ACADEMIC INDUSTRY INTERFACE IN
CARGILL GROUP OF COMPANIES
THIS COMPANY COMES UNDER FMCG INDUSTRY, BECAUSE its PRODUCT IS
1. NATURE FRESH ACTILITE
2. NATURE FRESH PURITY (KACHI GHANI PURE
3. NATURE FRESH PURITY (VANASPTI)
4. GEMINI REFINED COOKING OIL
ABOUT FMCG INDUSTRY
IT IS alternatively called as CPG (Consumer packaged goods) industry primarily deals
with the production, distribution and marketing of consumer packaged goods. The Fast
Moving Consumer Goods (FMCG) are those consumables which are normally consumed
by the consumers at a regular interval. Some of the prime activities of FMCG industry are
selling, marketing, financing, purchasing, etc. The industry also engaged in operations,
supply chain, production and general management.
FMCG INDUSTRY ECONOMY
FMCG industry provides a wide range of consumables and accordingly the amount of
money circulated against FMCG products is also very high. The competition among
FMCG manufacturers is also growing and as a result of this, investment in FMCG industry
is also increasing, specifically in India, where FMCG industry is regarded as the fourth
largest sector with total market size of US$13.1 billion. FMCG Sector in India is estimated
to grow 60% by 2010. FMCG industry is regarded as the largest sector in New Zealand
which accounts for 5% of Gross Domestic Product (GDP).
WHAT ARE THE FIRST MOVING CONSUMER GOODS(FMCG)?
Household Care Fabric wash (laundry soaps and synthetic, detergents);
household cleaners (dish/utensil cleaners, floor cleaners,
toilet cleaners, air fresheners, insecticides and mosquito
repellents, metal polish and furniture polish).
Food & beverage Health beverages; soft drinks; staples/cereals; bakery
products (biscuits, bread, cakes); snack food; chocolates; ice
cream; tea; coffee; soft drinks; processed fruits, vegetables;
dairy products; bottled water; branded flour; branded rice;
branded sugar; juices etc.
Personal Care Oral care, hair care, skin care, personal wash (soaps);
cosmetics and toiletries; deodorants; perfumes; feminine
hygiene; paper products.
Common FMCG products
Some common FMCG product categories include food and dairy products, glassware,
paper products, pharmaceuticals, consumer electronics, packaged food products, plastic
goods, printing and stationery, household products, photography, drinks etc. and some of
the examples of FMCG products are coffee, tea, dry cells, greeting cards, gifts, detergents,
tobacco and cigarettes, watches, soaps etc.
FMCG SECTOR IN INDIA
The Indian FMCG sector is the fourth largest sector in the economy with a total market
size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a
well-established distribution network, intense competition between the organized and
unorganized segments and low operational cost. Availability of key raw materials, cheaper
labour costs and presence across the entire value chain gives India a competitive
advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4
billion in 2015. Penetration level as well as per capita consumption in most product
categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the
untapped market potential. Burgeoning Indian population, particularly the middle class
and the rural segments, presents an opportunity to makers of branded products to convert
consumers to branded products. Growth is also likely to come from consumer 'upgrading'
in the matured product categories. With 200 million people expected to shift to processed
and packaged food by 2010, India needs around US$ 28 billion of investment in the food-TI
INDIA-A LARGE CONSUMER GOODS SPENDER
An average Indian spends around 40 per cent of his income on grocery and 8 per cent on
personal care products. The large share of fast moving consumer goods (FMCG) in total
individual spending along with the large population base is another factor that makes India
one of the largest FMCG markets. Even on an international scale, total consumer
expenditure on food in India at US$ 120 billion is amongst the largest in the emerging
markets, next only to China.
INDIAN COMPETITIVENESS & COMPARISON WITH THE WORLD
The following factors make India a competitive player in FMCG sector:
Availability of raw materials-
Because of the diverse agro-climatic conditions in India, there is a large raw
material base suitable for food processing industries. India is the largest producer of
livestock, milk, sugarcane, coconut, spices and cashew and is the second largest
producer of rice, wheat and fruits &vegetables. India also produces caustic soda and
soda ash, which are required for the production of soaps and detergents. The
availability of these raw materials gives India the location advantage.
Labor cost comparison-
Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest
in the world, after China & Indonesia. Low labor costs give the advantage of low cost of
production. Many MNC's have established their plants in India to outsource for domestic
and export markets.
Presence across value chain-
Indian companies have their presence across the value chain of FMCG sector, right
from the supply of raw materials to packaged goods in the food-processing sector.
This brings India a more cost competitive advantage. For example, Amul supplies
milk as well as dairy products like cheese, butter, etc.
INDIAN FMCG INDUSTRY SET TO GROW 16% DURING 2008-09
The Indian FMCG industry is expected to grow 16% during 2008-09 with rising
disposable income, changing lifestyle and rapid urbanization. The Federation of
Indian Chambers of Commerce and Industry (FICCI) predicted that the Indian
FMCG industry sales would grow 16% during 2008-09, reported .FICCI also
revealed that during 2007-08, the Indian FMCG industry sales are estimated to
grow 14.5% to reach RS 854.7 Billion. Within the Indian FMCG industry, there are
few sectors that will grow more than 20% during 2008-2009, like shaving cream at
23%, skin/fairness cream at 22%, shampoos at 21.3%, skin care & cosmetics at
20%, tooth powder at 22% and other care products. The prediction of higher sales
growth of FMCG products is based on strong economic fundamentals such as rising
disposable income of people. Now people can afford to spend on quality FMCG
products. Moreover, increasing salaries, along with rising trend of perks in the
corporate sector at regular intervals, have increased people’s spending power on
lifestyle products. Even government employees too are expending on lifestyle
products helping FMCG sector to grow rapidly. Apart from this, India is rapidly
changing into an urban country and with that, people’s preference for lifestyle
products is growing. Hence, the Indian FMCG industry is experiencing strong
growth in some categories such as skin care, anti-aging solution, deodorants,
fairness products and men’s products. In addition, the emergence of organized
retail such as supermarkets, and shopping malls is also playing an important role in
bringing boom in the Indian FMCG market. The young generation of consumers is
driving the demand for lifestyle products. Consumers are at the front seat changing
and redefining the branding and marketing strategy and marketplace for the retail
products that are ultimately boosting the retail sales in the country .However, the
fear of dissociation with earlier consumers still persists as they embrace and prefer
to stick to established brands only. The main reason for this dissociation is weak
distribution channels and marketing strategy in the country. According to a
Research Analyst at RNCOS, “The demand for lifestyle products is boosted by the
rising aspiration and modern facilities. As the spending power of consumers is going
up, the sales of FMCG products in India will rise too. Therefore, companies need to
improve the quality of products and employ right marketing mix by implementing
new technologies such as Customer Relationship Management.”
CRITICAL OPERATING RULES IN INDIAN FMCG SECTOR
Heavy launch costs on new products launch on Advertisements, free samples and
Majority of the product classes require very low investment in fixed assets.
Existence of contract manufacturing
Marketing assumes a significant place in the brand building process.
Providing good price points is the key to success.
SWOT ANALYSIS OF FMCG INDUSTRY
Low operational costs.
Presence of established distribution networks in both urban and
Presence of well-known brands in FMCG sector
Lower scope of investing in technology and achieving economies of
scale, especially in small sectors.
Low exports levels.
quot;Me-tooquot; products, which illegally mimic the labels of the
established brands. These products narrow the scope of FMCG
products in rural and semi-urban market.
Untapped rural market.
Rising income levels i.e. increase in purchasing power of consumers.
Large domestic market- a population of over one billion.
High consumer goods spending
Removal of import restrictions resulting in replacing of domestic brands
Slowdown in rural demand, Tax and regulatory structure
Cargill is an international provider of food, agricultural and risk management products
and services. We are committed to using our knowledge and experience to collaborate with
customers to help them succeed. In India, Cargill operates a number of businesses and
employs several hundred people. Our expansive operations include the handling, shipping
and processing of a wide range of products, including refined oils, grain and oilseeds,
sugar, cotton and animal feed. In addition, Cargill develops flavor systems and operates a
value investing business. Our presence in India has been growing since we began
operations in 1987.Cargill maintains a number of businesses in India, with operations
including the handling, shipping and processing of a wide range of products, including
refined oils, grain and oilseeds, sugar, cotton and animal feed. In addition, Cargill develops
flavor systems and operates a value investing business. Our presence in India has been
growing since we began a joint venture operation in 1987.
MILESTONE OF CARGILL IN INDIA
1987 Cargill Seeds - a joint venture operation - commenced in India.
1994 Cargill starts its fertilizer/crop nutrients operations in India.
1997 Cargill launches its primary sugar and edible oils trading business in India.
1998 Commences grain and oil seeds business in India.
2001 Launches food business under Cargill Foods – launch of brand “Nature Fresh”.
Cargill acquires the Food Flavors business from Duckworth Group UK, and
Duckworth Flavors India becomes part of Cargill India.
Cargill sets up green field edible oil refineries at Kandla and Paradip.
Cargill launches one stop agri-shops – Saathi Krishi Samadhaan Kendra’s.
2004 Cargill diversifies its fertilizer business into a joint venture with IMC global. Cargill
India's DAP business renamed as Mosaic India.
Cargill acquires Parakh Foods with brand quot;Geminiquot; and sets up a new
Business Unit called Cargill Refined Oils India. This is first business unit with
headquarters in India.
Cargill launches Saanjhi Unnati Program in Rajasthan for development of
malt barley in active collaboration with the Government of Rajasthan and
Cargill starts its sugar off shoring business to support the execution activities
of Cargill Netherlands.
Cargill sets up CarVal India Pvt. Ltd.
Cargill enters into a joint venture in a project for setting up a green field
sugar refinery in South India.
Cargill enters into joint ventures with local soybean crushers in
Maharashtra, Rajasthan and Madhya Pradesh.
Cargill enters into a joint venture and subsequently owns and leads a shrimp
feed manufacturing business in Rajahmundry in Andhra Pradesh.
2007 Cargill launches cotton trading business in India.
2008 an independently managed subsidiary Cargill, Black river advisor India pvt.ltd,
begins operations in India.
CARGILL GROUP OF COMPANIES
Cargill Refined Oils India imports, refines, sells and markets a wide range of vegetable
oils and fats to wholesale trade, industrial and household consumers across India. they own
and operate three vegetable oil refineries located at Paradip (Orissa), Kandla (Gujarat)
and Kurkumbh (Maharashtra). Cargill Refined Oils India has been operating within India
since 2005 and employs more than 750 people. These are
(K2)Cargill India pvt.ltd.,post-bhimasar,taluka-anjan,kutch-
(kk)Cargill India pvt.ltd.,e-4,e-45,midc,kurkumbh-413802(Maharashtra)
(Pd)Cargill India pvt.ltd.,oil terminal road, atharbanki,jagatsinghpur-
(PD)CARGILL INDIA PVT.LTD.
This is the paradip production unit
Mr.Harihar Rout, HR Manager.
Cargill India pvt.ltd.Paradip.
Mr.Bhanuprakash Rout, Production Manager.
Cargill India pvt.ltd.Paradip.
There are 11 product were producing in paradip unit of Cargill India. These are as
1.NATURE FRESH ACTILITE SOYABIN
GEMINI SUN FLOWER
GEMINI VANASPATI GHEE
2. NATURE FRESH ACTILTE SUN FLOWER
GEMINI SUN FLOWER
3. NATURE FRESH PALM
4. NATURE FRESH OLINE
5. NATURE FRESH PALMOLINE
6. NATURE FRESH MUSTARD
7. NATURE FRESH VANASPATI
For government purpose paradip unit is producing two products.
1. NEFED (For Orissa)
2. MMTC (For West Bengle, Sikim, Nagaland)
NEW PRODUCT DEVLOPEMENT
The paradip unit of Cargill India is developing two new products. Such as-
1. GEMINI VANASPATI GHEE.
2. NATURE FRESH VANASPATI.
Basically the company size of paradip unit is defined in two ways. Such as-
1. According to employee-There are 325 employees are working in paradip unit of Cargill
2. According to financial status-The total financial strength of paradip unit of Cargill India
is state 110 crore.
Cargill India paradip unit is applying new food technology for producing better quality
product which will be more demanded in market.
The target market of Cargill India of paradip unit is outside Orissa. So these are 3 target
markets, such as-
The products of paradip unit is costly than the other two unit of India. So its product are
preferred by the rich people or high income level people.
The target market of Cargill India of paradip unit is preferable outside Orissa, but in
Orissa he has two competitors-
1. RUCHI INFRASTRUCTER LTD.
2. GOKUL GROUP OF COMPANIES.
So from these two competitor POTENTIAL COMPETITOR is RUCHI
CURRENT BUSINESS STRATEGIES
There are three current business strategies of paradip unit.
1. Company wants to increase the salary of worker for increasing his production.
2. Development of safety precaution of worker.
3. Development of the food technology.
The fixing of price of the product is depending on the share price of crude oil & price is
determined by head of the department.
STRENGTH OF THE COMPANY
The strength of the company is food safety, because Cargill India of paradip unit had got
13 positions in food safety through all over world.
Cargill India is one of the top MNC (product-edible oil) in all over world & Cargill is
committed to being a global leader in corporate responsibility by nourishing the people and
possibilities that reside in communities where they do business. The employment policy of
Cargill India is non-discrimination towards all employees and applicants for employment.
All aspects of employment with Cargill are governed by merit, competence, suitability and
qualifications, and will not in any manner be influenced by gender, age, race, colour,
religion, national origin or disability. THE INTERNAL MOBILITY FACTOR STATE
THAT TO seek to offer employees career opportunities within Cargill India and promote
an open environment where employees can acquire new skills and learning. For employees
who meet the criteria and are willing to accept roles with higher responsibilities, THEY
provide avenues for growth & movement across Cargill businesses and geographies. THE
Learning and development opportunities At Cargill HAS committed to attracting,
retaining and training high performing people who embrace the company’s vision and
values. IT means to achieve this is by maximizing training and development to ensure that
employees have the competencies required to accomplish their business objectives as well
as develop their career in the company. Training opportunities include on-the-job learning,
participating in company programs and courses, and attending external programs based
on nomination by managers or peers. Employees also participate in performance
management programs to create a road map for their individual success at Cargill and
alignment with organizational goals.