99047510 summer-internship-project-report


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99047510 summer-internship-project-report

  1. 1. 1. INTRODUCTIONThe summer internship project, as a part of the course of Bachelor of Business Management ofsecond year students in Christ University is a great programme for the students to get an exposureto the real corporate world and its working.The students are exposed to real world working environment by working under company guides asinterns where a lot of learning takes place along with value addition to the organisation and thestudent as well. One gets to learn how the production process takes place, how the management isdone at various levels and learn by getting involved in the working of the organisation.In the due course of the internship a student gets to learn in the department as chosen for thespecialisation to be done in the final year. By working in the department desired, the student gets abetter understanding and can see if he/she fits into the particular field and where does the actualinterest of the student lies in.1
  2. 2. 2. OBJECTIVE OF STUDYING THE ORGANISATIONThe core objective of studying Reliance Industries Ltd, as an intern was to get an exposure to thereal world marketing operations and other processes that follow in the corporate world. Thefollowing were the various objectives : • To get an understanding of the working of a conglomerate company • To understand the marketing operations of an industrial market • To get an exposure to the supply chain management operations • To understand the various functions of the marketing department in particular2
  3. 3. 3. OVERVIEW OF THE ORGANISATION3.1. BRIEF HISTORYReliance Industries Limited (RIL) (BSE:500325,NSE:RELIANCE,LSE:RIGD) is an Indianconglomerate company headquartered in Mumbai, Maharashtra, India. The company operatesthrough three business segments: petrochemicals, refining, and oil and gas, other segment of thecompany includes textile, retail business, special economic zone (SEZ) development andtelecom/broadband business. RIL is the largest publicly traded company in India by marketcapitalisation and is the second largest company in India by revenue behind Indian Oil. It is alsoIndias largest private sector company by revenue and profit. The company is ranked 134th onFortune Global 500 list in 2011.In October 1997 the Delhi High Court heard a Centre for Public Interest Litigation (CPIL) petitionover the award of contracts to Enronand Reliance Industries to develop the Panna-Mukta oilfield,and issued notices to the involved companies and government organisations. Prashant Bhushanacted as advocate for CPIL. The petition claimed an inquiry was justified on the basis of testimonythat Reliance had bribed the the minister of petroleum, Satish Sharma, to get the award. Accordingto a report in Outlook India, at least Rs 4 crore was delivered to the minister in suitcases full ofcash.In September 2008 Reliance Industries was the only Indian firm featured in the Forbess list of"worlds 100 most respected companies". In October 2009 a team from the Central Bureau ofInvestigation was looking into allegations that V. K. Sibal, the oil regulator, had received favoursfrom RIL for approving a major increase in the costs for the KG-D6 gas fields. In June 2011 theComptroller and Auditor General (CAG) issued a draft report on production sharing contracts in theKrishna Godavari (KG) basin. It concluded that the Petroleum Ministry had acted incorrectly inletting Reliance claim the whole area. The CAG said "The undue benefit grant to the contractor(RIL) is huge, but cannot be quantified". In 2010 RIL stood at 13th position in the Platts Top 250Global Energy Company Rankings.The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is Indias largest private sectorenterprise, with businesses in the energy and materials value chain. Groups annual revenues are inexcess of US$ 58 billion. The flagship company, Reliance Industries Limited, is a Fortune Global500 company and is the largest private sector company in India.3
  4. 4. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.Starting with textiles in the late seventies, Reliance pursued a strategy of backward verticalintegration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oiland gas exploration and production - to be fully integrated along the materials and energy valuechain.The Groups activities span exploration and production of oil and gas, petroleum refining andmarketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail,infotel and special economic zones.Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibreproducer in the world and among the top five to ten producers in the world in major petrochemicalproducts.Major Group Companies are Reliance Industries Limited, including its subsidiaries and RelianceIndustrial Infrastructure Limited.Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader inthe materials and energy value chain businesses.Reliance Industry is the worlds largest polyester producer and as a result one of the largestproducers of polyester waste in the world. In order to deal with this large amount of waste, they hadto create a way to recycle the waste. They operate the largest polyester recycling centre that uses thepolyester waste as a filling and stuffing. They developed an innovative recycling process resultingin an award in Team Excellence.Reliance owns worlds largest refinery in Jamnagar which is a "zero discharge" refinery. Effluenttreatment plants based on the best available technology processes the waste released and convertwaste in to usable product. Reliance has also planted more than 5 million trees around this refineryin order to reduce the carbon foot print.He is credited to have brought about the equity cult in India in the late seventies and is regarded asan icon for enterprise in India. He epitomized the spirit dare to dream and learn to excel.The Reliance Group is a living testimony to his indomitable will, single-minded dedication and anunrelenting commitment to his goals.4
  5. 5. Reliance has more than 3 million shareholders, making it one of the worlds most widely heldstocks. Reliance Industries Ltd has continued to grow since its split in January 2006.On 30 May 2011, Reliance Industrys stock slumped 4% as due to reports that the Central Bureau ofInvestigation was probing a former upstream regulator for the companys alleged favouring ofprivate-sector energy companies. The leaked CAG’s draft report affected RIL’s shares, making thestock descend by 10.5% by 23 June 2011.5
  6. 6. 3.2. NATURE OF THE ORGANISATIONReliance Industries Ltd., is a conglomerate company. It is involved in various businesses and catersto a number of industries at once. The Chairman & Managing Director of the company is Shri.Mukesh D Ambani. The major businesses of Reliance Industries ltd are • Exploration and Production – crude oil and natural gas • Refining • Petrochemicals – Polymers and Polyester and Fibre Intermediates • Textiles • Retail • Special Economic Zones.6
  7. 7. RELIANCE PETROCHEMICALS :Reliances philosophy of Growth is Life has truly manifested itself in value creation opportunitiesfor its myriad stakeholders, which include its valued customers.The focus on Growth has helped us grow as one of the worlds largest producers of polymers. The2009-10 polymer production (Polypropylene, Polyethylene and Polyvinyl Chloride) is 4,091 kilotonnes.This growth has been achieved with state-of-the-art world scale projects and setting globalbenchmarks in product quality, standards and services.Reliances sites at Hazira, Vadodara, Gandhar in Gujarat and Nagothane in Maharashtra areintegrated with crackers. The Jamnagar site is integrated with the world class refinery, ensuringfeedstock security at all the sites.At Reliance the constant endeavour is to provide products and services that meet global standards.Based on the extensive interaction with the industry, they offer a wide range of grades for diverseapplications across packaging, agriculture, automotive, housing, healthcare, water and gastransportation and consumer durables.Superior technologies, strong focus on R&D, latest IT-enabled services to support supply chainmanagement and the end-to-end solutions offered across the value chain reinforce their commitmentto customer satisfaction.Theres more to Reliance Polymers than just delivering great products. Theres an underlyingrelationship of mutual trust and cooperation with associates and customers. Theres a stringent pro-active quality control procedure. Theres a firm commitment on following Safety, Health &Environment measures. Theres a responsibility towards creating & ensuring a safe and cleanenvironment.The ISO-9001-2000/ISO-14001 accreditation has not only ensured providing superior qualityproducts and services but also fetched several national/international awards beside global approvalsfrom multinational companies.The Reliance Hazira QA / QC Laboratories are accredited by National Accreditation Board forTesting & calibration Laboratories (NABL), Dept. of Science & Technology, Govt. of India fortesting in accordance with ISO / IEC 17025 Standard. This lends credence to the international levelsof competence and quality our products offer to customers worldwide.7
  8. 8. Total Customer Satisfaction, is what we strive for at Reliance. And with Rishta - the 360* customer-focused approach,Reliance ensures sustainable quality through automated systems, emphasis oncomplaint resolution, quality circles and adoption of programs such as "Six Sigma".At Reliance Polymers there is a commitment to provide Innovative products and services that bringtotal satisfaction and considerable value to customers.At Reliance, their philosophy is to be where the customer is. Their customers are ensured of easyreach of both their products and services round the clock. This is facilitated through over 150marketing outlets in India alone, supported by a national network of Regional and Sales offices andseveral overseas offices across the globe. The teams of skilled technical and development personnelare available to provide assistance at every stage.In order to provide both commercial as well as technical support to their customers, the SAP R3 andBusiness Information Warehouse Systems are implemented across all Reliance Polymer plants andoffice locations to ensure seamless integration of financial, material, sales and distributiontransactions. The latest IT-enabled services support the management of the polymer supply chain.Thus, Reliance Polymers is within your instant reach 24x7, 365 days a year.Currently Reliance Polymer grades are not only well accepted in Indian market but also exported tomore than 60 countries world-wide. Their Exports Business office in Mumbai, India, oversees theseoperations supported by overseas stock points and offices in the UK, Turkey, UAE, Indonesia,Vietnam and China.Market development team continuously works with OEM, end-users, processors and machinerymanufacturers to promote new applications of Repol Polypropylene which not only improve qualityat optimum cost but also open up opportunity to produce light-weight products for resourceoptimization of Mother Nature.Their technical and development team organize seminars, conferences, Road shows in Rural andurban India to bring awareness of the benefits of plastics and Repol. Polymer team works hand inhand with new investors in the field of polymers by offering suitable projects. They are also closelyworking with various Nodal agencies for product approval and accreditation.8
  9. 9. Automotive and Appliance: Repol PP grades offer excellent balance of impact and flexuralproperties to maximise the benefit of light weight, high stiffness yet break resistant components forautomotive and appliance industries.Packaging: Repol Polypropylene is an excellent choice for a variety of packaging applications inthe field of Bulk, Rigid and Flexible applications. Contact our development team to identify theright Repol grade for the new applications in packaging you want to develop for Bulk Packaging,Rigid Packaging & Flexible Packaging.Geotextile: Repol PP is suitable for manufacturing both woven and non-woven Geotextiles. RepolPP Geotextiles are used in infrastructure applications such as filter fabric for erosion control ofRiver embankment, Geotubes for sea erosion control, Subgrade reinforcement and as pavementstrengthening in Roads.Nonwoven: Polypropylene Nonwovens has a range of applications from Agriculture to packaging.Agrotextile applications with Repol benefit the farmers by way of Crop Cover, Fruit Cover, Lenobags for protection against harsh climate, insects as well as healthy and hygienic packaging. It findsextensive use in Medical applications like surgical masks gowns and many more.Building & Construction :Repol is a good fit for plumbing Pipe. Our team also support developingChemical Pipes for Paper, Sugar and plastics processing industry.9
  10. 10. Board of DirectorsChairman and Managing Director : Mukesh D. AmbaniExecutive Directors : Nikhil R. Meswani Hital R. Meswani P.M.S. Prasad Pawan Kumar Kapil1Non Executive Directors : Ramniklal H. Ambani Mansingh L. Bhakta Yogendra P. Trivedi Dr. Dharam Vir Kapur Mahesh P. Modi Hardev Singh Kohli2 Prof. Ashok Misra Prof. Dipak C. Jain Dr. Raghunath A. MashelkarCompany Secretary : Vinod M. AmbaniSolicitors & Advocates : Kanga & Co.Auditors : Chaturvedi & Shah Deloitte Haskins & Sells Rajendra & Co.10
  11. 11. 3.3. BUSINESS VOLUMETurnover : Rs. 2,58,651 crore ($ 58.0 billion)PBDIT : Rs. 41,178 crore ($ 9.2 billion)Cash Profit : Rs. 34,530 crore ($ 7.7 billion)Net Profit : Rs. 20,286 crore ($ 4.5 billion)Net Profit 10 year CAGR : 23%Turnover : Rs. 2,58,651 crore ($ 58.0 billion)PBDIT : Rs. 41,178 crore ($ 9.2 billion)Cash Profit : Rs. 34,530 crore ($ 7.7 billion)Net Profit : Rs. 20,286 crore ($ 4.5 billion)Net Profit 10 year CAGR : 23%Total Assets : Rs. 2,84,719 crore ($ 63.8 billion)Significant contribution to Indias economic growth : • 13.4 % of Indias total exports • 6.9 % of the Government of Indias indirect tax revenues • 4.8 % of the total market capitalisation in India • Weightage of 11.9% in the BSE Sensex • Weightage of 10.1% in the S&P CNX Nifty IndexGrowing Importance across the globe : • Largest refining capacity at any single location • Largest producer of Polyester Fibre and Yarn • 5th largest producer of Paraxylene (PX) • 5th largest producer of Polypropylene (PP) • 8th largest producer of Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG)Business Volume of the Polymer division of Bangalore Office :Total Polymer sold – 2 lakh tonnes per annumPolypropylene – 1,20,000 tonnes per annumPolyethylene – 60,000 tonnes per annumPolyvinyl Chloride – 20,000 tonnes per annum11
  12. 12. 3.4. PRODUCT LINEReliance Industries Ltd deals with several businesses and the range of major products and brands ofthe company are listed as follows :a) Exploration and production : Crude oil and Natural gas.b) Refining : • Liquified petroleum gas (LPG) – Reliance gas. • Propylene • Naptha • Gasoline • Jet/Aviation turbine fuel – Reliance aviation • Superior kerosene oil • High speed diesel • Sulphur • Petroleum cokec) Petrochemicals :Polymers : • Polypropylene (PP) – Repol • Polyethylene (HDPE, LLDPE, LDPE) – Relene • Ethylene Vinyl Acetate Copolymer (EVA) – Relene EVA • Polyvinyl Chloride (PVC) – Reon • Poly-Olefin (HDPE & PP) Pipes – Relpipe • Poly Butadiene Rubber (PBR) – Cisamer • Linear Alkyl Benzene (LAB) – RelabPolyester : • Staple fibre filament yarn, texturised yarn, twisted/dyed yarn – Recron • Polyethylene Terephthalate (PET) – Relpetd) Textiles : • Suitings, shirtings, readymade garments – Vimal • Ready to switch take away fabric in gift packs – Vimal Gifting • Ready to swtich take away fabric – V212
  13. 13. e) Retail : • Organised retail – Reliance retail • Food & Grocery speciality store – Reliance fresh • Mini hypermarket – Reliance super • Hypermarket – Reliance Mart • Electronics speciality store – Reliance Digital • Exclusive apple store – iStore • Apparel speciality store – Reliance trends • Health, wellness and pharma speciality store – Reliance wellness • Footwear speciality store – Reliance Footprint • Jewellery speciality store – Reliance jewels • Books, music, toys and gift speciality store – Reliance Timeout • Furniture, furnishing and homeware speciality store – Reliance living • Automotive services & products speciality store – Reliance Autozone • Iconic Italian lifestyle brand – Diesel • Authentic outdoor footwear and apparel brand – Timberland • Italian luxury mens clothing brand – Ermenegildo Zegna • Outdoor sports lifestyle brand – Roxy • Fashion forward footwear and accessories brand for women – Steve Madden • The finest toys in the world – Hamleys • Office needs, office supplies and stationary store – Office Depot • Optical speciality store – Vision express • Transportation fuels – Reliance petroleum retail • Fleet management services – Reliance Trans-connect • Highway hospitality services – A1 Plaza • Vehicle care services – R-care • Convinience shopping – Qwik Mart • Foods – Refresh • Auto LPG • Petroleum retail – GAPCO • Lubricants – Relstar13
  14. 14. Product flow chart :14
  15. 15. 3.5 INDUSTRY OVERVIEW – POLYMER MARKET IN 2012Indian Petrochemical industry is one of the fastest growing sectors in the world. Low operatingcapacities in Indian petrochemical concerns bring with it the opportunity for future facilityutilization. Polymer market is dependent on growth in related sectors. Low per capita consumptionof polymer offers opportunities for domestic manufacturers to meet the rising domestic demand forpolymers.Indian Petrochemical industry is considered to be growing at a 1% CAGR. India is considered asone of the fastest growing manufacturers of polymers. This has led to increased costs of importscreating opportunities for domestic players to generate high revenues.Drivers of this growth : • Demand from packaging industry • Growth in associated manufacturing sectors • Increase in usage of polymer products in agricultureChallenges : • Depreciation of rupee • Rise in crude oil prices • Environmental degradation • Low per capita consumption of polymersTrends : • Usage of polymers in the medical sector • Shift towards gas based production units • Improvised marketing offers for polymer buyers • Growing investmentsIndian polymer industry is extremely capable of exporting polymers as many petrochemical majorsstill operate at low capacities. Per capita consumption of polymer in India is at 2 kg compared to3kg in US and China with 4 kg. Major forms of polymers are polyethylene polypropylene,polystyrene and polyvinyl chloride. Polymer finds its usage in a variety of sectors like packaging,agriculture and plastics. Increase of crude oil prices have affected the polymer industry in Indianegatively.15
  16. 16. 3.6 PETROCHEMICALS SECTOR ANALYSISPetrochemicals, as the name suggests, are chemicals obtained from the cracking of petroleumfeedstock. Petrochemicals are used in many manufacturing fields. The industry is built on smallnumber of basic commodity chemicals, also known as building blocks such as ethylene, propylene,butadiene, benzene, toluene and xylene. Ethylene, propylene and butadiene are commonly referredto as olefins, while benzene, toluene and xylene are known as aromatics. Together, they form thebasis of all petrochemical products. The broad product segments of the industry include basicpetrochemicals, polymers, polyesters, fibre intermediaries and chemicals.Petrochemicals production process consists of primarily two stages. In the first stage naphtha,produced by refining crude oil or natural gas is used as a feedstock and is cracked. Cracking(breaking of long chain of hydrocarbon molecule) produces olefins and aromatics. In stage two,these building blocks are polymerized (made to undergo chemical processes) to producedownstream petrochemical products (polymers, polyesters, fibre intermediaries and other industrialchemicals.The industry is oligopolistic in nature with four main players dominating the sector noticeablyReliance Industries Ltd (RIL), Indian petrochemicals Corporation Ltd (IPCL), Gas Authority ofIndia Ltd (GAIL) and Haldia Petrochemicals Ltd (HPL). RIL, along with IPCL, accounts for 70%of the petrochemical capacity in the country. However, the downstream petrochemical sector,especially polyester, is highly fragmented with more than 40 companies. This fragmented structureadversely affects the health of the industry.Petrochemical industry is a cyclical industry.Globally, the petrochemical industry is characterizedby sluggish demand and volatile feedstock prices. Indias current per capita consumption ofpolyester is 1.4 kg, whereas Chinas and global per capita consumption is five times and three timeshigher respectively. Similarly, the 5 kg per capita consumption of polymers in India is one-fifths forthe entire world. India accounts for 3.1% of the total world polymer consumption of 200 mtpa.16
  17. 17. 1. Supply : Supply currently outstrips demand. In India, as refineries are expanding capacityleading to increase in production of naphtha, we believe its going to increase further.2. Demand : Demand of the petrochemicals generate from the downstream industries, which in turnare dependent on the state and growth of the economy. Indian economy is poised to grow 9.2% forthe next few years. Thus, the demands for the petrochemical products are bound to be on the higherend.3. Barriers to entry : The petrochemical industry is capital-intensive by nature. The minimumeconomic size of an integrated plant is around 1 million tonnes per annum, which in turn calls forhuge investments.4. Bargaining power of suppliers : Moderate to low, despite the surplus naphtha production in thecountry, bargaining power of suppliers seems to be moderate. This is due to the fact that thesuppliers are concentrated. However, going forward, integration is a ‘mantra for the oil refiningcompanies.5. Bargaining power of customers : Moderate to low, the downstream user industry is fragmented,which reduces their collective bargaining power. Import duties on the products have declinedsignificantly over the past and with additional capacities coming up in the Middle East thebargaining power of the customers might improve to an extent.6. Competition : Competition within the domestic market is limited, as there are only a handful ofplayers with world-class capacities. However, with reduction in duties, there is threat of importsfrom Middle East and the Asia Pacific region, which is going to increase the competition. Also, therefineries are getting integrated, which will reduce the industry concentration in terms of marketshare and in turn fuel competition.17
  18. 18. Current scenario and prospects : • Government has put in place a national policy on petrochemicals and has initiated steps to create mega integrated complexes called petroleum, chemicals and petrochemicals investment regions (PCPIRs). These PCPIRs will be set up in a 2,000 sq km area with an estimated investment of $280 bn. As 100% FDI is permissible in chemical industry, this should provide a boost to the sector. It is expected that domestic petrochemical sector will double its production capacity in next four five years. • Currently, R&D expenses of the industry are about Rs 2.2 bn (1% of the overall industrys turnover). With an approximate cost of Rs 4.4-6.6 bn, Government has provided for a policy of generating R&D centres for modernisation of the petrochemical industry. With this format, the government is aiming at a low-priced high-return involvement in the petrochemical segment, via public-private-partnership (PPP), to market the development of new applications of polymers and plastics, by establishing such centres of excellence (CoEs). • Operating rates are expected to bottom out in 2010. Demand in Asia, especially in India and China is expected to remain high leading to high cotton prices and stable margins from polyester products. This, along with project delays by Middle East could lead to the next super cycle in coming years.18
  19. 19. 4.ORGANISATIONAL STRUCTURE4.1. MAIN OFFICESMajor Plant Locations : • Dahej P. O. Dahej, Bharuch - 392 130 Gujarat, India • Gadimoga Tallarevu Mandal East Godavari District Gadimoga – 533 463 Andhra Pradesh, India • Hazira Village Mora, P.O. Bhatha Surat-Hazira Road Surat 394 510, Gujarat, India • Jamnagar Village Meghpar / Padana, Taluka Lalpur Jamnagar 361 280 Gujarat, India • Jamnagar SEZ Unit Village Meghpar / Padana, Taluka Lalpur Jamnagar 361 280 Gujarat, India • Nagothane P. O. Petrochemicals Township, Nagothane Raigad - 402 125, Maharashtra, India19
  20. 20. • Patalganga B-4, Industrial Area, P.O. Patalganga 410 220 Near Panvel, Dist. Raigad Maharashtra, India • Vadodara P. O. Petrochemicals Vadodara - 391 346, Gujarat, IndiaRegistered Office :3rd Floor, Maker Chambers IV222 Narimen Point, Mumbai – 400 021, IndiaTel : +91 22 2278 5000Fax : +91 22 2278 5111email : investor_relations@ril.comwebsite : www.ril.comBangalore Regional Office :62/2, 2nd FloorVictoria Circle,Richmond RoadBangalore – 560025.20
  21. 21. 4.2 MARKETING OPERATIONS MV PRASAD (Regional Manager) RAGHUNAND KRISHNAN SUBRATA SARKAR (Product Head - PP) (Product Head - PE/PVC) RAMAN JP (Territory Manager) SABU NINAN (Territory Officer) SHALINI KAMATH KP RAJESH (Logistics Officer) (Logistics Officer)21
  22. 22. 5. STRUCTURE OF THE MARKETING DEPARTMENT5.1 PROFILE OF EMPLOYEES • MV Prasad – Regional Manager • Raghunand Krishnan – Product Head (Polypropylene) • Subrata Sarkar – Product Head (Polyethylene/Polyvinyl Chloride) • Raman JP – Territory Manager • Sabu Ninan – Territory Officer • Shalini Kamath – Logistics Officer • KP Rajesh – Logistics Officer5.2 MARKETING OPERATIONS • The primary function of the marketing department is to enhance sales volume as the Bangalore Office is primarily a sales office. • There are two main aspects under sales volume – Organic Sales and Inorganic Sales. • Organic sales is where the main focus of the department is whereas inorganic sales is a secondary function of the marketing department. • Enhancement of organic sales comprises of three parts to be taken care of – Sales planning, Customer management and Supply chain management. • Sales planning goes hand in hand along with customer management and supply chain management. • Customer management includes building up contacts with the customers to get various information and new customers which in turn enhances the trade, and also meeting the requirements of the customers to maintain a long term relationship between the customer and the company. • Supply chain management is the clerical part of maintaining organic sales volume. Some of the functions under supply chain management includes – Coordinate with the Head Office, Get required grades of polymer as per the plan and ensure customer gets the product as per the planned quantity and as per his/her requirement. • The secondary function of the marketing department is to take care of the inorganic sales which mainly includes business development analysis to get new sales by developing new applications and new horizons to the polymer industry.22
  23. 23. 6. FUNCTIONS OF THE MARKETING DEPARTMENT6.1 MARKETING STRATEGY : • The marketing strategy of Reliance Petrochemicals is driven by a number of factors as it is a conglomerate company and the process is channelised through various levels. In the polypropylene sector, 80% of the market is held by raffia which mainly includes – woven sacks, plastic woven fabric and Flexible Intermediate Bulk Containers (FIBC). • The strategies adopted by the marketing department is different as polymer is an industrial product and is different from the trending marketing strategies of consumer goods or FMCG products. • The different steps adopted by the marketing department primarily depend on the ongoing international market trends in the polymer market. • Second, it is also driven by the floating exchange rates between different countries. • One of the main drivers of the marketing strategy is the demand supply gap. In this demand supply cycle, the two major roles are played by the raw material producer (RIL) and the customer who makes a productive usage of the raw material. The entire production process is based on this demand-supply cycle and the disequilibrium between the two is referred to as demand supply gap.23
  24. 24. 6.2 PRODUCTION PLANNING, DEVELOPMENT AND MANAGEMENT :The production planning is done based on the demand supply trend in the market. The main conceptadopted is supply chain management. Supply Chain Management is the management of upstreamand downstream relationships between suppliers and customers to deliver the best value to thecustomer at the least cost to the demand chain as a whole. Supply chain management software toolsbridge the gap between the customer relationship management and the demand chain management.The organization’s supply chain processes are managed to deliver best value according to thedemand of the customers.One of the factors that affects the production process is the seasonality in business. Some sectors(not the end users) have a seasonality in business which in turn is in direct co relation with the rawmaterial production and demand. Thus, seasonality plays a vital role in the production process.Product development and management is an aspect of the inorganic sales function of theorganisation. It mainly focuses on the development of newer applications of the existing productsand to use the raw material of polymer in newer environment friendly application to open up newhorizons. It deals with the planning of the efficient use of plastic as a product due to constantopposition from government and other environmental organisations, though the per capitaconsumption of plastic in India is 2kg as compared to larger numbers in developed countries likeChina and USA. The development and management activities are the secondary functions of themarketing department as it is part of the inorganic sales.24
  25. 25. 6.3 PRICING STRATEGY :Pricing strategies in an industrial product market like a polymer market is comparatively difficultthan a consumer product market. The two pricing methods adopted by Reliance petrochemicals areas follows : • Benchmarking with international prices : In this method, the organisation tracks down international prices of the same product in accordance with quality, grades etc and the prices of the domestic product is benchmarked with international prices so that it maintains an equilibrium of prices internationally especially in order to maintain good exports. • Port-based pricing : This is an internationally accepted pricing concept adopted by many other organisations like Reliance Industries Ltd. It mainly looks at the aspect of pricing based on the location. The prices of the product are location oriented and the freight and transportation charges of the raw material to the particular location affect the prices of the product. It mainly looks at the locational proximity to the port and the pricing is done accordingly. • Imports : At Reliance Industries Ltd, at times the pricing is affected by the number of imports so as to maintain a marginal level of profit in business. The export valuation is maintained at a level higher than the import valuation level. • Raw material pricing : The prices of the raw material play a vital role in the pricing of the product at Reliance Industries Ltd.25
  26. 26. 6.4 DISTRIBUTION STRATEGY :The distribution of the product goes through various processes at Reliance petrochemicals. A briefof the entire process is given below. • The produced material is primarily available at two locations of Reliance petrochemicals – depot and plant. • Depot is something like a store, where a customer can buy a minimum of even one single bag of material which is 25 kgs. • To avail material from the store, the minimum order level is higher than that of 25 kgs. • The customers register themselves under a company or a private firm/agent which is known as the del creder agent (DCA) who is an intermediate between the customer and the organisation. • The customer needs to place the order to DCA in order to get his material. • The DCA provides a security deposit amount with Reliance, and avails material within a certain limit. • Once a customer places an order to the DCA, the DCA will check his limit and accordingly place an order to Reliance through the SAP technologies software and once the order is placed by the DCA, it is moved to the logistics department. • The logistics department, checks with the DCA limit and other required documents and requirements and once it is verified the order is dispatched. • A master file of the customer can be created with Reliance Industries once the documents and required papers (Excise papers etc) are forwarded by the DCA and it is verified by the department and thus a master file is created. • The entire process of placing an order to dispatch of material takes place online through SAP software and management information system.(Note : This is not the exact procedure of the distribution of material. It is just a brief summary ofthe total process for an understanding purpose. The actual procedure is a little more in depth to theone given above.)26
  27. 27. 6.5 PROMOTIONAL STRATEGY :Since polymer is an industrial product and the customer of the products are mainly manufacturers orconverters and not the end users, there is not much of promotional activity taken up in this field. Butsome incentive schemes are given at time for a clearance sale of stock acquired at the plant anddepot.Another form of a promotional activity is Memorandum of Understanding (MOU) which is createdto safeguard the interest of the supplier and customer in uncertain situations in the market andbusiness.27
  28. 28. 7. CRITICAL ANALYSIS7.1 SUCCESS AND FAILURE ANALYSIS OF DIFFERENT PRODUCTS :In Karnataka region, Reliance polymers is the market leader in all three of its primary products –polypropylene, polyethylene and polyvinyl chloride. Reliance is undoubtedly the most successfulorganisation in this sector. It is the biggest private firm to do business in such a huge volume inIndia.The various successful products of Reliance under polymer division are : • Repol – Polypropylene • Relene – Polyethylene • Reon – Polyvinyl Chloride7.2 MAJOR COMPETITORS IN THE MARKETThe major competitors in the Karnataka region are as follows : • Haldia Petrochemicals Ltd – Polypropylene and Polyethylene • Indian Oil Corporation – Polypropylene and Polyethylene • GAIL India Ltd – Polyethylene • Finolex Group – Polyvinyl Chloride • Chemplast Sanmar Ltd – Polyvinyl Chloride ➢ Haldia Petrochemicals Ltd (HPL) : Haldia Petrochemicals is the second largest petrochemical industry in India with a total capacity equivalent to 7, 00,000 TPA of ethylene. It was formed out of a joint venture between Government of West Bengal, The Chatterjee Group, TATA Group and Indian Oil Corporation in 1994. The first commercial production started in 2001. The factory complex is located in Haldia, in the Purba Medinipur district of West Bengal, India.28
  29. 29. ➢ Indian Oil Corporation (IOC) : Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India. The company is the worlds 98th largest public corporation, according to the Fortune Global 500 list, and the largest public corporation in India when ranked by revenue. IndianOil and its subsidiaries account for a 47% share in the petroleum products market, 34% share in refining capacity and 67% downstream sector pipelines capacity in India. The IndianOil Group of Companies owns and operates 10 of Indias 21 refineries with a combined refining capacity of 65.7 million metric tons per year. The President of India owns 78.92% (1.9162 billion shares) in the company. In FY 2011 IOCL sold 64.1 million tons of petroleum products and reported a PBT of 90.96 billion, and the Government of India earned an excise duty of 257.899 billion and tax of 16,500 million. It is one of the five Maharatna status companies of India, apart from Coal India Limited, NTPC Limited, Oil and Natural Gas Corporation and Steel Authority of India Limited. IndianOil operates the largest and the widest network of fuel stations in the country, numbering about 19,463 (15,946 regular ROs & 3,517 Kissan Sewa Kendra). It has also started Auto LPG Dispensing Stations (ALDS). It supplies Indane cooking gas to over 62.4 million households through a network of 5,456 Indian distributors. In addition, IndianOils Research and Development Center (R&D) at Faridabad supports, develops and provides the necessary technology solutions to the operating divisions of the corporation and its customers within the country and abroad. ➢ GAIL India Ltd : GAIL (India) Limited is the largest state-owned natural gas processing and distribution company headquartered in New Delhi, India.It has six segments: Transmission services of natural gas and liquefied petroleum gas (LPG), Natural gas trading, petrochemicals, LPG and Liquid hydrocarbons, GAILTEL and Others. The company was previously known as Gas Authority of India Ltd. It is Indias principal gas transmission and marketing company. It was set up by the Government of India in August 1984 to create gas sector infrastructure. GAIL commissioned the 2,800 km Hazira-Vijaipur-Jagdishpur (HVJ) pipeline in 1991. During 1991-93, three liquefied petroleum gas (LPG) plants were constructed and some regional pipelines acquired, enabling GAIL to begin its gas transportation in various parts of India. GAIL began its city gas distribution in New Delhi in 1997 by setting up nine compressed natural gas (CNG) stations. In 1999, GAIL set up northern Indias only petrochemical plant at Pata.29
  30. 30. ➢ Finolex Group : Finolex Group is a private sector conglomerate based in Pune, India. The Finolex Group comprises Finolex Cables Ltd., Finolex Industries Ltd., Finolex J-Power Systems Ltd. and Finolex Plasson Industries Ltd. The early nineties saw the Finolex Group expanding into new business domains to manufacture Optic Fibre Cables and Copper Rods. Today the Group turnover exceeds Rs.30 Billion (about US $ 750 million). Finolex Cables Ltd (FCL) and Finolex Industries Ltd (FIL) are the two group companies whose equity shares are listed on the Bombay Stock Exchange and National Stock Exchange. Global Depository Receipts of Finolex Cables Limited are also listed on the Luxembourg Stock Exchange. Professionally managed, with continuous updating of technology and strict quality controls, Finolex strives for maximum customer satisfaction. Over the years, it has attained a significant position on the industrial map of India. ➢ Chemplast Sanmar Ltd - Chemplast Sanmar Limited is a chemical company based in Chennai, Tamil Nadu. It is part of Sanmar Group which has businesses in Chemicals, Shipping, Engineering and Metals. It has a turnover of over Rs.45 billion and a presence in some 25 businesses, with manufacturing units spread over numerous locations in India. Chemplast Sanmars manufacturing facilities are located at Mettur, Panruti, Cuddalore and Ponneri in Tamil Nadu, Shinoli in Maharashtra, and Karaikal in the Union Territory ofPondicherry. It is a major manufacturer of PVC resins, chlorochemicals and piping systems. The Cuddalore PVC project commissioned in September 2009 is the largest such project to come up in Tamil Nadu. Its aggregate capacity of 235,000 tons makes it one of the largest PVC players in India. Chemplast Sanmar Limited won two awards, at the 7th National Award for Excellence in Water Management organized by the CII in Hyderabad in December 2010. The flagship company of The Sanmar Group won the “Innovative Case Study” and “Excellent Water Efficient Unit” awards for the successful case study of zero liquid discharge at Mettur. Chemplast Sanmar, a pioneer in Zero Liquid Discharge has implemented this process successfully in all its manufacturing plants. Chemplast has not discharged a single drop of treated effluent since September 2009 in Mettur while in Cuddalore and Karaikkal there has been no discharge since inception.30
  31. 31. 7.3 MARKET SHARE OF RELIANCE AND VARIOUS COMPETITORSThe break up of the market share of Reliance Industries Ltd compared to various competitors in theKarnataka region in the polypropylene and polyethylene division are as follows :a) Polypropylene : • Reliance Industries Ltd – 81% • Haldia Petrochemicals Ltd - 4% • Indian Oil Corporation - 5 % • Imports – 10%b) Polyethylene : • Reliance Industries Ltd – 34% • Haldia Petrochemicals Ltd – 9% • GAIL India Ltd – 20% • Indian Oil Corporation – 17% • Imports - 20%31
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