Value Chain Analysis Of Super Pure Vegetable Oil

Management Essay
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This report contains information about Super Pure Vegetable Oil of Tanveer Oils Limited which is sister
concern of Meghna group of industries. We divided this report into five parts. In introductory part we
discussed the objective, scope, methodology and the name of the person we interviewed to get the
information. In the second part of the report we gave the information about the company, product and
their SWOT analysis. We divided Value chain section in two parts primary activities and support
activities. In primary activities we disclosed information about where they collect raw materials from, the
production process acid degumming, bleaching, filtration, deodorization and dry fractionation.
Moreover we discussed about their distribution channel and selling and marketing part. In supporting
activities section we discussed about their HR policy, Admin and research facility. And we put up some
recommendations for Tanveer Oils Limited.
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1. Introductory Part
1.1 Broad Objective:
Analyze the primary and supportive value chain of Super Pure Vegetable Oil of Tanveer Oils Limited.

1.2 Specific Objective:

To show how they manage their value chain
To show what methods they are using to manufactured their product
To watch carefully the degree of difference and similarities between the real life and theory.

1.3 Scope:
This study revolves basically around Tanveer Oils Ltd. This study includes an analysis of their value
chain Management.

1.4 Methodology:
While preparing this report information was gathered from the following sources:
Primary data: Interviews with personnel of Tanveer Oils Limited of Meghna Group
Secondary data: Official website of the company

1.5 Limitation:
In preparing this report certain limitations were faced:
This report may suffer from statistical error due to the fact that most of the data used here are primary.
Lack of sufficient alternative sources prevented verification of information.

The analysis presented here may vary with opinions of experts in this field.

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1.6 Contact Person:
To collect information about their value chain we contacted the following persons. We are very grateful
to them for helping us and giving us adequate amount of information.
I. Md. Kutubul Alam
Assistant General Manager
Tanveer Oils Limited
Meghna Group of Industries
II. Mahbub e Khuda
Manager
Quality Assurance
Tanveer Oils Limited
Meghna Group of Industries

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2. Company Profile
2.1 Meghna Group
Meghna Group of Industries is one of the leading companies of Bangladesh. They start their journey in
1976. They are born & led by Mostafa Kamal one of the most visionary & prolific business leader of
Bangladesh; he is the Honorary CRP of Bangladesh. By his prolific hands, labor & business mind today
Meghna Group of Industries has come to this position. His aim was to develop the economy of
Bangladesh. In 1976 he started his journey with a small trading initiative with few consumer goods in
Moulvi Bazar. From this he led this to import business, which led to his dream of industrialization In
Bangladesh & in 1989 he started his factory in the industrial park of Sonargaon in Narayongonj. From
then it is a story of success, building more industries now they have 23 industries & more are coming.
They have more than 10000 employees & as they are adding more industries it is creating more job
opportunities & contributing more to the economy.

Vision
The vision of Meghna Group of Industries is:
Foster a strong trust between consumers, employees & stakeholders
Stand the test of public scrutiny
Achieve highest possible standards in day to day work
Ensure what comes from the people go back to the people many times over.

Mission

The mission of Meghna Group of Industries is:

Deliver superior values to the stakeholders
Accelerate industrialization for a better future of the country
Empower millions of people to shape up their destinies.

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Tanveer Oil's Ltd
Tanveer Oil's Ltd is one of the enterprises of Meghna Group of Industries. It was situated in 2002; their
factory is situated in industrial park of Sonargaon in Narayangonj.

2.2 Product Profile

Fresh Soybean Oil
Fresh Soybean oil is one of the renowned brands of Meghna Group of Industries. This is enriched with
healthier food ingredients, it is also very nutritious. Fresh soybean oil is also used by the industry in a
variety of food products. For facilitating their production of soybean & mustard oil Meghna Seeds
Crushing Mills Ltd. has recently established which is their second factory, their first factory was
established in 2001 under Tanveer Oils Ltd. They import crude oil from Argentina, Brazil, USA &
Malaysia. They have 12 step purification processes for purifying crude oil; it is cholesterol free, with
Vitamin A, D & E. They have both manual & automated system. They have pet bottles from 250 ml- 5
liter.

Super Pure Vegetable Oil

Super Pure Vegetable Oil is another important brand of Meghna Group of Industries. The oil is
produced without any touch of hand; here the updated technology is used which assures good health.
The source of the vegetable oil is crude palm oil. Their first factory was established in 1990 with the
capacity of 400 MT per day; second factory is established in 2002 with the capacity of 600 MT per day.
Price of 5 liter pet bottle is Tk 480.

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2.3 Competitor Analysis
In the vegetable oil industry many company was at the beginning, they were about 60-62. But as it was
unplanned industrialization many of them face huge loss & now they are out of market, where some of
them are just holding their name but Pure Vegetable Oil remain rock steady, there main competitors
now a days are:

TK Group
TK group is the leading oil refinery company in the country; they have the ability to refine 300 to 700
tons per day. They market both in bilk and consumer pack. Currently in the market they have two palm
oil brands Family and Hilsha.

Mostafa Vegetable Oil industries Ltd

Mostafa vegetable oil industry limited is one of the biggest projects of Bangladesh. They have 3 units,

1st unit production capacity is 27000 metric tons of refine soya bean oil, 2nd unit production capacity is
15000 metric ton & the 3rd unit capacity is 35940 metric ton. These products are refined soya bean,
palm oil & vegetable ghee which is pure & cholesterol free these are very popular & highly
demandable. There first unit was established in 1990. Second was in 1992 which was built by German
origins, the third unit was established in 2000. They have invested an total amount of 118.17 crore taka
for this project with independent 3 units of edible oil refineries in the name of Mostafa Vegetable Oil
Industries Ltd. They have got the certificate from BSTI for maintaining quality & now they are preparing
documents for getting ISO certificate.

City Group
City Group is one of the biggest players in the market; in 2009 they imported 98,753 MT palm oil. Their
products name is Natural Brand Palm Oil. Their product is currently available in the market from 500
ml bottle to 16 liter bottle.

Bangladesh Edible Oil Ltd

Fully foreign owned company, their refining capacity is 150 tons per day. Their product is marketed at
the brand name of Lucky Vegetable Oil.

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2. 4 SWOT Analysis Summary
Tanveer Oils Limited is a sister concern of Meghna Group of Industries; their main strength is their
huge production capacity and technologically advanced factory installed by Lipico. There are lots of big
player in the market and more are trying to enter into this market but main problem is it requires a huge
sum of cash just to run the refinery. Some of the renowned company like Rupchada buy oil from them
in bulk amount and later sell them to the market, which sometimes create problem for their consumer
pack oils. Main threats are power cuts but they have power plant to ensure firm supply of energy to the
factory, besides that they have started building another power plant. Moreover they have to pay high
import duty for raw materials but they can offset that by export their products in foreign countries.

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3. Value Chain of Super Pure Vegetable Oil
3.1 Primary Activities
3.1.1 Supply and Logistics
Ingredients:
Crude palm oil is the main ingredients of Super Pure Vegetable Oil. In general they import crude palm
oil from Malaysia and Indonesia, approximately 90% from Malaysia and 10% from Indonesia. They
have their own clearing and forwarding agents in the port G. Shipping lines Limited and Mercantile
Shipping Lines Limited, they execute all the activities from clearing to delivering the raw materials from
port to the factory.

Packaging:
Dhaka Plastic Bottle (PET) Industry Limited, which is one of the company of Meghna Group supply
plastic bottle to the Tanveer Oils Limited. For making plastic bottle they import raisins from South

Korea.

Printing
For labeling the products they take paper form Tanveer Paper Mills Limited and print them in M.M.
Printing and Packaging Company Limited both of them are the sister concern of Meghna Group

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3.1.2 Operation
Factory:
Tanveer Oils Limiteds factory is in meghna ghat, Narayanganj. The whole manufacturing plant is
designed, supplied and installed by LIPICO Technologies a company headquartered in Singapore.

Refining Process
In order to refine the palm oil these steps need to be followed-

De-gumming
Acid degumming is a step to reduce the gum of the crude palm oil. In these step phosphoric acid is
added to the crude palm oil from the phosphoric acid tank. This process takes place in the degumming
tank.

Bleaching
In the second step bleaching earth is added to oil from the bleaching earth tank. In the bleacher the oil
is filtered and oil is pumped to the storage tank from where it will be sent to filtration.

Filtration
In the filtration process it is ensured that color oxidizing agent, bleaching earth is filtered from the oil.

Deodorization
In deodorization process oil is heated at 260 using steam distillation process by using the vapor of the
hot water. And then the fatty acid from the oil is vacuumed to another tank; which they call spend earth;
they sell this byproduct to brickfield. Later the oil is cooled down at below 50 by using oil cooler and
channels this to the refined oil tank.

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Figure-1
Tank
Bleaching Earth
Tank
Phosphoric Acid

Process
Water
Tank
Tank
Crude Oil
Steam
Heat at 260
Degumming Tank
Bleacher
Vacuum
Spend Earth
Storage Tank
Final Oil Cooler
Cooling below 50
Filter
Refined Oil
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Dry Fractionation
The last phase of the process is Dry fractionation; use to separate stearin from the palm oil. It is
divided into two steps:

I. Crystallization
They pour the refined oil into the crystallizers, to form crystals in the cool environment of the
crystallizers. Then they channel this oil and crystal into membrane filter.

II. Filtration
Figure-2
In the filtration process they use membrane filter to separates the crystal from the oil. They pump the
pure oil into the tank and the byproduct crystal is channeled to the stearin tank. They sell this stearin to
other company as dalda which is a cheap alternative of clarified butter also known as ghee.

Membrane Filter
Crystallizer
Refined Oil

Stearin
Super Pure Vegetable Oil
Oil Tank
6500 MT
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Quality Control
They have a laboratory to check the quality of the refined oil; they check the quality of the oil once in
every two hours. According to BSTI standard fatty acid in a palm oil should not be more than 0.25,
whereas Super Pure Vegetable Oils fatty acid is only 0.04.

3.1.3 Distribution
Tanveer Oils Limited maintains the distribution channel in two ways B2B (manufacturer to firm) and
B2C. In case of B2B there is no middle man. The company gets order from different firms and
delivering the vegetable oil to the industrial customers. Here the industrial consumers are the bulk
customers, they buy the bulk amount of oil from Tanveer Oils Limited, and they are basically from
Khatungonj & Moulvi Bazar. In this system the company maintains promotional activities less compare
to B2C. But in case of B2C (manufacturer to consumers) Tanveer Oils limited have own distribution
channel they have their own vehicles (cover van, truck etc.) From these they send their products to the
retailers whom they have contracted. To cover the huge areas they divide their own distribution channel
based on region, district and upzilla. So they employed dealer who covers region, sub dealer to district
and finally the sub dealers send the products to their own salesperson to cover upzilla to fulfill
consumers needs and demands.
Consumer Marketing (B2C)

Producer
Customer
Dealer
(Zilla)
Retailer
Dealer (Division)
Bulk marketing or Business to Business: (B2B)

Producer
Tanveer Oils Ltd. (Super Pure)
Customer,

Bangladesh Edible Oil Ltd. (Lucky Vegetable Oil)

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3.1.4 Sales and Marketing
For each & every company marketing is one of the most important processes for providing the value &
earning profit margin from the consumers. Tanveer Oils Limited also follows the sales & promotional
activity. They follow it in a different way as they have two types of marketing process one is the bulk
marketing another is consumer marketing. In the bulk marketing they follow no marketing strategy as
these are taken by the businessman of different place like Khatungonj & Moulvi Bazar. But in the
marketing process they follow different strategy for getting attention of the consumers. They follow the
promotional activity of leaflet which is given in the roads sometimes on some occasion they put it on
the top of road, sometimes they also put it in front of the sales shop. They also put their advertise in the
newspaper, the advertisement covers the lower portion of the page, they prefer the front page but if
they dont get the front page they put it on the third page of the countrys top newspapers. They also
give TVC in the Television but now a day there TV promotions have reduced dramatically. Tanveer Oils
Limited have different size of pet bottles in the market consists of 250ml, 500ml, 1lt, 2lts, 3lts, 5lts all of
them have different price, it depends according to the demand of the consumer, sometimes on the
availability of the raw materials, price of the raw materials etc. according to the market research of
Tanveer Oils Limited the customer demand is increasing day by day as the number of people is
increasing so they now they are bringing their new bottle size which is of 8 liter.

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3.2 Supporting Activities:
3.2.1 Human Resources
Basically HR policy and activities centrally controlled by Meghna group of industries for their each and
every segment of organization. Unlike that Tanveer Oils Limited also follows the HR policy of Meghna
group of industries as they are one of the enterprises of them. The Hr policies of them are that they
have their 3 levels of management process, the top, middle & low level management. The decisions
are taken by the top level management; they give their orders to the mid level & finally mid level puts it
to the lower level. The lower level management has to implement all the orders which are given by the
top level management. Here the process of determining the job process is the concurrent technique as
they come from the top level means they priories the top level and from that they went downwards. The
technique they follow to monitor the work process is the observation technique. As the work of the top
level is to observe the whole process is it running smoothly or not? The mid level officer also monitors
or observes the process but they have to conduct other work also. There whole HR process is
maintained by Meghna group of industries so the compensation, training, rewards & benefit are all set
by them the work of Tanveer Oils Limited is to implement the HR policy accurately.

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3.2.2 General Admin
In Tanveer Oils Limited according to the Organogram we can arrange them in three stages which are
given as follows;

Top level management

The top most personality in the organization who basically make the strategy, make the plan and also

generate the idea to develop more of the organization in long run. They measure the company situation
and on the basis of that take decisions which need to be implementing in the organization. GM, AGM
and the Assistant managers are playing most important role over there.

Middle level management

In the middle level management employees implement the idea and try to fulfill the objective of the top
level management through exact activities and the rules in the organization. They manage all other
employees and subordinates to maintain the working process and also let them understand about the
work. The responsibility is much higher in this level for the employees and they have to be very curious
about the whole working process. Department in charge, Engineers and the officers are play the role to
complete middle level function.

Junior level management

Lower level management basically follows the rules and procedures which organization set from the
very beginning for the employees and workers. They have to follow the command of their seniors to
complete the working process and to accomplish the whole work on behalf of the companies.
Operators, Supervisors, Electricians, Technicians, Store assistant are playing the role of junior level
management. They are highly recommended to the companies to follow the order from their superiors
and accomplish the process of work.
In the administration of Tanveer Oils Limited basically runs through a chain where the employees or the
representatives of the company organized each and every part to random complication of work and
reach the organizational goals. Responsibilities assigned to the different specialized persons, so that
the whole procedure from production to distribution will enlist in rapid growth.

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3.2.3 Research and Development
Tanveer Oils Limited has their own research and development department, where they have their
laboratory which is occupied with modern equipment & technology. The laboratory has different
advanced equipment like Titnometer, the weigh machine which maintains the balance of the
ingredients. They have their bottles which are imported from England where they keep the oils for
testing & other purposes. They have also modern Microscope which helps them to find out the germs &
makes the product safe & clear for the consumers. Their R&D is operated by their own expert, their
quality control manager is the head of the laboratory that monitors & takes care of all the process.
There laboratory is so much equipped & modern that BSTI was very satisfied with their laboratory, their
laboratory equipment has all the equipments which BSTI have. On their laboratory some American
experts once came for a visit & they were very pleased with their laboratory. The bottles they keep in
their laboratory were very well safe & they congrats them for maintaining such a quality in their R&D.

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4. Recommendation
Farming locally rather than importing:
If possible, MGI can firm palm oil and soya bean in BD. It can produce in BD by its own management or
employ farmers to grow crops for them. Currently, they import from Indonesia and Malaysia. If they firm
locally, they can cut major portion of shipping purchasing cost. Recently, palm is being planted in
Thakurgaon. Experts say that its soil and weather are friendlier for planting crops than that of Indonesia
and Malaysia. The company can take advantage of that natural boon.

Less energy consuming machines and process:

It has become very important right now. Frequent power failure and inadequate supply of gas has
created a major dilemma for them. There is no certainty that the situation will be better. Although they
have own power plant, for the shortage of gasses they has to spend more on furnace oil. Energy price
is increasing all over the world. So less energy consumption can result in better profit.

Unidentified Market:
They can recommend palm oil to food manufacturers. It is a very good substitute for preparing many
fast food items such as chocolate, pastry, ice cream, cookies etc which can make the taste of food
much better.

5. Conclusion
Tanveer Oils Limited, a technologically advanced oil refinery has a great potential. In this report we
tried to depict the whole process, from where they collect raw materials to how it reaches to the end
users.

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Bibliography
Websites:
1. http://www.meghnagroup.biz

Person Interviewed
1. Md. Kutubul Alam
Assistant General Manager
Tanveer Oils Limited
Meghna Group of Industries
2. Mahbub e Khuda
Manager
Quality Assurance
Tanveer Oils Limited
Meghna Group of Industries
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