Rohit Bhat_ Sec q _ Mba 3 Sem

8/8/2019 Rohit Bhat_ Sec q _ Mba 3 Sem

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` DEFINE THE BUSINESS AND COMPANY.` PROMOTORS.` VISION AND MISSION.` PRODUCT MIX.` MERGER, JV, TAKE OVER &ALLIANCES TILL D ATE.` TOP MANAGEMENT(CEO,CMO,CFO ETC)

` LOCATION OF MANUFACTURING UNIT &TOUCH POINTS` CURRENT GOALS & OBJECTIVES.` WHO ARE THE STAKEHOLDER OF COMPANY?` FINANCIAL ASPECT OF COMPANY.` SWOT` PRODUCT LIFE CYCLE` PORTER¶S FIVE FORCE MODEL` SUGGESTIONS & RECOMMEND ATIONS` CONCLUSION



` V.S.F production commences at Nagda in 1954. itis situated on the 150 acre site and is the largestin the world. Nagda is its core unit, producing a

wide range of VSF to suit the customersrequirements in terms of health, denier, colour andis the largest producer of spun dyed and specialtyfiber in the world.



` Kumar Mangalam Birla

` Rajshree Birla



` To be a premium conglomerate with a clear focusat each business level



` To pursue the creation of the value for our customer, shareholders, employees and society atlarge.



` Viscose Staple Fiber (V.S.F)



` Thai Rayon

Promoted in 1974 by the Aditya Birla Group, Thai Rayon is the solemanufacturer of Viscose Rayon Staple Fibre (VSF) in Thailand. More than50 per cent of Thai Rayon's VSF throughput is directly exported to morethan 20 countries worldwide. The VSF meets the stringent quality

expectations of customers in USA, Mexico, Europe, Turkey, Canada, Israel, Australia, South Korea, Philippines, Indonesia, Pakistan, Bangladesh andSri Lanka.

` PT Indo Bharat Rayon

Marketed under the brand name of 'Birla Cellulose', the company produces

a wide range of VSF in engineered specifications for textiles and non-woven applications. The company's strong focus on environmentalprotection is reflected through its investments in a sophisticated state-of-the-art waste-water treatment plant and scientific waste disposal systems.



` Board of Director

Mr. Kumar Mangalam Birla, ChairmanMrs. Rajashree BirlaMr. M. L. ApteMr. B. V. BhargavaMr. R. C. BhargavaMr. A. K. DasguptaMr. Shailendra K. JainMr. D. D. RathiMr. Cyril Shroff Dr. Thomas M. ConnellyMr. Adesh Gupta (Whole-TimeDirector)

Mr. K. K. Maheshwari (Whole-Time Director)



` Business HeadMr. K. K. Maheshwari, (Viscose Staple Fibre)

` Chief Financial Officer Mr. Adesh Gupta

` Company Secretary ::Mr. Ashok Malu

` Chief Executive Officer

Mr. Kumar Mangalam Birla



` Manufacturing PlantGrasim industries private limited (SFD)

Birlagram Nagda (Madhya Pradesh)Pin no:- 456331Tel no:- 246760 - 246766 / 256373 / 256556Fax no:- 244114/246024Website:- http://www.grasim.com

` Touch point

Goal market:- A factory outlet for providing information regardingthe company and selling the garments made up of the viscosestaple fibre the main product of the Nagda plant



` To become a US $ 65 billion Group by 2015 from US $ 30 billion today.

` Work on the 80,000 tons Greenfield project at Vilayat is at the pre-projectstage. It is expected to commissioned upto 2013.

` To work efficiently for developing sustainable environment. Various steps

taken for achieving this goals

` Towards green house gas reduction, your Company¶s plant at Kharach hastaken on three Clean Development Mechanism (CDM) projects. Thesehave been approved by the Ministry of Environment and Forest (MoEF) andtheir validation is underway.

` At your Company¶s Pulp Plant, waste is reclaimed as biogas. This is used inthe lime kiln and hot air generators, substituting furnish oil and light dieseloil to a large extent. Besides lowering the fuel consumption this initiativehas resulted in cutting down the emission of greenhouse gas.

` At VSF Plants, treated effluent is used for irrigation and better crop yields.For the year under review over 3,790 Bighas of farm land has beenirrigated.



` Shri Kumar Mangalam Birla` Smt. Rajashree Birla` Smt. Neerja Birla` Master Aryaman Vikram Birla

` Birla Group Holdings Private Limited` BGH Exim Limited` Birla TMT Holdings Private Limited` Chaturbhuj Enterprises LLP` Essel Mining & Industries Limited

` Global Holdings Private Limited` Gwalior Properties And Estates Private Limited



` Heritage Housing Finance Limited` IGH Holdings Private Limited` Infocyber India Private Limited` Mangalam Services Limited` Naman Finance And Investment Private Limited` Rajratna Holdings Private Limited` Seshasayee Properties Private Limited` SiddhipriyaEnterprises LLP` TGS Investment And Trade Private Limited` Trapti Trading And Investments Private Limited` Turquoise Investments And Finance Private Limited` Umang Commercial Company Limited` Vighnahara Enterprises LLP` Vaibhav Holdings Private Limited



` Operating Margin

` Interpretation: - From the above data we can conclude that theoperating margin is highest in the last fancial yearin due to thesuperb performance of the company after the downfall. Trend of operating margin is not constant.

0

5

10

15

20

25

30

35

2010 2009 2008 2007 2006

Operating

margin



` Gross Profit Margin

Interpretation: - This ratio tells an investor the percentage of sales\revenue left after subtracting the cost of good sold, and from theabove data we can conclude that GPM is highest in 2010 which showsthat company has efficiently handled the manufacturing and distributionfunctions of the company. The trend shows a constant increase in GPMfrom 2006 to 2008 than there is drastic fall in 2009 because of lessrainfall.

0

5

10

15

20

25

30

35

40

2010 2009 2008 2007 2006

GPM



` Net Profit Margin

` Interpretation:- this ratio tells us the profit margin which thecompany will get on the revenue of 1 rupee . we can estimate fromthe above data that due to good performance of the company ithas kept the profit margin around 25.6% which is highest upto nowthen preceding years.

0

5

10

15

20

25

30

2010 2009 2008 2007 2006

NPM



` Earning Per Share

Interpretation: - this is the most important ratio for the shareholdersand investors of the company. It tells the actual earnings availableto the shareholders on each share. It also shows the similar trendhighest in 2010 then declining in preceding years.

0

5

10

15

20

25

2010 2009 2008 2007 2006

EPS



` Return On Net Worth

Interpretation: - This ratio is one of the most important ratios used for measuring the overall efficiency of a firm. This ratio reveals how well theresources of the firm are being used, higher the ratio, better is the result.

0

10

20

30

40

50

60

70

80

90

100

2010 2009 2008 2007 2006

RONW



Dividend Payout Ratio

Interpretation: - dividend payout ratio is calculated to find the extentto which earnings per share have been retained in the business. Itis an important ratio because ploughing back of profits enables acompany to grow and pay more dividends in the future.

0

0.5

1

1.5

2

2.5

2010 2009 2008 2007 2006

Div. Payout

Ratio



` Profit Before Depreciation Interest and Tax

` Interpretation: - it is also known as the gross profit of thecompany. It is the profit before any kind of expenses such asdepreciation, interest and tax.

0

500

1000

1500

2000

2500

3000

3500

2010 2009 2008 2007 2006

PBDIT



` Depreciation

Interpretation: - it is a non cash expense that reduces the value of an assetas a result of wear and tear, age, or obsolescence. In the above datadepreciation is calculated on the basis of WDV method

0

2 0 0

4 0 0

6 0 0

2 0 1 0 2 0 0 9 2 0 0 8 2 0 0 7 2 0 0 6

de pr ec i a t i on



` Profit Before Interest & Tax

` Interpretation: - It is also known as operating income.The above data tells us the profitability of the firm andis obtained by subtracting depreciation from the grossprofit (PBIDT

0

500

1000

1500

2000

2500

3000

3500

2010 2009 2008 2007 2006

PBIT



` Profit Before Tax

` Interpretation: - It shows the profitability of the firm before paying any kind of taxes.

0

500

1000

1500

2000

2500

3000

2010 2009 2008 2007 2006

PBT



` Profit After Tax

` Interpretation: - It is the final profit which the firmobtain after paying all kind of expenses which includesdepreciation, interests and all kind of taxes. This profitcan be used by the firm for there future plans

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

2010 2009 2008 2007 2006

PAT



` Net Profit

`

Interpretation: - It shows the profit which remain after payingall kind of indirect expenses such as dividend, interest onloan etc.

0

500

1000

1500

2000

2500

2010 2009 2008 2007 2006

Net Profit



` Financial Strengths

1. The company has earned the net revenue of Rs. 20195 crores which is9% above the last year

2. It has also earned the net profit of Rs 3096 crores and at a registeredgrowth rate of 42%

3. ROE guidance for fiscal 2011 will be upped to 25%4. Strong Balance sheet. Will be a zero-debt company in 2 years as stated

by CFO5. The installed capacity of the company to manufacture the VSF is 333975

tpa and company last year manufactures quantity is 302092 tpa. Thisshows that company is working almost at the full capacity(93.66%) andresources are used efficiently.

6. Share capital of the company has been increased since last years7. Profit After Tax of the company has been increased from last year 8. Earnings Per share of the company is being increased from last year and

is favorable according to the investors.9. The company derives most of its revenues from exports and its

international acquisitions.10. Net income Margin stays same around historical 13-14% sales



1. Grasim industries market share is US$ 30 billion2. In the VSF sector grasim industries as a group are the largest player around the globe

according to the capacity which is around 7000000 tonnes3. The VSF plant of the Nagda is situated on 150 acre site and is the largest in the world.4. The VSF plant at nagda meets the 90% of the countries requirement of spun dyed specialty

fibre.5. Grasim industries has underwent many JV¶s and takeovers to strengthen its market

capitalization such as: -AV Cell and AV Nackawic in Canada, Birla Lao Pulp & PlantationLimited in Laos, Birla Jingwei Fibers Company Limited in China

6. In this business, alongside further backward integration, to bolster the low costmanufacturing competitive edge, the company is increasingly moving up the value chainthrough bringing in innovative products that signal the changing contours of the Pulp andFibre business

7. With the commissioning of Line 2 in China and the debottlenecking at Indo Bharat Rayon inIndonesia, an additional 45,000 tons will come through soon. Work on the 80,000 tons

Greenfield project at Vilayat is at the pre-project stage. We expect its commissioning in2013. By then, we would move to 8, 23,000 tons per annum8. Grasim industries has an extensive international presence9. International presence in over 60 markets including Europe, the US and China10. core competency in fibre manufacturing .11. Significant penetration of the Indian market due to large and focused sales force enabling

quick uptake of products.



1. The Aditya Birla Group was ranked number one in India and among thebest in Asia by Hewitt in their Best Employers Survey 2007

2. A large team of enthusiasts from the Aditya Birla Group are running at theStandard Chartered Mumbai Marathon 2011.3. Birla Cellulose has succeeded in a commodity market, proving clearly that

their fibre is made of sterner stuff 4. Birla Viscose offers a customer value creation service, which goes beyond

the requirements of timely delivery and good after sales service5. Greentech Environmental Excellence Award by Greentech Foundation6. D

istinguished Achiever Award to Mr. Ravi Uppal from the Aditya Birla Group7. Young Achiever Award to Mr. Rakesh Jha from the Aditya Birla Group8. One of the biggest asset of grasim industry is its knowledgeable and hard

working managerial staff which is headed by the chairman of the companyMr. Kumar Mangalam Birla,

9. Grasim Industries Ltd is one of the Indian companies to make it to the elitelist of Forbes Asia's Fabulous 50 award winners. The award winningcompanies were selected on the basis of employer retention strategies

used in the company.10. Knowledge based, low- cost manpower in science & technology11. Well-qualified and established entrepreneurs.12. A Grasim industry is overall anchored by the extraordinary 1000000

employees belonging to over 25 different nationalities.



1. Grasim has established a very strong R&D base covering different stages of the value chain.Birla Research Institute for Applied Sciences (BRI), Nagda is involved in the development of different generations of cellulosic fibres. Textile Research Application Development Centre(TRADC) at Kharach, a NABL accredited Lab, is involved in addressing research anddevelopment related to downstream textile value chain comprising various fibres, yarns,processing, garments, etc.

2. company with the help of its research & development wing has succeed in launching 3 newproducts in VSF range: - Viscose Plus, High Wet Modulus Fibers (Modal) and new generationSolvent Spun Fibers.

3. The waste product generated in the manufacturing process of VSF is sodium sulphate, which isalso used in the paper and pulp, detergent, glass and textile industries. Grasim is the largestproducer of sodium sulphate.

4. Ability to produce the products in a short span of time for selling.5. For the reduction of consumption of energy following measures have been taken:-` Adoption of triple effect steam ejectors at MSFE and anhydrous evaporators.` Adoption of De-super heater system in Anhydrous evaporator in Auxiliary PC 1 and PC2.` Replacement of condenser pump running for centrifugal compressor by energy efficient

pump.` Replacement of existing 600 KVA buck boost Furnace Transformer with 360 KVA Transformer.` Adoption of gravity flow of Slurry from Pulper to Homogeniser in place of pumping

` Development of 100% regenerated cellulose fabric in knit & woven which is dimensionally stableand have very good strength.` Standardization of construction and process parameters to achieve DP rating 3.5 for

Modal/Cottonblend fabric specially for shirts.

` Process optimization for weight reduction process for poly/viscose blend fabric to get extra softhandle.



Financial Weaknesses

1. By analyzing the balance sheet of year2009-2010 and 2008-2009 we can see thatworking capital is decreased tremendously from 820.03 in 08-09 to 281.32 in 09-10. This decrease in working capital means non- improvement in current financialposition of the business.

2. By deeply analyzing the balance sheet we can see that company raw material

storage period is quite long due to which the company has to incur the extra cost.3. Complexity of the Tax Code4. Foreign Exchange and Austerity Risks5. Gross sales of the company has been decreased from last years sales6. The stock level of the company has also been decreased from last year 7. Reserve funds of the company has decreased from the last year 8. Production Cost Increases

9. Unsatisfactory Corporate Governance10. The cost of manufacturing, conducting trial, and research are lower



1. The production of VSF is totally dependent upon the availability of the high qualityraw materials and no substitute is available for the raw material. So, the companyfaces problems in adverse conditions such as low rainfall or transportation strikeetc in which the raw material becomes unavailable and production has to behalted.

2. Market area/coverage is sometimes disturbed by the small producers. The localmanufacturers have the capability of producing low quality substitute of VSF andsell them at cheaper rates.

3.

The company is not customer/market driven or there process is very slow, due towhich the competitors get an undue advantage of it.4. The company¶s strategy of positioning its product as a premium product for niche

market hampers in expanding its market share.5. The company uses basic e-business tools in its day to day business6. Reliance on Few Products7. Produces Harmful Emissions8. Electricity Supply Uncertain9. Poor Marketing Nationally10. Poor Customer Service11. Weak Relative Distribution Channels12. Lack of Corporporate Social Responsibility13. Low Relative Marketing Strength



1. Relatively immature capabilities in R&D.2. In order to compete effectively in global markets, strategic

partnerships required to develop products3. Lack of resources similar to US and Europe based

competitors to develop a Fibre to marketing stage4. Weak Infrastructure5. Lack of patent legislation in India harms sales of its products6. Very less measure have been taken to reduce the emission of

the harm full effluents from the manufacturing process7. Time taken to introduce new product in the market is very

long

8. Not enough steps has been taken towards increasing themarket share of the company9. Upgradation of machinery acc. technology takes very much

time



1. Weak HR policies2. Corruption problem in the developing countries3. Unethical union leader 4. Indiscipline workforce

5. Improper time management6. Non availability of top management when ever required7. Lack of basic facility such as canteen, TV room etc. are

lacking8. Lack of coordination between different departments9.

No parking facility10. Safety equipments are also not up to date



` Financial opportunities

1. RDY will continue to grow at 20% even after the forecast period.

2. European Markets Liberalization3. InternationalExpansion

4. Increasing GDP of the country5. Availability of MNCs ± Good opportunity for loan licensees.6. Expanding in the South East7. The IMF has forecasted a growth of 2.3% for the advanced

countries and 6.3% for the emerging economies for 2010.8. Our economy is slated to grow in excess of 8%

9. Supply Chain Cost Reductions



1. Increase in consumer purchasing power

2. Increasing Fashion consciousness.

3. Expanding in the South East Asian market

4. Incredible export potential.

5. Expansion in Global Markets Diversified

6. Increased Market Share

7. International Trade simplified

8. Increase in Consumer Spending on fashionable clothes9. Emerging Markets exploitation

10. European Markets Liberalization

11. Further development of drug delivery technologies

12. Having good number of retail outlets , opening avenues for direct supply.

13. Increasing Fashion consciousness around the world.

14. Decreasing development time through favourable R&D collaborations and internal efforts.

15. Emergence of integrated global markets and globalization for new products.

16. Shift in focus towards high-margin specialty segments such as Lenin and VSF will improveoperating margins.



1. Step towards the making of strong employee retention strategies2. Extracurricular activities should be there to motivate the employees3. Corporate etiquettes classes should be taken for the employees4. Space for parking and other facilities should be sanctioned5. Office should be well equipped with the safety equipments

6. Interdepartmental coordination should be smoothen7. Proper coordination should be maintained with the union leader



1. Strategic alliances and JV¶s should be done toimprove R & D facilities

2. Exploit the untapped market

3. Acceptance of innovative product in the market4. Less no. of competitors in the market

5. Export of fibre product in US and Europe willbe a strategically important step for Indian

clothing industries.



` Financial threats1. Rupee Value Increase2. Global Slowdown3. Currency Volatility4. Foreign Currency Exposure

5. Excessive Taxes6. Generally Poor Global Economic Conditions7. Stiff competition due to WTO norms and arrival of MNCs.8. Non-tariff barriers imposed by developed countries.9. Government Regulation and policies10. Political Risk

11. Interest Rate Risk12. Commodity Price Risk



1. Competitor Risk

2. Project Execution Risk

3. Human Resource Risk

4. Foreign Exchange Risk

5. Input Availability Risk

6. Growing competition from China in manufacturing

7. Government Intervention

8. Technology Advancement9. Over Supply from China

10. Water Shortage

11. Changing Consumer Demand

12. Commencement of Product Patent law in near future.

13. Capturing market by other countries at low cost with good quality.

14. Outdated Sales and marketing methods

15. Stricter registration procedures.

16. High cost of sales and marketing17. Lack of strategy to bring convergence between aspirations of the `small¶ and `big player.

18. Global Warming



1. Lack of skilled labor

2. Higher training costs

3. Demanding union leaders

4. Higher retrenchments5. Frequent job shifts

6. Indiscipline workforce



1. Unbranded Packaging2. Small number of discoveries.3. Transformation of process patent to product patent

(TRIPS).4. High Cost of discovering new products and fewer

discoveries5. High entry cost in newer markets.6. Rapidly changing standards of quality and

manufacturing at the international level7. Inability to cope-up with the rapidly changing new

discovery technologies and processes at the globallevel.



Introduction

Growth

Maturity

Decline

Time



` After financial and market analysis it can be concludedthat VSF lies in growth stage of product life cyclebecause :-

1. Market share is increasing every year

2. Production is also increased which shows that demandis there

3. There are still untapped markets are there which has tobe exploited

4. Aggressive marketing is needed at this stage to makepeople aquainted with the product and its merits over the substitutes



Threat of Substitutes High



Industry rivalry

1) Not much competition2) Niche market3) Cotton, and domestic

market4) High exit barrier in form

of significant capital

investment

5) marginal product

differentiation

Bargaining

power of

buyers- limited

1)Increasing no.

of retailpurchasers2)Purchasingpower of Indiais increasing

Threats of new

entrants- higher

1)Technology and

Manpower easilyavailable

2)Distribution

Network and

Oversupplied

market deters new

entrants

Threat of Substitutes ± High1) The sub. Of VSF is cotton which is

available at cheaper rates2) Domestic market covered by

substitute products

Bargaining Power of Suppliers-Very High

1) Scarcity of raw material (coal. Petroleum,

wood pulp etc.)



` Company should raise funds through short term sources

for short term requirement of funds, which

comparatively economical as compare to long term

funds.

` Company should improve their Inventory Turnover

Ratio, By increasing inventory turn over ratio they can

increase their sales and cut down their cost of

production.



` The overall performance of Grasim Industries Ltd.is getting on a good

track. Company has parked its surplus fund in the various debt schemes of

mutual fund. There is an increase of investment from the previous year.

` Company is cash rich but as there are expansion and diversification plans

under the pipeline, company is not utilizing these funds. For meeting the

working capital needs and capacity expansion needs it has borrowed from banks.

` The recent boom in the retail sector in India is expected to sustain healthy

growth of VSF demand

Rohit Bhat_ Sec q _ Mba 3 Sem

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