATTERN The Fertilizers and Chemicals Travancore Ltd (FACT), is a Schedule A category Government of India enterprise, under the administrative control of department of fertilizers in the Ministry of Chemicals and Fertilizers. FACT was incorporated in 22/09/1943 and in 1960s the Government of India became the major shareholder. Board of Directors manages the Organization. The chairman of the Board of Directors is the Managing Director. FACT has a full time Finance Director, a Technical Director and a Marketing Director. There are also six part time Directors on the Board, nominees of Central and State Government. Shares of the company are listed at National stock exchange of India (N.S.E) DISTRIBUTION OF SHAREHOLDING

Category Government holding Government of India State Government Sub total Non promoter holding Insurance companies Sub total Others Private corporate Bodies Indian public NRIs or OCBs Clearing member

Number of shares 345465200 2585000 348050200 4026854 4026854 473597 2187434 14316 19573
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Percentage of shareholding 97.38 0.72 98.10 1.14 1.14 0.14 0.62

Sub total Grand total

2694926 3554771974

0.76 100.00

Profit Loss Statistics for the last 10 years Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Net Profit -3980.37 -15195 57 -19993 -16722 -16796 23566 -12473 897 4295

PERFORMANCE OF SHARES AT NSE Month High(Rs) Apr-09 32.50 May-09 46.00 Jun-09 58.10 Jul-09 48.45 Aug-09 38.50 Sep-09 42.75 Oct-09 41.75 Nov-09 48.00 Dec-09 41.10 Jan-10 68.10 Feb-10 66.30 Mar-10 54.00 Source: Yahoo Finances Low (Rs) 21.40 24.90 36.55 32.00 32.00 33.55 31.50 30.15 36.10 38.65 51.00 43.60

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BOARD OF DIRECTORS Sri. A.Asokan Sri. A.Asokan Sri.K.Mathevan Pillai Sri.V.G.Sankaranarayanan Sri.Satish Chandra I.A.S Sri. Deepak Singhal I.A.S Ms. Pratibha Karan Sri. T. M. Jeyachandran Sri. Khan Masood Ahmad Dr. R. K. Mishra Dr. B. S. Ghuman Dr. Bodeiah Sri.S.Balan Sri. A. K. Gupta Chairman and Managing Director (Acting) Director (Marketing) Director (Finance) Director (Technical) Part-time Official Director Part-time Official Director Non-Official Part-time Director Non-Official Part-time Director Non-Official Part-time Director Non-Official Part-time Director Non-Official Part-time Director Non-Official Part-time Director Non-Official Part-time Director Chief Vigilance Officer

EXECUTIVE DIRECTORS Sri.Venkatakrishnan.S Sri.K.V.Balakrishnan Executive Director (Finance) Company Secretary

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MILESTONES OF FACT
22/09/1943-Incorporation 26/06/1947-Production started 1959-60- UD-1st stage expansion completed 15/08/1960-FACT came under public sector4 1962- UD-2nd stage expansion completed 21/11/1962-Govt. of India became major shareholders. 24/07/1965-FACT Engineering & Design Organization 13/04/1966-FACT Engineering works 07/06/1966-CD-Phase I License issued 15/10/1966-UD 3rd stage expansion completed 01/10/1971-UD 4th stage expansion completed 27/04/1973-CD I, Urea plant commissioned 01/10/1973-UD 4th stage 150 TPD Ammonium phosphate 10/11/1976-CD-II, Sulphuric acid plant commissioned 10/12/1976-CD-II, Phosphoric acid plant commissioned 10/01/1977-CD-II, NPK trial run started 01/04/1979-CD-II NPK Commercialized 1981- 450 TPD Sulphuric acid plant modified to DCDA process 1981- 450 TPD Sulphuric acid plant modified to DCDA process 18/05/1984-PD-Caprolactum technical collaboration agreement 14/09/1984-PD-Zero date of ASCC project 06/08/1985-PD-Caprolactum license issued 09/11/1988-SO2 Acid plant Commissioned 26/07/1989-Award for excellence in performance 13/12/1989-FEW shifted to Palluruthy 21/09/1990-Oleum production commenced 20/12/1990-CD-12 MW captive power plant 01/03/1991-PD-Caprolactum commercial production started 01/03/1991-UD-New Ammonium Sulphate Commercial production started 22/03/1998-900 TPD Ammonia plant commercial production started 25/09/1993-Foundation stone-900 TPD Ammonia plant 03/11/1998-900 TPD Ammonia plant guarantee 09/11/1998-Test run

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PRODUCTS AND PRODUCT MIX

PRODUCTS Finished products
o o

Ammonium Sulphate - Udyogamandal Division Ammonium Phosphate / Complex fertilizers / Factamfos Udyogamandal Division & Cochin Division
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o o

Caprolactum - Petrochemical Division Biofertilizers - Research & Development Division Caprolactum - Petrochemical Division Ammonium Sulphate - Udyogamandal Division Nitric Acid & Soda Ash - Petrochemical Division Gypsum - Udyogamandal Division & Cochin Division Carbon Dioxide Gas Udyogamandal Ammonia - Udyogamandal & Cochin Division Synthesis Gas - Udyogamandal Division Sulphuric Acid - Udyogamandal & Cochin Division Oleum - Udyogamandal Division SO2 Gas - Udyogamandal Division Phosphoric Acid - Udyogamandal & Cochin Division

Exported Products
o o

Byproducts
o o o

Intermediary Products
o o o o o o

CHEMICALS

Anhydrous Ammonia - FACT produces Ammonia of over 99.96% purity. Sulphuric Acid - FACT has one of the largest plants in Asia and it manufactures Sulphuric acid of 98% purity.

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ORGANISATIONAL STRUCTURE OF FACT

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CMD

DIR MARKETING

DIR TECH

DIR FINANCE

GM MATERIALS

C.V.O

GM MARKETING

GM (CP& PC)

CM PURCHASE

CM SALES

CM DIST

CM TRADING

GM HR

EXEC.DIR (FINANCE)

MGR TRAFFIC

GM FINANCE GM (CD) GM (UC) GM (F &F) MGR STORES

JGM (UD)

JGM (PD)

CM FEDO

CM FEW

CM PRDN

CM MTCE MGR QUALITY MGR SAFETY MGR R&D

C.S.P

C.M.E

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ABBREVATIONS OF ORGANISATION CHART DIR- DIRECTOR TECH- TECHNICAL C.V.O- CHIEF VIGILANCE OFFICER C.P- CORPORATE PLANING P.C- PRODUCTION COORDINATION CD- COCHIN DIVISION UC- UDYOGAMANDAL COMPLEX F & F- FEDO & FEW JGM- JUNIOR GENERAL MANAGER UD- UDYOGAMANDAL DIVISION PD- PETROCHEMICAL DIVISION CM- CHIEF MANAGER C.S.P- CHIEF SUPERINTENDANT PRODUCTION C.M.E- CHIEF MECHANICAL ENGINEER
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MGR- MANAGER DIST- DISTRIBUTION MTCE- MAINTENANCE

DIVISIONS OF FACT

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FUNCTIONAL DEPARTMENTS

FINANCE DEPARTMENT ORGANISATIONAL CHART OF FINANCE DEPARTMENT

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FUNCTIONS OF FINANCE DEPARTMENT Some of the main functions are Payroll, billing, Preparation of journal, ledger and trial balance, Banking, Financial resources & materials accounting, Budget preparation, Cost accounting, Auditing, Preparation of financial statements & reports, Corporate Planning.

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PROCESS OF FINANCE DEPARTMENT Finance department in FACT is divided into five sections for carrying out its process. They are: 1. Bills & Materials 2. Sales 3. Costing, MIS, Budget 4. Cash, bank & Payroll BILLS & MATERIALS-The main functions are Stores accounting and Receiving, Dispatch and holding of bills. Bills section deals with the contract account for execution of civil works and other construction/erection, maintenance and services. SALES ACCOUNTING Some of the functions are 1. Accountability for selling and distribution of products & byproducts 2. Recording the transaction 3. Transfer of information from depots to HO 4. Compilation of reports THE COSTING, MIS AND BUDGET SECTION This section is concerned with ascertaining the cost of production, providing information, helping to prepare a budget, forecasting the performance and finally making a plan. Cost accounting Identification of the cost centre - Direct expenses is recorded to the respective cost centre. Indirect expenses are separately booked and allocated
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at the end of the year. Cost sheet is prepared in two ways. The item in the cost sheet is compiled on the basis of process of the products or on the basis of elements of the product. MIS (Management information system) To provide the management with vital facts which affects the efficient running of the business for decision making on planning, organizing and controlling the major activities of the organization and initiating suitable action. Budgeting Two types of budget-Revenue and Capital budget Two types of estimates- Budget estimate and revised estimate Revenue Budget Every year early in August detailed production targets and norms for consumption of materials for remaining portion of the current year and also for the next financial year are prepared by the head of Divisions. Capital Expenditure Shows all items of capital expenditure to be undertaken during the budget period like expenditure on acquisition of new assets like machinery, furniture and office equipments which have reasonable life; expansion of existing facilities and modification and improvements to plant and machinery Budget revision While preparing the next years revenue budget, the revenue budget for the current year is revised, based on the actual from April to September and the anticipated trend for the remaining period. Monthly report
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On closing of the accounts of the months a monthly P & L account is prepared for each Division and the same is send it to the Division Head, FD and CMD. This report would give a comparison of the actuals for every month against budgeted performance. THE CASH, BANK AND PAYROLL SECTION This is concerned more with the day to day activities and less of future forecasting & planning. Cash and Bank Accounts Section The various functions include: 1. Receipt of cash, cheques, bank drafts, and postal money orders 2. Payment of cash, cheques, bank drafts, and letters of authority 3. Handling of bank deposits/withdrawals, custody of cash and inter unit transfer of funds 4. Maintenance of petty cash books and cash books 5. Reconciliation of bank accounts 6. Security arrangement of cash handling 7. Safe custody of valuable documents 8. Cash interests calculation 9. Any other duties assigned by authorized officer Payroll Section Functions of the section are: 1. Preparation and disbursement of salaries and wages to managerial and non-managerial agencies 3. Processing of various personal payments advances
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employees

2. Effect various recoveries through payroll and remit the same to concerned

4. Keeps books of account for the above transaction Tax & duties section It is concerned with calculation & payment of various taxes and duties to the Government. CHALLENGES OF FINANCE DEPARTMENT Working capital crunch Due to which Upgradation of plants & machinery is not possible High quality equipment cannot be purchased. For the same reason, FACT goes for the lowest quoting bid. Cannot maintain adequate stock of fertilizer for combating shortage Lack of flexibility in production Low availability of credit due to nonpayment of loans & lack of security to keep for loans. Due to which the organization: Cannot grow and therefore stagnates Cannot compete with other fertilizer companies due to lack of fund

MATERIALS DEPARTMENT ORGANISATIONAL STRUCTURE OF MATERIALS DEPARTMENT

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FUNCTIONS OF MATERIALS DEPARTMENT

1. Importing raw materials under the approval of safe purchase committee constituted by the Board of Directors 2. Maintaining adequate raw materials needed for production 3. Procurement of Machineries, Intermediaries, equipment & spares 4. Inspection of Materials 5. Transportation of Raw materials, Products and Byproducts 6. Accountability for materials 7. Purchase of stationary and other Equipment needed by individual department 8. Vendor Development This department is divided into 3 Sub Departments. They are:
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1. Purchase 2. Stores 3. Traffic (Logistics) PURCHASE DEPARTMENT The purchase procedure covers the following areas of procurement of goods and services for the company. 1. Capital items (For project and other purposes). 2. Equipment and spares. 3. Raw material & Intermediary materials 4. Package items involving design, supply, erection and commissioning. Purchase Department is again divided into 3 sections. They are: 1. Raw materials 2. Equipment spares and supplies 3. FEDO & FEW Transport, Contracts and Stores Raw materials section Its main functions are: 1. Determination of quantity of materials required 2. Purchase of materials for production, from India and abroad 3. Make available adequate amount of material at the right time 4. Follow a fair & transparent procedure in the above activities 5. Pre & post dispatch Inspections 6. Payment

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Raw materials are Sulphur, Rock phosphate, Furnace oil, Naphtha, Ammonia, Benzene, Phosphoric Acid, Caustic soda and Sulpuric Acid. Challenges to raw material procurement 1. Scarcity of Raw materials 2. Sky rocketing prices 3. Shipping Problems 4. Working Capital crunch

Equipment & spares section Objectives 1. Purchase of Equipment & spares from India or abroad 2. Make available spares at the right time 3. Follow a fair & transparent procedure in the above activities Equipment & Spares Include 1. Capital items like heavy machinery or plant (For project and other purposes) 2. Spares for machinery 3. Package items involving design, supply, erection and commissioning

Challenges of equipment & spare section 1. Approval of Bids on the basis of lowest quotation where sometimes quality is compromised 2. Low working capital to maintain sufficient stock of goods
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FEDO & FEW, Transportation & Stores (FFTS) Section The Functions of the section are: 1. Project related procurement for FEDO & FEW 2. In-house procurement for FEDO & FEW 3. Storage of Raw materials 4. Raw material transportation & Technical assistance for handling

STORES DEPARTMENT Objectives 1. Collection and receiving of materials purchased 2. Inventory Management & Control 3. Issuing materials to user departments 4. Disposal of surplus and obsolete materials
Challenges for stores 1. Maintenance due to shortage of labour 2. Low stock of goods maintained due to shortage of Funds

TRAFFIC DEPARTMENT Objectives 1. To ensure Loading and despatch of products 2. To ensure right quantity and right product is delivered to right vehicle and to the right destination Process flow in traffic department
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The marketing division selects the depots where fertilizer has to be transported and gives the dispatch information to the traffic department. The traffic department selects the vendor for transport. Depots are allotted to vendors by the department.

The vendors are issued a vehicle in slip which is a slip for the vehicle to go into the loading site in which the destination, vehicle no, product or byproduct to be loaded are recorded. Before loading the empty weight of the vehicle is taken and after the loading the weight with the load is taken by the C.I.S.F Security men. If deviation more than the specified limit is noticed, the goods are either unloaded or reloaded. A copy of MDA (Material Dispatch Advice) is given to the lorry driver for dispatching to the concerned depot. When the goods arrive at the depot message is passed to the department. And the signed copy of MDA is returned to the department by the Vendors so as to enable him to collect payment. If the load dispatch is found damaged, loss in quantity noticed, penalty is charged from the vendor.

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FACT has permanent workers for loading activity. The department engages contracts to transport finished products from the plants to different depots or to the customers. Packing the materials in the bag is also the responsibility of the department. The product is bagged in HTPG bags. The product is transported by, trucks and railway wagons. There is a private railway siding for FACT at Kalamassery and also at Cochin Division. A full rail wagon takes 2200 tones of product. A godown at Kalamassery stores fertilizer. Lorries and trucks for the transportation are chosen based on the tender. Challenges of traffic department 1. Lack of fleet management system 2. Labour issues 3. Vendors Performance & Review

PRODUCTION DEPARTMENT Objectives

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1. Production planning 2. Co-ordination of production function 3. Co-ordination with Maintenance and Production department. Production process Annual production targets for the next year are prepared based on installed production capacity of the plant and production data for the previous year. Necessary feedback is also taken from marketing department while fixing the production target. The production targets thus fixed are presented to the corporate office for review and approval by CMD and the plant managers are informed of the same. The production and consumption ratios for the previous years are duly considered. All the data are compiled to form the production budget. A copy of the production budget is sent to the finance department for preparing the finance budget. The production plan and budget are then presented to the Government for approval. The production budget then acts as the basis for further performance monitoring. Based on the production plan, purchase department initiates action for procuring raw materials. In the event of any change in the annual production plan becoming necessary, the corresponding change in the raw material, requirements are intimated to the purchase department. Production planning department receives data from all the plant and other interfacing departments and compiles them. Various MIS reports consist of daily production reports, monthly reports and yearly reports they are sent to the management Organisational chart of production department

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Plants at Udyogmandal division 1. Ammonia plant

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2. Acid plants 3. Ammonium Sulphate plants 4. Ammonium Phosphate plant/FACTOMFOS Ammonia plant The capacity of the Ammonia plant is 900 TPD. The investment for the plant was about Rs.618 Crores. The plant has economy scale size and employs state of the art technology for the process engineering and control systems. Acid Plants Sulphuric Acid plant The Sulphuric acid plant is designed to produce 1000 TPD of monohydrate. The plant is based on the double conversion, double absorption process and was designed by FEDO in collaboration with Davy power gas Plant. Phosphoric Acid plant The Phosphoric acid plant is designed to produce 360 TPD of phosphoric acid through the dehydrate route. The plant designed by FEDO in collaboration with MESSER SOCIETY DE PRAYON OF BELGIUM employs the prayon convertible process to give a product having strength of 30% phosphoric acid. A separate concentration section is provided to concentrate this weak acid to strong acid having strength of 45% phosphoric acid.

Ammonium Phosphate Plant

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The complex fertilizer plant was designed to produce quantities of N P K fertilizers of various grades. FACTOMFOS consists of NPK and S in the ratio 20:20:0:15 Products 1. Ammonium Phosphate/FACTOMFOS 2. Ammonium Sulphate 3. Muriate of potash

Challenges of production department 1. Raw material scarcity is upsetting the entire production plant 2. Working capital shortage is affecting the smooth functioning Around the globe all industries are facing a very acute shortage of raw materials and various natural resources. Sulphur prices over the year have gone up 10 times and 5 times in case of naphtha. However, LNG can be substituted for naphtha which again is witnessing an acute shortage. Some raw materials like Rock Phosphate and Sulphur are being imported, which again invites shipping problems for FACT being its demand for raw materials is in low quantity. In addition Fertilizer industry is looked upon as a sick industry, even from the government side, the subsidy is not given by analyzing the real situation.

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QUALITY ASSURANCE DEPARTMENT At FACT, Quality has always been an article of faith & strictest international standards are adhered to in producing the various products. The sophisticated micro processors, based digital distribution control system, bring about efficiency in information management and process optimization. The process control, based on online analysis assures consistency in quality throughout the manufacturing process &also in the finished products. A well equipped & modern lab provides reliable analytical support. Extensive trouble shooting facilities aid the rigorous quality assurance programs. Exceptionally qualified experienced & specially trained high caliber professionals provide expertise at all levels of quality control department. A customer service cell comprising of trained technical experts provides extensive products application support. OBJECTIVES 1. Ensure that product quality matches with standard quality. 2. Achieve high levels of safety. 3. Minimize delay in procurement of raw materials. 4. Maximize capacity utilization.

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ORGANISATIONAL STRUCTURE OF QUALITY CONTROL DEPARTMENT

SAFETY DEPARTMENT In the wake of rapid development of technology, more & more complex processes have come into existence in industrial establishments paving the way for increased hazardous situations inside & outside the factory. SAFETY POLICY OF SAFETY DEPARTMENT

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1. Provide safe & healthy work environment to all employees & maintain high degree of safety standards in all the factory installations right from design stage to the disposal stage. 2. Create & maintain safety consciousness among the employees & neighboring citizens by way of safety education, safety training, safety propagation & all other possible means. 3. Take all possible steps to prevent the potential disasters likely to emerge in the course of employment or otherwise & maintain good work practices. Employees & citizens residing in the neighborhood. 4. Monitor the environmental conditions regularly, conduct safety inspection, accident investigation, take stock of safety standards by safety audit other techniques & initiate appropriate action for ensuring safety of men & material & healthy environment. 5. Ensure strict compliance of all rules & regulations with respect to safety, health & environment protection. 6. It is expected that the employees of FACT will co-operate & ensure their active involvement in all activities connected with the accident prevention programme 7. FACT employees with the co-operation of neighboring society will extend all possible efforts to prevent & contain any major disaster in case of occurrence in the factory in spite of all the safety precautions & measures

DISASTER MANAGEMENT
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Disasters like Bhopal tragedy have occurred at many places in the world causing heavy loss to life & property. These emergency situations arise all of a sudden & create great havoc & should be tackled as quickly as possible. A detail study has been made on site emergency plan for FACT divisions & is readily available in the factory. POLLUTION CONTROL DEPARTMENT FACT continues to give top most priority to pollution control activities. FACT has already invested Rs500 million in specially setting up pollution control plant at UD, PD & CD with a recurring Rs120 million annually. FACT UD & CD are ISO 14000 certified units. As a commitment to the mankind the department has taken all necessary safe guards to prevent the water & atmospheric pollution caused by effluent gases & liquids thrown out of the factory. The company maintains all effluent parameters within limits as prescribed by the statutory authority. Liquid effluent & gas emissions from plant coil are subjected to the state Government pollution boards rules for the disposal of hazardous wastes generated. The ambient air quality monitoring stations continuously monitor the level of pollutants like sulphur dioxide, oxides of nitrogen, ammonia, carbon monoxide & hydrocarbon. FACT has a well established Effluent Treatment Plant (ETP). It was commissioned in 1981 at a cost of Rs 167 Lakhs. Sources of effluents to the ETP include the wastes from the Sulphuric acid plant, Phosphoric acid plant, Ammonium Phosphate 20-20 plant, Ammonia complex etc.

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MAKETING DEPARTMENT GENERAL INFORMATION Fertilizer Marketing is different from other product marketing. Fertilizer has a high demand. Therefore, it can be termed as a sellers market. However, its demand is seasonal and is very much dependent on the Monsoon. Market penetration is very difficult, and once a company captures a market its brand is substituted for the product. The brand image plays an important role. The whole market is also dependent on farmers awareness about fertilizers. All of these call for a planned marketing effort and huge requirement of funds to meet the seasonal demand of fertilizer. OBJECTIVES Monitoring of sales & distribution Study & respond adequately to the information from market research department and from field establishment Liaison with bulk buyers, central and state government officials and officials of fertilizers association of India

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ORGANISATIONAL CHART OF MARKETING DEPARTMENT

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SUB DEPARTMENTS OF MARKETING DEPARTMENT. 1. Sales Department 2. Distribution Department 3. Agronomy Sales department The sales department is headed by a Chief Manager who is responsible for sales coordination of function across various depots, conduct an effective market research for analyzing market and calculating the demand and finally promote the sales of FACT products. FACT today holds major market share in Kerala, 11% in Karnataka and 6% in other states. Sales Promotion Tools of FACT FACT over the years have innovated various techniques of sales promotion. Many of them are recognized as effective tools of promotion by national and international agencies. These techniques are mainly grouped into two: Mass Communication Techniques Personal Contact Method

Mass Communication Techniques This method involves catering to a large number of people in the shortest time possible. Advertisement are done through Films, Exhibition, Radio jingles, Hoardings, Posters, Farmers awareness programmes in AIR, Wall Painting, Advertisement, Direct mail service etc. Personal Contact Methods As the name implies, in this method, more personal and closer contact with farmers are developed through promotional methods. The methods adopted
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by FACT are through Demonstrations, Block demonstrations, Soil testing, Seminar, Study classes, Co-operative training programmes, Dealer training, Squad programmes etc. Realizing the importance of bringing the essential agricultural inputs and facilities for advisory service under single roof, FACT has converted its major selling points into Agro Service Centers rendering service to farmers. These centers advise the farmers on modern farm management techniques, credit availability, marketing prospects etc. It also prepares detailed farm plans for each farmer according to his agriculture pattern. Distribution department Chief Distribution Manager is entrusted with planning, monitoring and implementing of product distribution and co-coordinating the movement from production units and ports. The marketing network of FACT is spread over the southern states of Kerala, TamilNadu, Pondicherry, Karnataka and Andhra Pradesh. In each state there are 4 area office and 16 regional offices. The distribution network consists of 100 Agro Service Centers, 50 field storage points and over 7900 retail selling points in these states, and serves the farmers by the supply of fertilizers and agronomy advice. Agronomy department Fertilizer sales are highly dependent on farmers awareness on modern techniques of farming by using fertilizer for high productivity. Awareness creation involves an elaborate and well-planned farmer education and fertilizer promotion program, which in turn calls for a multiplicity of activities. Chief Agronomist has overall charge of the agronomy department, which renders technical guidance, and supervision of all agronomy services.
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Market Research department takes care of collection, analysis and interpretation of data pertaining to fertilizer market and preparation of product wise, month wise and annual sales plan for each area. Agronomy prepares the farmers to buy fertilizers.

. CHALLENGES OF MARKETING DEPARTMENT Improper Subsidy policy, Govt. Subsidy policy does not take into account the technology used for production & cost of raw materials, and comes to the organization after a long gap after actual sales, which leads to acute shortage of working capital. Lack of fund for research activities Narrow product range

Unnecessary intervention of state and central governments in distribution & sales

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 Recurring losses have put the organization on the back foot looking for survival in the present than long term plans & resulting research, leading to low level of research activities and narrow product range.

RESEARCH AND DEVELOPMENT

GENERAL INFORMATION FACT began research in a modest scale in 1962 with just four scientists. Over the years this nucleus has grown in to a full-fledged but compact integrated division with a team of about 12 personnel. The division is recognized by the ministry of science and technology for in house research and by the ministry of environment and forests, Govt. of India. R&D plays a vital role in giving the company and its products the cutting edge in a competitive environment. FACTs well-equipped R&D section has advanced facilities equipped with pilot plants, modern equipment and accessories. It is backed by a team of highly motivated research scientists. Various processes have been developed and patented by FACT R&D division of which several have been commercialized successful. Production of biofertilizers has commenced with an installed capacity of 150tonnes per annum. FACT R&D division has got modern and sophisticated laboratory and the facilities are continuously expanded and updated. A wide variety of tests conforming to Indian and international standards are carried out. FACT R&D division has a unique mobile laboratory equipped with state of the art instruments for monitoring, assessing, computing and recording air data. FACT has won Indian Chemical Manufacturers Association award twice for
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outstanding performance in Development of technology & Export of technology.

ORGANISATIONAL STRUCTURE OF THE R&D DEPARTMENT

FUNCTIONS OF R & D DEPARTMENT

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1. Quality control cell: It is constituted for efficiently monitoring the quality of finished chemical fertilizers both in manufacturing unit and the field godowns, distributors and dealers for evaluating the quality as per the direction of Ministry of Agriculture, GOI. This is also part of the companys commitment to ensure the quality even after dispatching the product to market. A 3 tier quality control system is being followed here:1. A chemist in the production plant who monitors the production. The quality control labs collect samples bi-hourly and does the analysis. The Fertilisers Control Order norms are being followed appropriately. 2. The manager along with the other staff does visit the plant once in a week to ensure the quality and quantity of the product. 3. Again, once in 3 or 4 weeks, they visit the marketing depots, sales points to ensure the quality and quantity of the products.

2. Bio-fertilizer Production: R&D produces biofertilizers such as Rhizobium, Azospirillum and Phosphobacter from its 150 tons per annum plant. The plant was commissioned during the end of 1999. These fertilizers are manufactured under the trade name BIOFACT. Owing to the short shelf life, production of these bio-fertilizers is based on specific demands of marketing division. Efforts are underway to change over

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to a new carrier material called Lignite that conforms to the recently laid down FCO regulation.

3. Zinc fortified Factamfos : Indian soils suffer from substantial deficiencies of micronutrients elements. Zinc deficiency is the most common and widespread. Zinc is being recognized in India as fourth important yield-limiting nutrient; next to Nitrogen, Phosphorous and Potassium. R&D has conducted several experiments to incorporate Zinc in the complex fertilizer Factamfos with 0.5% Zinc level. The trial run was successfully conducted at 150 TPA plant at Udyogamandal.

4. Utilization of by-products of the company for value addition.

5. Pollution Control: FACT continues to give most priority in pollution control activity. FACT Udyogamandal and Cochin divisions are ISO 14001 certified units. As a commitment to environment R&D dept has taken all the necessary safe guards to prevent the water and atmosphere pollution caused by efficient gases and liquid flowing out from the factory. The company would maintain all efficient parameters within the limit as prescribed by factory authorities. The ambient air quality monitoring station, continuously monitor the level of pollutants like Sulphur
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dioxide, oxides of Nitrogen, Ammonia, Carbon Monoxide and Hydrocarbons.

Future Plan of Action

Studies on value addition of Ammonium Sulphate, Phosphogypsum and Organic fertilisers. Studies to find out locally available alternative carrier materials for the sustainable production of Bio-fertilisers. Efforts are initiated to continue the quality control cell activities covering the entire Marketing network. R&D center plans to conduct studies on the incorporation of zinc as Micronutrient in NP fertilizers. Development of Liquid Fertilizer solution.

Expenditure on R&D Details of expenditure on R&D are given separately Rs. in Lakhs YEAR 2007-2008 2008-2009 CAPITAL 1.13 0.00 REVENUE 26.83 36.24 TOTAL 27.96 36.24 (as % of total
turnover)

0.032 0.017

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HUMAN RESOURCE DEPARTMENT Human resource department is one of the most complex and challenging fields of Endeavour. It is considered to be the most expensive and important resource of every organization. In FACT the scope of human resource department is very vast. OBJECTIVES OF HUMAN RESOURCE DEPARTMENT 1. To provide, create, utilize and motivate employees to accomplish organizational goals. 2. To secure integration of individual & group in securing organizational effectiveness. 3. To create opportunities to provide facilities, necessary motivation to individuals and group for their growth with the growth of the organization by training and development compensation. 4. To provide attractive, equitable, incentives, rewards, benefits, social security measures to ensure retention of competent employees.
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5. To maintain high morale, encourage value system and create environment of trust, mutuality of interests. 6. To provide opportunities for communication of expressions, participation, appreciation recognition and provide fair efficient leadership. 7. To create a sense and feeling of belongingness, team spirit and encourage suggestions from employees 8. To ensure there is no threat of unemployment, inequality while adopting a policy recognizing merit and employee contribution and condition for stability of employment. ORGANISATION STRUCTURE OF HR DEPARTMENT

Division wise Human Resource strength (2008 2009) Non Managerial Managerial
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Total

Division HD UD CD PD FEDO FEW MKTG SECTIONS

Strength 103 949 772 419 24 21 134

Avg. Age 47 47 49 45 49 50 49

Strength 217 312 356 239 82 22 115

Avg. Age 50 48 52 46 48 50 48

Strength 320 1261 1158 658 106 43 249

Avg. Age 49 47 50 46 48 50 49

FACTs HUMAN RESOURCE department is mainly comprised of 3 sections Establishment Training and Industrial Engineering Industrial Relation

Establishment The establishment section includes:i. ii. iii. Recruitment Performance Appraisal Welfare Schemes

i) Recruitment

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The recruitment policy is done as per prescribed recruitment specification with proper authority appointments by the BOARD OF DIRECTORS. The following are sources of recruitment: Confirmed employees within the division or company Employment Exchange as per provisions of Employment Exchange Act Employees on deputation from the government Casual labourers who were initially taken from employment exchange By transfer from public sector undertakings Apprentices who completed training in FACT Dependents of deceased employees who died while in service

ii) Perfomance Appraisal FACTs performance appraisal started in 1962.In 1984 the system was further revised to include potential assessment, assessment of training needs and performance counseling. Features i. ii. Self appraisal for all management employees Reporting and receiving officers specified for each level of appraisal
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iii. iv. v. vi.

Assessment by the Assessment Committee Grading on the basis of assessment Communication of final rating to employees formally Provision for appeal by employees formally

iii) Welfare Schemes Labour welfare works are defined as any arrangements of Working conditions, organization of social and sports club and establishment of funds by a firm which contributes to the workers health and safety comfort , efficiency , economic security , education and recreation. Principles of Labour Welfare i. ii. iii. iv. v. vi. vii. viii. ix. x. Adequacy of wages Social responsibility of industry Efficiency Totality of welfare Co-ordination of integration Association of democratic value Responsibility Accountability Timeliness Self help
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Industrial engineering and training Industrial engineering The main objective of this section is to make effective utilization of the manpower resources and restructure it for the benefit of the organization. The main Function of this section is: Manpower planning that comprises of manpower audit and forecast future requirements. Custodian of Manpower Inventory Work study Removing system bottle necks Production incentives etc Maintenance scheduling Work environment policy Employee problem analysis

Training centre The training and development activities of the company have been centralized with effect from April 2004. With this arrangement, the Management Development Centre, (MDC) the training centres of Cochin

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division, Udyogmandal Division have been centralized into one department called FACT Training Centre Training Centre of FACT has started job-oriented courses in Fire & Safety Engineering. New Courses in Heavy Equipment Operation and Maintenance, Welding Technology and Process Plant operation are being organized. These courses are planned to be offered in association with Governmental agencies and statutory bodies. The objective is to convert the training centre in to a Skill Development Academy with a view to provide facilities for skills development and making educated youth employable. Objectives of Training i. To identify training needs of the employees as a whole on the basis of uniform criteria. ii. To impact required training, which equip the of employees consisting of officers and workers of the company with knowledge and skill, required for improved performance. iii. To meet training needs with specific reference to ISO 9001:2000 and ISO 14001:2004 standard requirements iv. To maintain a database of training details and development activities.

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Organization structure of Training centre

IMPARTING TRAINING In FACT, there are basically 2 methods of training for employees. The method of training is decided on the basis of requirements. 1) ON THE JOB TRAINING This is specific to the job and concentrates on imparting knowledge and skill to the concerned employee. Induction training include introduction of an employee to the organization and job by giving him all possible information about organizations culture , climate, objectives, policies, practices, products etc .In job instruction training , necessary instructions about the job are given by the concerned superiors. Instruction manual is also supplied for the same and it helps employees to deal with work conditions. Job rotation is
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another on the job training in which an employee is made to move from one job to another at certain intervals. Job rotation in FACT is intradepartmental, interdepartmental and inter divisional. Intra departmental job rotation is done within the departments so that all employees are exposed to different functions carried out in their departments Workers employed to different plants are rotated among the plants at periodic intervals. These rotations give skill and knowledge to the employees in different jobs. 2) OFF THE JOB TRAINING This method is employed to impart knowledge and skills in the employees in general areas which enable them to perform the job better. The main objective of this programme is personality development such as leadership quality, communication skills, attitude change etc. These methods consist of lectures, conference, group discussions, case studies, role playing and transactional analysis. Off the job training is carried out with the help of internal or external faculty on the basis of their availability and suitability. Examples of programs conducted by internal faculty are fire fighting training, employee development programme, fire and industrial hygiene, safety etc INDUSTRIAL RELATION IN FACT The term industrial relations is used for all types of relationships between all parties concerned with industrial entrepreneurs. The concept of industrial relations has been extended to denote the relations of the state with employees, workers and their organizations. This includes individual relation and joint consultation between employers and their organization and trade unions and the part played by state in regulating their relations. There are mainly 2 objectives of INDUSTRIAL RELATIONS:57

1. To preserve industrial peace 2. To secure industrial co-operation

FACT ENGINEERING AND DESIGN ORGANISATION FEDO a division of FACT a premier engineering consultancy firm in India, with the ISO 9001 certification was established in 1965.FEDO is involved in the supply of project design, engineering & implementation and plant operation and maintenance services, mainly to the fertilizer, petrochemical and oil & gas industries. Their ranges of services are preparing project feasibility reports to comprehensive turnkey project implementation, besides plant operation and maintenance services. FEDO has a human resource base of 100 employees where 60 employees work with advanced hardware and software tools for delivering a high quality of service in design, engineering , project management and construction , procurement etc . FEDO has the unique distinction of having worked with a group of globally reputed process licensers like HALDOR TOPSOE, MW KELLOGG, STAMICARBON, CHYODA, TOYO ENGINEERING, NITA GELATINE etc. FEDO has also successfully carried out in the last few years engineering and plant operations and maintenance assignments in Gulf countries like Kuwait, Oman and Qatar. FEDO faces stiff competition from private sector firms like Soorya Group of Companies and so on and public sector companies like Engineering India LTD and PDIL.

MAJOR CLIENTS OF FEDO

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 Indian Oil Corporation. Bharat Petroleum Corporation Ltd. Hindustan Petroleum Corporation Ltd. IBP Company Ltd. Gas Authority of India Ltd. ONGC Rashtriya Chemicals and Fertilizers Ltd. KRIBHCO SPIC Madras Fertilizers Ltd. National Highways Authority Of India Cochin Port Trust Cochin Shipyard Ltd. Roads and Bridges Development Corporation of Kerala. Corporation of Cochin.

LATEST PROJECTS OF FEDO Crude oil pipeline for Cochin Refinery which is still in its engineering stage.
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 Additional Crude oil storage tank for Cochin Refinery. Mooring or Single point Mooring facility and underground pipeline for Cochin Refinery. Storage tanks for Cochin Refinery. Extraction plants in Orissa for Monozite a mineral extracted from sand The Gypsum plant in Cochin Division of FACT.

FACT ENGINEERING WORKS (FEW) FACT Engineering Works situated in Palluruthy, Cochin was established in 1996, as a unit to design and fabricate the equipments and erect them for the fertilizer plants. Over the years, it developed capabilities in the manufacture of class I pressure Vessels, heat exchangers, columns, towers, storage tanks, chemical process equipments, penstock pipes, spiral guided wet type multi lift gas holders and rail mounted LPG tank wagons, KVAERNER AND MC GREGOR type hatch covers and bulkhead stools for cargo ships etc. required for the fertilizer, petrochemical and petroleum industries. It also undertakes fabrication and erection of plant and equipment for process

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industries, cross country in-plant and offsite piping, refinery shut down inspection services. FEW is an ISO 9001 certified unit. The constructive wing of FEW thus undertakes the following activities: Design, engineering, fabrication and erection of Dry seal/Wet seal industrial gasholders of vertical/spiral lifts. Design, engineering, fabrication and erection of Hydraulic Gates, Spillway Shutters, Penstock Pipes etc. Laying of cross country pipeline for water supply schemes/oil terminals on turnkey basis. Design, engineering, fabrication and erection of columns, towers etc.

HIGHLIGHTS OF FEW FEW is involved in the fabrication of tanks, vessels, heaters, coils etc. of both internal requirements of FACT as well as other external agencies. Cochin Shipyard is one of the major clients of FEW. FEW was responsible for the Hatch Covers required by RANI PADMINI the first ship launched by Cochin Shipyard.

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 FEW is responsible only for the execution of orders of agreement entered into by the FEDO division of FACT. All the quotations and material purchase is carried on by FEDO. FEW is the only Public Sector division to have acquired the prestigious DNV CERTIFICATION. FEW has ventured into the production of ship components which involves a joint venture with the Cochin Shipyard. FEW has entered into a few collaborations with Private Sector Industries and is eagerly awaiting private sector clients.

MAJOR PROJECTS UNDERTAKEN BY FEW HUDCO project in Kerala Design and Fabrication of Vessels and tanks for Cochin Shipyard, CPCL, MRPL. Erection of Stage 1 and Stage 2 pipelines in Bengaluru. FUTURE PROJECTS Design and Fabrication of equipments and tanks for proposed Phosphoric Acid tank in Wellington Island for FACT. Small scale shop jobs for Private Industries. ORGANISATIONAL STRUCTURE OF FEW

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63

COMPUTER SERVICE CENTRE FACT computerized its activities since 1965 to meet the growing need for management information, engineering and commercial applications. The major mission and function of the Computer Service Centre is to operate as a central agency for providing computer services to various divisions of FACT to aid in management of information. The centre is equipped with servers in all its divisions connected by FACT NET and Intranet network. OBJECTIVES Setup and maintain corporate network of computers called FACTNET. Process data and prepare relevant information for various levels of management for appropriate and speedy managerial decisions Identify and develop prospective areas for computerization To augment production by reducing breakdowns of plants and equipments through integrated computerized maintenance and material management system. Cost reduction through standard costing and budgetary control monitoring through computerized system Financial disciplines by applying various modern techniques through computerized system
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 Prompt and efficient service for meeting employees information requirements, payment of wages , settlement of claims etc. Optimum solutions to engineering designs and use of techniques such as CAD , CAE etc. thereby enhancing professional competency and aiding competitive quotes. To have a marketing management system for invoicing , credit control , marketing analysis etc

To link the computer systems in FACT with the National Network for capturing environmental data and information required by the company.

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VIGILANCE DEPARTMENT
GENERAL INFORMATION Vigilance is an integral part of the management function. The department is a statutory requirement for all public sector companies. The Department in FACT is headed by a chief vigilance officer (CVO).The incumbent CVO is an IPS or IAS officer. He or she possesses the status rank and perquisite of a functional director. Under him/her there are two Chief Managers from vigilance department posted at FACT head office at Udyogamandal. OBJECTIVE To act as a policeman and deter fraud or any unscrupulous activity in the organization and to punish such activity when takes place, thereby, creating an environment of mutual trust and fair play in the organization.

ORGANISATIONAL CHART OF VIGILANCE DEPARTMENT

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The CVO has the power of dual reporting either to the CMD or directly to CVC of Govt. of India. Vigilance Notice boards have been installed in all the offices all over the company displaying the address and telephone numbers of the CMD, CVO, and CVC. These authorities can be approached on complaints of corruption. They can be accessed by e-mail also. Actions taken The cases of fraud charged against a department or an employee is circulated throughout all departments which act as a deterrence to malpractices for fear of being caught. If the case involves above Rs. 25 lakh, then the case is handed over to the CBI. The CBI can also take over the case from the department if paramount importance has been attached to the case. An employee is suspended from service during the period of trial and if found guilty from the court of law, then he or she is terminated from service considering the gravity of the case.
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SHORT TERM AND LONG TERM STRATEGIES

SHORT TERM STRATEGIES Following are the short term plans / strategies of the company to enhance its profitability. 1. Mechanism of bagging operation at Cochin Division In order to improve productivity and reduce man power by 65%, it is proposed to fully automate the labor intensive bagging and loading operations at Cochin Division. This scheme involves installing automatic bagging machine and use of wagon and truck loading machines to reduce the dependency on manual labor. Estimated cost of the modification is approximately Rs. 21 Cr and it is planned for completion by the end of 2010.

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2. Marketing of Organic fertilizer FACT intends to strengthen its presence in the field of organic fertilizers. The company has drawn up plans for marketing of organic fertilizers generated from the solid waste treatment plant of the corporation of Kochi at Bramapuram.

3. Complex Fertilizers At present FACT has the capacity to produce 6.33 lakh MT of complex fertilizers Factamfos. 20:20:0:13. FACT intends to expand its existing complex fertilizers plant at Cochin division from 2000 MT to 3000 MT per day. This will increase the turnover of the company by Rs. 500 Cr. 4. Container freight station FACT intends to setup container freight station at Udyogamandal in association with Container Corporation of India ltd. And central warehousing corporation.

LONG TERM PLANS AND OUTLOOK FOR FUTURE

1. Switch over to LNG The company has drawn up plans for switch over of feed stock for the ammonia plant and fuel for the boilers and complex fertilizers plant to LNG,
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required modifications on the plant for switch over of feed stock are planned for completion by April 2011. The company expects to reap the benefits of a lower LNG price compared to naphtha to generate profit 2. The new urea plant FACT intends to put up a new urea plat with a capacity of 5 lakh MT per annum at Udyogamandal as an add-on to existing 900 TPD ammonia plant. The estimated cost for the project is Rs. 695 CR. This project is targeted to be online by the time LNG is available in Kerala by 2011-12.

3. Revamp of the raw materials storage and handling system at Wellington Island. To cater to receipt and handling of larger volumes of raw materials to meet the requirements of the proposed expansion or revamp it will be essential to refurbish the facilities at Willingdon islands. This will include replacement of the old conveyer system, improving the dust handling facilities increasing the number of barge unloading points and replacement of the grab type ship unloader with modern continuous type ship unloader. 4. Expansion of Caprolactum production capacity FACT intends to expand the production capacity of its Caproloactum plant by 100000 MTPA utilizing the low sulphate route. The ammonium sulphate production after the expansion will remain at the current levels of 225000 MTPA. This project envisages meeting the additional requirements of cyclohexanone partly through a revamp of the existing anone plant and
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partly through imports. The estimated cost of this project is Rs. 750 Cr. And it will increase the turnover of FACT by Rs. 800 Cr. Outlook for the Future: On completion of all these projects and implementation of the vision plan for the next 5 year, FACT will become profitable on a sustainable basis. The profitability will increase substantially after FACT is able to switch over from Naphtha to LNG as feedstock. FACT expects to achieve a 100% increase in its present turnover and profit during the next 5 years.

SWOT ANALYSIS
STRENGTH Has a good Brand name and reputation High quality products. FACTAMFOS is a premium product in complex fertilizer containing Sulphur Sustained operating parameters of the plant at good level and productivity of plant at good level Well-qualified and technically skilled manpower Good support with farmers/end segment One of the two producers of Caprolactum in India with world-class quality ISO Certification to most of the divisions Strong dealer network in South India
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 Good engineering and consultancy design, perhaps one among the best in Indian Fertilizer segment FEDO has own process know-how for hydrogen, Sulphuric Acid, Ammonium Sulphate, DAP and complex fertilizers FEDO has worked in association with many international process licensors, and has acquired the capacity of customizing and designing projects to the requirements of the Indian consumers. FEDO is an approved center of surveyors and audit for portliness, installation, non-destructive testing energy audits, ISO audits and so on.

WEAKNESS The government controls the prices of finished goods, but the prices of raw materials are uncontrolled. So it is forced to operate in an uneconomic situation The average age of employee is very high (49 Yrs). The number of younger professionals is decreasing and some managerial personnel are forced to handle more than one position due to freeze on recruitment. Lack of product line diversification Lack of working capital resources Several unskilled jobs, which could be sub contracted are undertaken by the permanent employees at high cost

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OPPORTUNITIES Less expensive alternative sources of energy and other inputs Acquiring technology to utilize other available resources Expanding production capacity to drive benefits of scale FACT ammonium sulphate has greater demand in foreign countries Opportunities for product diversification Very large asset base A premium product in the complex fertilizer segment containing Sulphur Strong Marketing network in Southern India. 2150 acres of land and infrastructure facilities. Operational efficiency and high capacity utilization of plants. Scope for expansion and diversification. THREATS Volatile in the prices of raw materials and feedstock like naptha, furnace oil etc.

Inadequate compensation for FACTOMFOS under the present price concession scheme from government.

Inadequate realization from the sale of Ammonium Sulphate.

Fluctuations in the price of caprolactum Non availability of sufficient quantity of BENZENE, Phosphoric acid etc.
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 Unfavorable policy of the Government Diminishing market for Caprolactum Lack of product differentiation High pricing and scarcity of raw materials Severe liquidity crunch leading to non-operation of plant at higher capacity Decreasing market share of FEDO and FEW due to stiff competition.

Loss on Caprolactum on account of price decontrol\withdrawal of subsidy of the co product ammonium sulphate.

High cost of captive ammonia due to high price of Naphtha as compared to gas.

CONCLUSION
FACT is the pioneer in fertilizer production which paved the way for increased productivity in agricultural sector. It started with a vision to become a dependable global player in agriculture and provide self reliance in engineering and technology especially in fertilizers. With this vision it navigated through all difficulties which came on its way in the initial stages of growth. Setting up of R & D centre was an envisaged activity to keep
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abreast

with

the

latest

development,

especially

for

Biofertilizers

manufacture. With commercialization of its production at Udyogamandal, it began its expansion stage to Cochin division and finally to petrochemical division. But the reigning period of FACT came to an end with the scarcity and skyrocketing prices of raw materials. It could hardly do anything to save its declining trend as the product pricing is done by the Govt. of India. The show case example has been the drift of the company to loss even after making a record production in 1999-2000. Today, the organization runs at loss and is short of working capital. The working capital crunch has stopped most of its envisaged activities. The organization as of now is stagnating and is in a difficult stage of production. The immediate impact is seen in its low funding to R & D department, reluctance in adopting new technologies, revising the corporate plans to the bare minimum targets and reduction in welfare measures of the company. The trend has badly affected its market share and has stepped behind in competing with its contemporary organizations. However, even in this tragic situation, the company is operating above 90% capacity utilization. The management and its staff are putting their best to sustain the company. Trade unions are cooperating with the management by understanding the companys situation and responding to its need. The future however looks bright when the opportunities and strengths of the organization are considered. FACTs real strength is its experienced employees who have tasted the different stages of its growth. Further, it tries to acquire new technology for cutting the cost of production. Governments new policy on subsidy may rewrite the history of FACT.

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BIBILOGRAPHY www.fact.co.in 2. Annual report of FACT (2008-2009) 3. www.google.com 4. www.wikipedia.com 5. Yahoo Finances
1.

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