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ORGANIZATION STUDY AT AVT NATURAL PRODUCTS VAZHAKULAM

Presented by, Riba K John1

CONTENTS Introduction Industry profile Company profile Organization chart Departmental analysis SWOT analysis Findings and suggestions2

INTRODUCTION An organizational study encompasses the study of organizations from multiple viewpoints, methods, and levels of analysis. To understand the structure and functioning of the organisation To the study the different departments and their functions To relate theoretical understanding of management theory in real life settings To understand the reason behind the success of the firm in this competitive environment.3

INDUSTRY PROFILE AVT NPL primarly comes under the segment of spice industry. India- Home of spices known for spice and culinary herb production. Have a history of 7000 years Indian spice trade is booming. Large demand in international market India faces competition from China, Malaysia & Pakistan India contributes 70% to the world spice derivative market.SOURCE : http://www.strategyr.com/Spices_and_Seasonings_Market_Report.asp4

KEY TRENDS There has been a substantial increase in use of fresh herbs and spices owing to an increased demand in the hotel industry. Change of consumers towards leading a healthy has increased the use of herbs/natural spices for natural flavouring. Use of spice derivates like essential oils are being widely used internationally in food and beverage industries for flavouring and fragrances The global demands of spices has increased due to : Increase in demand and consumption of ethnic food Introduction of flavoured coffee, tea and aerated drinks in the beverage industry. A sharp growth in the processed food consumption. Increase in the demand for natural fragrances for various health therapies.

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COMPANY PROFILE AVT Natural Products Ltd (AVT NPL) is a venture promoted by AV Thomas Group, as a strategic diversification from the traditional plantation business. Formed in the year 1994, based in Aluva Strategic business units are: Marigold oleoresin: forms the major part of the export and the main source of income to the company. Spice oleoresin and essential oil Value added tea

AVT Contract Farming

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HISTORY A V Thomas group of companies consists of diversified businesses in Tea, Rubber, and Consumer products such as spices, food ingredients, leather and Healthcare products. AVT Group Business Units Plantations : 15000 Acres(6070.28 HA) of Tea, Rubber, Coffee, & Spice Plantations in South India (5 companies)with 10 processing factories Consumer Products:Tea, Coffee & Spices. One of the largest and popular brands in south India. Leather Goods: AVT Leather manufactures a wide range of leather goods for well known brand names in the USA, Europe, The Far East & Australia. Medical Appliances: Manufacture & Marketing of Rusch Foley Catheters and distributes range of Imported Products in India

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Biotechnology: L.J. International Ltd. Plant Tissue Culture. Product range covers more than 70 products comprising of Flower, Fruit, Forestry, Foliage and Medicinal plants which are exported to several countries in the Americas, Europe, Africa, the Far East and Australia Commodity Exports: Export of Spices, Natural Rubber, Coir Products & Food items. Logistics: Licensed Custom Agents, Air & Sea Cargo agents, Ware Housing. Trading & Agencies: Building Materials, Rubber chemicals etc. Food & Feed Ingredients AVT Integrated Spice Project AVT Natural Products Limited AVT McCormick Ingredients Pvt. Limited.8

VISION To be a global leader in enriching lives through natures own ingredients as food, nutrition and medicines for mankind.

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MISSION To be a global leader in Marigold Extracts through a fully integrated supply chain with excellence in Plant Science & Agriculture and Logistics Management. To achieve growth and stability in performance by diversifying to value added natural ingredients for synergistic business segments through development of product research and technology base. To bring in highest level of efficiency, traceability, food safety and quality in the supply chain through Contract Farming. To establish brand equity for natural ingredients through development of consumer marketing skills. To comply flawlessly with ever changing international statutory regulations for our business segments. To consistently add value in our business to deliver superior returns to all stakeholders-customers, employees, shareholders, suppliers, and society.

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VALUES Constantly strive for value in whatever we do. Belief in ethical business and transparency. Encourage individual excellence and foster environment for team work. No short cuts never sacrifice long term for short term. Know the business environment, product and customers well update knowledge. Respect the neighbourhood and individuality of each customer, supplier, and employee.11

CODE OF ETHICS 100% compliance with the law. Protection of proprietary information and confidentiality of information Prohibition against insider training Giving and receiving gifts of certain values Policies regarding records retention and e-mail access. Policies on improper or questionable payments.12

AVT TEAM AVT Natural has 160 permanent employees in its direct rolls.

450 foot soldiers supporting contract farming advising farmers onGood Agricultural Practices (GAP). 45 Apprentices

The dedication to total customer satisfaction and adherence tohighest quality standards have established the company name to be reckoned with in the food ingredients business.

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PRODUCTS & SERVICESAVT NPL operates in the business segment of solvent extraction There are 3 product categories that AVT currently operate in the market: Marigold Extracts for Poultry pigmentation, Eye care and Food Coloring Spice Oils and Oleoresins for Food coloring and flavoring. Value Added Beverages through removal Caffeine from Black Tea using different solvent systems like Ethyl Acetate and Methylene Chloride.

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The products manufactured in AVT NPL are as follows: Natural extracts Marigold feed Colour chilly Turmeric Hot chilly(capsicum) Black pepper (natural) Black pepper (de colourized) Ginger Celery Nutmeg Essential oils Black pepper Ginger Celery Nutmeg

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Antioxidants Rosemary extract Green tea New products Black carrot Safflower extract Annatto Fenu greek Basil extract Decaffeinated black tea Tarmind extract Cola

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DIVISIONS IN AVT NPLAVT NPL has 3 major divisions Agro operations Dehydration unit Solvent extraction plant

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PROCESSProcessing plant AVT Natural has a highly flexible extraction facility with two large continuous extraction plants that can process up to 100 metric tons of raw material per day, medium sized batch plant that can process about 4 metric tons of raw materials per day and small pilot plants that can process just 15 Kg per day. These varying throughputs give the plant flexibility to cater various customer volumes. No customer is turned away, however small his order may be. Solvents used: Hexane, Acetone, Ethanol, Methanol, Ethyl Acetate and water for extraction.18

FLOW OF PROCESS Pre treatment Extraction Evaporation Stripping Finishing and blending Food safety

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ORGANIZATION CHART

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DEPARTMENTS IN AVT NPL Human Resource Department Finance & Administration Sales & Marketing Production Planning & Control Quality assurance & quality control Engineering service department Purchase department Research & Development department Production department21

COMPETITORS SYNTHITE: Synthite is the market leader in the field with an annual turnover of 400million $. PLANT LIPIDS: plant lipid is the market challenger with a turnover of about 250 million. KANCORE AKAY ENJAYES KANCORE, AKAY and ENJAYES are the followers in the market with their turnovers in the range 50100 million$.22

SWOT ANALYSISSTRENGTH Contract Farming model Risk Mitigation GAP ensures quality Marigold extract Production Contract with Kemin corporation till 2020 Established market abroad AVT McCormick OPPORTUNITIES Growing demand for natural products Possibilities of diversification in to more products from more commodities Upcoming new markets all over the world. AVT Natural looks forward in joining hands with organizations which believes in quality at source, traceability, food safety etc. WEAKNESS No direct connection with end users. (only B2B transactions)

THREATS Mass production by China and Peru eating into the profits of the organisation. Unable to meet demand due to irregular rain fall in the production places. Presence of well established competitors in the market. Presence of substitute goods at lesser cost also affects the business.23

FINDINGS Best employee welfare activities: the company provides one of the best welfare packages in the industry. The company measures the satisfaction levels of its customers through constant contact and enquiry with the customers. The quality of the products and the production process are continuously analysed by the quality control department of the company. Audits are done frequently by the company. External audits are done by the multinational customers, by the government agencies and also by international quality assurance organizations. Effective inter- departmental and inter personal communication.24

SUGGESTIONS

Review quality testing processes and reduce lead time for release. Reduce new product development time Make more future oriented plans and decisions. Though the market situation is stable for the next decade, research should