Final report

Truck Mapping Study in Industries

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DECLARATION
We, Anurag Dwivedi and Prashant Srivastava do hereby declare that the project entitled
“Truck Mapping Study for TCI Foundation” is an original work. The contents of this
report have not been published before and reflect work done by us during the
Organizational Training-II component of the Post Graduate Diploma in Forestry
Management of the Indian Institute of Forest Management, Bhopal from 24th
September, 2007 to 30th
November, 2007 with Social and Rural Research Institute, A
specialist unit of IMRB International, India.
Place: IMRB International, Delhi Date: 30th
November, 2007
Anurag Dwivedi Prashant Srivastava
(PFM class of 2008) (PFM class of 2008)


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ACKNOWLEDGEMENT
We are highly grateful to IMRB International for providing us the learning opportunity with Social
and Rural Research Institute (SRI), A Specialist unit of IMRB International.
We extend our sincere thanks to Mr. A.V. Surya, AVP and RSD, IMRB International, Delhi for
providing us the opportunity to work on Truck Mapping Study for TCI Foundation.
We are also grateful to Mrs. Charu Sheela, APD, IMRB International, Delhi, for her continuous
support and guidance during the entire training period.
We would like to extend our gratitude towards Mr. Ashwin, APD, IMRB International, Delhi, Mr.
Soumya Sinha, SRE, IMRB International, Delhi and Mr. Saurabh Sardana, Consultant, IMRB
International, Delhi, for their constant support and guidance throughout the period of our
organizational training.
We thank Mrs. Aparajita Bhalla, Programme Officer, BMG Foundation, Mr. Tarun Vij,
Programme Director, TCI Foundation and Mr. Anil Nair, Programme Manager, TCI Foundation
for their critical inputs in the study.
We are also very thankful to the office staff, the management as well as the field staff of the
organizations for providing us with an amicable work atmosphere during the course of our
organizational training.


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We take this opportunity to thank Prof. D.K. Bandyopadhyay, Director, Indian Institute of Forest
Management, Bhopal and our Organizational Training Chairperson, Prof. HS Gupta, Faculty,
Indian Institute of Forest Management, Bhopal for providing us with this opportunity.
Words of gratitude are also due to Dr. Manmohan Yadav, Faculty, Indian Institute of Forest
Management, Prof. P.K. Biswas, Faculty, Indian Institute of Forest Management, for their
constant support that helped us in preparing several key components of this report.
We are grateful to Dr. C.S. Rathore, Faculty, Indian Institute of Forest Management, for his
support in organizing this report in proper format.
Lastly we would like to thank our family members and friends who have been providing us with
moral support and encouragement throughout this period.
Place: IMRB International, Delhi Anurag Dwivedi (PFM 2008)
Date: 30th
November, 2007 Prashant Srivastava (PFM 2008)


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Contents
DECLARATION ................................................................................................................................................ I
ACKNOWLEDGEMENT ................................................................................................................................... II
Introduction .................................................................................................................................................. 1
Background ............................................................................................................................................... 1
Need for the study .................................................................................................................................... 1
Objectives.................................................................................................................................................. 1
Initial Challenges ....................................................................................................................................... 1
Methodology ................................................................................................................................................. 3
Sampling .................................................................................................................................................... 3
Data Collection .......................................................................................................................................... 3
Data Analysis ............................................................................................................................................. 3
Indian Iron and Steel Industry ....................................................................................................................... 4
Indian Steel Scenario ................................................................................................................................. 4
Global Steel Scenario ................................................................................................................................ 4
Major Players ............................................................................................................................................ 6
Steel Authority of India Ltd (SAIL) ......................................................................................................... 6
TATA Steel ............................................................................................................................................. 7
ISPAT industries Ltd. ............................................................................................................................. 7
JINDAL Steel and Power Ltd. ................................................................................................................. 8
HINDALCO ............................................................................................................................................. 8
Conclusion ................................................................................................................................................. 9
Indian Automobile Industry ........................................................................................................................ 10
Automobile Sector Overview .................................................................................................................. 10
Transportation in the industry ................................................................................................................ 12
Major Players and their Logistics ............................................................................................................ 13
Maruti Udyog Ltd. ............................................................................................................................... 13
Hyundai Motors India Ltd. (HMIL) ...................................................................................................... 14
Hero Honda ......................................................................................................................................... 14
Bajaj Auto Ltd. ..................................................................................................................................... 15


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TVS Motor Company Ltd. .................................................................................................................... 15
Conclusion ............................................................................................................................................... 16
White Goods Industry ................................................................................................................................. 17
INDUSTRY OVERVIEW ............................................................................................................................. 17
Colour TVs ............................................................................................................................................... 17
Refrigerators ........................................................................................................................................... 18
Air Conditioners ...................................................................................................................................... 18
Washing Machines .................................................................................................................................. 18
Major Players .......................................................................................................................................... 19
LG Electronics India Ltd. ...................................................................................................................... 19
Samsung .............................................................................................................................................. 19
Whirlpool India Ltd. ............................................................................................................................ 20
Videocon ............................................................................................................................................. 20
Conclusion ............................................................................................................................................... 21
Fast Moving Consumer Goods .................................................................................................................... 22
Fast Moving Consumer Goods (FMCG) ................................................................................................... 22
Indian FMCG Sector‐ An Overview .......................................................................................................... 22
Outlook ................................................................................................................................................... 24
Major Players .......................................................................................................................................... 25
Britannia Industries Ltd. ...................................................................................................................... 25
P&G Health and Hygiene..................................................................................................................... 25
Nestle India Ltd. .................................................................................................................................. 26
Hindustan Unilever Ltd. .......................................................................................................................... 26
Conclusion ................................................................................................................................................... 27
Chemical and Food Grains Industry ............................................................................................................ 28
Indian Chemical Industry ........................................................................................................................ 28
Major Players .......................................................................................................................................... 28
Cipla .................................................................................................................................................... 28
Food Grains ......................................................................................................................................... 28
Engineering ................................................................................................................................................. 29
Overview ................................................................................................................................................. 29
Major Players .......................................................................................................................................... 29


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Bharat Heavy Electrical Limited (BHEL) ............................................................................................... 29
Brakes India Ltd ................................................................................................................................... 29
Express Cargo .............................................................................................................................................. 30
Overview ................................................................................................................................................. 30
Indian Scenario ........................................................................................................................................ 31
Operations .............................................................................................................................................. 31
Network .............................................................................................................................................. 31
Major Players of the Industry ................................................................................................................. 32
GATI Express Cargo ............................................................................................................................. 32
SAFEXPRESS ......................................................................................................................................... 33
XPS Express Cargo‐ Specialized branch of TCI ..................................................................................... 33
Conclusion ................................................................................................................................................... 35


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List of Figures
Figure 1:  Short listed industry segments for the study ................................................................................ 2
Figure 2:  Comparison of production, consumption and export of steel in India ......................................... 5
Figure 3:  Manufacturing Hubs and Key Players in Automotive segment .................................................. 10
Figure 4: Share of mode of transport in MUL ............................................................................................. 13
Figure 5:  Transportation share to different parts of India in MUL ............................................................ 14
Figure 6: top ten towns with highest per capita spending on FMCG products .......................................... 24
Figure 7: Share of organized and unorganized sector in Express cargo ..................................................... 30
Figure 8:  Percentage of different sectors in Express cargo ....................................................................... 31


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List of Table
Table 1:  Country wise production of Steel in the world .............................................................................. 5
Table 2: Trucks used by the steel industry .................................................................................................... 9
Table 3:  Major players in different segments of Auto Industry ................................................................. 11
Table 4:  Domestic sales trend of Automotives .......................................................................................... 11
Table 5:  Export Trend of automotives in India ........................................................................................... 12
Table 6:  Truck used by major players ........................................................................................................ 16
Table 7:  Market share of companies in different segments of white goods ............................................. 19
Table 8:  Trucks used by Major White goods companies ........................................................................... 21
Table 9:  Top Ten Companies in FMCG sector ............................................................................................ 23
Table 10: Trucks used by four major players in the FMCG sector .............................................................. 27
Table 11: segment wise revenue (in lacs) of GATI ...................................................................................... 32
Table 12: Estimated number of total  trucks  used by the industries ......................................................... 35


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Introduction
Background
ransport Corporation of India (TCI) Foundation, funded by Avahan, the social arm of Transport
Corporation of India, has been implementing Project “KAVACH”, a national HIV/AIDS prevention
program for long distance truck drivers and helpers. For the very purpose, TCI Foundation has
commissioned a study to SRI, a specialist unit of IMRB International, to identify halting points of long
distance trucks and containers. This is to understand the locations where HIV/AIDS intervention should
be arranged for truckers by setting up “KHUSHI” clinics.
To do the same TCIF has identified four different possible intervention sectors namely Port, TSL’s,
express cargo and specialized cargo.
Need for the study
Industries have major share in the GDP of India after service sector and manufacturing and distribution
of finished goods and requirement of raw material makes these industries user of trucks. To find out the
industries with high truck usage, the industry was scanned and then six segments namely Steel Industry,
White Goods, Automobile, FMCG, Engineering and Chemicals & Food Grain Industry were chosen for
study based on the discussions with client. Industries trucks are categorized in specialized cargo.
Express cargo was also a segment to be studied as these companies mostly operate through road
transport.
Objectives
The objective of the study was to
understand the general trend of logistics within each of the shortlisted industry segment
Find out number of trucks used within each industry segment
Identify industries which are heavy user of trucks
Estimate number of trucks within an industry segment
Estimate number of total trucks used by the industries
Initial Challenges
To achieve the objectives of the study, industries needed to be chosen correctly for the study so that the
chosen industries truly represent the current Indian scenario and covers most of the industries if not
whole. The challenges faced during the selection were
Diversity in the industry
Logistics component
Short listing of industries to be studied
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SRI‐IMRB

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Methodology
Sampling
Industries for the study were chosen by discussion with client and this part was already completed. We
have started the work after this point.
Data Collection
he data collection method to achieve the objective of the study were as follows
Primary research
Secondary research
In primary research officials of logistics department of different companies were interviewed.
To conduct these interviews a discussion guide was developed. This discussion guide was intended to
find out the number of trucks used by that particular facility. These interviews helped us to extrapolate
the number of trucks used by the same company across other production facilities if there is any. Also
interviewing multiple companies in a segment gave a broad understanding and the pattern of
transportation in that particular segment which helped to extrapolate the data in the given segment to
find out the total trucks used where ever it was possible. The possibility of extrapolating the data was
depending upon the availability of universe by primary or secondary data.
In our secondary research, internet was our main source. Annual report of the companies, different
reports by research companies, articles, news articles, blogs and business magazines, different websites
were searched for information and triangulation as well. Also secondary research was very helpful in
estimating the approximate number of trucks in an industry.
Data Analysis
The data obtained from the field by he interviews and secondary sources was the base for the
extrapolation to find out the approximate number of trucks in each segment of the industry and total
number of trucks in the industry approximately. Following were the main assumption based on
discussions with the client and primary and secondary sources:
Carrying capacity of one truck= 15 tonnes
Carrying capacity of one truck in white goods= 100 nos. of finished item
Carrying capacity of one truck for cars= 6 cars (on average)
Carrying capacity of one truck for bikes= 50 bikes (on average)
Number of trips of a truck per month= 3.47 (Based on the data collected by man tab done in
SGTN )

T


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Indian Iron and Steel Industry
Indian Steel Scenario1
he Indian steel industry witnessed a robust growth during the last financial year, in line with the
global trend. Along with Brazil, Russia and China, India is expected to be a strong growth engine
for global steel demand in the coming years. The current GDP growth and strong economic
fundamentals would enable increase in steel consumption in India in the coming years. Overall steel
production is expected to rise from the current level of over 49 Million Tons to 110 Million Tons by 2020
(Annual Report , 2007). Steel production grew by over 10% during 2006‐07. The growth in steel
consumption is characterized by substantial investments in the sector, both towards enhancement of
existing capacities as well as setting‐up of green‐field projects. Domestic steel consumption during the
year was higher by 11% over the previous year. The current growth rate of Indian economy is likely to
sustain the surge, witnessed in domestic consumption, during the year.
Apparent steel consumption in India during the fiscal 2006‐07 was over 43 Million Tons. Consumption of
both flat and long products grew by a healthy 11%. Changes in market demand structure are likely to
see a significant shift of focus to developing Asian economies like China and India. The year witnessed a
growth of over 6% in exports of steel products. Additionally, the surge in demand for steel in China and
the overall economic growth witnessed in US and EU Nations present a strong platform to Indian steel‐
makers to intensify their export options. Technological innovations would further enable Indian
steelmakers to cut on input costs, improve production efficiencies and achieve global competitiveness.
Global Steel Scenario
Global Steel Industry is currently characterized by growth in volumes and profitability and analysts
predict an optimistic future in the near and medium term. Global Steel scenario witnessed
intensification of efforts towards restructuring and consolidation. The center of gravity of steel industry
has been steadily shifting towards the East with China and India emerging as major future markets. The
growth of emerging markets, namely, Brazil, Russia, India and China, has prompted consolidation at a
level, not hitherto witnessed in the Steel Industry. Apparent steel consumption, world‐wide, during
2006‐07 was over 1113 Million Tons, which was higher by 8% over the previous year. The prestigious
International Iron and Steel Institute has projected an apparent steel use of over 1250 Million Tons by
2008 at an annual growth exceeding 6%. While steel production has historically been concentrated in
the European Union, North America, Japan and the former Soviet Union, steel production in China and
elsewhere in Asia has grown in importance over the past decade. This production shift to Asia has
largely been the result of proximity to the major growth markets for steel consumption and the greater
availability of key raw materials. Moreover, while production in the European Union, Japan and the
United States remains significant, steel producers in these regions have increasingly focused on rolling
and finishing of semi‐finished products. In 2006, China was the largest single producer of steel in the
world, producing approximately 422 Million Tons of steel, representing an 18% increase in production
over the previous year and further representing approximately 33% of total world steel production in

1
Indian Steel Industry and Global Steel Scenario have been taken from Annual Report 2006‐07 of ISPAT Industries
Ltd.
T


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2006. The robust growth in steel production has led to an increased demand for basic inputs, such as,
iron ore, scrap, pellets, coal, coke etc. Procuring stable supply of inputs is a major challenge today for
any steel plant. The shortages in availability of basic raw materials and bottlenecks in logistics resulted in
higher prices of inputs during the year. Raw material prices are widely expected to rule firm during the
current year at levels higher than prices which had prevailed during the previous year.

Figure 2:  Comparison of production, consumption and export of steel in India
(Source: AR 2006‐07, ISPAT)

Table 1:  Country wise production of Steel in the world
Rank by sovereign
state
Country Steel production
(million tonnes)
World 1244.2
1 China 422.7
2 Japan 116.2
3 US of America 98.6
4 Russia 70.8
5 India 50
6 South Korea 48.5
7 Germany 47.2
Source: www.wikipedia.org accessed on November 19, 2007

0.00
10.00
20.00
30.00
40.00
50.00
60.00
2006 2007
consumption
production
export


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Major Players
In the Indian steel industry the major players are SAIL, TISCO, ISPAT and JINDAL STEEL which accounts
for maximum share of the pie. The rest of the production of steel comes from 180 small plants almost all
of which are private sector plants2
. The mode of transportation for steel and steel products is railways
most of the time but due to unavailability of rail network or space in the train makes these industries to
use road as alternate transportation mode although the outbound transportation in most of the
companies by road is lesser compared to rail ways. Most of the production facilities are located near to
iron ore mines and coal mines for easy availability of the raw material. Location of iron ore and coal
mine makes inbound transportation short distance as the required raw material is iron ore and coal as
fuel. For inbound logistics road transportation is generally not used if it is long distance instead train is
used as that saves cost and raw materials are required in bulk. Coal, required for energy to produce coal
is always transported through railways so truck uses is very less in inbound transportation.  There are
two kinds of steel which are manufactured i.e. primary and secondary. Primary steel is used to
manufacture secondary steel which then is used by other companies to produce other goods. The total
steel production is comprised of both primary and secondary steel which amounts to around 50 million
tonnes in India during the year 2006‐07 and makes India 5th
largest producer of steel in the world next
after China, Japan, USA and Russia.
Steel Authority of India Ltd (SAIL)
Steel Authority of India Limited (SAIL) is the largest steel maker in India. It is a public sector undertaking
wholly owned by Government of India and acts like an operating company. Incorporated on December
2, 1972, SAIL has more than 131,910 employees. The company's current chairman is S.K. Roongta. SAIL
has an annual production capacity of 13.5 million metric tons.
Major plants owned by SAIL are located at Bhilai, Bokaro, Durgapur, Rourkela, Burnpur (near Asansol)
and Salem. SAIL is a public sector company, owned and operated by the Government of India. According
to a recent survey, SAIL is one of India's fastest growing Public Sector Units.
SAIL has around 26% share in production of steel in India. It has also been seeded on 18th
place by
International Iron and Steel Institute. Its four facilities accounts for more than 85% of total production3
.
45% of the coal requirement is met by Coal India Ltd. and rest of the requirement is met by imports.4

Major inputs were provided by Mr. H.K. Singh, Engineer, SAIL, Bhilai Plant. The number one producer of
the steel in India is SAIL with a capacity of producing more than 12 million tonnes has 26% market share.
It has production facilities at 7 places out which 4 facilities contributes more than 85% of total
production. Its capacity has increased after the merger of IISCO with SAIL. 15% to 20% of the
transportation takes place by road (as per their annual report of this year) and they use some 2500 to
3000 trucks to transport this 20% steel and around 70% of these trucks are LDT’s.5


2
  http://www.techno‐preneur.net/ScienceTechMag/june‐07/steel_industry.pdf
3
  http://en.wikipedia.org/wiki/List_of_steel_producers
4
www.sail.co.in
5
Source: Annual Report, SAIL, 2007


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TATA Steel
Tata Steel, formerly known as TISCO (Tata Iron and Steel Company Limited), is a steel company based in
Mumbai, India. Its main plant is located in Jamshedpur, Jharkhand, though with its recent acquisitions,
the company has become a multinational with operations in various countries. The registered office of
Tata Steel is in Mumbai. In the year 2000, the company was recognized as the world's lowest‐cost
producer of steel. The company was also recognized as the world's best steel producer by World Steel
Dynamics in 2005. The company is listed on BSE and NSE.6

Ratan Tata is the Chairman and B. Muthuraman is the Managing Director of the company. Dr. Tridibesh
Mukherjee and Mr. Arun Singh are Deputy Managing Directors of the company. Tata Steel is a limited
company registered in India under the Companies Act, 1956.
TATA Steel is 5th
largest producer of steel in the world7
and 2nd
largest in India after SAIL with a
production capacity of 5 million tonnes of steel at its Jamshedpur plant in Jharkhand. In India, it has
market share of 12% production wise.8

Mr. Amit Goel (Senior Logistics Manager, TISCO, Jamshedpur) told that most of its outbound
transportation takes place through railways but around 30% of transportation takes place through road
while nearly all inbound takes place via railways. To carry out the transportation of this 20%, 3500 trucks
are attached and out of this 80% is long distance.
ISPAT industries Ltd.
Ispat Industries Limited (IIL) is one of the leading integrated steel makers and the largest private sector
producer of hot rolled coils in India. Set up as Nippon Denro Ispat Limited in 1985 by founding Chairman
Mr. M L Mittal, IIL has steadily grown into a Rs 7,000‐crore company, assuming its position as flagship of
the reputed Ispat Group. A corporate powerhouse with operations in iron, steel, mining, energy and
infrastructure, the Group today figures among the top 20 business houses in the country9
.
The sprawling 1,200 acres Dolvi complex houses the 3 million tonne per annum hot rolled coils plant,
that combines the latest technologies ‐ the Conarc process for steel making and the compact strip
process (CSP) ‐ introduced for the first time in Asia. The Kalmeshwar complex houses Ispat's 0.4 million
tonnes cold rolling complex, which also includes the galvanised plain/ galvanised corrugated (GP/GC)
lines and India's first colour coating mill.10

Kamleshwar plant has lesser capacity and and share of road transport is 60%.11



6
  http://en.wikipedia.org/wiki/Tata_Steel
7
International Iron and Steel Institute, http://en.wikipedia.org/wiki/List_of_steel_producers
8
www.tatasteel.com
9
http://www.ispatind.com/ispattoday.asp
10
http://www.ispatind.com/ispattoday.asp
11
Interview by field


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Mr. Ashok Gupta, Logistics Manager, ISPAT industries Ltd. provided the inputs regarding the
transportation in steel industries in general and in ISPAT in particular. 80% transportation is by road and
out of this more than 75% are long distance trucks. This company uses around 2200 trucks at two of
their plants and around 2000 is used at Dolvi production facility.
JINDAL Steel and Power Ltd.
Jindal Steel and Power (JSPL), part of the US$4 billion Jindal Organisation, has business interests in steel
production, power generation, mining iron ore, coal and diamond exploration/mining. The current
turnover of the company is over Rs. 3000 crores and on a path of catalyzing economic development of
the country through its contribution to the infrastructure sector. From construction industry to
household requirements, steel has been synonymous with every single infrastructure development. JSPL
understands this fact and leveraged its capabilities to offer premium grade steel, which acts as an
anchor to our economy and augmenting it further. JSPL has the most modern steel‐making capacity
presently to the tune of 2.90 million TPA.12
The production facility at Raigarh has capacity of 2.4 million
tonnes of finished steel while Raipur plant has capacity of .5 million tonnes.
Mr. R.A. Singh (Assistant General Manager, JSPL, Raigarh) has given a lot of input regarding
transportation in steel industry and JSPL in particular. He has told that some 2200 trucks are being used
by these facilities in all. Around 40% of their transportation is done through road and out of this 60 to
65% is long distance.

HINDALCO
Hindalco Industries Limited, a flagship company of the Aditya Birla Group, is structured into two
strategic businesses — Aluminium and Copper — and is an industry leader in both. A metals
powerhouse with a turnover of US$ 14 billion, Hindalco is the world's largest aluminium rolling company
and one of the biggest producers of primary aluminium in Asia. Its copper smelter is today the world's
largest custom smelter at a single location. Established in 1958, Hindalco commissioned its aluminium
facility at Renukoot in eastern U.P. in 1962 and has today grown to become the country's largest
integrated aluminium producer with annual capacity of .65 million tonnes, ranks among the top quartile
of low cost producers in the world. With a strategic intent to achieve vertical integration in the copper
business, Hindalco acquired two captive copper mines in Australia — Nifty and Mt. Gordon through
Aditya Birla Minerals Limited.13

Mr. Sanjeev Jha (Logistics Manager, HINDALCO, Renukoot) told that 100‐110 trucks are dispatched every
day from the facility which makes around 900 to 1000 unique trucks. This district is on the hill so there is
no rail network thus their 100% transportation takes place through road out of which around 70% is
long distance.


12
Annual Report, JSPL, 2006‐07
13
http://www.hindalco.com/about_us/index.htm


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Apart from these companies, BALCO (Mr. M. Chatterjee (Senior Transport Officer)) and BHUSHAN Steel
and Strips Ltd. was also explored and people were interviewed.
Conclusion
Although, major transportation in steel industry is done through rail but the huge amount of production
and unavailability of rail network or rail space makes steel industry massive users of trucks in which the
percentage of long distance is quite high.

Table 2: Trucks used by the steel industry
Company Production
capacity
(million
tonnes)
%
transportation
by road
No of
trucks
used
annualy
No. of
trucks
used
monthly
unique
trucks
in a
month
no. of
plants
number
of
trucks
per
plant
No. of
trucks
claime
d

Volu
me
wise
share

Steel

SAIL 12 20 160000 13333 4206 4 1052 NA 25%
TISCO 5 30 100000 8333 2402 1 2402 3500 13%
ISPAT 3.4 80 181333 15111 4355 2 2177 2000 8%
JINDAL 3 40 80000 6667 1921 2 961 2200 6%
BHUSHAN 1 10 6667 556 160 3 53 160 2%
HINDALCO 0.65 100 43333 3611 1041 1 1041 950
Total 14084


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Indian Automobile Industry
Automobile Sector Overview
ndia is a vast country, roughly one third the size of the US, with a $3.4 billion indigenous automotive
industry that includes serious contenders such as Tata, Maruti and Mahindra & Mahindra.
Automotive production in the region is booming and this is attracting Western manufacturers. In the
last few months Audi has announced its intention to join Volkswagen stablemate Skoda in the region,
and VW is looking for a site to produce vehicles in volume. BMW is planning to start manufacturing in
Chennai by early 2007, building the 3 and 5‐series models for local consumption. In addition, Renault
has just signed an agreement to build the Logan in India in a jointly owned plant with Mahindra &
Mahindra, and plans to extend the product line beyond the Logan. Many foreign carmakers are already
there. One example is Hyundai, which is producing substantial volumes (260,440 April 05‐Mar 06) and is
planning to increase volumes to 600,000 by the end of 2007. It is adding a second plant, which is
scheduled for completion in October 2007, and half of its volume is earmarked for export14
.

Figure 3:  Manufacturing Hubs and Key Players in Automotive segment
Source: Automotive Magazine, Jan‐Feb 2007
The Automotive Sector The automotive industry is one of the key components of the Indian
manufacturing economy. The Indian automotive industry achieved a turnover of Rs.1, 65,000 crores in
2005‐06 and accounted for over 13 million direct and indirect jobs and 17% of the total indirect taxes15
.
In the year 2006‐07, total vehicle production (including two wheelers) grew 14%. The total production of

14
  Automotive Logistics Magazine, January ‐February 2007
15
Automotive Mission Plan 2016, Government of India
I


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Multi Utility Vehicles (MUVs), Light Commercial Vehicles (LCVs) and three wheelers in India during the
year under review was 1,088,676 vehicles. This is a growth of 25% over the previous year16
.

With the potential to emerge as one of the largest manufacturing hub in the world, presently India is
2nd
largest two wheeler market in the world
4th
largest commercial vehicle market in the world
11th
largest passenger car in the world
Major players in India within different categories can be summarized as follows:
Table 3:  Major players in different segments of Auto Industry
Commercial
vehicles
TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force motors,
Eicher Motors
Passenger
vehicle
TATA Motors, Maruti Udyog,  Honda Motors,  Toyata, Skoda, Mahindra & Mahindra,
Daimler Chrysler, Hindustan Motors, Hyundai
Two Wheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors
Three Wheeler Bajaj Auto, SIL
Source: SIAM
The domestic sales trend and export trends are represented in the following table.
Table 4:  Domestic sales trend of Automotives
Automobile Domestic Sales Trends (Number
of
Vehicles)
Category 2005-06 2006-07
Passenger Cars 882208 1076408
Utility Vehicles 194502 220199
MPVs 66366 83091
Total Passenger
Vehicles
1143076 1379698
M&HCVs
207472 275600
LCVs 143569 192282
351041 467882

16
SIAM


SRI‐IMRB Page 12

Total Commercial
Vehicles
Three Wheelers
359920 403909
Scooters
909051 940673
Motorcycles 5810599 6553664
Mopeds 332741 355870
Electric Two Wheelers - 7341
Total Two Wheelers
7052391 7857548
Grand Total
8906428 10109037
Source: SIAM
Table 5: Export Trend of automotives in India
Automobile Exports Trends (Number
of
Vehicles)
Category 2005-06 2006-07
Passenger Cars 169990 192745
Utility Vehicles 4489 4403
MPVs 1093 1330
Total Passenger Vehicles
175572 198478
M&HCVs
14078 18838
LCVs 26522 30928
Total Commercial Vehicles
40600 49766
Three Wheelers
76881 143896
Scooters 83934 35685
Motorcycles 386054 545887
Mopeds 43181 37566
Electrict Two Wheelers - -
Total Two Wheelers
513169 619138
Grand Total
806222 1011278

Source: SIAM
Transportation in the industry
Most of the transportation in this industry takes place via road and rail transport has a minor share. One
special feature of the road transport used in the industry is that the trucks/trailers used are specially
designed for the industry. Further, in order to maximize on profits, the transporters have collaboration
with more than one automobile manufacturer. Say, for e.g., a truck carrying cars from Maruti


SRI‐IMRB                                   Page 13

production plant of Gurgaon to Chennai would return with car load from Hyundai production unit of
Chennai.
Major Players and their Logistics
In order to understand the logistics of the industry major manufacturers of cars and bikes were studied.
Logistics managers were interviewed to understand the logistics trend in the industry.
Maruti Udyog Ltd.
Maruti Udyog Ltd. Is one of the major manufacturers of Passenger Vehicles in India. The production
plant of Maruti Udyog Ltd. is situated at Gurgaon. The Gurgaon plant comprises of three fully integrated,
state‐of–the‐art production facilities spread over a sprawling 297 acres. While the three plants have a
total installed capacity of 350,000 cars per year, several productivity improvements over the years have
made it possible to manufacture nearly 630000 cars per year at these facilities alone. MUL enjoys a
volume share of about 42 % in passenger vehicles segment.
Logistics
Maruti avails services of the transporters for its inbound and outbound logistics. The raw materials are
transported to Maruti Udyog Ltd production
plant, mostly from the metro cities in almost
equal proportion. As for the outbound
logistics, the dispatch department informed
that in the month of September, 2007 nearly
65000 manufactured Maruti Cars where send
to different parts of the country. The number
of cars dispatched from the production unit of
Maruti has been nearly  same on average for
the year round. For most of this
transportation, road transport was used.
About 2% dispatch, from the manufacturing region, was done by rail transport and the remaining was by
road.
Ms. Inna Ghosal, Head Sales & Dispatch, MULinformed that Maruti Udyog has nearly 5000 trucks are in
association with it. A total of around 9000 trucks were loaded in the month of September, 2007 at the
Gurgaon production plant. This implies that out of 5000 trucks associated with Maruti, some did make
more than one trip to/from their respective destinations.
98%
2%
Mode of transport used by Maruti Udyog
Ltd
Road
Rail
Figure 4: Share of mode of transport in MUL

Truck Ma

SRI‐IMRB

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SRI‐IMRB                                   Page 15

Mr. Vipin Trihan, Asst. Manager, Warehousing& Logistics, informed that for Long distance inbound,
engine parts have major share. Daily around 10‐15 daily truck load of engine components is transported
from Southern Parts of India.
For outbound logistics, he said that on an average about   6000 bikes are dispatched per day from the
manufacturing plants of Hero Honda. Of these, upto 65% of the transportation is to Maharashtra and
Gujarat combined, remaining 35% is sent to different parts of the country as per demand. Each specially
designed truck on an average carries 50‐60 bikes.
Hero Honda has about 2500 trucks in association with it to conduct deliveries across the country.
Bajaj Auto Ltd.
The second seeded manufacturer of motorbike in India which sold 2.72 million vehicles in the fiscal year
2006‐07. Bajaj has four manufacturing plants namely at Akurdi, Pantnagar, Chakan and Waluj but Akurdi
plant is non‐operational now18
.
Mr. Arjun Kasturia, Engineer, PPC, Pant Nagar plant, Bajaj Auto Ltd. and Mr. Harika, Engineer, Chakan
Plant has provided the information about the logistics of the Bajaj Auto Ltd.
In Pant Nagar Plant, there are no owned trucks by the manufacturer. For inbound logistics, he informed
that around 75% required components are available with the vendor clusters located around the plant.
Around 19 trucks are associated with the plant to carry out inbound transportation and majority in this
are short distance.
For outbound logistics he has revealed that 21000 to 24000 bikes are dispatched per month for which
around 15 to 20 trucks are dispatched per day. This dispatch is send to all part of India which has more
than 60% long distance dispatches.
Similarly, considering all the plants of Bajaj, we can find nearly 2000 trucks associated with Bajaj Auto.
TVS Motor Company Ltd.
TVS Motor Company has sold 1.5 million units of vehicle and has three manufacturing plants one each at
Hosur in Tamil Nadu, Mysore in Karnataka and Solan in Himachal Pradesh19
.
According to SAP Case Study around 4000 bikes are dispatched per day from the plant depending upon
the demand from the dealers located in different parts of the company. More than 1500 trucks are used
by the company across its three plants to take care of outbound logistics.


18
Annual Report 2006‐07, Bajaj Auto Ltd.
19
Annual Report, 2006‐07, TVS


SRI‐IMRB Page 16

Conclusion
Comparing the entire manufacturer studied will make it easier to understand the truck uses by this
industry.
Table 6: Truck used by major players
Company Sales(06‐
07)
Type
of
truck
Monthly
truck
requirement
Number
of Plants
Unique
Trucks
estimated
Volume
Share
(approx %)
Maruti 674924 1 42.8
TK 5 11249 5000
TK 6 9374
TK 10 5624
Hyundai 310,786 1 19.7
TK 5 5180 3000
TK 6 4316
TK 10 2590
Hero
Honda
3336756 5500 2 2500 39.4
Bajaj 2380000 3967 3 2000 28.1
TVS 1500000 2500 3 1200 17.7

Considering the sales of bikes, passenger vehicle and commercial vehicle, calculating on the assumptions
that truck carries 6 passenger vehicle and commercial vehicle and 50 bikes on an average the total
number of trucks used in a month is 43655.


SRI‐IMRB                                   Page 17

White Goods Industry
INDUSTRY OVERVIEW20
he Indian consumer electronics products and household appliances industry has an annual
turnover of approximately Rs.190 billion.
The Industry can be broadly categorized into two segments:
(a) The consumer electronic products segment includes products such as TVs, video products and
home entertainment products and
(b) The household appliances segment includes products such as refrigerators, washing machines,
air conditioners, microwave ovens, vacuum cleaners, dishwashers and small appliances such as
irons, heaters, vacuum cleaners, fans, mixers and water purifiers.
The key products in the Indian consumer electronics products and household appliances industry are
colour TVs, refrigerators, air conditioners and washing machines. At the product level, within the
Consumer Electronic and household appliances Industry in India, the penetration level of CTVs is the
highest, followed by Refrigerators, Washing Machines and Air Conditioners.

The Key growth drivers of the Industry are:
(a) Rising income levels and increasing affordability; fuelling consumerism and growth in demand
for white goods
(b) Change in perception of Consumer goods as ‘basic necessities’ as opposed to ‘luxuries’, largely
driven by increased awareness and advertising.
(c) Rationalizing of prices by key players, due to a conducive tariff policy by the Government.
(d) Increasing demand for technology driven replacement of consumer goods and household
appliances.
Colour TVs
Colour TVs are the dominant product in the Indian consumer electronics products and household
appliances market both by volume and by value. The leading brands in the colour TV market are
Videocon, Philips, Onida, Samsung, LG and Sony. As per company, top six brands in the Indian colour CRT
TV market have consolidated their dominance during the past few years and accounts for about 75% of
the market share. The Indian CTV market is predominantly a small‐to‐medium segment market (14",
20"and 21"). The large CTV segment (>21"), though growing rapidly, accounts for around 5% of the total
demand. The market demand for colour CRT TVs is expected to have increased around 17%‐20% in the
year ending 31 December 2006. The key trend in the industry has been the increasing demand for flat
colour CRT TVs. Flat colour CRT TVs now account for approximately 60% of the total colour CRT TV
market. The growth in demand in this sector of the colour CRT TV market has been driven by a reduction
in the price differential between 21" conventional colour CRT TVs and flat colour CRT TVs, and increasing
consumer preference for flat colour CRT TVs. It is expected that the growth in the CTV segment in India
will be mainly seen in the 29" & 21 Flat CTV segment. A key trend that differentiates the Indian CRT TV
market from the developed world is the fact that unlike the developed western markets, where the
demand is shifting from the Cathode Ray Tube (CRT) based technology to LCD/Plasma based technology;
in India, the demand for CTVs will mainly come from CRT based technology. The high technology costs
associated with hi‐end TVs result in a very high price tag which acts as a key barrier to its demand
growth. Globally, the TV industry is moving technologically from black and white to CTVs and CTVs to
PDP (Plasma Display Panel) and LCD (Liquid Crystal Display) CRT TVs.

20
Source: Annual Report 2006‐07, Videocon Industries Ltd.
T


SRI‐IMRB Page 18

The key growth drivers of CRT TV business in India are likely to be:
(a) Low penetration levels‐ The penetration level of CRT TVs in India is more lower when compared
to other countries, worldwide.
(b) Electrification in rural India and increasing aspirations of people in rural India.
(c) Replacement of TVs due to ageing.
(d) Multiple TV demand from Middle and high income categories.
(e) Price erosion and easy and inexpensive finance availability.
(f) Sports events/festivals
(g) Products innovations.
Refrigerators
The growth in the refrigerators sector is minimal in recent years largely on account of rising input prices,
shrinking margins and the poor financial health of the refrigerator divisions of most of the major
consumer electronics products and household appliances manufacturers. Apart from this, the major
factor for hike in price is stringent regulation for pollution control which demands for better technology
which in turn increases the input price. This factor leads to increase in sales price of the appliances.
Air Conditioners
Globally, split air conditioners account for 80 percent of room air conditioner sales. In India, window air
conditioners are thought to have been preferred to split air conditioners because of their lower price.
According to industry sources, the demand for split air conditioners has increased considerably in the
year ended March 2006, due to a reduction in the price differential between split and window air
conditioners, increased affordability and because split air conditioners require less space, have low noise
levels and is better looking than window air conditioners. The ratio between window and split AC’s in
India is now approximately 1:1. Increasing affordability, acceptance of air conditioners as a utility
product rather than a luxury item and historic low penetration of air conditioners in India have been the
key demand drivers in the industry.
Washing Machines
The Washing Machines industry has witnessed slow growth on account of a low acceptance among
masses due to availability of cheap manual labour as a substitute. Despite the aggressive pricing policy
adopted by the players, demand remained largely inelastic to price. The growth was restricted to urban
areas, whereby the rising number of working women offers growth potential. Washing machines still
feature down below on the average consumer’s purchase list.


SRI‐IMRB                                   Page 19

Major Players
In the white goods category, the Korean companies have major chunk of pie. The two giants, LG and
Samsung has more than 50% share and dominated all existing players in small period by offering good
quality products in low price. Other players like Whirlpool, Videocon, Onida, Philips, BPL and Sansui are
making all efforts to capture the market. Share of 4 major players in different segment is as follows
Table 7:  Market share of companies in different segments of white goods
Market share of the companies
Company LG Samsung Videocon Whirlpool
Category
CTV 26.2 15.5 7.5 ‐
Micro wave Oven 41.2 22 ‐ ‐
Refrigerator 37.9 16 ‐ 19
Washing Machine 34.1 15 12 14
AC 34 13 6 6
avg. % share 34.68 16.3 8.5 13
Source: Report by IBEF (Fortune 500 companies in India)
LG Electronics India Ltd.
LG Electronics Ltd is market leader with 35% market share21
in white goods industry. It has 25% market
share in CTV, 30% in refrigerators and 33% in washing machines segments. LG India achieved a turnover
of Rs. 8,250 crores in 2006, posting an overall growth of 10%.  The overall contribution was 43% from
Home Appliances, 39% from Consumer Electronics, 13% from IT products and 5% from GSM22
. The
company has five production units, 2 at Noida and Pune are wholly owned by the company23
while three
at Mohali, Kolkata and Bhopal are outsourced manufacturing facilities24
.
Mr. Chandan, Logistics Incharge, LG Noida Factory was interviewed to gather information regarding the
outbound and inbound logistics of the factory. He informed that 300 hundred trucks are used by them
for the outbound logistics at this facility while monthly dispatch of trucks is between 1000 and 1200. He
has estimated that 900 to 1000 trucks are used by LG across all its production facilities.
Samsung
The second seeded company in this segment with production capacity of 4.5 million appliances has 17%
market share25
in white goods industry. The company has only one manufacturing plant in Noida.

21
www.rediff.com/bussiness
22
Fortune 500 companies in India, Report by IBEF
23
Official website of LG Electronics India Ltd. www.lgindia.com
24

25
www.rediff.com/bussiness


SRI‐IMRB                                   Page 20

Samsung has market share of 15.5%, 22%, 16%, 15% and 13% in CTV, microwave oven, refrigerator,
washing machine and AC respectively26
.
Mr. Nihar Barot, Logistics Manager, Samsung India was interviewed to understand the outbound and
inbound logistics truck use. He has informed that monthly dispatch of 2000 to 2200 trucks takes place
from the facility. No truck is owned or associated but has six‐seven top line vendors who arrange for
most of the required number of trucks. He informed that dispatch to the North, South and West zone is
30% each and 10% to East. As per his estimate, number of unique trucks used b y Samsung would be 700
to 800.
Whirlpool India Ltd.
Whirlpool India Ltd. has share of around 13% in overall market while share in refrigerator, washing
machine and AC is 19%, 14% and 6% respectively. Company has three plants at Faridabad, Pune and
Pondicherry and has production capacity of 3 million appliances (sold around 2 million appliances27
).
Mr. S.K. Kalra, GM Logistics, Faridabad Plant, Whirlpool India was interviewed and he said that 600
trucks are associated with Faridabad Plant. He has also estimated that around 250 trucks, in all, are used
by two other plants.
Videocon28
Videocon Industries Ltd. Has reported net sales of Rs.72188 millions in the fiscal year 2007 with total
production of 5 million appliances in the same year. This company has 7 factories and deals in Electrical
and Electronics along with Oil and Petroleum. The white goods products are their main business and
they have strategy of producing and selling in the same state to get the tax benefit, as reported in their
annual report 2006. This company has production facility in top white goods consumer states like
Maharashtra, UP, Uttaranchal, Gujarat and Rajasthan. Having more than one production facility in
Maharashtra and other places reduces the transportation cost thus the number of LDT’s.
Calculating on the basis of the assumption for data analysis the number of trucks used by the Videocon
in month across its 7 plants is around 1200 trucks.


26

27
Annual report 2006‐07, Whirlpool India Ltd.

28
Annual Report 2006‐07, Videocon


SRI‐IMRB                                   Page 21

Conclusion
White goods industries do not fall in the category of heavy users of long distance trucks due to many
production facilities and production facilities near the consumption places.
Comparing all the above mentioned companies shows that number of unique trucks used by a company
in white goods segment is less than 1000.
Table 8:  Trucks used by Major White goods companies
white goods
Company productio
n
capacitiy
(million
unit)
Annual
no. of
trucks
no. of
trucks
used
monthl
y
unique
trucks
in a
month
No. of
plants
Uniqu
e
Trucks
per
plant
Actua
l no.
sold
No. of
trucks
claimed
Value
wise
market
share
LG 5 50000 4167 1201 5 240 NA 900‐
1000
35%
Samsung 4.5 45000 3750 1081 1 1081 NA 700‐800 17%
Whirlpool 3 30000 2500 720 3 240 2 600+250 12%
Videocon 5 50000 4167 1201 7 172 NA ‐ 8%
Others 2 20000 1667 480 1 480 NA ‐ ‐
Total 19.5 195000 16250 4683 17 275 18.5 ‐ ‐


SRI‐IMRB                                   Page 22

Fast Moving Consumer Goods
Fast Moving Consumer Goods (FMCG)
roducts which have a quick turnover, and relatively low cost are known as Fast Moving Consumer
Goods (FMCG). FMCG products are those that get replaced within a year. Examples of   FMCG
generally include a wide range of frequently purchased consumer products such as toiletries,
soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non‐
durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include
pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate
bars.
In 2005, the Rs. 48,000‐crore FMCG segment was one of the fast growing industries in India. According
to the AC Nielsen India study, the industry grew 5.3% in value between 2004 and 2005.
Indian FMCG Sector An Overview29
The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1 billion.
Well‐established distribution networks, as well as intense competition between the organized and
unorganized segments are the characteristics of this sector. FMCG in India has a strong and competitive
MNC presence across the entire value chain. It has been predicted that the FMCG market will reach to
US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle class and the rural segments of the
Indian population are the most promising market for FMCG, and give brand makers the opportunity to
convert them to branded products. Most of the product categories like jams, toothpaste, skin care,
shampoos, etc, in India, have low per capita consumption as well as low penetration level, but the
potential for growth is huge.
The Indian Economy is surging ahead by leaps and bounds, keeping pace with rapid urbanization,
increased literacy levels, and rising per capita income.
The companies mentioned in the Table below are the leaders in their respective sectors. The personal
care category has the largest number of brands, i.e., 21, inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks,
and Ponds.  There are 11 HLL brands in the 21, aggregating Rs. 3,799 crore or 54% of the personal care
category. Cigarettes account for 17% of the top 100 FMCG sales, and just below the personal care
category. ITC alone accounts for 60% volume market share and 70% by value of all filter cigarettes in
India.


29
Report by IBEF , Fast Moving Consumer Goods
P


SRI‐IMRB                                   Page 23

Table 9:  Top Ten Companies in FMCG sector
S.
NO.
Companies
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4.   GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and
Health Care
10. Marico Industries
Source: Naukrihub.com
The foods category in FMCG is gaining popularity with a swing of launches by HLL, ITC, Godrej, and
others. This category has 18 major brands, aggregating Rs. 4,637 crore. Nestle and Amul slug it out in the
powders segment. The food category has also seen innovations like softies in ice creams, chapattis by
HLL, ready to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. This category seems to
have faster development than the stagnating personal care category. Amul, India's largest foods
company has a good presence in the food category with its ice‐creams, curd, milk, butter, cheese, and so
on. Britannia also ranks in the top 100 FMCG brands, dominates the biscuits category and has launched
a series of products at various prices.
In the household care category (like mosquito repellents), Godrej and Reckitt are two players. Good
knight from Godrej, is worth above Rs 217 crore, followed by Reckitt's Mortein at Rs 149 crore. In the
shampoo category, HLL's Clinic and Sunsilk make it to the top 100, although P&G's Head and Shoulders
and Pantene are also trying hard to be positioned on top. Clinic is nearly double the size of Sunsilk.
Dabur is among the top five FMCG companies in India and is an herbal specialist. With a turnover of Rs.
19 billion (approx. US$ 420 million) in 2005‐2006, Dabur has brands like Dabur Amla, Dabur
Chyawanprash, Vatika, Hajmola and Real. Asian Paints is enjoying a formidable presence in the Indian
sub‐continent, Southeast Asia, Far East, Middle East, South Pacific, Caribbean, Africa and Europe. Asian
Paints is India's largest paint company, with a turnover of Rs.22.6 billion (around USD 513 million).
Forbes Global magazine, USA, ranked Asian Paints among the 200 Best Small Companies in the World
Cadbury India is the market leader in the chocolate confectionery market with a 70% market share and
is ranked number two in the total food drinks market. Its popular brands include Cadbury's Dairy Milk, 5
Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380 Million) Marico is a leading Indian group in
consumer products and services in the Global Beauty and Wellness space.


SRI‐IMRB                                   Page 24

Outlook
There is a huge growth potential for all the FMCG companies as the per capita consumption of almost all
products in the country is amongst the lowest in the world. Again the demand or prospect could be
increased further if these companies can change the consumer's mindset and offer new generation
products. Earlier, Indian consumers were using non‐branded apparel, but today, clothes of different
brands are available and the same consumers are willing to pay more for branded quality clothes. It's
the quality, promotion and
innovation of products, which
can drive many sectors.
The top ten cities for
consumption of FMCG in India
are depicted in following map.
The rank of the city depending
upon the amount they spend
on FMCG products is written
there. Most of the FMCG
manufacturing plants are
located majorly at these places
or at nearby places. Most of
the plants are situated in such
a strategic way that raw
material is easily available from
the nearby places. Also to get
the tax benefit bigger players
have strategy to produce and
sell in the same state e.g. HUL
has 32 plants in all over India.

Source: www.mapsofindia.com
To understand the transportation of this sector following companies were studied:
P&G Health and Hygiene
Britannia Industries Ltd
Nestle India Ltd.
Hindustan Unilever Ltd.
HUL is giant with maximum share in the toiletries, beauty products etc., P&G is among top five in daily
use products, Britannia is leader in Biscuit market and Nestle is leader in confectionaries and chocolate.
These companies were chosen so as to get the right picture of the transportation and number of trucks
used within the industry.
Figure 6: top ten towns with highest per capita spending on FMCG products


SRI‐IMRB                                   Page 25

Major Players
Britannia Industries Ltd.
The Group's principal activities are manufacturing and marketing of biscuits, bread, rusk, cakes and dairy
products like cheese, butter and milk. The brand names of biscuits include Marie Gold, Treat, Maska
Chaska, Good Day, Milk Bikis, Little Hearts and Pure Magic. The Group's plants are located at Mumbai,
Kolkata, Delhi, Chennai and Uttaranchal. On 20‐Mar‐2007, the Group acquired 70% stake in Strategic
Food International Co LLC and during the year it also acquired Al Sallan Food Industries Company.
With a total production capacity of 3 lac tonnes, the Delhi factory of Britannia produces around 100
tonnes per day. The other 3 operating factories are at Kolkata, Chennai and Rudrapur while one at
Mumbai is non operational now30
.
An interview was conducted at Delhi factory with Mr. Arjun of Logistics department which revealed that
on an average 10‐15 trucks are used per day by the factory out of which 40% are long distance. Thus 4‐6
trucks are long distance per day. Thus in all around 400 to 450 trucks are used by Delhi factory in a
month. Thus unique trucks out of the trucks used in a month will be 130 calculating with the cycle time
of 3.47.
Regarding the inbound logistics (raw material) it has been told that all the inbound is short distance as
all the raw material is transported from the warehouses situated nearby.

P&G Health and Hygiene
P&G Hygiene and Health Care Limited is one of India's fastest growing Fast Moving Consumer Goods
Companies that has in its portfolio P&G's Billion dollar brands such as Vicks & Whisper. With a turnover
of Rs. 500+ crores, the Company has carved a reputation for delivering high quality, value‐added
products to meet the needs of consumers.
The production has been 40,000 tonnes and raw materials brought into the plant were 25,000 tonnes
for Goa plant which is only plant for P&G Health and Hygiene31
. Thus the number of trucks used will be
calculated as follows:
Total tonnes handled by plant in a year= 65,000
Thus number of trucks per month= 360.
The number of unique trucks will be around 100 in a month taking average number of trips equal to 3.47
in a month.

30
www.britannia.co.in
31
Annual Report 2005‐2006, P&G Health and Hygiene


SRI‐IMRB                                   Page 26

Nestle India Ltd.
Nestle India Ltd a 59.8 per cent subsidiary of Nestle SA, Switzerland, is a leading manufacturer of food
products in India. Its products include soluble coffee, coffee blends and teas, condensed milk, noodles
(81 per cent market share), infant milk powders (75 per cent market share) and cereals (80 per cent
market share). Nestle has also established its presence in chocolates, confectioneries and other
processed foods. Soluble beverages and milk products are the major contributors to Nestle's total sales.
Some of Nestle's popular brands are Nescafe, Milkmaid, Maggi and Cerelac. The company has entered
the chilled dairy segment with the launch of Nestle Dahi and Nestle Butter. Nestle has also made a foray
in non‐carbonated cold beverages segment through placement of Nestea iced tea and Nescafe Frappe
vending machines. Exports contribute to 23 per cent of its turnover and the company reported net sales
of Rs. 2816 crore in 200632
.
Nestle India Ltd. has a production capacity of 1.4 lac tonnes. Out of this 1.4 lac tonnes, the Moga factory
of Nestle alone produces around 1 lac tonnes (Source: Annual Report, 2006‐07 and Energy Report for
Moga plant). In all Nestle uses around 700 trucks in a month but these trucks are not unique.
Hindustan Unilever Ltd.33
Hindustan Lever Ltd is a 51 per cent owned subsidiary of the Anglo‐Dutch giant Unilever, which has been
expanding the scope of its operations in India since 1888. It is the country's biggest consumer goods
company with net sales of US$ 2.4 billion in 2003. HLL is amongst the top five exporters of the country
and also the biggest exporter of tea and castor oil. The product portfolio of the company includes
household and personal care products like soaps, detergents, shampoos, skin care products, colour
cosmetics, deodorants and fragrances. It is also the market leader in tea, processed coffee, branded
wheat flour, tomato products, ice cream, jams and squashes. HLL enjoys a formidable distribution
network covering over 3,400 distributors and 16 million outlets. In the future, the company plans to
concentrate on its herbal health care portfolio (Ayush) and confectionary business (Max).
This company has 35 brands and 32 production facilities and annual production is 40 lac tonnes. Around
21000 trucks are used monthly by the company across all the production facility. Taking a cycle time of 3
as most of the truck movement is short distance due to large number of production factories around
7000 trucks are used in a month by all 32 factories of HUL.


32
Fast Moving Consumer Goods, Report by IBEF
33
Annual Report, Fast Moving Consumer Goods, Report by IBEF, www.hll.com


SRI‐IMRB Page 27

Conclusion
Although, most of the logistics of FMCG sector is handled by road transport but number of unique LDT’s
is very less. The reason is decentralized production and centralized consumption. Also raw material is
available within short distance. Hindustan Unilever Ltd is number one in FMCG market but has 32
production plants across the country.
Table 10: Trucks used by four major players in the FMCG sector
Company Production
capacity in
lac tonnes
No. of
trucks
used
annualy
trucks
used in
a
month
unique
number
of
trucks
no. of
plants
number
of
trucks
per
plant
No. of
trucks
claimed

FMCG

Nestle 1.4 9333 778 224 2 112
Britannia 5 33333 2778 801 4 200 150‐200
P&G 0.65 4333 361 104 1 104
HUL 40 266667 22222 6404 32 200


SRI‐IMRB                                   Page 28

Chemical and Food Grains Industry
Indian Chemical Industry
Chemical Industry is one of the oldest industries in India, which contributes significantly towards
industrial and economic growth of the nation. It is highly science based and provides valuable chemicals
for various end products such as textiles, paper, paints and varnishes, leather etc., which are required in
almost all walks of life. The Indian Chemical Industry forms the backbone of the industrial and
agricultural development of India and provides building blocks for downstream industries.
Chemical Industry is an important constituent of the Indian economy. Its size is estimated at around US$
35 billion approx., which is equivalent to about 3% of India's GDP. The total investment in Indian
Chemical Sector is approx. US$ 60 billion and total employment generated is about 1 million(Source:
Department of Chemicals and Petrochemicals) .The Indian Chemical sector accounts for 13‐14% of total
exports and 8‐9% of total imports of the country.   Currently, per capita consumption of products of
chemical industry in India is about 1/10th of the world average. With investments in R&D, the industry is
registering significant growth in the knowledge sector comprising of specialty chemicals, fine chemicals
and pharmaceuticals.
Distribution model generally involve dealers and retailers.

Major Players
Cipla
Cipla is market leader in the chemical industry with 5.16% market share (ET, 3 Oct 2007). The main
competitors of Cipla are Ranbaxy and GSK. According to annual report of Cipla, the production during
the year 2006‐07 was of 17000 tonnes across its 7 production units. The products are transported in
concentrated form.
Calculating by tonnage, around one thousand trucks are used by Cipla in a year at 7 production facilities.
Food Grains
Food Corporation of India (FCI) is involved in movement of food grain in India. FCI operates through a
country‐wide network with its Corporate Office in New Delhi, 5 Zonal Offices, 23 Regional Offices
practically in all the State capitals,   166 District Offices(as on 30.06.2007) and 1470 depots (as on
01.01.2007). The foodgrain surplus is mainly confined to the Northern States, transportation involves
long distance throughout the country. Stocks procured in the markets and purchase centers is first
collected in the nearest depot and from there dispatched to the recipient States within a limited time.
Most of the movement of the FCI takes place by railways especially long distance one but hey also use
road and water as the mode of their transportation. Due to high number of depots the movement of
trucks is very much fragmented. On an average about 1,20,0000 bags (50 Kg) of food grains are
transported every day from the producing States to the consuming areas, primarily by rail.


SRI‐IMRB                                   Page 29

Engineering
Overview
This industry is categorized into two segments namely Heavy Engineering and Light Engineering. The
contribution of Heavy Engineering in Engineering sector is over 80% while Light Engineering accounts for
less than 20% of total market. The annual turnover of this industry is US $ 22 billion as per the report of
IBEF. In this category, either the finished good is very bulky and heavy or small. Two understand the
logistics operation of this industry one major player from each category was studied. BHEL from Heavy
Engineering and Brakes India Ltd. from Light Engineering segment was chosen.
Major Players
Bharat Heavy Electrical Limited (BHEL)
BHEL, a Government subsidiary and a profit making company of Govt. of India has 14 manufacturing
plants across the subcontinent. All the plants have different specialization, such that all plants are
engaged in different manufacturing or activity, e.g. Plant at Varanasi, UP is specialized in repair works.
Mr. L.S. Rawat, Engineer, BHEL Hardwar was interviewed to find out the logistics operation in the plant.
As he has revealed, there are no trucks owned by the plant and around 70 trucks are associated with
them. The % road in transportation is 70‐80% at Hardwar.  He has estimated that this number will be
same across all the plants of BHEL and this number will be less than 1000 and long distance will be less
than 500.

Brakes India Ltd
Brakes India Ltd. manufacture brakes for automotive manufacturers. The manufacturing facilities of
Brakes India Ltd. are in close proximity of automotive manufacturers to reduce the transportation cost
to maximize the profit. Their location makes nearly all of their transportation short distance. In all, BIL
uses around 500 trucks out which more than 70% are short distance (Source: Transport Department)

Truck Ma

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