A study on

LOGISTICS AND DISTRIDUTION

With reference to
NAGARJUNA FERTILIERS AND CHEMICALS LIMITED
(KAKINADA)

A project report submitted to the department of

Commerce and management studies, Andhra University,
Visakhaptnam in partial fulfillment for the award of the degree of
BACHELOR OF BUSINESS MANAGEMENT

By
A.VAISHNAVI

Under guidance of

DECLARATION
We

hereby

declare

that

this

project

report

entitled

LOGISTICS

AND

DISTRIBUTION at NAGARJUNA FERTILIZERS AND CHEMICALS LTD submitted by

us to ADITYA DEGREE COLLEGE, KAKINADA is of our own and has not submitted to any
other university or published anytime before.

CERTIFICATE
This is to certify that the project work entitled LOGOSTICS AND DISTRIBUTION with
reference to NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED, Kakinada
submitted by A.VAISHNAVI in partial fulfillment for the award of B.B.M
bondafide work carried out by him under my guidance.

Degree is

ACKNOWLEDGEMENTS
We hereby take this opportunity to express our sincere gratitude to the following eminent
personalities whose aid and advice helped us to complete this project work successfully without
any difficulty. We sincerely thankful to Management Team of NFCL, for their valuable support
and the interest they have shown in me during the course of the project.
We wish to record our deep sense of gratitude and indebtedness of MR. S.
KRISHNA MURTHY D.G.M. (HPD)

MR. E.V.A.T. BABU (Training Head), MR. M.P.

RAMA RAO (Training Manager) MR. ANWAR BASHA (Sr. Manager, Personnel) and
K.VENKATESAWA RAO for providing us the project work and required material by giving
precious support and helping to bring out this project
We are thanking to our heads Dept of Management, for giving us an opportunity
to take up this Project.
We express our thanks to our parents and friends who helped and supported to us to a
great extent to complete this project and last but not least we thankful to all mighty.
.

CONTENTS
CHAPTER-I

PAGE NO.

INTRODUCTION
OBJECTIVES
NEED FOR THE STUDY
METHODOLOGY
LIMITATIONS

CHAPTER-II
INDUSTRY PROFILE

CHAPTER-III
COMPANY PROFILE

CHAPTER-IV
THEORETICAL FRAME WORK
DATA ANALYSIS AND INTERPRITATION

CHAPTER-V
FINDINGS
SUGGESTIONS

QUESTIONNAIRE
BIBLIOGRAPHY

CHAPTER-I
INTRODUCTION
OBJECTIVES
NEED FOR THE STUDY
METHODOLOGY
LIMITATIONS

INTRODUCTION
Logistics :
Is the process of planning, implementing and controlling the efficient, effective flow and
storage of goods, services and related information from point of origin to point of
consumption for the purpose of conforming to customer requirements?
The Oxford English dictionary defines logistics as: The branch of military science
having to do with procuring, maintaining and transporting material, personnel and facilities
Business logistics:
The science of planning, design and support of business operations of procurement,
purchasing, inventory, warehousing, distribution, transportation, customer support, financial
and human resources.
Logistics management:
Logistics management is the part of the supply chain which plans, implements and control
the efficient, effective forward and reverse flow and storage of goods, services and related
information between the point of origin and the point of consumption in order to meet
customers requirements. A professional working in the field of logistics management is
called a logistician. The function of logistics is planning , procurement , transportation ,
supply and maintenance. The process if logistics is requirements of determination ,
acquisition , distribution and conservation.

OBJECTIVES

To know the awareness of dealers and farmers perception towards Nagarjuna products.

To identify the sales of NFCL in the market.

To depict the general purchases procedure followed by farmer in a buying fertilizers.

To identify the various problems related to marketing activities and provide suggestions
for improvement.

To know the satisfactory level of the farmers and dealers regarding to NFCL fertilizers.

Taking the feedback from the dealers and farmers of NFCL products.

To know the price changes impact on the NFCL fertilizers.

NEED FOR THE STUDY

NFCL is one of the leading companies in fertilizers.

The distribution of products is important process for the firm to exist for long time.

To study about how the product reaches to the customers in time and to the right place.

NFCL have more than 6000 customers all around Andhra Pradesh. So distribution plays a
major role

The increases in flexibility in the logistics network reduce overall landed costs and
improve customer satisfaction.

METHODOLOGY
The methodology used for the study is through various sources , they are primary sources and
secondary sources.
The primary data related to point transport costs and transport rate from Kakinada to various
locations has been collected from the transport work orders issued by NFCL.
The data related to the rail fright, customer locations and handling transport and storage expanses
were collected from the work orders issued by the NFCL to various C and F agents.
Other data related to the company information have been collected from the company brochures,
annual reports, annual of NFCL library and discussions with NFCL officers.
Data Collection:
The data is collected collected from the primary and secondary sources. The primary sources are
interviews with various personalities of the firm like executives, senior managers and casual
labors. The secondary sources are taken from the books, journals taken from companys library.

10

LIMITATIONS

A period of 45days is not adequately sufficient to obtain a thorough of the

organizations performance and consumers opinion.

Not all consumers could spare the time required proper answering of the
questionnaire.

The study is confined to only areas in East Godavari district.

The scale plan is tentative and is subject to vary due to seasonal changes.

11

CHAPTER-II
INDUSTRY PROFILE

INDUSTRY PROFILE

12

India has been predominantly considered as an agricultural dependent economy. Agriculture

plays a very dominant role as more than one-fourth of our GDP come from this sector. Nearly
70% of population depends on the agriculture for their lively-hood. The basic need for an
agricultural dependent economy is fertilizers and urea is one of the main fertilizers. India is the
second largest manufacturing country in the world.
All fertilizers consist of three main ingredients.
Nitrogen(N) -- which promotes general plant growth
Phosphorous(P) -- which promotes flowering
Potassium (K) which promotes strong roots.
The ingredients are mixed in various combinations because plants have different needs.
The combinations are indicated by a three number code:
The first number is the percent of nitrogen (N)
The second number is the percent of phosphorus (P)
The third number is the percent of potassium (K)
About Fertilizer:
Fertilizer is simply, plant food. Just like the human body needs vitamins and minerals,
plants need nutrients in order to grow. Plants need large amounts of three nutrients nitrogen,
phosphorus, and potassium. These are commonly referred to as macronutrients. Fertilizer
makers take those three nutrients from nature and put them into soluble forms that plants can
easily use.
There are a number of other nutrients plants need in small amounts. These are referred to
as the minor nutrients, or micronutrients.

These many nutrients are typically produced

separately, but end up being mixed together in varying amounts to match the needs of a
particular crop. The analysis found on each bag or bulk shipment of fertilizer tells the farmer or
consumer the amount of nutrients being supplied. States have a system of laws and regulations

13

that ensure the fertilizer is properly labeled and delivers the amount for nutrients stated on the
bag.
Our world would be vastly different without commercial fertilizers. Following World
War II, new technologies allowed for the rapid expansion of fertilizer production. Coupled with
growing food demand and the development of higher-yielding crop varieties, fertilizer helped
fuel the Green Revolution.
Today, the abundance of food we enjoy is just one way fertilizers help enrich the world around
us.
While fertilizers provide many important benefits that are necessary for our way of life,
the improper use of fertilizers can harm our environment.

Weve used the most recent

developments in science to study our products and make sure safety comes first.
Fertilizer:
Fuel for growing plants just like humans and animals, plants need adequate water, sufficient
food, and protection from diseases and pests to be healthy. Commercially produced fertilizers
give growing plants the nutrients they crave in the form they can most readily absorb and use:
nitrogen (N), available phosphate (P) and soluble potash (K), Elements needed in smaller
amounts, or micronutrients, include iron (Fe), zinc (Zn), copper (Cu) and boron (B).
Each crop year, certain amounts of these nutrients are depleted and must be returned to
the soil to maintain fertility and ensure continued, healthy future crops. Scientists project that
the earths soil contains less than 20 percent of the organic plant nutrients needed to meet our
current food production needs. Therefore, through the scientific application of manufactured
fertilizers, farmers are meeting the challenge of the future, today.
Another component of plant DNA is phosphate, which helps plants to use water
efficiently.

It also helps to promote root growth and improves the quality of grain and

accelerates its ripening. And potassium, commonly called potash, is important because it is
necessary for photosynthesis, which is the production, transportation and accumulation of sugars
in the plant. Potash makes plants hardy and helps them to withstand the stress of drought and
fight off disease.
14

Fertilizer Types:
Because every crop is different and the soils and weather conditions crops are grown in
vary dramatically around the world, commercial fertilizers, which are manufactured from natural
sources, come in many formulations.
Combining air with hydrogen using natural gas as the feedstock makes ammonia, the
building block for nitrogen fertilizers. Ammoniated phosphates, which include mono ammonium
phosphate (MAP) and diammonium phosphate (DAP), are made by reacting ammonia with
phosphoric acid. Muriate of potash, also called potassium chloride, is made from mine ores that
have been processed to remove naturally occurring salts.
Ammonium nitrate is a solid fertilizer containing approximately 34 percent nitrogen that
is water soluble and used in various fertilizer solutions. Aqua ammonia is another nitrogenbased fertilizer made by combining ammonia with water. It contains up to 25 percent nitrogen
and is either applied directly to the soil or is used to manufacture phosphate fertilizers.
Nitrogen solutions are water solutions of ammonia, ammonium nitrate and, sometimes,
urea, a solid fertilizer containing approximately 45 percent nitrogen, and other soluble
compounds of nitrogen. Nitrogen solutions are used in ammoniating super phosphate, the
manufacture of complete fertilizer and for direct injection into the soil.

They vary in

composition and nitrogen content and are sometimes applied under pressure.
Nitrogen (N):
Nitrogen is a part of all plant proteins and is a component of DNA and RNA the
blueprints for genetic characteristics.

It is necessary for plant growth and chlorophyll

production. Nitrogen is the building b lock for many fertilizers. Where does N come from?
Nitrogen is present in vast quantities in the air, making up about 78 percent of the atmosphere.
Nitrogen from the air is combined with natural gas in a complex chemical process to make
ammonia.
Phosphorus/Phosphate (P):

15

Phosphorus as a nutrient is sometimes most valuable to plants when put near the seed for
early plant health and root growth. Plant root uptake is dependent on an adequate supply of soil
P. Phosphorus is relatively insoluble in water. The water in most soils must replace all of the P in
the soil water 2 to 3 times each day to meet the crops demand for P. Phosphorus compounds
help in directing where energy will be used.

Phosphorus compounds are needed in plant

photosynthesis to repackage and transfer energy. Phosphate is also a component of DNA, so it

is one of the building blocks of genes and chromosomes. Phosphorus is involved in seed
germination and helps plants to use water efficiently. Where does P come from? Phosphorus
occurs in natural geological deposits. Deposits can be found in the U.S. and other parts of the
world.
Potassium/Potash (K):
Potassium protects plants against stresses. Potassium protects plants from cold winter
temperatures and helps them to resist invasion by pests such as weeds and insects. Potassium
stops wilting, helps roots stay in one place and assists in transferring food. Potassium is a
regulator. It activates plant enzymes and ensures the plant uses water efficiently. Potassium is
also responsible for making sure the food you buy is fresh. Where does K come from? The
element potassium is seventh in order of abundance in the Earths crust.
Through long-term natural processes K filters into the oceans and seas. Over time,
these bodies of water evaporate, leaving behind mineral deposits. Although some of these
deposits are covered with several thousands of feet of earth, it is mined as potash or potassium
chloride. Potash ore may be used without complex chemical conversion; just some processing is
necessary to remove impurities such as common salt.

FOOD FOR THE GROWING WORLD

16

Industry at a glance:
Since 1883 the industry has worked to promote the advances in the development and
application of fertilizers that have helped to feed a hungry world. The revolutionary concept of
plant nutrition was born from the discovery of the biological role of chemical elements in plant
nutrition and the need to feed a growing population concentrated away from the farm in the
rising industrial centers of the world.
Because of modern fertilizers, world food production since 1960 has more than doubled,
keeping pace with the population explosion. Today, the fertilizer industry is poised to help
produce the food that will be needed to feed the worlds projected 9 billion people in 2025.
The fertilizer industry is essentially concerned with the provision of three major plant
nutrients nitrogen (N), phosphorous (P) and potassium (K) in plant available form. Each
nutrient is responsible for different aspects of plant growth and health.
Fertilizers:
Regulated for quality and safety like other manufactured goods, fertilizers are regulated
for quality and safety at the federal and state levels. Every state in the country, plus Puerto Rico,
has its own fertilizer regulatory program, usually administered by the state department of
agriculture.
State Regulation:
State regulation is concerned with consumer protection, labeling, the protection of human
health and the environment, and the proper handling and application of fertilizers. Fertilizers are
regulated at the state level because soil conditions vary dramatically from state to state across the
country. For example, the rocky, thin soils of New England are vastly different from the deep,
rich black soils of the Midwest Corn Belt. A different level of fertilizer nutrients in the soil,
different crops (potatoes versus corn, for instance) and different weather and cropping patterns
require state-specific regulation.
Where Science and safety come first the modern commercial fertilizer industry was
founded on the revolutionary scientific discovery in the last part of the 18 th century that chemical

17

elements play a direct role in plant nutrition. This initial concept was supported by direct
scientific experiment and opened the way for industrial-scale manufacturing of fertilizers of all
types in the 19th century, beginning with super phosphate in 1843. This was followed by
ammonium sulphate, sodium nitrate and, finally, in the first two decades of the 20 th century, the
manufacturing of synthetic nitrogen fertilizers directly from atmospheric nitrogen.
Assessing Fertilizer Safety:
Fertilizer research and development historically have been focused on maximizing
economic crop yields from given rates of nutrient application. Since the advent of the modern
environmental movement in the 1960s, research has also been concerned with minimizing
potentially adverse human health and environmental effects from fertilizer manufacture and
application.
As part of its continuing commitment to safety, in 1996. The Fertilizer Institute initiated
a comprehensive safety assessment project to determine the risks, if any, of metals in fertilizer.
Small amounts of metals are found in phosphate and potash fertilizers due to their presence in the
mined ore bodies. In addition to phosphate and potash products, some micronutrient fertilizers.
Which come from both mined ores and recycled wastes, also contain metals.
Fertilizers Enrich our World:
Improvements in agricultural efficiency through research and technology increase food
output while protecting the environment and enriching our world in numerous ways.
Fertilizers feed the growing world. As the worlds population continues to climb toward
an estimated 8.5 billion in 2040, experts estimate that food production must increase more than
two percent annually to even maintain current diets. Commercial fertilizers will be key in the
fight to feed the growing world.
Fertilizers protect the environment. The efficient use of fertilizer also helps to conserve
the natural environment. With fertilizers and modern high yield farming practices, more food is
produced per acre each year, so land may be conserved. Fertilizers, used properly, help to prevent
the widespread loss of habitat that results from wasteful slash and burn low-yield farming,
which is a major global environmental threat.
18

Fertilizers at work in industry:

Aside from their benefits to agriculture, fertilizer components are central to such
industrial process as semiconductor chip making, resin manufacture, cattle feed production,
metal finishing, the manufacture of detergents, fiberglass insulation and more, even rocket fuel.
PROJECT DETAILS
PLANT I

PLANT II

COST (Rs.Crores)

1180

970

Debt / Equity

2.5 : 1

2:1

Zero Date

5 sept 1988

1 Aug 1995

Schedule

42 Months

30 Months

Comm. Production

1st August 1992

19th March 1998

Total Area = 1127 Acres.

Plants Area = 380 Acres.
Green Plant Area = 747 Acres
[Total Plants: 350, 000 plants with 170 species]
Ammonia

2 * 900 MT Per Day

(Reassessed : 1050 MT Per day)

Urea

2 * 1500 MT Per Day

(Reassessed : 1810 MT Per day)

Offsite Facilities:
Water Treatment
Cooling towers.

19

Inert Gas Plant

Boilers, Gas Turbines
Ammonia Storage
Naphtha storage

Imported Technology:
Ammonia

Haldor Topsoe of Denmark

Urea

Snamprogetti of Italy

Co2 Removal :

Giammarao Vetrococke of Italy

Systems used:
1. ISO 9001:2000 (QMS) (1995/2003)
2. ISO 14001 (EMS) (2000)
3. OHSAS 18001 (2001)
4. SAP R/3 (2000)

20

CHAPTER-III
COMPANY PROFILE

COMPANY PROFILE
The founder of Nagarjuna group:

21

Get all the education you can, but then do something .Dont just stand there, make
something happen. It is not easy, but if you keep your nose to the grind stone and work at it is
amazing how in a free world you can become as great as you want to be
One person forms a perfect example for this statement Mr.K.V.K.Raju Garu. He was a
visionary and a professional technocrat entrepreneur who realized the importance of core sectors
to an economy like India. He has guided the group with his philosophy. Serving society through
industry

Founder:

22

Sri. Kanumuri Venkata Krishnam Raju - An eternal source of inspiration [Born: 2811-1928 ,United with God: 16-06-1993]
Sri. KVK Raju was born in a humble agricultural family in Andhra Pradesh on November
28, 1928.A graduate from Banaras Hindu University and the Madras Institute of Technology he
went on to complete his Master's in Mechanical and Industrial Engineering frochigan State
University and the University of Minnesota, USA. After a short stint in the American Industry he
returned to India and worked for short periods at Caltex Oil Refinery, Orient General Industries
and Associated Electrical Industries. Finally, he joined Union Carbide of India and worked with
them for 15 years.
While working with Union Carbide, KVK's deep-rooted urge to serve society through industry
impelled him to start out on his own. Thus was born Nagarjuna Group in 1973 with an
investment of US$ 23 million. The Group has since then come a long way to become a
diversified conglomerate with an asset base of US$ 2.5 billion.
A recipient of various awards for his outstanding contribution to the industry and society, KVK,
was a firm believer in the adage "practice what you preach". A self-made man KVK practiced
simple living and high thinking. He dreamt big and worked with an unstinted focus of mind and
body to make his dreams come true. KVK was a visionary with firm belief in his mission to
serve society through industry. It is this belief, which continues today to be the guiding light of
Nagarjuna Group.

The Nagarjuna Group:

23

Nagarjuna Group is the one of the growing business conglomerates in India. The founder Sri
K.V.K.Raju laid the foundation of the Nagarjuna Group in 1974 with an investment of Rs.50
millions. The group is poised for quantum growth in investment in core sectors of the country
such as steel, power, agri inputs\outputs, finance services and other proposed new ventures.
Nagarjuna Group will thus have multiplier effect by its presence in the core sectors of the
economy which in turn will have multiplier effect on the industrial as well as the economic
development of the country.

1974:

decades. Starting with manufacturing steel, Nagarjuna steel Limited was launched.
1985: With focus on agriculture input business started plant nutrition business with

Nagarjuna Fertilizers and chemicals limited.

1992: Forayed into the crop Protection Business with Investments in Pesticide

Birth of a business group that pioneered several core enterprises in the coming

Formulations manufacturing followed by Technical Grade Manufacturing in the year

1994.
1994: Micro irrigation business started to address the irrigation problems of farmers

living in water and energy scarce regions.

1995: Ventured into Energy Sector. Entered into Power generation by setting up

Nagarjuna Power Corporation Limited.

1997: Entered into Petroleum by setting up Nagarjuna oil Corporation Limited.
Consolidating its core activities, today the groups major operations cover Agri and
Energy sectors.
The Nagarjuna fertilizers and chemicals limited were conceived way back in 1973.

The project which was originally to be implemented by government of Andhra Pradesh and
Shaw Wallace did not take off. Therefore, the project which was sought to be implemented, did

24

not work. It was in 1985 that the Nagarjuna group came on to the scene and the implementation
of the prestigious project which is of a modest size was entrusted to it.
Nagarjuna Fertilizers and Chemicals Limited (NFCL) is the first gas based fertilizer
factory in South India.

The plant is based on the latest fertilizer technology from M/s.

Snamprogetti, Italy for Urea process with an installed capacity of 1500 Mt/day for each unit.
The ammonia process is based on technology from M/s.Haldor Topse, Denmark with an installed
capacity of 900 Mt/day per each unit.
The feed stock for unit I is natural gas and feed stock for unit II is NG/Naphtha.
The current consumption of natural gas is 2.15 million standard cubic meters per day and 500
MT of Naphtha per day. The natural gas is being received through pipe lines from Tatipaka
situated 92 Kms. away from the factory and is marketed by M/s. Gas Authority of India Limited.
Naphtha is being supplied by M/s. HPCL. The water requirement of 6.0 Million Gallons/day is
received from Samalkot Summer Reservoir through two pipelines.

The

construction of Unit-I was started in 1988 and the commercial production commenced from
August 1, 1992. The construction of Unit-II was started in 1995 and the commercial production
commenced from March, 19, 1998. Presently the total average production is above 3600 MTs of
Urea Per day.

Finance:
The total cost of the existing complex is Rs. 2156 crores (Rs. 1186 crores for Unit I and Rs.
970 crores for Unit II). This consists of loan of Rs. 1,162 crores (Rs. 515 crores for Unit I

25

and Rs. 647 crores for Unit II) sanctioned by IDBI, IFCI, ICICI, UTI, LIC, GIC and also
Banks. The foreign exchange component of Rs. 781.07 crores was met by the Indian Financial
Institutions like IDBI, IFCI & ICICI and also by Italian Buyers credit. The public and promoters
subscribed the equity portion of Rs. 332.12 crores. The internal reserves of Rs. 323 crores were
utilized for construction of Unit II.

Logo Specialty:
The logo exemplifies the Groups inner
strength through the circles which stand for the

26

core values of the organization viz., concern,

commitment, quality and integrity towards its
stake-holders, viz., customers, employees,
investors and community. The central circle
symbolizes the Sun, the source of prime
G

energy for the solar system. The five circles

The new corporate logo of
the

Nagarjuna

symbolizes

value-based
actualizing

the

Group

dynamic

also symbolize the five elements of the

Universe and the spirit of continuity.

and

The triangle represents the planet Mars.

organization,

Mars, from time immemorial has symbolized

concept

prosperity, success and abundance of energy.

Trusteeship.

of

The triangle in the logo represents the upward

flow of perennial energy towards the mission
of the group.

NFCLs Vision Statement:

27

To be Global Leaders in Plant Nutrition

For close to two decades, we at NFCL have predominantly been in

the business of

manufacturing and marketing Urea, a segment of the Plant Nutrition business space. Given our
cumulated experience and strengths in understanding the farmer, the agriculture, various
initiatives taken in the past, the exposure of Indian agriculture to global economy and therefore
the need for Indian farmers to be globally competitive, have realized the need to provide
innovative and comprehensive Plant Nutrition solutions.
The leadership we refer to in our Vision Statement is in terms of providing innovative and
creative solutions.

NFCLs Mission Statement:

We shall
Pioneer transformation in the approach to plant nutrition
Deliver holistic plant nutrition solutions to the farmers
We shall develop crop, site and stage specific wholesome plant nutrition solutions. NFCL
shall focus on all necessary initiatives towards this be it manufacturing technology, regulatory,
logistics and using a mix of several sciences and skills.
NFCL would network itself to deliver these plant nutrition solutions to the farmers in a novel,
precise manner that results in overall increase in productivity.
In the process of providing these solutions, NFCL shall delight all the stakeholders
employees, investors, suppliers, customers and society at large. The stakeholders would prefer to
be associated with us not only for the higher value we offer, but also shall cherish their
relationship with us due to the way we deal with them with full commitment, responsibility and
accountability.

Content:

28

We the Associates of NFCL are committed to continuously evoking customer delight through
constant review and monitoring and delivering proactive value added solutions. We are also
committed to strive for satisfaction of all stakeholders in a balanced manner through sustainable
growth and profitability

Excellence:
We shall continuously strive for Excellence in all dimensions of the Company through
teamwork, creativity and other means.

Ethics:
We shall strive for wholesome business relationships by adhering to the principles of
trusteeship, fair play and transparency in all our dealings that we shall practice a work cultural,
which is performance driven and conducive to in proving discipline, accountability and depth of
character, team spirit and honesty in all our personal and professional relationships.

Learning:
We shall build a learning organization where creativity, innovation, entrepreneurship
and knowledge sharing are encouraged and fostered actively

Concern:
We consciously recognize that the development of associates is inextricably linked to the
sustainable growth and profitability of the organization. Therefore, mutual care and concern
between the associate and the organization shall be our abiding value.

NFCLS People and Culture:

NFCL Employees live every moment of life in harmony with nature to create value for our
stakeholders, the society and ourselves.

As Individual they shall always:

29

Be Humane
Be cordial and pleasant
Be honest and equitable
Be giving and forgiving
Be positive

And at work, they shall always:

Experiment.
Align individual goals with original goals
Share knowledge
Create an environment, where work becomes an enjoyable and
Be proactive and Responsible
Pursue Excellence
Be committed

information

They believe in creating a culture that encourages values, teamwork, innovation, leadership and
performance.
The plant site at Kakinada provides several employees friendly facilities like well managed
canteen, club house with most modern recreational facilities including indoor games, swimming
pool, theater etc.
Several programs are regularly organized for employees and their families like sports and
cultural events. A school with most modern facilities is being run for the children of employees
named AKSHARA PUBLIC SCHOOL.

30

Location /manufacturing of the Plan:

NFCL plant is located at Kakinada the head quarters of East Godavari district in A.P. The site
selected for the location of the project is about 5 kilometers from Kakinada town and 3
kilometers from the port of Kakinada. 1175 acres of land have been identified for the location of
the plant and associated facilities, of which the plant is located in 380 acres, green belt in an area
of 747 acres. The site faces the Bay of Bengal on the East Side, 300 meters away from highest
high tide line

Since the plant is located close to the town, a number of environmental measures have been
taken to ensure international standards and the principal of zero discharge of effluents. Nagarjuna
fertilizers and chemicals limited is thus considered as a promoters and advocator of
environmental protection in chemical industry.

31

Natures Invaluable and Beautiful Gift to Mankind.

Man can live in harmony with the environment only when mankind is guided by respect for the
Mother Earth and all living things. Nagarjuna Fertilizers and Chemicals Limited believe that
Industry should exist in harmony with nature. In pursuance of the corporate vision, and as a
humble contribution to the Mother Nature, the complete ecological system in and around the
Factory has been changed by establishing a K.V.K.RAJU SUNDARAVANAMU in an area of
747 acres surrounding the Complex. The entire area has been covered with 4, 50,000 plants
consisting of 170 species, transforming a once highly saline marshy area devoid of any
vegetation into a lush green arboreal park. The establishment of 1 K.M. wide green belt is an
integral part of overall natural ecological system consisting of eleven water bodies for fish,
habitat for animal life and sanctuary for both indigenous as well as migratory birds with the
factory nestled in the most natural and idyllic surroundings created with dedication.
An integrated Environmental Management Plan (EMP) has been incorporated in the basic design
itself to ensure strict adherence to International Standards. The investment on pollution control
equipment in the Plant is close to Rs.110 crores of capital investment and a recurring expenditure
of 6 crores being spent annually for operating and maintaining the equipment.

Main Features of Eco-System:

Afforestation:
740 acres of area has been planted with 4.5 lakh saplings of 170 species. Weak areas have been
planted with selected species based on criteria like tolerance to salinity, availability from local
sources and their ability to survive with least maintenance. A full-fledged nursery with mist
chamber and sprinkler irrigation system has been developed for supply of plants to afforestation
programme.

Animal Enclosures:
A deer park with spotted deer has been set up in an area of six hectares with chain-link fence on
all sides. Separate enclosures for birds, rabbits and certain other animals are made available.

32

Some of these animals like jungle cat, fox, jackals, mongooses, squirrels, bats, snakes, and turtles
are also being let out freely in this eco-system as a part of our animal conservation programme.

Use of Treated Effluent:

The total treated effluent generated from the factory is being utilized through a network of over
17 K.M. of PVC pipeline for sustenance of the eco-system to show the purity levels of the
effluents and the technological efficiency of the plant equipment.

Awareness Program:
As a part of NFCLs sincere endeavor to bring awareness about the benefits of cleaner
environment on the general standards of life, company has started GREENING THE ROADS
of Kakinada in phases. As a part of this programme, flowering trees were planted on either side
of the 4 K.M. lengths of roads from Bhanugudi Junction to Nagamallithota and from
Nagamallithota to NFCL. This programme is being extended to further areas in phases.

Environment:
The countrys best experts in such diverse disciplines as forestry, horticulture, soil chemistry,
ornithology and landscaping. The underlying motto of the Group is We give back more to
society than what we take from it. Going much beyond the statutory requirement law for
environment protection, the company has implemented a comprehensive environmental
protection plan in the plant, resulting in near zero pollution of air and water through treatment of
chemical pollutants, recycling and effluent control. A team was set up before commissioning of
plant to look into environmental issues. Based on the Environmental Impact Assessment made by
the team, utmost care was taken to incorporate the findings and create a man made forest. The
green belt was the outcome of the combined wisdom and experience of Creating ecology in a
barren saline infested marshy land, over two-thirds of the plant complex (nearly 747 acres) was
33

earmarked and has been completely developed into a green belt which extends over a kilometer
with more than 0.35 million trees of 170 species, eleven water bodies with marine life, animals
and birds. It is a favorite of nearly 70 species of migratory birds.
In addition to the monitoring stations at Kakinada Plant, an ambient air

monitoring mobile van

is also available to monitor the quality of air outside the factory premises.

Health:

Occupational Health of associates and contract workmen is of paramount importance at

NFCL. At our Kakinada plant premises we have a well equipped Occupational Health
Center with facilities for Spirometry, X-ray, ECG, Audiometry, testing of blood, urine etc.
and availability of Ambulance and medical assistance round the clock. The Medical officer at
the plant is assisted by qualified assistants.
Medical equipment necessary for medical emergencies is also available. Annual Medical
Checkup, which is mandatory for each associate, is carried out regularly. The families of
associates also undergo the Annual Medical checkup, which is a part of the Health
Management Program.
A counselor appointed by the company constant touch with the families of the associates and

34

provides necessary guidance related to marital, legal or addiction related problems.

Safety in NFCL:
NFCL is committed to adopt the highest standard in Safety. Fertilizer plant at Kakinada has an
excellent safety record with 1 Million safe man hours being crossed on several occasions in the
plants history of operations and reaching about 3 Million safe man hours. Regular internal and
external audits are ensured so as to reduce urea dust in the bagging plant, reduction of noise
levels, and improved air quality in working areas. Personal protective equipment and related
safety training is provided by the company to all the concerned associates.
After implementing OHSAS 18001 in the year 2001 in the Kakinada plant, we offered to British
Safety Councils 5 - Star Occupational Health & Safety Audit and attained the 5 - Star rating in
March 2005. In pursuance of continual improvement, we chose to implement Process Safety
Management System (PSMS).
The Process Safety Management System (PSMS) addresses the inherent safety in the Chemical
Process and enhances the effectiveness of our existing Safety and Occupational Health
Management Systems. The PSMS was evolved as a code of practice by Occupational Safety and
Health Administration (OSHA), USA and is mandatory for all chemical industries in USA. The
Process Safety Management System (PSMS) focuses on application of management controls to
operations involving hazardous materials in a way that process hazards are identified,
understood, and controlled so that process related injuries and incidents can be eliminated.
Though such a practice is not mandatory in India so far, at NFCL it is a self-initiative in line with
OSHA, USA standards to update our safety systems and processes.

35

Human Resource Philosophy of The Organization:

Human resource is a valuable resource of the organization.

To achieve effective utilization of human resource in the light of the organizational goals.
High performance profile
Delegation of authority
Highest importance of human values.

Human Resource Training & Development:

The company has recognized well in advance the need for training and development of its human
resources, to help them develop their skills to adapt to the changing world business and
technological scenario. It believes is one of the important ways to reach greater productivity in
todays environment. In that it NFCL there is a separate department to develop employee skills
and performance according to changing environment.
The plant has world class training infrastructure facilities. Spacious classrooms congenial for
learning sessions are well equipped with the latest and modern gadgets. The Training
Programmers are given to employees of all levels of all departments in NFCL. The faculties for
these programmers are both internal and external. The experienced in various department are the
internal faculty and external people of related event are invited to deliver their experiences to the
NFCL employees. For the purpose of training the organization is having well equipped
laboratory and training facilities. Some of them consist of audio-video aids, well-configured
computers and LCD projects etc.

Community and Environment Focus:

36

NFCL aim to become the champions of the environment and the

community, at large, and will

demonstrate this commitment by:

Working as partners with local residents through creation of employment opportunities.
Supporting and improving the local ecological system
Adhering to the principles of sustainable development
Contributing to the physical, academic and economic well being of the

community.

Employee Focus:
NFCLs aim to have the most satisfied employee base by the turn of the century through its
commitment to:
Personal and professional development of the individual
Rewarding teamwork, innovation and quality behavior
Thorough job satisfaction
Creating and sustaining a close-knit family culture wherein every individual experiences a sense
of belonging.

Marketing:
NFCL is operating in Andhra Pradesh, Orissa, West Bengal, Maharashtra, Karnataka and
Pondicherry (Yanam territory). A professional team, with a wide range of products, that include
Urea, traded fertilizers (DAP, MOP, Complex fertilizers), Micro-nutrients, Pesticides, Organicfertilizers and Bio-pesticides, has taken NFCL very close to the farmers and made
NAGARJUNA a household name among the farming community.

37

Keeping pace with the changes in agricultural practices NFCL has developed organic-fertilizers
and bio-pesticides with support from NARDI. A new concept in fertilizers i.e., Customized
Fertilizer Granules (CFGs) has been developed and the product is in trials.
NFCL's Development activities focus on imparting training to farmers and dealers on the latest
package of practices in various crops and technology transfer. Training programs are carried out
both on campus at KVK, Kakinada and off-campus at villages and towns. A well-equipped and
trained development team organizes the programs using audio-visual vans, jeeps, slide projectors
and literature on products and crops, etc. State Governments, Agriculture Universities and the
farming community as a whole have acknowledged the effectiveness of development programs
being carried out by NFCL.

Customer focus:
In recognition that business is based on quality and integrity, NFCLs aim to have the most
satisfied customer base by enhancing farmer-productivity through forward integration on the one
hand, and through catering to industrial needs on the other. Unto this end, NFCL shall:

Produce high quality products that give value for money

Offer quality service that engulfs, amongst other things, a package of inputs, both

products and services

Innovate to satisfy the real needs of customers

38

Engage in fair, open and ethical practices.

Shareholder focus:
NFCL aim to keep its shareholders satisfied by:
Delivering the best long-term return on investment amongst all companies in the Indian agribusiness industry.
Continuous growth and excellence in business performance.

Performance:
SALES
YEAR

PRODUCTION

SALES

TURNOVER

NET PROFIT

INCLUDING

AFTER TAX

SUBSIDY
Ammonia

Urea

MFG Urea

(MT)

(MT)

(MT)

188027

308453

251599

(Rs. Crores)

(Rs,Crores)

364.48

32.11

1992-93
(8 months)

39

1993-94

344498

591213

598787

606.51

127.87

1994-95

386357

675149

659094

843.14

192.89

1995-96

413390

708059

689767

882.27

221.18

1996-97

412694

716910

695154

922.49

155.24

1997-98

401627

689648

682836

795.88

122.10

1998-99

699110

1212607

1205376

1214.54

143.73

1999-00

751442

1297510

1283195

1435.96

113.50

2000-01

796024

1364794

1324497

1215.52

46.53

2001-02

706528

1221944

1217629

1062.69

39.70

2002-03

689263

1187259

1101776

748.65

57.47

2003-04

712534

1325467

1265376

1178.26

74.67

2004-05

723525

1382953

1256704

1385.63

85.35

2005-06

788471

1379220

1396927

1452.95

6685

2006-07

756814

1324054

1310856

1815.24

3171

2007-08

1354490

08-09

1378162

09-10

1482103

10-11

1655042

OTHER GROUP OF COMPANIES OR INSTITUTIONS:

Nagarjuna Agric hem Limited

Nagarjuna Palma India Limited
Nagarjuna Agricultural Research & Development Institute
K.V.K.Raju International Leadership Academy
Nagarjuna Power Corporation Limited
Nagarjuna Haifa India Limited

40

Nagarjuna Oil Corporation Limited

Bijam Biosciences Limited
Nagarjuna Foundation

Diversification:
Nagarjuna Group is on the threshold of major growth phase. Nagarjunas aim is not just to meet
the challenges of change, but to be the leaders in all the businesses that we are in, namely, Agri
Inputs/Outputs, Energy Sector, Refining and Financial Services. Nagarjuna Group will thus have
significant presence in the core sectors of the economy, which will have a multiplier effect on the
industrial and socio-economic development of the country.

Future plans of the company:

To improve the capacity, utilization and energy efficiency through technology up gradation.
Switching over to 100% natural gas as raw material instead of Napata in Ammonia plant II
To continue to improve environmental performance under the framework of ISO 14000 EMS.
To achieve British Safety convenience sword of honor in safety management.
To enhance the standards in the present quality management system (ISO 9002) by adopting the
ISO 9001-2000 revision.
To enhance the standard in the present quality management system (ISO 9002) by adopting the
ISO 9001-2000 revision.
To widen the scope and offer technical services to various external agencies including overs as
an excitement.

41

Awards:

EPIC Award for Anti-Pollution measures taken by the Industry by Environment Public
Interest Committee, Kakinada in 1993.

Good Housekeeping Award for 1994 by National Safety Council, A.P. Chapter.

Best Industrial Canteen Award for 1994 by National Safety Council, A.P. Chapter.

Indian Chemical Manufacturers Association (ICMA) Award for "Environmental Control

Strategies and Safety in Chemical Plants" for the year 1994.

Award of Merit for 1994-95 by National Safety Council, U.S.A. for completing 2 Million
Accident Free Man Hours.

ISO 9002 Certification from Bureau Veritas Quality International (BVQI), Netherlands,
in 1995.

Golden Peacock National Quality Award by Institute of Directors, New Delhi, India for
1995.

British Safety Council's National Safety Award for the five consecutive years 1994, 1995,
1996, 1997 & 1998 and also for the year 2000.

Rajiv Gandhi Parti Bhoomi Mitra" Award for 1994-96 by Waste Land Development
Board, Government of India.

National Safety Award for 1996 by National Safety Council, U.S.A.

42

Award for Innovative and Purposeful Programmed for Social Progress for the year 1996
by Indian Chemical Manufacturers

Association (ICMA), Mumbai.

Merit Award for 1997 and 1998 by Royal Society for the Prevention

(RoSPA).
Best Workers Welfare (including Family Planning) effort by an Industrial or

of Accident

Commercial Unit in the in the State for the year 1997-98 by Andhra Pradesh Chambers

of Commerce & Industry (FAPCCI).

Golden Peacock National Award for Environmental Management by World Environment

Foundation for the year 1998.

Paryavarana Parirakshak Award by Rotary International at Visakhapatnam for the year

1998.
VANAMITRA - 1999 from Govt. of A.P. for Developing and Maintaining Greenbelt.
Achieved 84% in OH&S - Audit conducted by British Safety Council, U.K. in January

2000.
ISO 14001 EMS Certification from BVQI in May 2000
Best School Industry Linkage Award 2000 by NCERT - an Autonomous Organization of

Government of India - December 2000.

Bronze Award for Occupational Safety for the year 2000 by Royal Society for the

Prevention of Accident (RoSPA), UK.

Best Environmental Management Plan 2000-01 in Vizag zone by Andhra Pradesh

Pollution Control Board, Visakhapatnam.

National Safety Award for 2000-01 from British Safety Council, U.K.
Best Environmental Improvement Effort by Industries located in the State in 2000-2001

from Federation of AP Chamber of Commerce and Industry, Andhra Pradesh.

Bronze Award for Occupational Safety for the year 2001 by Royal Society for the

Prevention of Accident (RoSPA), UK.

Commendation Trophy jointly given by National Safety Council, A.P. Chapter & Director

of Factories, A.P. for Implementing OHSAS 18001 in March 2001.

Occupational Health and Safety Assessment Series (OHSAS-18001) Certification from

BVQI in April 2001.

Environmental Protection Award in Nitrogenous Fertilizer plants category for the year
2001-02 from Fertilizer Association of India, New Delhi.

43

Perfect Record in Occupational Safety/Health Award Programme for operating two

million employee hours without occupational injury or illness for the period from

10.10.2001 to 13.11.2002 from National Safety Council (NSC) of USA.

Cleaner production Award for good practices for the year

APPCB,Hyderabad in 2004
National Award for Excellence in water management 2004 by confederation of Indian

industry (cII) in 2004.fi

Five star health and safety management system Audit by British safety council, London

in 2005.
Commendation prize awarded on the occasion of first national convention on Energy

conservation initiatives by Andhra Pradesh productivity council, Hyderabad in 2005.

Best technical innovation award and prestigious FAI Environment protection award in

the nitrogenous fertilizer plants category for 2004-05. By FAI, Delhi in 2005.
Award for excellence in Natural gas conservation in the fertilizers sector category for

2004-05 by GAIL in 2005.

Best management award from labour department of AP state government in 2006.
Best technical innovation award for 2005-06 by FAI, Delhi in 2006.
National award for Excellence in water management 2006 by CII Godrej GBC,

Hyderabad in 2006.
Environment protection award in Nitrogenous Fertilizer plants category for the year

2006-07 by FAI, Delhi in 2007.

Commendation prize under the stream category for its energy conservation initiatives by

Andhra Pradesh productivity council, Hyderabad in 2007.

National award for water efficient unit 2007 by confederation of Indian industry,

Hyderabad in 2007.
Certificate of appreciation for implementing the process safety management system

(PSMS) by national safety council, A.P. chapter, Hyderabad in 2008.

Environmental protection award in nitrogenous fertilizor plants category from FAI, Delhi

in the year 2008.

Rashtriya chemicals and fertilizars award for the best article in production and

technology from FAI, Delhi in the year 2008.

Second runner up award for excellence and innovation in SHE (safety, health and

2003-04

by

environment) performance in the year 2008 from IFA (international fertilizer industry
association, France.

44

Excellence in safety award in nitrogenous fertilizer plants category for the year 2008-09

from FAI, Delhi.

Excellence in management of health, safety and environment for the year 2008-09 from

ICC, Mumbai.
Environmental protection award in nitrogenous fertilizer plants category from FAI, Delhi

in the year 2008-09.

Runner-up award for the state energy conservation award for the year 2008-09 under the

chemicals and fertilizers sector by NEDCAP.

Best management award for maintaining excellent cordial industrial relations and for
effective implementation of employee welfare activates in the year 2010 from govt. of

A.P.
Prestigious-EVI green business leadership award best performer in the chemicals and

fertilizers category for the year 2009-10.

ICC award of certificate for water resource management in chemical industry for the year

201 0 from ICC.

ICC award of certificate of merit for the best compliment under responsible care for

codes environment protection and process safety management from IEE in the year 2010.
Runner-up award in nitrogenous fertilizer plants category from FAI, Delhi and platinum
award for manufacturing excellence by IMEA from forst and sullican and financial
express in the year 2010.

Welfare measures In NFCL:

It has taken several welfare measures to improve the general working conditions. They are given
below:

A.C. Facilities

Drinking Water Facilities

45

Lockers given to employees for keeping their belongings.

Annual Medical Examination

First Aid Boxes at several locations

Cultural Activities

Library Facilities

School for children of NFCL employees

Uniform to all employees

Groups savings linked Insurance Schemes

Protective wear like helmets

Transport facilities

Canteen facilities

housing loan facilities

NFCL Objectives:

Performance Management

High performance potential

Individual growth potential

Belief in Youth

High Result Orientation

Law procedure Orientation

Entrepreneurial Development

Distinct Nagarjuna Group Ethos

High sense of respect for value of time and money Harmonious employee

Development of Human Resources on a continuous basis

Highest importance to human values

Objectives assessment of individual performance

Disciplined behavior of all employees

Belief in system management

46

relations

Belief dynamism

Belief in multi skilled concept

Continuous monitoring control

Swot Analysis:
Strengths: A broad and modern product range good corporate image especially in Andhra
Pradesh excellent dealer network in most of the other states open work culture and good working
environment qualified trained and motivated team quality assurance system ISO 9000 location
advantage of plant

Weakness: Broad product range is not synergies yet. In adequate information system and
coordination between area offices and lead offices. In adequate marketing database/market
information. Procedural bottlenecks some complacency about market retention. Inadequate
reporting systems.

Threats: Decontrol, Joint Ventures, International cartels. No availability of raw materials in

future.

Opportunities: Huge gap between usage outside and inside India. Expansion object offering
double the quantity. New irrigation projects increasing the demand.

Organization structure and functions:

The organization of NFCL is simple and is considered to be a flat structure. Various departments
in NFCL are:

47

Finance department:The role of finance department is basically a staff function. Its major duty is to look into matters
of

Treasury
Audit
Accounting
Dealing with government.

Objective:
NFCL has highly developed marketing network. Its aim is to spear head the agricultural
revolution in the country and be the most trusted friend of farmers. Several innovative publicity
advertising measures were taken to consolidate the brand equity of Nagarjuna products.

Human Potential Development Department:The company has separate HPD and HRD departments. The HPD department plays a vital role
from recruitment to separation of an employee. It also maintains statutory and non-statutory
facilities. It acts as, grievance redressal unit maintains contract employee, and HRD conducts
training programmers

Functions:

Personnel
Recruitment
Attendance
Employee benefits
Wages and salary administration
Statutory conferences
Participative committees
Labour department and
Other government agencies.

Administrative Functions:
To develop and maintain harmonious industrial relations.

48

To advice the top management in the formulation of sond personnel practices.

To structure and monitor various activities pertaining to HRD.
To keep changing trends in legislation and their effect personnel policies of the company.

H R D Department:Defining the methods and new techniques for assessing the training needs.
Conducting training programmers to the employees.
Evaluating the training programmes.

IT Department IT department looks after all the matters relating to maintaining personnel records and
management information systems.

Production Department:This department looks into production levels from time to time and prepares plans to meet the
target standard.

Technical Services Department:Safety measures are taken from time to time and safety boards are displayed to make employees
cautions. Fire extinguishers and fire alarms are placed at regular intervals incase emergency,
regular checkup and regular training classes conducted to employees.

Engineering Department:Electrical, instrumental, civil, mechanical services, general engineering are part of their
department.

Material Department:-

49

The major function of this department is to look into the purchase of raw materials. It takes
necessary steps and maintains good amount of raw materials necessary.

Time Office Management:

The Organization maintains strict office timings and disciplinary rules. All the employees are
expected on the site on time and any in-disciplinary act would be severely looked into.

Shift

Timings

6:00 AM

2:00 PM

10:00 PM

to

6:00 AM

8:00 AM

to

4:30 PM

GENERAL SHIFT

to

2:00 PM

to

10:00 PM

Network:
NFCLs 170 people strong marketing force is committed to provide total customer satisfaction
through reliability, timeliness, courtesy, honesty and value for money. This commitment has
helped NFCL in achieving the status of the leading player in plant nutrition in the states of
Andhra Pradesh, Orissa and West Bengal, Karnataka and Chhattisgarh. Servicing 5 states, NFCL
have 5 zonal offices and 16 area offices.

Andhra Pradesh

50

51

CHAPTER-4
THEORITICAL FRAME WORK
DATA ANALYSIS AND INTERPRITATION

THEORETICAL FRAME WORK

52

Introduction:
Coming to the project work, it is about the study of marketing in which items of distribution and
transport are available at NFCL Kakinada. The authority has suggested me to study the existing
transport logistics prevailing and to find out an economical way through a computer package
which will enhance the economical way and in the transportation sector.

Process:
Choosing a data

Defining objectives

Searching for data

Sources of data

Selection of the source

Collection of the data

Analysis of data

Findings and collection

suggestions

The project is concentrated on creating a computer package to workout, develop and

implementation of utilization logistic system for daily use of NFCL distribution under excel, for
the urea in fetching the dealer point in an economical way.
NFCL believes in the core principle of serving the society through industry and benefiting
the farmer to the utmost utility of its product towards increasing farm productivity thus enhance
the global competitiveness of the Indian Agricultural products significantly.

What is logistics?

53

Logistics can be defined as planning, organizing and controlling of movement of goods, services
and related information from source to distinction, effectively and efficiently.

Effectiveness talks about the time management whether we are able to deliver goods from

the organization of raw materials through the end user.

Efficiency talks about the monetary part i.e. adopting best in class logistics practices to
maintain their market share and profitability.

To complete in todays business world, a company needs to be able to deliver product with low
costs, in a timely manner to any location in the world. For any company that competes in the
global market place, they must adopt appropriate best in class logistics practices to maintain their
market share and profitability.

Why is logistics so popular?

Impact on customer service: since consumer demands are constantly changing, companies must
develop the infrastructure and culture to quickly and efficiently adapt to become more customers
centric.
Reduced costs and increased competitiveness: companies have utilized just-in-time, bar coding,
the integration of information systems, strategic partnering and outsourcing. Which have allowed
firms to decrease cycle typically cut logististics budgets by 20-40%.

Development of information technology: since 1990, there has been a dramatic change increase
in the implementation of information technology to support logistics functions.

Relevance of logistics in N.F.C.L:

54

Optimization of distribution costs

-Manufactured urea
-MOP & OF

Transport logistics (controlled & decontrolled scenarios)

-L-1 logistics up to ware houses (WHs) for MU & OF.
-L-2 logistics up to dealer locations for MU & OF.
-L-3 logistics are of port logistics.

Implementation of dual (rail/road) movement.

Spatial allocation of material in TANDEM with ASP.

-WH reservation for karif and Rabi.

Spread of dealers:

55

state

dealers

consignee

Total

locations
6025

Andhra pradesh

2609

6695

9304

Orissa

284

284

387

158

285

West Bengal

158

total

SPREAD OF DEALERS

56

L-1 Logistics From Port To W.H Location:

Sl.no

Mode

cost

S.n

Mode

cost

Wf-COA-BZA RH-SPT

292

Wf-LWF-NGFS-RH-SPT

375

Wf-NGFS-BZA RH-SPT

319

LWH-SPT

380

Wf-SPT

324

Wf-NGFSBZA,WHSPT

387

Wf-LW-COA-BZA RHSPT

347

Wf COA-WH-SPT

415

Wf-COA-BZA WH-SPT

360

10

Wf-NGFS-WH-SPT

443

57

SPREAD OF LOCATIONS

location
100%

90%

80%

7 0%

60%

location

50%

40%

30%

20%

10%

0%

In order to exercise control over the delivery of fertilizers to their customers, NFCL has fixed the
linkages for each WH with respect to the dealers and locators, each dealer locations has to draw
58

material only from a single WH on extremes or on FOL terms from plant. Hence, for exdeliveries
from WH, the ones of transportation lie with the dealer only.
As per the recognized distribution system, NFCL is to distribute fertilizers on FOL terms that is
the company has to deliver the fertilizers to customers and hence product decision has to be
taken to decide the source of material (material source could be more than one WH), the
incidental transport costs and execute dispatches from the WH from which the transport costs are
minimum to the customer location.
Further there exist some asymmetries, as enunciated bellow, in the transport sector which can be
taken advantage of by adopting dual mode of transportation.

Rail fright is telescopic in nature (i.e. as distance increases, the per kilometer rate

decreases).
Transportation by rail is cheaper than road, where the location is accessible by rail)
Due to return load concept, road freight from some potential markets (like Vijayawada,
tadepalligudam, Guntur) is cheaper to the locations in the hinter land.

Due to the above facts, for some of the locations, cross logistics from other unconventional WHs
or RHs can be explored and if feasible, material dispatch could be initiated to minimize the
transport costs.

Summary of the district-wise locations:

59

Locations
district

analyzed

Objective-1

Objective-2

Objective-3

East Gd.

14

14

56

West Gd.

367

944

1548

4380

Krishna

309

972

1644

4560

Guntur

413

1854

3312

9470

Prakasham

270

650

718

1930

Khammam

195

774

1460

3782

Nalgonda

222

863

1419

3164

Warangal

177

682

970

3016

Total

1958

6753

11085

30358

DATA ANALYSIS: The mode of transport in NFCL is

60

Water
Rail
Road

NFCL uses water for imports and remaining two ways it will use in the country for
Sending its products. Out of 100% it uses rake for 80% and through road 20%.
The net weight of urea in bag is 50kg and sack weight is 130grms and the gross weight is
50.130grms and measured as 20 bags = 1000kgs =1 Metric ton.
The type of trucks available is mainly of 17 tones capacity . Each truck will carry 340 bags. i.e.
17.000 MT
NFCL is having three transport contractors namely Avanthi, Cormandal and Ever green.
The order of allocation will be prefixed ratios between contractors.
Most of the trucks will be placed from sad guru lorry owners association and the above
Mentioned three contractors are affiliated to this union.
1 Rake is equal to 43 wagons. Each Wagon will carry 63tons and 1 Rake will carry 25205tons.

PLAN OF TRANSPORT:

61

plant

rake
Dealer

Rail head

And
Sub dealer
Local

transport

Ware house
The above diagram show the goods move from the plant
From plant NFCL will send its product through trucks on road to dealer and sub dealer.
Another way is through rake. Through rake the goods will reach to rail head
From goods shed products will be send to dealer.
Remaining stock from goods shed with the help of local transport it will be send to
Ware House local and nearby field location ,Ware Houses as per requirement and plan by area
officers.
The stock stored at Ware House is used when required the company will send stock to
DETAILS ABOUT DISPATCH OF GOODS:
FINAL PRODUCTION MODE OF DISPATCH
YEAR
IMPORTS
RAIL

ROAD

RAIL
COEF.
TOTAL

62

RAIL
FRIGHT
IN

NO.OF RAKES

04-05

1593593

1277487 316527

1594014

80

49.38

548

05-06

1449403

1134558 314846

1449403

78

46

488

06-07

2035646

1614597 4220202

2034799

79

91.86

664

07-08

2816959

2402192 361481

2763673

87

49.43

979

08-09

2084734

1871607 312129

2813736

85

111.25

720

09-10

2089045

1643751 510697

2154448

76

112.92

637

10-11

2622840

2097957 529040

2626997

80

157.75

789

63

CHAPTER-V
FINDINGS
SUGGESTIONS

FINDINGS

There is no proper road transportation.

There is less truck facilities for transportation.

64

There is no canteen facility to the drivers.

There are no rest rooms for the drivers.

SUGGESTIONS

Improve the loading procedure to load trucks quickly.

Provide canteen for drivers otherwise allow them to take food in bagging plant.

65

Arrange rest rooms for transporters as they have to stay in night on some days.

Measures should be taken to see that dealers do not unload the stock at sub dealers

BIBLIOGRAPHY

MARKETING MANAGEMENT PHILIP KOTLER

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