CHAPTER-1

INTRODUCTION

INDIAN SUGAR INDUSTRY

1.1) INTRODUCTION:

Sugar originated from the Arabic word "sharkara" and is derived from the sanskrit world "sharkara". Sugar is an important part of the daily diet and  forming a class of edible substances which includes  sucrose, lactose, and fructose. It provides the human body with requisite carbohydrates and is basically extracted from sugar cane and sugar beet.  Found in fruits, honey, sorghum, sugar maple and in several other sources, it is the main ingredient of candy which is loved by children the world over. Yet, it has been  blamed for causing tooth decay and excess consumption of sugar has been associated with a host of ailments like diabetes, obesity, weight gain, depression, joint pain, fatigue and insulin resistance and even cancer. Sugar is present in various forms in fruits, honey, maple syrup and other natural sources. It is extracted by an intricate process, whereby the pulp is extracted first and then, the remaining is used for producing the sugar. Sugar has wide variety of uses and is used for baking, sweets, alcoholic beverages, and even in the soap we use. Further, it is also used as a food preservative and in confectionery items.

1.2) History:

Sugar is said to have originated in India. During the Gupta dynasty in India, the extraction of sugar was clearly known to the Indians. Experts identify the Pacific region and certain parts of India like the North East as real locations where the sugar cultivation was practised. This was taken to the western hemisphere by the Arab traders who borrowed the techniques from India and subsequently, set up mills to commercially produce this highly useful agricultural product. The production of sugar spread to countries like Spain and the Portuguese took it to South America.

During the eighteenth century, sugar production became increasingly mechanized and sugar market went through a phase of great boom. New technology was developed as sugar became a very popular item and specialized procedures were developed for the large scale processing of sugar. At first, the sugar was used mainly for tea and then, went into the making of  confectionery and chocolates. The Dutch took sugar to the Carribean Islands and today, this area is the largest source of sugar in the world. With the introduction of sugar plantations in the Carribean islands on a large scale, the price of sugar fell

substantially and  in Britain, all classes of people took to  sugar and it has become a part of their routine. Earlier, it was relegated to the upper echelons of society, it, then, became a common commodity and became sufficiently cheaper. Maximum consumption of sugar has been recorded from Belgium  and the least consumption is from Ethopia with an amount of three kilos per year.

1.3) Sources of Sugar

Generally, sugar is produced from plants like sugarcane and sugar beet. The sugarcane plant is very thick with long grasses. A perennial crop, it is grown in the various tropical and subtropical areas. The stalks of the sugarcane is the exact location, from where the sweet sap is extracted. Sugar beet has the highest sugar content from among  the beetroot family and  this variety is specifically cultivated for high quality sugar production. In addition, sugar is produced from sweet sorghum, maple, honey, corn sugar, etc. Of a 180 countries of the world, around a 100 of them  make sugar from the  sugar beet and cane.

1.4) Types of sugar

1)Raw sugarsRaw sugars consist of varying shades of yellow to brown sugars and is

processed by boiling till it solidifies. From sugar beet juice, the raw beet sugars are extracted and are then used to fabricate white sugar. Raw sugars include demerera, muscovada and turbinado. These are available in crystalline and loaf forms, where the moulds are then allowed to dry up and the resulting product is called jaggery or gur.  Raw sugar is not so popular in South America. Mill white sugar is produced by exposing the sugar to sulfur dioxide but it retains the coloured impurities.

2)Blanco direct Blanco direct is a white sugar used much more in India and Asia and is less purer than the white sugar. It undergoes  the process of phosphation and is more devoid of impurities. White refined sugar, popular in the West, is processed  by dissolving the raw sugar and purifying it with phosphoric acid or by filtration strategies. White sugar is available in granulated form. Granulated sugar includes coarse grained sugars such as sanding sugars, caster sugar and

superfine powdered sugar and they are divided on the basis of fineness of grades.

3)Brown sugars

Brown sugars are formed when sugars form fine crystals with high molasses content or from coating white refined sugar with a cane molasses syrup. Colour and taste becomes stronger with increasing molasses content . On being exposed to air, they tend to harden and proper handling of this. Natural sugars are found in their natural form and covers the most unrefined sugars and includes the fruits, grains and vegetables. The World Health Organization has approved the natural sugars as carbohydrates for unrestricted consumption purposes.

1.5) Manufacturing Process:

For sugarcane, the process of refining is carried out in following steps Pressing of sugarcane to extract the juice. Boiling the juice until it begins to thicken and sugar begins to crystallize.

Spinning the crystals in a centrifuge to remove the syrup, producing raw sugar.

Shipping the raw sugar to a refinery where it is washed and filtered to remove remaining non-sugar ingredients and color.

Crystallizing, drying and packaging the refined sugar.

1.6) World Sugar Scenario:

After two consecutive seasons of surplus between world sugar production and consumption, World Sugar economy is now facing a significant supply-demand imbalance. There will be fall in global sugar production. The world consumption of sugar is forecasted to grow by 1.73% to 167.446 mln tones. World production is expected to increase by 4.817 million tonnes, which is 8.404 million tonnes lower thanworld consumption.

World export availability is expected to rise due to projected growth in output in exporting countries. World export availability for season 2009-10 is

expected to be 51.964 million tonnes, as against 50.903 million tonnes in the previous season.

A significant production shortfall in India and China, as well as a further contraction of production in the EU, on the other hand and a continuing expansion of sugar output in Brazil, on the other hand are the four major supply features of Sugar season 2008-2009.

1.7) Indian Sugar Economy

The sugar industry is the largest agro-based industry and India is the Second largest producer of sugar in the world next only to Brazil. Sugar industry in India is headed for a rough patch during the current sugar year ending September 30, 2009. India plays a crucial role in the world's sugar output. Indian sugar industry is controlled by the Government. Starting from cane price to the price of sugar, everything is under the hands of the Government. The Statutory minimum Price (SMP) of sugarcane is fixed by the Central Government to support the cane farmers. However, states like U.P., Haryana and Uttarakhand are free to fix their own price known as State Advisory Price (SAP), which is usually higher than SMP.

1.8) India’s Production:

The Country’s sugar output touched a three year low. Sugar production in 2008-09 season is set to fall by 44% from the previous season. In sugar season 2008-09, production has declined to 147.50 lacs tones compared to production of 263.28 lac tonnes in the year, 2007-08. One major reason for this is the shrinkage in the sugarcane growing area in last couple of years due to delay in cane payment and confusion over the price, less area of ratoon in this season and poor monsoon in some parts of the country. The sugar industry is cyclical in nature. It is dependent upon monsoons for both its production and price realisation. Such a shortfall in sugar production has posed a serious threat to inventory on hand. Drop in cane output may lead to increase in cost of production for sugar companies and hit their profit margins in 2009.

1.9) Government Policies:

Rising prices of sugar has caused concern to the Government and it has intervened substantially to control the prices of the sugar, because it is one of the essential commodities. The Government brought in measures such as weekly quota for free sale, weekly reporting mechanism to monitor sugar dispatches and sale, liberalized raw sugar import under Advance Authorization

Scheme [with change in export obligation norm from ‘grain-to-grain’ to ‘tonne-to tonne’ basis] and finally the facility to import raw sugar without export obligation as well as import of white sugar upto 10 lakh tonnes by Government agencies, both at zero% customs duty. The Centre is also planning to bring back Gur under the Sugarcane (control) order, 1996 to ensure adequate cane supplies to sugar mills.

Sugar Pro ducing States in India

CHRCHAPTER-2

COMPANY PROFILE

THE NANDI SAHAKARI SAKKARE KARKHANE NIYAMIN- KRISHNA NAGAR2.1) PROFILE OF THE COMPANY

The Nandi SSK, was a pioneer in the exporting of power to other

industry. Situated in state of Karnataka, it combines for technology and the

latest Mechanization and compliments High quality sugar.

Alongside, the factory waste namely molasses is used for organo

Chemicals industrial alcohol/rectified spirit is manufacture with the sugar waste.

The Nandi SSK is also looking towards venturing into plant a new plant for

production.

2.2) History:

The Nandi SSK entered the sugar industry in the early nineties. Based in

the Indian State of Karnataka, it began operations by setting up one sugar

factory, of which used a scientific method of cultivation. Despite increasing

emphasis on traditional cultivation methods, The Nandi SSK was among the

few to introduce modernity to this industry.

Sugar factories in Maharashtra were being victimized through state

policies Private farms were being nationalized and the co-operative movement

quickened the pace of ultimate closure of these farms. This was unfortunate

because the yields from these belts of sugarcane were among the best in the

world. The yield of cane was 64 ton per acre, recovery of sugar was 11.5% per

acre and yield of sugar was 7.36 tons per acre. Realizing that it could no longer

work towards its full potential, The Nandi SSK was opened at Krishna Nagar,

Bijapur in Karnataka State.

Today advanced technology and a high level of Mechanization has made

The Nandi SSK one of India’s largest sugar producers. The Nandi SSK

company has one of the highest average recovery rates in industry.

2.3) COMPANY VISION AND MISSION :

THE NANDI SSK will continue to expand its operations by expanding

production into new markets and applications. Growth will also come from

value added diversification derived from the group’s strengths in products and

process.

The quality of the products and services delivered by THE NANDI SSK

will always strive to exceed customer expectations.

THE NANDI SSK always has and will continue to use renewable

resources in its products. We believe that this is an important need for

sustainable development.

THE NANDI SSK has been and always is aware of its social commitment

to the community that it serves. We believe that we have a responsibility and

obligation to return to society what we earn from it.

THE NANDI SSK has a vision to adopt the most modern technologies

and equipments to improve the production of the company and to create more

no of employment.

THE NANDI SSK has an vision to help farmers present in the surrounding area and help them in improving their yield totally they want to see rural development

2.4) BOARD OF DIRECTORS

The Board of Directors includes

Shri Shashikantgauda B Patil, President of Nandi SSK,

Shri R. Biradar Vice President, Nandi SSK,

Shri H M Veerbhadraswamy who is the Director of The Nandi SSK,

Shri Kempanna Biradar, Asst Director Nandi SSK,

Shri Ramesh Jakaraddi, director

Shri Malappa Desai, director

Shri Kumar Desai, director

Shri Chandappa Karaddi, director,etc.

2.5) ACHIEVEMENTS AND AWARDS:

1. BEST TECHNICAL EFFICIENCY AWARD

(1999,2009,2010)

2. PREMIUM DEALEAR OF THE YEAR (2009-10, 2010-11)

3. BY SOUTH INDIA BIOTECH BELGAUM

4. TECHNICAL EFFICIENCY AWARD AT DELHI(1998-99)

5. SECOND PRIZE AT NATIONAL FEDERATION OF

COOP. SUGAR FACTORIES LTD, NEW DELHI

6. GOT PRIZE FROM KCF MANGALORE FOR RECORD

SALES OF MAGALA FERTILIZERS IN APRIL 2000-

MARCH 2002

2.5) ORGANIZATION CHART:

2.6) BANKERS AND INSTITUTIONS:Bank of India

Industrial Development Bank of India

State Bank of India

HUDCO

2.7) COMPANY QUALITY POLICY : We are committed to produce and supply products to meet our costumers

needs.

We shall continually strive to improve the effectiveness of our quality

management system.

We shall train and motivate our employees for continual improvement.

We are conscious of our responsibility towards safety, Health and

Environment.

Quality is what we think, and Believe.

CHRCHAPTER-3

DEPARTMENTAL STUDY

3.1) FUNCTIONAL DEPARTMENTS

1 Administration Department

2 Purchase Department

3 Cane Development Department

4 Production Department

5 Finance Department

6 Sales and Distribution Department

Administration Department

Administration department is the main department in the organization.

They are total number of 56 employees working in this department. Is divided

into 6 sections and they are as below :

1. Share section.

2. Purchase section.

3. Stores section.

4. Sales Section.

5. Time office section.

6. Computer section.

7. Security section.

8. Telephone operating section.

1) SHARE SECTION:

The Share section is one of the important sections because more than half

of the total authorized capital is collected from shareholders. In this factory the

share are class

1. Grower shares A class

2. Non Grower Shares D class

3. Society share B Class

4. Out of Area Share E class

5. Govt share C Class

The person who wants to become a member has to follow the procedure /

rules. He has to fulfill appropriate application given by the share section

authority. If the boards of directors approve the application in body meeting,

then only he is treated as shareholder of the factory. After the approval he has to

pay the amount equivalent to face value of the share.

There is no transferability of share. If at all he wants to transfer his shares,

he has to transfer to such a person who is the member of the factory. If he

transfer to another person it is not valid and such shares get cancelled. For the

identification of its members, the factory issues share certificate and identity

cards to such share holders.

2) PURCHASE SECTION :

Purchase officer

Clerks

Attenders

FUNCTIONS OF PURCHASE DEPARTMENT:-

receiving purchasing requisition

determining the volume of materials to be ordered

placing orders

inviting tenders and quotations from different suppliers

Checking and passing bills for payment.

Receiving and inspecting materials.

Steps involved in purchasing the materials:

A. Raising requisition :

It is the first step and necessity for particular can be used only by the user

of the material.

B. Scrutinizing requisition :

The manager scrutinizes the demand of materials. He examines

whether the item mentioned in the requisition note is necessary or not.

C. Vendor selection :

After scrutinizing, if a material is necessary then tender advertisement

is given or if they have permanent vendors. The manager chooses the power

vendor. The BOD does selection of vendors.

D. Enquiry :

After selecting a proper vendor enquiry is sent to the vendor.

E. Receiving Quotation :

The purchase manager receives the quotations from vendors to whom

the enquiries are sent. Through there quotations a right vendor is chosen.

F. Sending purchase order :

Lastly the purchase order is placed to the selected venders. In this way

purchase of material takes place.

3) STORES SECTION

Stores keeper

Clerks Tool room Clerk Diesel room Clerk

Attainders Tool room attainders Clerks

Daily wage labors Attainders

PROCEDURE OF WORKING AT PRESENT:

Handling of materials: First, they receive the stores purchase indents

from concerned section heads for requisition to purchase item needed for the

crushing or off season work. Then they mention the present stock of item in the

purchase indents, after verifying the stores. Then only they forward the

purchase indents.

After receiving the materials from suppliers they seek the quality approval

of the same materials. After getting the approval materials are placed to the

respective to the racks they issue the materials by adapting FIFO method.

They issue the materials to the workers of the factory on loan and

retainable basis on daily loan or personal loan.

STORES ACCOUNT:

After receiving the materials from suppliers quantity will be verified.

The details of the materials will be entered in to transport registered and

approved memo will be sent to the concerned departments for getting quality

approval. They keep bin cards for each different items receipt from the suppliers

with details.

TOOL ROOM:

Tool room is personnel issue the materials to the workers on temporary

loan and retainable basis entering in the register.

List of the registers:

1. Transport register.

2. Approval memo book.

3. Bin card files.

4. Purchase order.

5. Stores purchase indent etc.

4) TIME OFFICE :

Time keeper

Clerks

Time office is one of the important sections of administration department.

There are 5 employees working in this department.

Functions:

1. Showing the absent report to the HOD’s

2. To receive the attendance cards from the workers

3. To put attendance of the workers in the master role

4. It arranges the duty to the workers, maintains working bell

5. It maintains salary register book.

Types of Leaves:

1. Sick leaves :

Sick leave provided to employees 15 days per year

2. Casual leaves :

Casual leave provided to employees 12 days per year

3. Earn leaves :

If employee attends 30 days in a month then he is eligible for 3 days

Earn leave

Shift working :

In a shift of 8 hours the factory is providing 4 types of shifts.

Shift Time

I 4 am to 12 pm

II 12 pm to 8 pm

III 8 pm to 4 am

General Shift 8-30 am to 5-30 pm

5) SALES SECTION :

Sales officer

Godown clerk

Consultant Clarks

In this section sales of the following products produced takes place are

sugar, molasses, bagasses and power. This factory is producing three types

of sugars they are M-30, S1-30 and S2-30 grades. And also it producing by

products like molasses, bagasses, press mud. These are used by factory it self

only like molasses and press mud are used in distillery / Ethanol production

and bagasses is used in production of power. And power is exported to

KPTCL.

This section will take care of all the sales transactions. The sale of sugar

is done according to the notification by the central government and has such

factories follows certain government rules in sales of sugar. Accordingly,

Karnataka state federation of co-operative sugar factories limited will give

figures of bags to sell within a month.

PROCEDURE FOR SALE:

The organization undertakes selling activities in three methods;

1. Free sale: Free sale is done within the country. Hear company will invite

tenders from different buyers at a 10 days notice. The sugar is sold to that

buyer who quotes or bids highest price. Tenders are called periodically. If

the rate is not satisfactory the tender will be cancelled. In free sale sugar

is being done to bulk purchases on the bases of tenders, these bulk

purchases then sell the purchased sugar to retailers.

2. Levy sale: It is also done within the state of Karnataka and being sold to

the government of Karnataka on levy bases. The government then

distributes outlets at predetermined, reasonable price.

3. Export : Sugar is sold outside the country on the contract bases.

According to the rules and regulation of the contract it will be done.

6) COMPUTER SECTION:

The total number of employees working in this department is 9. This section

is to maintain all types of records that are very important for the organization

and the following departments are computerized in the factory,

a) Weigh bridge department

b) Cane accounts department

c) Time office department

d) Laboratory department

e) Stores department

f) Sales department

g) Purchase department

h) General accounts department

i) Sales accounts section

7) SECURITY SECTION:

Security officer

Assistant security officer

Security guard

The security section is operating under the administrative department. It

is also working in three shifts as mentioned under time office section. Hear in

this department the employees are recruited on the yearly contract basis. There

are total 42 guards working in this section.

FACILITY TO WORKERS:-

1 Availability of rest house with TV facility.

2 Availability of quarters.

3 Providing 2 wheelers for employees who are visiting the field to

supervise and check the availability cane.

4 Executive levels are provided with 4 wheelers.

5 Weekly one holiday of any in a week

FINANCE DEPARTMENT:

Accounts of finance department are the main and the hart of every

department of the company or industry. Hear in this factory, the accounts

section maintains all the transactions related to the factory dealings. The sale

accounts, purchase accounts, etc are maintained and this department prepares

P&L account, Balance sheet, etc.

In RSSK is divided finance department or accounts department in two sections.

1. General account section

2. Cane account section

In the above chart 50% of the labors are working in the general

account section and 50% are in the cane accounts section.

1. GENERAL ACCOUNTS SECTION:

In general accounts section book keeping is followed. General

account transactions like receipts and payments registers are maintained.

Receipts include sales process of sugar, molasses, share amount, etc. Payments

include salary, tax, etc. maintaining audit and audit rectification is done, annual

account and monthly account are prepared and maintained.

Some other types of registers are maintained by this section are:

a. Advance register

b. Contractors register

c. Contra register

d. Fixed assets register

e. Bank register

f. Expense register

Functions

1) Its main function’s to finalize each & every record of the factory.

2) It prepares profit & loss a/c & balance sheet.

3) It executes financial activities in factory.

4) Ratio analysis.

5) Report to the management.

6) Conduction of meetings.

2. CANE ACCOUNTS SECTION:

This section maintains the cane accounts and cane bills. This section

purchases the cane on daily basis and prepares accounts of forthrightly basis. In

addition, will take care of all cane suppliers accounts and department manager

separates accounts for cane suppliers.

The section will provide cane bill once in a month desired by the higher

authority. While giving cane bill, department will debut all the expenses and

advances which is given to the cane suppliers in terms of seeds, fertilizers and

transportation facilities and also harvesting of the cane that all the expenses are

given by the factory.

The registers maintained in this section are:

a) Self harvesting payment register

b) Harvesting bills

c) Cultivator payment register

CANE DEVELOPMENT DEPARTMENT

Cane Manager

Office manager Cane Cane Procurement Manager Cane Dev Manager Cane Officers Cane Officers Field Assistants Field Assistants

Objectives of the CDD:

To get best quality of cane at a right time

To improve the variety of the cane

To provide all facilities like seeds, fertilizers, unloading and

loading charges

Main objectives are to receiving exactly 2500 TCD

To undertake seeds development program

Varieties of Sugar cane:

1. COC671 {Early Maturity}

2. CO8011 {Middle Maturity}

3. CO86032 {Early Maturity}

4. CO8021 {Early Maturity}

5. CO94012 {Early Maturity}

PRODUCTION DEPARTMENT

STRUCTURE

Laboratory In charge

Laboratory Chemist

Laboratory Boys

Deputy Chief Chemist

Manufacturing Chemist

Staff and Workers

The production department is center of the center organization. The main

function of the production department is Functions:-

To maintain close and co-ordinates relationship with all others.

To upgrade the technical efficiency of the production.

To flow up the daily production schedule of as per plan.

To produce the future needs of the company and to promote the

organization.

CHRCHAPTER-4

SWOT ANALYSIS

SWOT ANALYSIS:

SWOT analysis is a strategic planning method used to evaluate the

Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a

business venture. It involves specifying the objective of the business venture or

project and identifying the internal and external factors that are favorable and

unfavorable to achieving that objective. The technique is credited to Albert

Humphrey, who led a convention at Stanford University in the 1960s and 1970s

using data from Fortune 500 companies.

STRENGTHS

Global prices to move up –an incremental positive

The demand is everlasting

Environmental conditions suitable for the growth of sugar cane

About 2.7% cultivable land is used for the cane production

The sugar industry also includes alcohol and gur which is mainly for the

domestic industry

WEAKNESS

Production to decline by 20-25%

Shift of the farmer from cane to paddy, wheat, pulses and oil seeds

The greater diversion of cane to unorganized sector

The ignorance in the residual sugar market

Some of the government policy that adhere the growth of the sugar

industry

Shortage in sugar cane supply

Obsolete technology

OPPRTUNITIES

Prices to rise by 25% in coming years

Higher margins , lower cyclicality driving shift towards integration

The increase in demand year after year

The shift of Brazil from white sugar to production of ethanol.

THREATS

Less rainfall in the highest sugarcane cultivating regions

Due to water shortage the shift of the farmers to multiple crops

cultivation

Due to government policies the selling of sugarcane by the farmers to

private sectors

Sugar production being more volatile than cane production

Due to rise in domestic consumption the export is likely to fall