CHAPTER 1

INTRODUCTION

1.1INTRODUCTION

An organization is a social unit which is deliberately constructed and reconstructed

to seek specific goals. It is a social group which distributes tasks for a collective goal. It is a social

unit of people, systematically structured and managed to meet a need or to pursue collective goals

on a continuing basis. All organizations have a management structure that determines

relationships between functions and positions, and subdivides and delegates roles, responsibilities,

and authority to carry out defined tasks. Organizations are open systems in that they affect and are

affected by the environment beyond their boundaries.

Organizational studies is "the examination of how individuals construct organizational

structures, processes, and practices and how these, in turn, shape social relations and create

institutions that ultimately influence people", organizational studies comprise different areas that

deal with the different aspects of the organizations, many of the approaches

are functionalist but critical research also provide alternative frame for understanding in the field. 

It is an effort towards understanding the organization, its policies, structure and

methodology adopted. It gives us brief description of the overall functioning of the company or

organization. It helps a management student to acquire knowledge and skills require making a

major contribution to the challenges of industrial and commercial management.

The main purpose behind the study is to understand the overall performance of the

organization, which includes its function and processes of various departments and their inter-

dependence and other organization and understand their basic functions, their purpose,

achievements, competitors and the mission and vision of the company and their progress towards

that. It helps to develop students with knowledge of business managements who will be able to

handle successfully the complexity and uncertainty of the contemporary business environment.

•The study encompasses the systematic and careful application of knowledge about how people

perform within organizations.

1

•To understand the working environment of the organization.

The study is limited to EICL, TVM. English Indian Clays Ltd, established in 1966,

operates China Clay mines in the southern most of India, in lush green Kerala. The company’s

clay mining and refining operations center on Trivandrum where the processing plant produces

several grades of refined Kaolin (clays) to cater to the paper, paint, rubber, plastic, fiber glass,

cement and ultra-marine industries. It concentrates on the functioning of different departments in

the organization. The study focuses on the organizational structure of EICL. It is purely based on

the information obtained from the departmental heads of the organization.

•To understand the structure and functioning of the organization.

•To understand the delegation of authority and responsibility.

•To understand the various policies and programs of the organization.

1.2. INDUSTRY PROFILE

The early history of the industry is, as would be expected, very much concerned with the

discovery and production of China clays for use in ceramics. The story starts thousands of years

ago and thousands miles away. China clay, the pure white porcelain used by the Chinese, was

discovered many thousands of years ago and has always been a much prized material. Despite

many attempts to find its sources elsewhere, it reminded elusive until a few deposits were found

in some parts of Europe and in America early in the eighteenth century.

When China clays or kaolin was discovered in England, it was realized that it was of a

much finer quality than found elsewhere in Europe. A Quaker apothecary-cum-potter, William

Cook worthy made the discovery in Cornwall in 1746. He experimented with various samples and

in 1768 he took out a patent to use the material, soon producing items at his Plymouth Porcelain

Factory. Until that time, English pottery had consisted of coarse earthenware and stoneware

ceramics and had suffered considerable competition from elsewhere.

As more potteries made use of porcelain, so the demand grew and by the early nineteenth

century, the kaolin industry had become highly successful, with many of the potters owing right

2

to mine the material for themselves. In addition by the middle of the nineteenth century, China

clay was increasingly being used as a raw material by the developing paper industry.

Early in the twentieth century, the industry was made up of some seventy or so individual

producers, each competing on price with little regard for marketing or standards. There was

almost no capital investment or product development and over production was great, wages were

low and working conditions were poor.

By 1910, paper had completely overtaken ceramics has become the prime user of China

clay. Over 75% of output was exported, with North America and Europe being major markets.

The China clay industry in Cornwall and Devon held a virtual monopoly on the supply of that

mineral to the world market. Just after the First World War, the three leading producers joined

forces-forming English China Clays Limited in 1919, placing almost 50% of the industry’s

capacity under one banner.

1.2.1 FORMATION OF CHINA CLAY

China clay or kaolin occurs in the deposits in the form of china clay rock, a mixture of up

to 15 percent China clay and up to 10 percent mica and the remainder being quartz. One of the

purest of the clays, composed chiefly of the mineral kaolinite, usually formed when granite is

changed by hydrothermal metamorphism. Usage of the terms China clay and kaolin is not well

defined; sometimes they are used synonymously for a group of similar clays and sometimes

kaolin refers to those obtained in the United States and China clay to those that are imported.

In some parts of South West, the feldspar in the granite is higher in its soda content than

its potash content and these places are these places are where China clay is found. It came into

being through a complex sequence of events. While the molten rock was still cooling, it was

attacked successively by steam, boron, fluorine and tin vapor, these acting on the alkali content of

the feldspar and converting it into China clay.

Kaolin’s whiteness, opaqueness, large internal surface area and non-abrasiveness make it

an ideal filler material for paper production. As a coating agent in paper, it provides a smooth,

opaque surface with good printability and ink retention. Although about 80% of all kaolin

production is used production is used in paper, other uses include fillers for rubber, plastic, paint

and adhesives as well as in ceramics such as porcelain and refractory products.

3

Chemical Formula: Al2O3, 2SiO2, 2H2O.

1.2.1.1 Physical Properties

Sp. Gravity : 26

Bulk Density : 0.821

Oil Absorption Value : 25-35

PH of 10% Solution : 7-8

Water Soluble Salts : Not more than 2%

Moisture and Volatile Matter : Not more than 1%

Refractive Index : 1.5

Loss on ignition % : 13-15

1.2.1.2 Chemical Composition

Al2O3 : 32.9%

SiO2 : 42.3%

Fe2O3 : 0.6%

MgO : 1.6%

Na2O : 0.6%

K2O : 3.0%

1.2.2 USES OF CLAY

Paper, kaolin performs two quite separate functions in paper making. As a filler or

loading, it is incorporated within the body of the paper, both reducing its overall cost and

improving its printing properties. It is also a coating pigment, enhancing the surface properties of

the paper, such as brightness, smoothness and gloss, thus allowing the accurate reproduction of

color printing.

4

Ceramics, Kaolin was originally used in the manufacture of white ware ceramics. The

amount of kaolin used for this purpose is now greatly exceeded by that used in the paper industry.

The ceramic and refractory industries remain a major market, accounting for nearly one million

tons of kaolin in Western Europe.

The major markets for English kaolin in the white ware ceramic industry are tableware,

vitreous-China sanitary, wall tiles (in the UK), electrical porcelain and glazes. In addition, kaolin

and calcined clay are used for refractory applications.

1.2.3APPLICATIONS

Paint applications: Water based decorative paints: gloss; semi-gloss and silk; exterior

matt-smooth and textured; interior matt; primers.

Solvent based decorative paints: Gloss; semi-gloss and eggshell; matt; undercoats;

primers. Protective and OEM coatings: metal primers; furniture lacquers; domestic

appliance finishes; electrophoresis coatings; coil coatings; traffic marking; printing inks.

Rubber applications: Kaolin is incorporated into both natural and synthetic rubber

compounds and is the rubber industry’s most widely used non-black filler with reinforcing

properties.

Cable insulations: Cable sheath; hose; extrusions; belting; footwear; pharmaceutical;

seals; general moldings; plant lining; domestic moldings; latex; tyres/inner tubes.

Plastic applications: Kaolin has many uses as a filler in plastics.

Specialty films: PE master batch; PE cables; PE film; PVC cables; PVC extrusions; PVC

plastisols; PP moldings; polyamide moldings; PBT/PET moldings; unsaturated polyester;

urea formaldehyde; phenol formaldehyde.

Metakaolin: For the building and construction industry. A high quality pozzolanic

material, blended with Portland cement to improve the durability of concrete and mortars.

White cement: In the production of white cement, iron is a deleterious component which

can be avoided by using kaolin, an alumino silicate with very low iron content.

Glass fiber: The raw material for introducing alumina to glass compositions for glass

fiber manufacture is kaolin.

Agricultural industries: The caking or setting of granular fertilizer prills is a serious

problem since the caked mass must be broken down into its individual particles before it

5

can once again become free-flowing product. Kaolin, some of which is amine-coated, acts

a non-stick coating to the fertilizer prill. As color is of no significance, cheaper grades can

be used.

Other industries: Pharmaceutical applications; quality leather; textiles; inks, dyes,

adhesives, crayons and pencils; toothpastes and cosmetic applications; chemical industry.

1.2.3.1 Into the future

Some of the uses listed below are already common while others are innovative and in the

development stage.

1. Plastic film, Video and audio tapes, where clays are used as anti-blocking agents.

2. Laundry products, Washing powders and detergents.

3. Decorative concrete, Mortars and renders.

4. Mark resistant polypropylene for automotive use Thermoset moldings for baths, shower

trays.

5. Light weight concrete Water treatment systems.

6. Biotechnology, Ability of lightweight high strength ceramic materials to support micro-

organisms.

1.2.4 MARKET DEMAND

Market demand sometimes impacts the kaolin industry adversely. For example, the

majority of paper manufacturers use high speed blade coaters. The efficiency and throughput rates

of these machines should be improved because manufacturers are constantly seeking to improve

operating speeds.

This places a demand on the kaolin industry to provide kaolin products with rheological

properties compatible with higher machine speeds. Rheology can only be improved by blending

ores, which has its economic and inherent limitations. Controlling rheological properties by

blending crude ores or finished products is costly because it requires additional systems and labor.

In addition, the producer must operate and maintain more than one time.

6

1.2.4.1 Producer Trends

Businesses that sell onto highly competitive markets, where profits are constantly

squeezed, do not generally produce technological innovations although still suffering from low

margins and thin profits, kaolin producers have been innovative, responding to market demands

with high brightness products. They have developed technologies for the production of affordably

priced high quality products and are taking long term optimistic view of the market place. The

kaolin industry will continue to work in partnership with paper industry in identifying new

products needs and developing new products to fill these needs.

1.2.4.2 Kaolin in India

In India, the production of kaolin is about 2, 00,000 metric tons. India is a major producer

of kaolin in Asia. India is not a good customer of kaolin. The kaolin import to India is less

compared to other Asian countries.

EICL Limited, a Company incorporated in India, was part of the erstwhile Thapar Group.  

The Company was incorporated in 1963 in technical & financial collaboration with English China

Clays Ltd., U.K, the pioneer and the then world leader in Kaolin processing.   This collaboration

with ECC ceased in the year 1992.

EICL has two key Divisions, viz., Clay & Starch Divisions.  The Clay Division, having

three manufacturing locations in Kerala, specializes in mining and processing of high end kaolin.

Both the divisions of EICLTVM have grown to be market leaders in their respective fields. This

growth been chiefly driven by prudent investment in world class R&W facilitates for research in

kaolin and starches enabling their businesses to be specialized solution provides for various

application spanning diverse industries.

Most domestic clay is mined by open pit method using various types of equipment

including draglines power shovels, front and loaders, backhoes, scraper loaders and shale planers.

In addition, some kaolin is extracted by hydraulic mining and located in Pennsylvania, Ohio and

West Virginia, whether the clays are associated with coal deposits. A higher percentage of fire

clay is mined clays, because the higher quality fire clay is mined underground than other clays,

because the higher quality fire clay deposits are found at depth that make open pit mining less

profitable.

7

The early history of the industry is, as would be expected very much concerned with the

discovery and production of China clays for use in deposits in the form of China clay rocks, a

mixture of up to 15 percent China clay and up to 10 percentage mica and the remainder being

quartz. One of the purest of the clays composed chiefly of the mineral “kaolin” usually formed

when granite is changed by hydrothermal metamorphism. Usage of the terms China clay and

kaolin is not well defined. The history of China clay industry in 3 heads International scenario,

National scenario and State scenario.

1.2.5 INTERNATIONAL SCENARIO

The early history of the industry is, as would be expected, very much concerned with the

discovery and production of China clays for use in ceramics. The story starts thousands of years

ago and thousands of miles away.

China, the pure white porcelain used by the Chinese, was discovered many

thousands of years ago and has always been a much priced material. Despite many attempts to

find sources elsewhere, it remind elusive until a few deposits were found in some parts of Europe

and America early in the eighteenth century. The search to find deposits in England was

increased.

When China clay or kaolin was discovered in England, it was realized that it was of much

fines quality than found elsewhere in Europe. A Quaker apothecary cum potter William Cook

Worthy made the discovery in Cornwall 1746. He experimented with various samples and in 1768

he took out a patent to use the material, soon producing items at his Plymouth porcelain factory.

Until that time English pottery has consisted of coarse earthenware and had suffered considerable

completion from elsewhere.

As more potteries made use of proclaim so the demand grew and by the early nineteenth

century the kaolin industry had become highly successful with many of the potters owning rights

to mine the material of them. In addition, by the middle of the nineteenth century, China clay was

increasingly being used as a raw material by the developing paper industry.

Early in the twentieth century the industry was made up of some seventy or so individual

procedures, each competing on price with little regard for marketing or standards. There was

almost no capital investment or product development and over production was great, wages were

low and working conditions were poor.

8

Deposit this by 1910, production was approaching a million tons a year and paper had

completely overtaken ceramics as the prime user of China clay. Over 75 percentage of output was

exported, with North America and Europe being major markets. The China clay industry in

Cornwall and Devon held a virtual monopoly on the supply of that mineral to the world market.

Just after the First World War, the three leading procedures joined forces forming English China

Clays Limited in 1919, placing almost 50 percent the industry’s capacity under one banner.

1.2.6 NATIONAL SCENARIO

The ceramics industry in India came into existence about a century ago and has matured

overtime to form an industrial bare from traditional pottery making the industry has evolved to

find its place in the market for sophisticated insulators, electronic and electrical items. Over the

years, the industry has been modernizing through new innovations in product profile, quality and

design to emerge as a modern, world class industry ready to take on global competition.

The Indian Ceramic Industry ranks at 8th position in the world and products around 2.5

percent of global output. The industry provides employment to 550,000 people, of whom 50,000

are directly employed. Gujarat accounts for around 70 percent of total ceramic production.

The ceramic products 60th in organized as well unorganized sector. The share of organized

sector in total production in around 55 percent. The organized sector is characterized by the

existence of a few large players. Small and medium enterprises (SMEs) account for more than 50

percent of total market in India, offering a wide range of articles including crockery, art ware,

sanitary ware, ceramic tiles and refractory and stone ware pipes among others. Most of the players

are grouped together in clusters.

Over the last two decades, the technical ceramics segment has recorded an impressive

growth propelled by the demand for high alumina ceramics, cutting tools and structural ceramics

industry has emerged as a major manufacturer and supplier in the global market.

During 2008, India was the 24th largest ceramic trading nation in the world and accounted

for a share of around 0.9 percent in total ceramics trade increased from US & 738million at a

CAGR of 22.2 percent. The increase in trade was led by rise in imports, which increased, from

US & 523.8 million in 2001 to US & 523.8 million in 2008 at a CAGR of 30.9%. India’s

ceramics exports on the other hand increased at a CAGR of 12.8% from US & 83.3 million to US

&214.5 million.

9

China was India’s main sources of 008 with imports ceramics imports, during 2008 with

imports worth US & 50.7 million and US & 22.5 million respectively. India’s top five import

sources together accounted for 82% of India’s total ceramics imports during 2008. China alone

accounted for 60.7% of India’s ceramic imports. UAE, Saudi Arabia and Malaysia were the major

destination for India’s ceramics export destinations together accounted for 30% of Indian total

ceramics exports.

1.2.7 STATE SCENARIO

The state is plenteous in China clay kaolin which forms an important raw material in the

production of porcelain items such as crockery and glazed tiles. It is the finest variety of the

kaolin found in the entire country and is fundamental in the high tension insulators and sanitary

ware producing units. About million tons of such fine China clay are to be found in the state.

Another variety of clay is found in Kerala and is useful albeit of an inferior raw material in the

production of tiles and bricks. Graphite, an allotrope of carbon which is used in the manufacture

of the lead used in the pencils also occurs freely in the state. The silica and quartz deposits wealth

of the state is a composition of 79 tons of lime stone, 11 million tons of bauxite, 35 million tons

of illuminate, 3 million tons of retiles, 1 million tons of monazite and 0.7 million tons of

borophite. The bounties of the state mineral wealth need to be exploited and put to proper use.

The industrial potential of this mineral treasure has not been reined in yet.

1.3 COMPANY PROFILE

English Indian Clay Ltd, (EICL)Thiruvananthapuram (TVM) was incorporated on 18th

November 1963 and operates in two business divisions namely clay and starch. EICLTVM is an

ISO 9001-2000 company supported by a strong research and development setup.EICL was

established by Maharaja of Travancore along with Mr. M. N. Ramakrishna Iyer in collaboration

with English China Clay (ECC), UK who provided the machinery and expertise. The first plant

commissioned was the Rotary drier Plant with a capacity of 15000TPA. The company has a

registered office at TC-94/4, Veli, TVM, Pin code -695021. EICL, is engaged in the business of

clay mining and refining and manufacturing of starch and allied products.

EICL has two key business segments namely Clay business and starch business, with

strong R&D setup at all its three manufacturing locations. The collaboration with ECC ceased in

10

the year 1992. EICL has been actively engaged in manufacturing and processing of China Clay of

different grades for use as a coating agent and a filling agent.

The company has its clay manufacturing units at Veli, Thonnakal and Kollam located in

Kerala. The installed capacity of the plants was 36, 000 MT per annum initially and it has since

been increased to 2, 13, 600 MT per annum as of date. The Starch business has two

manufacturing divisions at Yamuna Nagar in Haryana and Pondicherry. The starch division at

Yamuna Nagar can be trace its origin back to 1937.

EICLTVM manufactures and processes China clay of different grades for use as a coating

agent and filling agent. The installed capacity of the plants was 360000 MT per annum initially

and it has since been increased to 213600 MT per annum of date with approximately70% of

domestic market share.

The Starch Division has two manufacturing units, one located at Yamuna Nagar, Haryana,

manufacturing Starch and its derivatives, and the other located at Shimoga exclusively

specializing in the manufacture of value added Modified Starches for various Industrial

applications. The divisions have the distinction of being the lonely starch company in India to

have acquired ISO-9002 certification and DSIR recognized R&D Centre, which is recognized by

the Department of Science and Technology, Govt. of India. EICL has been successful in

maintaining strict quality control and consistent conformity to International standards. Current

starch producing capacity of the company is 101040 MT per annum. EICLTVM is a market

leader in modified textile starch and a significant player in traditional starch with suitable growth

rate.

The Starch Division was started under the name of Bharat Starch Industries in the year

1937.  It was subsequently taken over by EICL Limited in the year 2002. Both the Divisions of

EICL have grown to be market leaders in their respective fields.  This growth has been chiefly

driven by prudent investment in world class R&D facilities for research in Kaolin and Starches,

enabling these Businesses to be specialized solution providers for various applications spanning

diverse Industries.

EICLTVM is promoted by the prestigious BM Thapar group and Mr. Karan Thapar is the

chairman of the company. The group is one of the big industrial houses of India having

successfully managed large companies in diversified industries. The other companies under the

control of Mr. Karan Thapar are Graver Cotton Ltd and Premium Energy and Transmission Ltd.

11

1.3.1 COMPANY HISTORY

EICL was established in 1963. The main objective of the company is Mining of China

clay and manufacturing of processed China clay paper, textiles, rubber, plastics, ceramics,

insecticides etc. In 1970, Thapar group took over the company. The company went in for

automation during second half of 1980’s to improve productivity and by the end of 1985, it began

to achieve a steady profit.

By 1990 a second plant was commissioned in Pondicherry, a spray drier plant with a

capacity of about 20000TPA and commenced leasing activities. In 1994, EICL was awarded ISO

9002 certification for quality assurance in production. In 1995, 3rd plant, the calciner plant was

commissioned by EICL with a capacity of 20000TPA. It produces calcined clay which is another

variety of China clay. In 2003, the company commissioned a 20000TPA calciner plant at

Thonnakkal as a part of its continuous expansion.

In 1994, shares of EICL were listed on the Bombay Stock Exchange. In 2002, EICL was

merged with Bharat Starch Industries Ltd. In 2007, EICL acquires clay reserves and

manufacturing assets of clays Pvt. Limited at Kollam. This becomes the third manufacturing

location of clay business. In 2008, two MW co-gen plant was commissioned at Yamuna Nagar to

reduce the cost of stream and power significantly.

1963   EICL incorporated on 18.11.1963.

1964   Commerical manufacturing started for Hydrous Clay at Veli, Kerala.

1992 

Stake of English China Clays Ltd., UK (now merged with IMERYS PTE Ltd-

France) in EICL bought by Thapars.

1993 

Mr Karan Thapar appointed as Chairman cum Managing Director of the

Company (CMD).

1994   Shares of EICL listed on the Bombay Stock Exchange

1994   EICL commissions a Speciality Starch Plant at Puducherry.

2002   Merger of Bharat Starch with EICL.

2003

 

Capacity expansion in calcined clay at a greenfield location (Thonnakkal, Kerala)

by commissioning of a R&D project for the manufacture of 25000 MTA of

Calcined clay.

12

2005   Capacity expansion in Hydrous Clay at Thonnakkal, Kerala.

2007

 

EICL acquires clay reserves and manufacturing assets of Wolkem Clays Pvt

Limited at Kollam (Kerala).  This becomes the third manufacturing location for

Clay Business.

2008 

2 MW Co-gen plant commissioned at Yamuna Nagar to reduce the cost of steam

& power significantly.

2008   De-merger of the Investment Division of EICL to Bharat Starch Products Ltd.

2008 

Capacity expansion in Calcined clay at Thonnakkal, Kerala.

1.3.2 VISION OF EICL

“To be a leader in processed China market in Asia and to be an employer of choice

fostering a culture that values dedication, respect and continuous improvement”.

1.3.3 MISSION OF EICL

“To provide consistently high quality products and material to our customers in a sale,

timely and efficient manner, at lowest possible cost and to grow with them and ensure the growth

and development of employees of the company in order to achieve the objective of the

organization and the caver goals of the employees”.

1.3.4 QUALITY POLICY OF EICL

EICL. TVM is committed to processing and supply of value added Hydrous and claimed

clay, meeting customer requirement of quality, delivery and application support through continual

improvement of the effectiveness of its quality management system.

1.3.5 ENVIRONMENTAL POLICY

EICLTVM is committed to meet or exceed relevant environment regulations and other

environment related requirement through the continual improvement of the environmental

management system and the prevention of pollution with systematic review of environment

objectives and target.

13

1.3.6 BUSINESS OBJECTIVES

To adhere to, and deliver, the following objectives in the business of 

A) Mining, Refining & Processing of China Clay.

B) Starch, Modified Starch and related products.

Conduct business affairs ethically.

Produce high-quality products at competitive prices for Industrial Application, with

adequate care of Environment.

To grow profitably and responsibly and create value for all the Shareholders & Stake

holders alike.

Continually improve products & processes through judicious and effective use of R&D.

1.3.7 PHILOSOPHY 

EICL’s philosophy is to enhance overall long term value of its shareholders, customers,

lenders and employees.  We strongly believe that our strength lies in managing our business in a

professional manner, and in adopting transparency & responsibility in all our operations.  We

work towards developing a professional, knowledge based, and system driven work culture.

 1.3.8 VALUES

To develop a professional, knowledge based, system driven work culture.

Respect for ethical integrity, environmental protection, and safety.

Believe in people and system driven performance.

“Thinking Organization” with pro-active action.

Team performance is more important than individual performance.

Customer satisfaction.

Quality and Cost conscious.

1.3.9 CORPORATE GOVERNANCE

The company has compiled with the code on corporate governance as prescribed by the

Securities Exchange Board of India and had taken all necessary steps to ensure that the guidelines

prescribed by SEBI in this regard are fully compiled with.

14

1.3.10 SOCIAL RESPONSIBILITY

The company continued to pursue its agenda on social responsibility during this year.

Water provided round the year to the neighboring villages around the Thonakkal Mines through

pipeline and through water tank.

A pioneering rain water harvesting scheme spread over 80 acres of land was successfully

implemented at Thonakkal Mines and the water stored in the reservoir is stored with the

neighboring villages. This is the largest commissioned rain water harvesting scheme in Kerala.

1.3.11CORPORATE PROFILE

Chairman : Mr. Karan Thapar

Directors : Mr. Praveen Sachdev

: Mr. T. Balakrishnan

: Mr. D Kohli

: Ms. P S Saini

: Mr. Rahul Gupta

: Mr. S K Toshniwal

: Mr. S N Dua

: Mr. S Padmakumar

: Mr. Vijay Kishore Sharma

: Mr. J. K Jain

: Mr. Vijay Raj

Managing Director : Dr. VenkateshPadmanabhan

Vice President : Mr. S.K. Jain

Auditors : Mr. Walker Chandiok& Co

Bankers : ICICI Bank Ltd

: UTI Bank Ltd

: Oriented Bank of Commerce

: State Bank of India

: State Bank of Indore

: Indusind Bank

Shares Listing at : Mumbai Stock Exchange

15

Revenue : 79.3977(USD in Millions)

Market Capital : 2370.51401295(Rs. in Millions)

Corporate Office : Global Business Park, 801-803, Tower-B,

8th floor, Mehrauli, Gurgaon (Haryana)

Corporate Address : TC 79/4, Veli,

: Thiruvananthapuram-695021, Kerala.

Head Office : N 75, Connaught Circus,

: New Delhi-11.

Works : Thiruvananthapuram (Kerala)

Financials : Total Income Rs. 4635.678257 Million

(year ending March 2014)

: Net Profit Rs. 160.991516 Million

(Year ending March 2014)

Business Operation : Miscellaneous

1.3.12 WORKING PATTERN OF THE COMPANY

It is a 24 hour working company. The working time is divided into three shifts.

Shifts Timing

A 6 am- 2 pm

B 2 pm- 10 pm

C 10 pm- 6 am

Table 1: Working Hours

16

There are three grades of employees. They are

Workers

Staff

Officers

The workers are on a long term settlement of four years with the company. The company and

employees come into agreement about salary, welfare activities and incentives for four years. The

percentage of change in salary for four years will be mentioned in the agreement. Thus there will

be less conflict between the employees and the company. 1.75% of monthly turnover is also

distributed to employees as incentives. Bonus is given to employees according to bonus act. It is

fixed for four years.

General shift is from 9 am to 5 pm. For plant officers and staff, the timing is from 8 am to 5

pm. For office workers in the night, every day a duty officer is appointed.

1.3.13 EMPLOYEE PROFILE

EICL has 340 employees working in EICL.There are also casual laborers and contract

laborers.

Category Number

Officers 60

Administrative staff 36

Workers 170

Employees 46

Apprentices and trainees 28

Total 340

Table 2: Employee Profile

Address for correspondence

17

1.3.14 ORGANIZATIONAL STUCTURE

Grouping of activities or departmentalization is an essential step in every organization and

it helps to design an organization structure. It makes large and complex organization into small

flexible groups which are easier to manage. It shows the horizontal differentiation in an

organization. Grouping of activities into departments or divisions can be done by grouping tasks

into jobs, combining of groups into identifiable segments, on the basis of functions, products,

process, territory etc.

Department is a workgroup combined together to perform certain functions of similar

nature. Departmentalization is done to “Simplify managerial tasks and to maintain control by

grouping employees within well-defined areas”. Detailed and well defined policies and

procedures which each department has to follow during the different operations have been laid

down by the company.

At EICL, the departments are classified according to their functions, which follow the

principle of grouping activities in accordance with the functions. The functional area consists of 7

major departments, each headed by Senior Managers or Deputy General Manager. The major

functional areas include the departments like Human Resource Management, Commercial,

Finance & Accounts, Research & Development, Marketing, Production and Quality Control.

1.3.14.1 EICL ORGANIZATION CHART

The organization structure of the company is diagrammatically represented by an

organization chart. The chart shows the lines of responsibilities between the various departments

of EICL.

18

English Indian Clays Ltd,

TC-79/4, Veli, TVM- 695021, Kerala

Phone: 0471 741133, 4095111

Email: psaini@eicl.com

Website: www.eicl.in

Chart 1: EICL Organization Chart

19

Chairman

Executive Director

Vice President

Senior

Manager

Operations

General Manager Operations

General

Manager

Sales and

Distributio

n

Deputy

General

Manager

Commerci

als

Commercial Manager

Senior

Manager

Quality

Control

Senior

Manager

Finance

Deputy

General

Manager

Marketing

Marketing

Manager

Senior

Manager

Finance

Senior

Manager

HRA

Deputy

General

Manager

Mines

Senior

Manager Mines

Senior

Manager

R&D

Senior

Manager

Maintenanc

e

Level 1- Chairman

Chairman controls the overall activity of the organization. He is the reporting officer of

the level 2 Managers. He is responsible for solving issues at his level in the most of the situations.

Level 2- Managing Director

Managing Director is responsible for solving issues at this level in most of the situations.

The Managing Director is the Chief Executive of the corporation. He is assisted in the registered

office by the heads of various divisions.

Level 3- Low level Management

Every Departmental Manager is Subordinated by one or more middle levels Managers.

Each of these manager will have a deep technical knowledge about the functions of the

department.

1.4 PRODUCT PROFILE

The company has hydrous and calcined clays for application in paper, paint, rubber, fiber

glass and other industries. English Indian Clays Ltd. TVM’s products have been in use in above

industries in India, Africa and the Far East. Its products include hydrous and calcined clay.

1.4.1 CLAY

EICL’s Clay business is the largest integrated clay facility in Asia, mining and refining

high end Calcined and Hydrous Clays. EICL operations are multi location with an installed

capacity of 240,000 tons per annum.  With the commissioning of its new calciner in 2009, EICL

has increased the Calcined Clay capacity to 60,000 tons.

EICL products touch and enrich everyday life of people through wide range of

applications spanning diverse segments including paint, paper, inks, plastics, fiberglass and

catalysts, etc. The corner stone of EICL philosophy is to be a solution provider to customers

through value enhancing products and services. 

Application needs of user industries are incorporated at incubation stage itself through

extensive interaction with customers and our application specialists work closely with customers

at shop floor integrating its use. EICL believes in building partnerships that are long

20

lasting.  EICL’s performance enhancing pigments are classified into No. 1 fine grades and regular

grades.  The fine grades of Calcined Clays are used as partial substitute for TiO2.

The fine Hydrous Clays are used for premium paper coating application, delivering

excellent print characteristics and rheology.  The regular grades are used as extender pigments

and precoats enhancing opacity and whiteness providing the right base to build on. The premium

grades are also used by the Cable and Plastic Industries taking care of specific application

requirements of volume resistivity and ease of extrusion.

1.4.1.1 Application – User industries

Paper & Board

Paint

Printing Inks

Rubber

Cable

Plastic

Glass & Fiber

Printing Inks

Rubber

Cable

Plastic

Glass Fiber

Ultramarine

Concrete

Others

1.4.2 STARCH

   The Starch business of EICL started out as an agro based Company called “Bharat

Starch Industries”.   This company was set up in 1937, with production facility located at

Yamunanagar (Haryana).  It was the first Company in the organized sector to enter into Starch

manufacturing.  Bharat Starch Industries started initially as a Corn Wet Milling Unit with 80 MT

21

per day grinding capacity, manufacturing Native and Modified products primarily for Food, Paper

and Textile Industries. 

EICL’s Starch business has now grown into 2 manufacturing locations – one at Yamuna

Nagar and the other at Shimoga.  These two Units manufacture Starches for different applications,

with particular focus on value added Speciality Starches. The business today has capacity of

76500 MT per annum (both Maize and Tapioca products).   

The business maintains leadership position through product innovation & development,

and providing application support to customers. The products manufactured cater to the specific

requirements of customers, such as:

Wet-end Additives, Surface Sizing and Coating Binders for Paper Industry.  

Adhesives for Paper Sack/ Packaging Industry.  

Starches for Pharmaceutical Industry.  

Syrups for Confectionery, Food & Beverage Industry.  

Yarn Sizing, Printing & Finishing for Textile Industry.  

Starches for Oil well Drilling Industry  

 

1.4.2.1 Products

a) Maize Starch

Maize Starch is a white or creamy powder having various direct and indirect

applications. Our Native Starch is manufactured from selected good quality corn with high

brightness and low ash content, which is very desirable in the Food, Pharmaceuticals and Paper

Industries.  It finds applications in the Food Industry as a thickener and emulsifier in the

manufacture of Sauces, Puddings. 

It is used by the Textile/ Jute Industries in wrap sizing, finishing, back filling and

printing.  In the Paper Industry Maize Starch is widely used for sizing and increasing the strength.

It finds usage as an adhesive in the manufacture of Corrugation Board and Paper Boxes.  It is

even used by the Laundry as a stiffener of clothes after washing.

Packing: It is available in 50 kgs HDPE bags with moisture proof HMLDPE inner liner.   

Storage: The product should be stored in ambient conditions, away from damp surfaces.

22

b) Modified Starches

A very wide range of Modified Starches are available for numerous

applications such as,

i. Adhesives

ii. Coating Starches

iii. Coating Binder Starches

iv. Wet end Starches

v. Spray Starches

vi. Pharma Starches

vii. Food Starches

viii. Textile Starches

ix. Pregel Starches

x. Adhesive Starches

xi. Oil Well Drilling Starches

They are explained as follows

i. Adhesives

This product range has applications in Paper Tubes, Core, Cones, Edge Protectors,

Corrugation and Pasting Gums segment.  All these adhesives provide strong bonding, faster

setting time, uniform spread ability, and are ready to use. Marketed under the brand names

Addcol, Bondex Y-90, Bondex FD-80 and Bharat Gum.

 ii. Surface Sizing, Lamination and Coating Starches

These Starches have a range of viscosity and fluidity to suit the requirements of paper processing

in the application of surface sizing.  These contribute to the enhancement of surface properties of

finished paper sheet by facilitating smooth application as a surface sizing agent without gel

formation. Marketed under the brand names Synthosize-10, Papyrox, Amyloplast-10, Amyloplast

SMO and Thitrite-90.

iii. Coating Binder Starch

This product range finds usage in Coating and Lamination of Paper & Board as well as in

the Pharmaceutical and Latex Industries.  Marketed under the brand names Amylogum C-

40, Amylogum S-20 and Amylokote.

23

iv. Wet End Starch

These are Cationic and Amphoteric Starches for Wet End Applications in the processing

of paper. These products help to improve surface strength properties, fiber & fillers retention,

water clarification, reduction in water pollution and rattling/stiffness.  They also contribute in the

enhancement of smooth running of high speed machines. Marketed under the brand

names Fibreloc T-20, Fibreloc T-25, Fibreloc T-45, Fibreloc T-65, Fibreloc T-

85 andAmylofloc.  Various grades of Fibreloc, are modified to different levels according to

specific customer requirements/ benefits.

v. Spray scratch

These Starches were developed as an answer to the problems of the Kraft Paper

Industries.  Marketed under the brand names Amylospray, Super Bond, Super Spray,

and Amylosize.

vi. Pharma Starch

Pharma grade Maize Starch is a premier product used in various applications in

Pharmaceutical industries. It is manufactured from carefully selected grains with controlled

feeding to the system maintaining hygienic condition throughout the process to control

microbiological load.  It has very low bacterial count as compared to Native Starch. 

Marketed as Maize Starch (IP), Maize Starch (25 kgs) and Amyloflow.

vii. Food Starch

Food Starches are ideal products to meet the exacting requirements of processed foods.

High Viscosity Native Starch, in the uncooked form, is used as filler or bulking material in

processed foods. When cooked, it acts as a suitable thickener and texturizer for consumer

prepared foods. Marketed under the brand names Aquasol and Aquagel.

viii. Textile Starches

They are used in textile yarn sizing.  These products have a proven track record for sizing

application and are also used as the major ingredient of the size recipe. These products impart the

required mechanical strength properties to the yarns to ensure hassle free weaving process even in

24

high speed air jet looms.  These products have GOTS certification from Control Union

Certifications, Netherlands. The trade names are TEXOPLAST,

CARBOJET and JETSIZE (different grades are available as per the specific customer

requirements and types of yarns i.e fine count, coarse count, dyed, etc.).  All major corporate mills

in India are our customers.

ix. Oil Well Drilling Starch

These starches are used as viscosifiers in oil well drilling and are exported 100% to the

Middle East.  These are also one of the key ingredients of a mud chemical system.  DRILLING

STARCH (DS) and HIGH THERMAL STABLE DRILLING STARCH (HTDS) are used to

provide filtration control and rheology stability in all types of waterbase drilling fluids.  HTDS is

stable upto 135 °C (275 °F) temperature.  CARBOXYMETHYL STARCH (CMS) is a non-

ionic material especially suited for fluids containing salts or ion sensitive additives.

x. Pregel Starch

These products are pre-gelatinized starches with suitable modifications and have wide

application in Industries for manufacturing Laundry Starch,Mosquito Coil Starch and Coal

Briquetting Starch.  These products are cold water swell able in nature and form homogenous

paste on stirring.  The adhesive and binding properties of these products are excellent.

xi. Adhesive starch

This product is marketed as Aqua paste CP and is used in corrugation box manufacturing

for pasting and corrugation.  This is a cold water swell able product and its bonding strength is

very good.  As a result its usage is very suitable for 3 Ply and 5 Ply boards.

25

The product range is as given below:

Type Grade Industry

Very Fine Coating Clays Super coat Paper

Fine Coating Clays Hi gloss Paper

Normal Coating / Paint Grade

Clays

BCK Paint/Paper/Printing Ink

Coating/Filler Grades KCG Paper/Rubber

Fiberglass Grades Fiberlin Fiber glass

Very Fine Calcined Clays Himafine Fiber glass/Paper

coating/Paint/printer Inks

Fine Calcined Clay Himapol Paint/Ready Mix

Concrete/PVC Compounding

Coarse Calcined Clay Himapol Paint/Ready Mix

Concrete/PVC Compounding

Cement Grade Calcined Clay Himacem

Himablue

Ready Mix Concrete

Cement/Ultramarine

Table 3: Product Grades

26

Items Sales (%)

Paint 35

Paper 30

Rubber 20

Fiber glass 10

Others 5

Table 4: Industry wise market break up

1.4.3 EICL EXPORTS

Over the last 10 years, EICL products have established themselves in the international

market. With hydrous and calcined clay of quality comparable with the best grades available in

the world, EICL products offer distinct techno-commercial advantage in Africa, South East Asia

and Middle East markets due to its geographical location.

1.4.4 COMPETITORS

In Domestic Market

INDAL, Kolkata

Kerala Ceramics Limited, Kundara

Ashsbosa Clay and Minerals

27

Neeleswaram Clay

Cochin Clay, Madurai

In International Market

Engel Hard, U.K

Imercis, USA

Huber, Germany

1.4.5 Market

EICL enjoys a market for the product that is manufactures. The other companies, which

hold a position in the market other than EICL, are smaller in size and turnover, nor do they have

adequate technology to match EICL in terms of quality. It has a market share about 60% in the

two lakhs tons market.

1.4.5.1 Customers of EICL

Paper industry

ITC Ltd –BudraChalo : Andhra Pradesh

Ballarpur Industries Ltd : Ballarpur

Paper Straws Products : New Delhi

Haryana Coated Paper Ltd : Faridabad

Rohit Pulp Paper Mills : Gujarat

Sreevidhya Paper Mills Ltd : Nasik

Soap and Detergent

Hindustan Lever Ltd : Mumbai

Colgate Palmolive : Mumbai

Godrej Soaps : Mumbai

Paint Industry

28

Asian Paint India Ltd : Mumbai

Jemson A Nicholson India Ltd : Mumbai

Berger Paints India Ltd : Kolkata

Shalimer Paints : Kolkata

Distinct techno-commercial advantage in Africa, South East Asia, Far East and Middle East

markets due to its geographical location. EICL exports cover around 12-14 countries with 80% of

its exports to UAE. It faces competition from international markets such as USA, Brazil, UK and

China. In 2003-2004, export marked a growth of 16.5%. The major parts of Cochin and Tuticorin

provide logistic support to all major parts of the world.

CHAPTER 2

29

RESEARCH METHODOLOGY

The organization study was done for a period of month and aimed at an industrial

exposure and to understand the functioning of the organization in real life. The main intention

was to help students to link the corporate management practices with the theories learnt.

2.1 OBJECTIVE OF THE STUDY

Primary objective of the study is to learn in detail about the overall functioning of

English Indian Clays Ltd.

The secondary objectives are as follows

1. To understand the organization structure.

2. To know about the policies and procedures of the organization, its Vision

and Mission.

3. To understand the various departments, their functions and administration

levels.

4. To know the various stages of manufacturing processes.

5. To study about the functions of the organization.

6. To interact with the managers of various levels of the organizational

hierarchy as well as the workers at work place.

7. To make a SWOT analysis about the organization.

8. To compare and contrast theoretical knowledge with the actual practice.

9. To analyze the financial performance.

10. To know how the theory learned are practically applied in the organization.

2.2 SCOPE OF THE STUDY

The organization study is conducted to have practical knowledge about the various

functions and activities of an organization. The study done in English Indian Clays Ltd, in their

Trivandrum plant helped to attain the aim of study. English Indian Clays Ltd, a well reputed and

experienced company in Kerala was one of the best place of study for an MBA student. The

company was running with various departments and has vast hierarchies of administration, which

is a best example of study for the well understanding of how a management works practically. It

is easily reach unto the top most as well as the lower most level of the company. So it was found

30

to be truly effective in doing a project work on the organizational study at English Indian Clays

Ltd. the study helped to know the activities of various departments in the organization. The

importance of each activity in an organization is analyzed.

2.3 METHODOLOGY

Research is a systematic method of finding a solution to problem. Research methodology

refers to the method of gathering data through extensive interviewing and other methods. The data

collected were analyzed within the parameter of evolution model to prepare the final report. This

report was prepared based on both primary and secondary data collected from the English Indian

Clays Limited during the study period. Primary data were collected from direct observation,

discussions with the company personnel and by face to face interviews with officials in various

departments. Secondary data includes data collected from internet, company annual reports and

manuals of various departments.

By collecting information about the company from various instruction manuals

and journals provided by the Training Department.

By conducting talks and meetings with various department heads to understand

separately the individual functioning of the different departments and their

importance.

By visiting the plant as well as other operational areas to observe and experience

their activities directly.

2.4 LIMITATIONS OF THE STUDY

Since the study is conducted at the Veli center of English Indian Clays Ltd., it contains

more information about the office at Veli and lacks detailed information regarding the other

centers of the organization.

The conclusion and inference are drawn on the basis of data received from personal

interviews and it may not be accurate. No set of rules have been followed in collecting the

information. More importance is given to understand the organization and not to evaluate it

critically. Sampling is not possible in this study. Financial statements are generally based on

historical or original cost. The current economic conditions are generally ignored.

CHAPTER 3

31

DEPARTMENTAL STUDY

3.1 FUNCTIONAL DEPARTMENTS

Departmentalization is the process of dividing the work of the organization into

departments or either manageable units. Departments are classified on the basis of grouping

activities. Functional, product, territorial customer, process, time and numbers are the main

patterns of grouping activities.

The basic purpose of the departmentalization is:

To make the size of each departmental unit manageable.

To secure the advantages of specialization.

To help the organization to expand and grows.

To facilitate management development.

To delegate responsibility.

To facilitate Administrative Control.

Detailed and well defined policies and procedures which each department has to follow

during its different operations have been laid down by the company. Under ISO, all the

procedures are highly standardized and separate manuals are issued to all departments. This is

issued and controlled by various HODs. The efficient and effective functioning of all the

departments in an organization is important for the progress of the organization.

A good organization structure is determined by the type of communication and

coordination existing between various departments in an organization. With the various

departments responsibility is delegated to various persons, who help in decision making and

makes the functioning of the organization simpler. The functional departments include:

1) Marketing Department

2) Commercial Department

3) Production Department

4) Research And Development Department

5) Finance and Accounts Department

32

6) Quality Control Department

7) Maintenance Department

8) Project Department

9) Human Resource and Administration Department

3.1.1 MARKETING DEPARTMENT

Marketing is the process of planning and executing the conception, pricing, promotion

and distribution of ideas, goods and services to create exchanges that satisfy individual and

organizational goals. The main function of marketing is managing relationships in an

organization, with outside vendors and the customer. Without marketing there is no customer

and without the customer there is no use for the product or service the company is producing.

At EICLTVM, the marketing acts as a guide and lead the company’s other

departments in developing, producing, fulfilling and servicing products and services for their

customers. Communication is vital and the marketing department typically has a better

understanding of the market and customer needs. The goals and guidelines set by the

marketing department are in line with the vision and mission of the company. The upper

management is also involved in and endorses cooperation by all departments in following and

implementing the plan and integrating a consistent message into all communication channels.

At EICL, there is a system of preparing the Material Complaint Report (MCR). MCR

is a report prepared by the marketing department which consists of customer complaints about

the product. This will be circulated among all the department which consists of customer

complaints about the product is. After detecting the mistake, the complaint will be rectified

with immediate effect.

English Indian Clays Ltd. TVM goes in for industrial marketing, as its product is used

as raw material by other industries such as paint, paper, rubber and ceramics. The company

also has its own Exports Divisions in the marketing department. Over the last 10 years,

English Indian Clays Ltd. TVM products have established themselves in the international

market. It exports products to about 18 countries some of which include UAE, Philippines,

Mauritius, Oman, Yemen and South Africa. With hydrous and calcined clays of quality

33

comparable with the grades available in the world, English Indian Clays Ltd. TVM products

offer distinct techno-commercial advantage in Africa, South East Asia, Far East markets due

to its geographical location.

3.1.1.1 MARKETING DEPARTMENT CHART

Chart 2: Marketing Department Chart

3.1.1.2 FUNCTIONS

The functions of marketing department are:

Identify purposive customers.

Conduct market survey and market research.

Source orders and execute them as per delivery schedules agreed upon

Provide application support to customers in coordination with EICL R&D center

and QC department.

Attend customer complaints and take preventive action against recurrence of

similar complaints.

Attend and settle customer complaints.

34

Marketing Manager

Assistant Manager Industrial Relations

Executives

Assistant Manager Sales

Officer Logistics

Executives

Service the existing customers- servicing involves

o Meeting customers schedules on time.

o Keeping track of customers stores and purchase department.

3.1.1.3 LOGISTICS SUPPORT

The major Indian Arabian Sea port of Cochin is only 220 km our works. Regular

connections to all the major ports in the world are available from Cochin. A new port at Tuticorin,

managed by Singapore Port Authority has come up in a major way to the East in Bay of Bengal.

This port is 200 km from their works and major shipping lines have started calling here. These

two ports together ensure minimum lead time for their cargo to be shipped out of India to

destinations all over the world. For domestic cargo, EICL offers movement of material by coastal

route as well as CONCOR rail in addition to the direct truck option.

3.1.1.4 MARKET RESEARCH

Marketing research is the systematic design, collection, analysis and reporting of data and

findings relevant to a specific marketing situation facing the company. At EICL, the HOD of the

marketing department also maintains a good MIS. It uses internet for collecting information and

interacting with customers, etc. The department goes in for product analysis and competition

analysis. Product analysis is done to study the recent or proposed production, sales and pricing

policies of the companies.

3.1.1.5 AGENTS

Agents are appointed by EICL because it is not possible for the company to cater to the needs

of all the customers who are situated at various cities of which are far from their branches. After

satisfying the conditions, the appointed agent enters into an agreement with the company which is

signed both by the agent as well as the Vice President and the marketing manager of the company.

Agents are appointed as per the recommendations made by the branch offices to the

management. Criteria for appointment of an agent are the following:

a) An agent should have a business in the potential area or in the particular industry.

b) The person to be appointed as the agent should be financially strong.

35

c) The agent should have sufficient technical knowledge to deal with the customer

problems.

d) The agent should have sufficient market as well as office infrastructure like Fax,

Telephone, warehouse etc.

e) The person appointed as agent should have good contacts in the industry.

3.1.1.6 ELEMENTS OF MARKETING MIX

1) Product

Marketing development ensures that the product is of the same grade as specified by the

customers and meets the quality standards. Currently 35 grades of clay are available, each with 2

main specification brightness and fitness. The right quality clay should contain 78-88% brightness

and fitness content from 60-10%.

2) Price

The prices are based on pricing policies taken by the company based on the market

conditions. The pricing decisions are taken by the marketing department after studying the market

conditions and also comparing the competitor’s price.

3) Promotion

It deals with advertising and sales promotion for the product. Since the company goes for

Industrial marketing department concentrates on direct marketing as a means of promotion which

enjoys the advantage of two way communication. EICL has marketing offices in Mumbai and

Delhi and has marketing agents in Mauritius, South Africa, GCC, Sri Lanka, Indonesia, Jordan

and New Zealand.

4) Packaging

Packaging is done in laminated High Density Poly Ethylene (HPDE) bags. EICL products

are generally packed in 50 kg or 1000 kg (Jumbo bags). They are also packed in 25 kg bags as per

36

the requirements of the customers. The 75 kg bags are used to pack the product in the form of

lumps.

5) Place

In this clay industry the place is not that much important. The production plant is setup in

TVM and Thonakkal.

3.1.1.7 INDUSTRIAL MARKETING

Over the last 10 years, EICL products have established themselves in the

international market. With hydrous and Calcined Clay of quality comparable with the best grades

available in the world, EICL products offer distinct techno-commercial advantage in Africa,

South East Asia, and Far East and Middle East markets due to its geographical location.

The location is selected based on auction freight advantage countries. They will

have agents to do the marketing part. These agents will have regular touch with the customers

asking them about the quality of the product. The main products in international marketing are

Paint, rubber, insulators, ready mix concrete, rubber, etc.

3.1.1.8 LIST OF MAJOR CUSTOMERS

Clay being the major raw material for various products EICL has got paper

industry, soap and detergent industry, paint industry, ceramic, rubber and fiber industry. The

major customers of EICL include

Paper Industry

ITC Ltd –BudraChalo : Andhra Pradesh

Ballarpur Industries Ltd : Ballarpur

Paper Straws Products : New Delhi

Haryana Coated Paper Ltd : Faridabad

Rohit Pulp Paper Mills : Gujarat

Sreevidhya Paper Mills Ltd : Nasik

Soap and Detergent Industry

Hindustan Lever Ltd : Mumbai

37

Colgate Palmolive : Mumbai

Godrej Soaps : Mumbai

Paint Industry

Asian Paint India Ltd : Mumbai

Jemson A Nicholson India Ltd : Mumbai

Berger Paints India Ltd : Kolkata

Shalimer Paints : Kolkata

Ceramics Industry

Spartex Ceramics India Ltd : Chennai

Naices India Ltd : Pondicherry

Surya Pottery Ltd : Himachal Pradesh

Eagle Potter Private Ltd : Gaizabad

Diamond Pottery Private Ltd : Bahduge

Rubber Industry

MRF Ltd : Chennai

Paragon Rubber Industries : Kottyam

Bata India Ltd : Banglore

Fiber Industry

FCB Ltd : Thana

UP-TiywaGlan Ltd : New Delhi

3.1.1.9 COMPETITORS

EICL, being the largest producer of China Clays in India, has a very few competitors. The

monthly production of EICL (about 1200 tons) is higher than the annual production of same of

38

the companies in the same sector. Hence competitors are not a threat to EICL. Some of its

competitors are

Kerala Ceramics, Kollam

20 microns

Wolken

3.1.1.10 FUTURE PLANS

Marketing department strives to move proactively to anticipate and meet the product and

service needs of the market. This includes providing value added products, enhanced capacity of

existing range etc. Marketing department of EICL helps to market its products by knowing market

changes, meeting the requirements of customers, knowing the competition in the market and

taking steps to counter this competition.

At EICL, the idea that marketing is a team effort is constantly reinforced among

employees. The marketing department in EICL studies the market and the customers, determines

the best way to reach those customers, and works with the rest of the company to help determine

the new product needs of the market and represent the company in a consistent voice.

3.1.2 COMMERCIAL DEPARTMENT

The commercial department in EICL is responsible for the procurement of raw materials,

vendor development and procurement of raw materials, chemicals, spares and packing materials,

vendor development and procurement of imported materials. The department consists of stores

sections.

3.1.2.1 MISSION

The mission is to procure material of required quantity at most competitive prices for

uninterrupted production and maintenance of the plant with least possible tie-up in inventories

and with constant endeavor to make it economical.

3.1.2.2 COMMERCIAL DEPARTMENT CHART

39

Chart 3: Commercial Department Chart

Senior Manager Commercial is responsible for giving the approval for purchase of

materials, assessing, rating and finalization of vendor, setting disputes pertaining to terms of

contract and purchase order. Any incidents regarding project are taken care of by the Assistant

Manager-Purchases. Vendor development vests with him. Assistant Manager (Stores) controls

the functions performed in the stores section.

The executive (commercial) is responsible for verification of indents, sending

inquiries, obtaining quotations, preparation of comparative statements, renewal of for licenses,

clearing materials, preparation of transport documents and follow up with the vendor. The

executive (stores) is responsible for receipt of materials, preparation of records for sending out

and receipt of outward materials and lay down procedures for calibration of balance used for

measurements related to store activities.

40

DGM Commercial

Senior Manager Commercial

Executive Purchase

JR executive

Supervisior

JR Assitant

Executive Stores

JR Executive

Senior Assitant

JR Assistant

Store Attenders

The supervisor in purchase section is responsible for verification of indents, sending

inquiries, obtaining quotations, preparation of comparative statements and obtaining approval

of purchase orders. Senior assistant (stores) assists the Executive (stores) in his job and store

attenders issue the stored items to the user departments as advised to them.

3.1.2.3 ACTIVITIES

Review of stock materials indents.

Selection of materials source, obtaining offers, negotiation, terms of purchase,

ordering, follow up, receipt, payment, vendor rating and evaluation, approved

suppliers list and new source development.

Market Intelligence: continuous interaction with market and collecting data on

costs, demand and product substitution.

Receipt of goods, inspection and their approval.

Proper storage and materials accounting and reconciliation, safety and security,

easy accessibility and identification of the location.

Issue of materials to the user department.

Compliance with statutory and audit formalities.

Clearance of incoming materials.

Obtaining and renewal of licenses.

Systematic storage of scrap and periodical disposal.

Physical stock verification and identification of surplus item, its disposal and

perpetual inventory system.

Divisions will all departments, effective and timely communication with all

concerned.

Transportation of materials- fixing transporters for transportation of all materials,

rate contract for bulk materials to the user department.

3.1.2.4 VENDOR DEVELOPMENT AND EVALUATION

At English Indian Clays Ltd. TVM there are two vendors for transportation, one contractor

for excavation and three vendors for the purchasing raw materials, packing materials, machinery

spares, machinery, electrical items and other items. It has two steps:

41

a) Vendor selection

b) Vendor rating

Vendor can be selected based on interactions with the user to clearly identify the need.

Knowledge of all possible sources, frequent visit of sales representatives and summary of

discussions with them facilitates vendor selection. Enquiries are sent to selected vendors to know

their past experience, financial status and reputation. Vendor is asked to give samples and

specifications. Vendor name is registered on approval by Senior Manager – Commercial.

Vendor rating is done on the basis of how many times the vendor is able to deliver the

materials as per the delivery schedule. The following factors are taken into consideration.

Quality of material delivered on time.

Response time.

Whether the vendor is able to give any technical support.

Packing Materials Kamalavel Corporation, Tuticorin

Klean Pack, Banglore

Multi Packing , Banglore

Chemicals Swastik Corporation, Erode,

Gulshan Chemicals, Bombay

Travancore Cochin Chemicals, Cochin

Surya Corporation, Pondicherry

Bhagya stores, Thiruvananthapuram

Fuel oil Bharat Petroleum Corporation Ltd

Hindustan Petroleum

Indian Oil Corporation

Table 5: List of Vendors

42

3.1.3PRODUCTION DEPARTMENT

The production department is the core of the company which in turn is supported by

all the remaining departments. All the departments are interdependent. The Production

Department of EICL is mainly concerned with the mining and processing of China clay. EICL

produces about 1,50,000 tons of China clay and calcined clay per year which cater to the

needs of paper, paint, fiber glass rubber cable, soaps and detergents and plastic industries in

the country. The plant capacity is 190,000 metric tons per annum and is the biggest in South

East Asia. The mining activity is performed by experts who ensure that the art equipment

grinds the ores to the particles, with high-powered machineries ensuring a product that meets

highest quality standards conforming to international class.

3.1.3.1 PRODUCTION DEPARTMENT CHART

Chart 4: Production Department Chart

The production department at English Indian Clays Ltd. TVM is headed by the

General Manager (operations) and the senior manager (operations) and the managers

(production). It is concerned with the planning, organization and controlling the activities

relating to the production functions. The activities carried out by the production department

ranges from the mining of raw materials to the packaging of the finished products. The

43

GM Production

Senior Manager Operations

Production Manager

Plant 1

Shift In Charge

Workers

Plant2

Shift In Charge

Workers

Plant3

Shift In Charge

Workers

Maintenance Manager

Mechanical Engineer

Mechanical Supervisor

Technician

Electrical Engineer

Electrical Supervisor

Electrician

company is engaged producing two types of clays clained clays and hydrous clays from app

heat ion in paper paints, rubber, fiberglass and other industries.

3.1.3.2 PLANTS

The production process takes place in various plants. Plants refer to the buildings used in

connections with the manufacturing, processing, packaging, labeling and storage of calcined and

hydrous clay. EICL, TVM has 4 plants. First 3 plants are at the Veli unit and the fourth plant is at

Thonnakkal. The entire production process takes place in these plants.

Plant1 - The product is dried using a rotary drier, which operates at high temperature.

Plant 2 - It is a spray drier plant which does direct drying. In plant 2, spray drier called atomizer

is used for obtaining products in the granular form. Both the plants are used for producing

hydrous clay.

Plant 3 - Has been shut down.

Plant 4 – At Thonakkal is used for the production of calcined clay.

Types of Clay Produced Available Forms Plants

Hydrous clay (with water

content)

Lump, Powder, Spray, Dried 1 and 2

Calcined Clay (without water

content)

Spray dried, Powder 4

Table 6: Types of clay produced

3.1.3.2.1 Capacity of Plants

New calcined clay at Thonakkal has a capacity of 20, 000TPA. Another hydrous

clay with a capacity of 3, 00, 000TPA is commissioned in 2004. EICL had completed a

spray drier plant at Thonakkal, which has a capacity of 50, 000MT per annum. The total

capacity of EICL is 2, 13,600 MT per annum. The company has raised the grinding

capacity of Yamuna Nagar plant to 136TPD. It had resulted in increasing the corn wet

44

capacity by 10%. The company had also installed additional capacity in Pondicherry to the

tune of 1500MT per annum for producing Carbojet, a new specialty for the textile industry.

3.1.3.3 PROCESSES

The various processes involved in the production of hydrous and calcined clay at

EICL are as follows:

1) Mining

The raw material is extracted from the bottom portion of the earth using excavators

and is transported to the plant, where they are graded on color in a yard.

2) Matrix Analysis

It mainly deals with analyzing and granting the clay matrix based on color. Generally

the matrix is found in 3 colors- white, grey and pink. White clay indicates clay in the pure

form. Grey clay indicates the presence of graphite and pink color indicates the presence of

iron (ferric) content. This is done with the help of process control lab which decides the

blend of grades that go into the production process according to customer requirements.

3) Matrix Blending

The different grades of clay matrix in appropriate proportions as per process control

lab to obtain raw materials of desired characteristics according to customer requirements.

The process control lab is responsible for deciding the quality of the matrix coming from

the mines.

This is done with the help of quality control department. It decides the blend of grades

that go in to the production process according to the requirements of the customers. This is

based on the type of product to be produced on the particular day. It also keeps an eye on

the quality of the product during various stages of production.

45

4) Blunger Requirements

Here water is added with the raw material (clay matrix) to form the slurry. The clay

matrix in bulk form is fed to the machine called Blunger with addition of water to form the

required amount of slurry.

5) Classification

It is the process of separating the higher grid from the slurry. Through this process

25 to 30% of sand gets removed.

6) Hydro Cyclone Process

This is a two stage process. In the first stage the slurry after classification is passed

to 14” hydro cyclone where there is a primary vortex formation by which the residue

moves downward to the nozzle and the secondary vortex moves the product upwards and

in the second stage it is passed to 3” hydro cyclone where the remaining sand gets

removed.

The first stage removes the heavier sand particles, and the second stage removes

the smaller grit particles. After removing the grit particles and other impurities, the refined

product in the form of slurry is stored in storage tanks.

7) Bleaching

It is the process of separating the impurities like iron particles by subjecting the

refined product to chemical separation. Bleaching agent used is Hydro Sulphite bleaching

of clay removes iron impurities and allows clay to be bleached to perfect whiteness.

Sodium Hydro Sulphite transforms trivalent iron to bivalent which, on subsequent

acid treatment (by adding sulphuric acid which reduces the pH value to 2.5), dissolves and

removes iron from the clay. To neutralize the acidic content of the slurry and to prevent

from revamping, carbonate and soda ash is added to the slurry and the bleached slurry is

46

then collected in a holding tank. Having refined the clay, it is moved on to the final

process i.e. drying.

8) Drying

Drying refers to converting the liquid clay into a solid material by a process known as

filtration. The products of filtration normally have a moisture content of about 25%. Passing

the clay through a thermal drier further reduces this moisture content. The driers are fired by

natural gas and see a product emerging at around 10% moisture.

9) Screening

The bleached slurry(containing 12% salts) is subject to screening through which

graphite and other foreign materials are screened off then pumped and passed through a filter

cloth.

10) Filter Pressing

Here a hydraulic filter press is used to drain off the excess water. On passing through

the filter cloth, the slurry gets converted to cake from with 65% salts and 35% water. The cake

is collected and it is sliced using a cutter. Here on, the drying process varies depending on the

plant in which it is carried out. Plant 1 makes use of indirect drying through a rotary drier and

plant 2 makes use of direct drying by means of spray drier.

The different operations at plant 1 are mentioned below

a) Paddle Mixing Operation

The sliced clay are mixed with 12% dry powder in paddle mixer which converts the

moisture content to 22% and put in the rotary drier.

b) Rotary Drying Operation

The drier runs on fuel, hot air is passed through it and to this 12% dry powder is

added. It turns to lump from containing around 12% moisture. The lumped product is sent to

the lump silo from where it is either sent to packaging section or it is sent to attritor mill

where the lumps are milled to powder from with 2% moisture and then send to silos for

packaging.

47

Chart 5: Production Process

48

Mining

Transportation

Unloading as microheaps as grade

Matrix analysis

Matrix blending

Blunger Operation

Classifier Operation

14" Hydrocyclone

3" Hydrocyclone

Storage tank

Bleaching

OperationBleached

Storage TankPlant

1

Plant 2

The different operation at plant2 is mentioned below:

a) KneadingOperation

At plant2, the sliced clay cakes (containing 65% salts) are mixed with chemicals (dispersal

agent) like accumer or calgon to convert it to slurry form. This process is known as

kneading.

b) Atomization

The slurry is then stored in storage viscosity tank. It is then passed to the spray drier

called atomizer with the help of a feed pump where hot air is passed through the slurry which

kept in a closed chamber. The product obtained in powder form contains only about 2%

moisture, which is then send to silos for packing.

c) Packaging

The product stored in silos is send to either jumbo ( 1 ton bag) bagging or 50 kg bagging

machine and dispatched.

The different operations at plant 4 are mentioned below

Calcinations

At plant 4, which is a calciner plant where the moisture content from is removed by

adding chemicals to get calcined clay. The powdered product from the attrition in the first

plant or spray dried powder in the second plant is sent to the calciner where the moisture is

removed and then sent to silos for packing. The calcite is for high value.

3.1.3.3 TYPES OF LAYOUT

A layout essentially refers to the arranging and grouping of machines which are meant to

produce goods. The type of layout followed in EICL is process layout. It involves grouping

together of like machines in one department. The process arrangement is signified by the

grouping together of like machines based upon their operational characteristics. The advantages

of process layout are

Reduced investment on machines as they are general purpose machines.

Greater flexibility in production.

49

Better utilization of men and material.

Greater scope for expansion as the capacities of different lines can be easily increased.

3.1.3.4 VENDOR SELECTION AND RATING

Vendor selection is one of the most important processes. The vendor has to supply the

raw materials. The selection is done on the basis of following criteria

Capacity of vendors.

Reasonable price.

Reliable supplier.

Responding time.

Quick delivery.

Meet the customer’s requirements.

Considering the reputation of the supplier.

Vendor Rating

The vendor rating will be done on how the vendor is able to meet the requirements of

the customers. The goodwill of the vendor is very important. If all the criteria of a vendor

selection is met then that vendor will be in good list. If the vendor is unable to meet the customer

requirements then first warning will be give but after the third warning that vendor will be black

listed.

3.1.3.5 LOGISTICS

The major Indian Arabian Sea Port of Cochin is only 220 km from our works.

Regular connections to all the major ports in the world are available from Cochin. A new Port at

Tuticorin, managed by Singapore Port Authority has come up in a major way to the East in Bay of

Bengal. This Port is 200 km from their works and major shipping lines have started calling here.

These two ports together ensure minimum lead time for their cargo to be shipped out of India to

destinations all over the world. For domestic cargo, EICL offers movement of material by coastal

route as well as CONCOR rail in addition to the direct truck option.

3.1.4 RESEARCH AND DEVELOPMENT DEPARTMENT

50

EICLTVM has a well-equipped R&D center that is recognized by the department of

Science and Technology. It is started in 1992 with the view to provide technical advice to the

customers and to offer technical assistance including testing services to other departments of

English Indian Clays Ltd. TVM. Its in-house research and development unit is known for

stringent quality control and developing tailor made products for the customer’s requirement.

The company has regular samples of various materials taken at various stages of the

production process to analyze complete mineralogical and chemical composition by their

competent team of Research and Development experts, enabling them to not only

recommending right products to the customers but also to develop customized minerals if

required.

3.1.4.1 RESEARCH AND DEVELOPMENT DEPARTMENT CHART

Chart 6: R&D Department Chart

3.1.4.2 FUNCTIONS

The department has close relations with the nation draw upon the national laboratories

and the research wings of major customers. Hence it is able the expertise of these esteemed

organizations in bringing out innovative products and finding new applications for existing

51

Senior Manager R&D

Assistant Manager

TraineesSenior

Supervisor

Worker

Research Chemist

Junior Supervisor

products. The research and development department supports other departments by providing

with them steps in cost reduction and for optimum utilization of resources.

The following are the functions performed by the Research and Development

Department

Develop new products.

Provides support to other departments.

Provide application support to customers.

Internal testing for each industry.

Generate application data.

Process improvements.

Interaction with external industries and research organizations.

Interaction with research departments of major customers to understand their

needs and meet quality requirements.

3.1.4.3 DEVELOPMENT OF NEW PRODUCTS

The R&D Department has developed varieties of grades of clays of which the important

are the following

Hydrous Clay

Surface Treated Clay

Calcined Clay

Speciality Clay

Development of new products is one of the major activities of R&D Department. It is carried

out by following steps.

1) Feedback from customers by visiting them directly.

2) Translate it into Product Specification.

3) Identifying Resources.

4) Sample preparation as per the specification.

5) Application test.

6) Pilot plant trail and Plant trail at customer site.

52

7) Testing and application (sample given to customer’s first small sample and the large

sample).

3.1.4.4 APPLICATION SUPPORT

EICL has well equipped application laboratory in Thiruvananthapuram. This laboratory

is under the control of R&D Department. The different kinds of labs available with R&D

department are paper, rubber, cement, paint and ceramic industry specialists, supported by most

modern equipment, who constantly thrive for offering proactive solutions to the respective

industries.

The paint lab carries out manufacturing and testing of paint. Some of the qualities

analyzed are opacity, glass, smoothness and viscosity. The chemical lab conducts analysis of clay.

There is also an instrumentation room which houses world class equipment for testing, some of

which includes serigraph, Brookfield viscometer and X-ray diffractometer. The investment in lab

is very high as it is fully equipped with the most modern equipment to carry out all types of

analytical tests for its customers.

3.1.4.5 AREAS IN WHICH R&D WAS CARRIED OUT

Provided technical support to improve the quality of Specialty Hydrous clays for the paint

industry.

Provided technical assistance for identifying and providing suitable blend of raw matrix.

Introduced a cheaper process chemical to reduce the production cost.

3.1.4.6 FUTURE PLANS OF ACTION

Commercialization of Specialty Clays in new industries.

Development of delaminated clay.

Optimization of super gloss quality to replace imported clay in paper coating.

Develop cheaper and suitable process chemicals for reducing the cost of production.

Collaborative research works with major customers to develop cost effective formulations

in all areas of application.

Developing new products.

3.1.5 FINANCE AND ACCOUNTS DEPARTMENT

53

The Finance and Accounts department is responsible for the financial functions and

activities of the company and for the administration of company’s fiscal policy. The main

activities include budget preparation, monitoring the income and expenditure. MIS reporting,

audits, tax administration, updating the shareholders on the financial health of the company,

maintaining accounting records, preparation of financial statements, ledger administration

etc.. The finance department is a supporting department.

Senior Manager is the head of the department and authorized signatory of the unit. He

is responsible for the consolidation functions. Executive (Accounts) and Senior Manager are

responsible for balance sheet preparation. The Executive Accounts also participate in audits,

prepare statements related to MIS reporting and handle taxation matters and accounting.

Senior Supervisor and Junior Supervisor are responsible for accounting and returns

preparation. The cashier receives and distributes funds, records monetary transactions, issue

receipts, balance records, transfer funds and prepares cash receipts.

3.1.5.1 FINANCE AND ACCOUNTS DEPARTMENT CHART

Chart 7: Finance and Accounts Department Chart

3.1.5.2 OBJECTIVES

54

Senior Manager F&A

Executive Accountants

Senior Supervisor

JR Supervisor

Assistant Trainee

Accounts Officer

Senior Assistant F&A

JR assistant F&A

To collect, record, classify, analyze and evaluate various functional data and make reports

to provide information to management, government, shareholders and general public. To

assist management by making investment analysis, tax planning and working capital

management.

3.1.5.3 FUNCTIONS

The main activities of the department includes

Budgeting

Financial Accounting

Cash Accounting/ MIS Preparation

Audit Compliance

Computerized Accounting

Statutory reports and tax reports

Cash flows

Investments

Cost allocation

Internal and External financial reports

Control of expenditure

Administration of taxes

Financial concurrence and advice

General accounting records

Complication of codes, rules and procedures concerning financial transaction and having

bearing on their implementation

Some of them are explained as follows

1) Budgeting

Individual budgets are prepared by the concerned departments and master budget is

prepared by the finance department. Budget is normally prepared 3 months in advance and has

to be approved by the Chairman.

2) Financial Accounting

55

EICLTVM has in-house accounting software and has standardized on clipper as their

development platform. The database used is FoxPro. Financial Department maintains separate

ledgers for the 3 plants in EICLTVM namely manufacturing ledger which includes office

expenses and normal administration expenses, spray driver ledger and calciner ledger. A

separate ledger is maintained for the R&D department. The total control of all these ledgers

rests in the general ledger.

3) Cash Accounting/ MIS Preparation

EICL TVM has installed MIS for better operation. It is prepared by the Financial

Department. It is prepared on the second of every month. This includes various financial

statements like profitability ratio for mines, stores trend, drawing power trend, debtor’s age-

wise analysis, cash flow and fund flow statements and ratio analysis.

MIS Review: in this process, the management reviews the cost. The management also reviews

the sales, variable cost, fixed cost, depreciation and net profits.

4) Audit Compliance

Both internal audit and statutory audit is conducted. Internal audit is done once in 6

months by Varma&Varma. Statutory audit is done on a quarterly basis by Mr. Walker

Chandiok& Co. the other functions include Statutory Compliance and Fund Management.

5) Payroll

The payroll is prepared by the HR department and it has to get approval from the

finance department. HR executive, AM- P&A and department head of F&A are responsible

for inputs of salary details of payroll system.

6) Working Capital Management

The finance required for the day to day running of the organization is obtained from

the sales collections. Loans are also taken from financial institutions which help to meet the

working capital requirements. Inventory is kept a security for loans. Public deposits are also

used as short term source of funds.

3.1.5.4 FINANCIAL ANALYSIS

56

Analyzing financial statements, is a process of evaluating relationship between component

parts of financial statements to obtain a better understanding of firm’s position and performance.

Ratio analysis is one of the most used techniques of financial analysis. Financial ratios help to

find out a firm’s performance and financial situation. Most ratios can be calculated from

information provided by the financial statements.

Financial ratios can be used to analyze trends and to compare the firm’s financials to those

other firms. For the financial analysis of EICL, data from financial statements such as Balance

Sheet, Profit and Loss Account, and Cash Flow Statement of the company are utilized.

Ratio analysis is used as a tool for analyzing and interpreting the financial statement of

EICL. Its financial performance is studied through the calculation of different financial ratios such

as liquidity, profitability, and solvency ratios. Financial ratios can be classified according to the

information they provide. Comparative ratio analysis helps to determine a company’s strength and

weakness, evaluate its financial position and understand the risks. The following types of ratios

are frequently used

Leverage ratios

Liquidity ratios

Activity ratios

Profitability ratios

1) Leverage ratios

Financial leverage ratios are used to understand a company’s ability to meet its long term

financial obligations. Unlike liquidity ratios that are concerned with short term assets and

liabilities, leverage ratios measure the extent to which the firm is using long term debt. EICL uses

leverage ratios such as debt-equity ratio and long term debt-equity ratio.

Debt Equity Ratio and Long term Debt Equity Ratio

This ratio is determined to ascertain the soundness of the long term financial policies of the

company. The ratio indicates the extent to which the firm depends on the outsiders for its

existence. A high ratio means less protection for creditors. A low ratio indicates favorable

57

situation since the creditors feel the owner’s fund can help absorb possible losses of income and

capital.

Debt Equity Ratio = Total Debts/ Total Equity

Long term Debt Equity Ratio = Long term Debts/ Equity

The leverage ratio for EICL is more than 1 it means a company finances its assets with

debts and its growth with debt. This can result in volatile earnings as it can result in additional

income expenses.

2) Liquidity ratios

They are used to determine the company’s ability to meet its short term debts and

obligations as they fall due. It includes the current ratio and quick ratio. Generally, the higher the

value of the ratio, the larger is the margin of safety that the company possess to cover short term

debts.

Current ratio

It represents the ratio of current assets to current liabilities. Current ratio is an index of the

firm’s financial stability since it shows the working capital which is the amount which the current

assets exceed the current liabilities. It is expressed as current assets/ current liabilities. A current

ratio of 2:1 is the ideal ratio and is expressed as a safe margin solvency.

Quick ratio

This ratio, also termed as acid test ratio, is determined by dividing “quick assets” by

“current liabilities”. The ratio may be expressed as quick or liquid assets/ current liabilities. The

ideal ratio is 1:1 and is also an indicator of short term solvency of the company.

In EICL the current ratio is kept below the standard level and it is clear that available funds are

utilized efficiently.

3) Activity ratios

The activity ratios indicate the efficiency with which capital employed is rotated in the

business. Activity ratio or turnover ratio indicates the number of times the capital has been rotated

in the process of doing business.

Fixed assets Turnover Ratio

This ratio indicates the extent to which the investments in fixed assets contribute towards

sales. It is given by sales/ fixed assets.

58

Working Capital Turnover Ratio

This ratio indicates whether or not working capital has been effectively utilized in making

sale. Working capital is calculated by deducting current liabilities from current assets. The ratio

can be found out by dividing sales by net working capital.

Stock/ Inventory Turnover Ratio

It explains whether investment in inventories is within proper limits or not, i.e. it signifies

the liquidity of the inventory. The ratio is calculated as (cost of goods)/ (average stock). The

average stock or inventory mat be calculated on the basis of the average of inventory at the

beginning and at the end of accounting period. A high inventory turnover ratio indicates brisk

sales. The ratio is therefore, a measure to discover the possible trouble in the form of

overstocking. A low inventory turnover ratio results in blocking of funds in inventory which may

ultimately result in heavy losses due to inventory becoming obsolete or deteriorating in quality.

4) Profitability ratios

Profitability ratio is an indication of the efficiency with which the operation of the

business is carried out. Poor operational performance may indicate poor sales and hence poor

profits. A lower profitability may arise due to the lack of control over the expenses. The important

profitability ratios are

Gross Profit Ratio (GPR)

The ratio expresses relationship between gross profit and sales. It is given by (Gross

Profit*100)/(Net Sales). An increase in the gross profit ratio may be due to

1) Increase in the selling price without a corresponding increase in the cost of goods sold.

2) Decrease in the cost of goods sold without a corresponding decrease in the selling price of goods.

Net Profit Ratio(NPR)

This ratio establishes the relationship between profit after tax and sales. This ratio I

determined by dividing the net income after tax to the net sales for the period. An increase in the

ratio over the previous period indicates improvement in the operational efficiency of the business.

59

Earnings per Share(EPS)

It is calculated by dividing the profit available to the equity shareholders by the number of

shares issued (Net Profit After Tax)/(No of Equity Shares). The earnings per share help to

determine the market price of the equity shares of the company.

A comparison of EPS of the company over the years will also help in determining whether the

equity share capital is being used effectively or not. It also helps in determining the company’s

capacity to pay dividend to its equity shareholders.

Operating Expenses Ratio

This ratio is the test of the operational efficiency with which the business is being carried.

The operating ratio should be low enough to leave a portion of sales to give a fair return of the

investors. A ratio of 85-90% is considered as normal operating ratio in many cases.

3.1.5.5 LIMITATIONS OF FINANCIAL ANALYSIS

A reference point is needed. To be meaningful, most ratios must be compared to historical

values of the same firm.

Most ratios by themselves are not highly meaningful. They should be viewed as

indicators, with several of them combined to paint a picture of the firm’s situation.

Yearend values may not be representative. Certain amount balances that are used to

calculate ratios may increase or decrease at the end of the accounting period because of

seasonal factors. Such changes may distort the value of the ratio. Average values should

be used when they are available.

Ratios are subject to the limitation of accounting methods. Different accounting choices

may result insignificantly different ratio values.

3.1.6 HUMAN RESOURCE AND ADMINISTRATION DEPARTMENT

Human Resource and Administration Department act as a link between the employees

and the top management. It is involved with the selection and placement of right candidates

for right job at all levels in EICL.

60

3.1.6.1 VISION

Human Resource and Administration Departmentis responsible for ensuring the

maximum utilization of available human resources and to ensure growth and development of

the employees of the company in order to achieve the objectives of the organization and the

career goals of the employees.

3.1.6.2 MISSION

Human Resource and Administration Department aims at ensuring that all employees

in the company are well versed with the job that they are doing with respect of the quality and

services and the optimum contribution are made by all employees through rewards for

performance by enriching their knowledge and skill and by ensuring proper work environment

and welfare amenities.

3.1.6.3 SCOPE

Human Resources Development functions include recruitment and selection,

placement and induction, performance rating, identification of training needs, training and

development programs, welfare measures etc. Administrative functions of P&A department

are attendance management, wage and salary administration, PF and ESI scheme

administration, security matters and safety management. Personnel department also arrange

for promotion, demotion and transfer and job rotation.This department performs both Human

Resources Development functions and Administration functions.

It works in close contact with all other departments and also coordinates various

activities within the organization. It is responsible for ensuring maximum utilization of

available human resources and to ensure growth and development of the employees of the

company in order to achieve the objectives of the organization and career goals of the

employees.

The policies and practices of HR department are in line with ISO 9001:2000 and also

conform to the provision laid down in various Acts of which include

1. Workmen’s compensation Act 1923

2. Trade unions Act 1926

3. Industrial disputes Act 1946

61

4. Factories Act 1948

5. Industrial employment standing orders Act 1947

6. Mines Act 1952

7. Employees State Insurance Act 1948

8. Employees Provident Fund Act 1852

3.1.6.4 HUMAN RESOURCE DEPARTMENT CHART

Chart 8: Human Resource & Administration Department Chart

3.1.6.5 FUNCTIONS

The major functions of Human Resource Department include

Human Resource Development Function

Administrative Function

3.1.6.5.1 Human Resource Development Function

The main function of Human Resource Development include

Recruitment, selection and placement of employees

Training of employees

Performance appraisal

Promotions

62

GM HR

Manager HR

Deputy Manager HR

Supervisor

Deputy GM P&A

Assistant Manager P&A

JR Executive HR

Management Trainee

Supervisor

Disciplinary action

Welfare activities

1) Recruitment and selection

Each department in need of manpower prepares job specification data for

manpower requirements along with approval of VP/ED to HR Department. The job specification

data for each department should contain detailed educational qualification and experiences needed

for each job. HR head discuss with intended to assess the nature of recruitment like casual,

trainee, temporary, permanent etc. and also sanctioned manpower for the department. If the

requirement is beyond the sanctioned strength, the department will give a detailed justification

note to the HR head with the approval of the appropriate authorities. If it is within the approved

strength, the qualification, experience etc. required for the candidate to be assessed by Human

Resource and Administration department head in consultation with the concerned department.

The company verifies the availability of suitable internal candidates in the company so that the

post can be filled through transfer. If the internal candidates are not available, get application

form from suitable candidate through reference, advertisement, local media or through manpower

consultants. All application received are screened according to their qualification, experience etc.

by the concerned department HOD and HOD HR. screened candidates to be called for test and

interview. Interview is done by Vice President/ Corporate HR/ Subject Expert. Final interview is

done by Executive Director. Workers are interviewed by HOD. Medical examination is done for

the selected candidates.The department performs activities like

Raising job specification data and requisition for recruitment with sanction for VP/ED.

Source application through advertisement and other manpower supply resources.

Receive application and prepare comparison sheet

Shortlist applicants

Shortlist applicants called for interview and send interview letters

Constitute interview committee

Candidate fill application blank and conduct interview

Interview board members and issued assessment sheet to other interviewers

Rank list preparation reference check and submitted for approval of VP/ED

Send letter for appointed person and joining report prepared

63

There are three interview committees:

1) For workers and staff

2) For executives up to MMA level

3) Above MMA level

Selected candidates to be offered appointment in the specified format in duplicate. Candidates

who report for joining duty are subjected to medical examination by company medical officer and

medical examination fitness certificate to be issued. Documents are to be collected at the time of

joining:

A] Signed copy of appointment order

B] One passport size photograph

C] Copy of relieving order if any

D] Age certificate

E] Copy of mark list

F] Experience certificate if any

G] Relieving order if any

H] PF Enrollment form

I] ESI Enrollment form

2) Induction Training

Induction training is conducted to familiarize himself with operations of the

company with emphasis on quality management system, customer requirements, process

requirement etc. It helps to understand process and monitoring activities of the company and to

impart necessary knowledge and skill for effective performance.

The newly joined employees are trained for the following number of days.

Category of employees Length of induction training period

Workers 3 days

Staff and officers One week

Above MMA level 4 days

Table 7: Length of induction period

64

Human Resource personnel prepare the induction training schedule subject for approval of the

HOD HR. then thee approved schedule is circulated among faculty members. Daily monitoring

will be done by HR personnel.

After the training the trainee should have to do a presentation in front of the VP, HOD HR, GM

and other faculty members and other exports. Detailed training report should be submitted on the

last date of training. The induction report will be reviewed by VP and HOD HR.

3) Training and Development

It is intended to provide 100% employee shop floor training, general training,

impart quality and meet customer requirements, 100% coverage of employee in new equipment

and new process from time to time, conduct survey of employee satisfaction etc.

Training plan will be finalized before 31st of every year and as estimate amount will be included

in the annual budget earmarked for HR department. Training programs are to be organized at 3

stages for employees.

Shop Floor training

General Training

Functional Training

Inputs like Training need assessment, training calendar, course material, evaluation format etc. are

prepared and the outputs obtained are Evaluation sheet, training review, safe working and

productivity improvement.

4) Performance appraisal

The performance appraisal program is conducted separately for workers, staff and

officers of the organization. The main objective of performance appraisal is to assess the

performance and provide feedback to the employees and improve employee morale. All the

HOD’s are responsible for rating the performance of the officers for trainee, probationers and

permanent staff on annual basis.

On the completion of training period, before placing the trainee an probation, he is appraised by

the concerned. If performance is good, orders are to be issued by HR department placing the

employee on probation period. Probationers to be appraised on completion of 6 months

65

probationary period in prescribed form. Annual appraisal form for each category of employees is

done in the following months in every year.

Employee Category Month of appraisal

Workers December

Staff April

Officers April

Table 8: Months of performance appraisal

Completed appraisal is to be approved by ED and increment/ additional/ promotional Orders to be

issued on 1st April. Quarterly appraisal (PAS) for officers is to be prepared for every quarter and

ratings to be done by concerned HOD’s.

5) Promotion

Promoting employees in the organization is good business practice which can

generate loyalty through the recognition of individual merit and improved morale by fulfilling

employees need for increased status.

For this purpose, workers are categorized in 5 grades

Unskilled

Semiskilled

Skilled1

Skilled2

Highly skilled

Staff is categorized in 5 grades

Junior Assistant

Senior Assistant

Junior Supervisor

Shift in charge

Senior Supervisor

66

Officers are categorized in 7 grades

Executive 2

Executive 1

Assistant Manager (MMA)

Manager(SMB)

Deputy General Manager(SMA+)

General Manager

Vice President

Promotion of workers will normally be effected from the next wage period following the date on

which the vacancy arises and the promotion process will be completed within a period of 45 days

subjected to the following selection procedure. The selection for promotion will be based on the

following eligibility norms:

Seniority ------- 60 marks

Attendance ------- 20 marks

Performance Rating ------- 20 marks

6) Disciplinary Action

Disciplinary actions are taken whenever it is necessary to maintain adequate

discipline inside the organization. Punitive actions include warning, fine and dismissal.

Process:

1) The employee concerned will be given a memo explaining the charge and call him to

submit his explanation within a fixed time.

2) If the employee pleads guilty in writing, disciplinary action may or may not be imposed

on him at the discretion of the punishment authority.

3) If the employee denies charge, enquiry shall be conducted by the management giving him

an opportunity to prove his innocence.

4) After the enquiry is over, a show cause notice containing the proposed punishment and

calling for further explanation from the concerned employee shall be given to him.

5) The order imposing the disciplinary action shall be communicated to him.

67

6) An employee who is charged the misconduct, punishable with dismissal may be kept

under suspension pending enquiry into such charges.

7) If after enquiry, the employee is found guilty of the charges, he shall not be entitled to any

wages for the period under suspension pending.

8) The enquiry officer may extend the period of enquiry at the request of the employee

provided that the employee agree in writing to waive his claim for wages.

7) Welfare activities

The objective is for organizing employee welfare activities like redressal of

employee grievances, canteen, recreation club, benevolent fund, welfare fund, co-operative

society, issues of soaps and towels to workers, medical assistance and sanitation facilities.

1) Canteen – it is accessible for 24 hours. Food available at subsidized rate. Per day 13

rupees is given as canteen allowance to the employees.

2) Recreation club- EICL has a recreation club in which newspapers, magazines etc. are

available. Chess, caroms and cards are also available in the club. A tour is arranged every year for

the employees and family. Annual day is conducted every year. Every year there will be painting

competition for children. The prizes will be distributed on annual day. Sports week is also

celebrated. Every year, uniform will be distributed to the employees. For male employees, one

towel and two soaps and for female employees, two towels and three soaps are given every year.

3) Cooperative society- Its function is to give loans to its members. Also cooperative society

collects welfare funds. Rs.100 are collected monthly for welfare funds. 3% to 4% interest is given

to this welfare funds. It gives two wheeler loans to staffs and workers. Maximum amount given is

Rs.25000. the amount should be reimbursed in 60 installments.

4) Medical Insurance- EICL provides medical insurance to every employee in cooperation

with United India Insurance Company. Medical assistance is given to every employee for twenty

four hours of hospitalization.

Every year Rs.2000 is given as medical allowance in two installments. In a year, maximum of

Rs.20000 is given as medical assistance to each member of a family of four members. The

company doctor is available for one and half hour every day.

68

Housing loan subsidy is also given to employees. A part of housing loan taken by the employee is

paid by the company. Festival allowances and school allowances are also given to employees.

Shift allowance is also given to workers.

3.1.6.5.2 Administrative Function

The main Administrative functions include

Attendance Management

Payroll Posting

Wage and Salary Administration

PF Administration

Office Management

ESI Scheme Administration

Security Management

Safety Management

1) Attendance Management

Computerized attendance punching system is used in the organization to monitor and

manage the attendance of permanent employees. Every worker is given a punching card he

has to punch the card while entering and leaving office or website. It enables to identify the

exact working hours of every employee.

2) Payroll Posting

For preparing payroll, the employees are grouped into three as workers, staff and officers.

After consolidation and verification of attendance, it is transferred to the salary program.

Salary is posted to the corresponding salaries account of the related ledger. HR Executive,

AM P&A and HOD F&A are responsible for inputs of salary details of payroll system.

3) Wages and Salary Administration

The objective of wage and salary administration is for preparation, verification and

disbursement of wage and salaries for workers, causals, contract workers, trainees, staff and

officers. Salary is given on the 30th of the month. If the employee is present on all the 30 days,

69

then full salary is given after deducting all the loans, if the employee has taken any loans. If

the employee is absent without any leave, then the salary of that day will be deducted.

Dearness allowances are given according to the cost of living index.

4) Provident Fund Administration

The objective is for the administration of PF of employees of EICL as per PF Act and

rules. All employees of the company are entitled to receive benefits under the PF which is a

defined contribution plan. 12% of basic salary of every employee is taken as PF.

The same amount is invested by the company to the employee provident fund. In the

12% invested by the company, 8.33% goes to the pension fund of the employees. The pension

fund is taken as contributory installments. The PF pension is given monthly after the retirement

of the employee. Loans are also provided through the PF.

5) ESI Scheme Administration

It is defined contribution scheme recognized and administered by Gov. of India. Every

month, 1.75% is deduced from the salary for the ESI scheme. ESI facility is provided for

employees who have salary below Rs.7500. employee who has salary above Rs.7500 is given

medical facilities.

6) Office Management

HR&A is responsible for supply of water, stationary and furniture and all instruments for

the smooth functioning of the office. Shift vehicle facility is given to the employees. Conveyance

allowances are given to non-users of shift vehicle.

7) Security Management

Security officer and guards are responsible for the security of the company. Security

arrangement of EICL is very strict. Every visitor should enter his name and purpose of visit in a

register. Visitors are allowed to enter the office only after enquiring with the concerned

department. Visitors are given a pass to enter into the office. The traffic of vehicles inside the

office is strictly controlled by the security guards.

70

8) Safety Management

Employees are given safety training for dealing with dangerous machines. The department

provides conveyors, mesh and safety belts, safety caps, welding glasses, fire extinguishers for the

safety of the employees. Every year, March 1st week is celebrated as safety week. Essay writing

competition about safety and safety talk by external faculties are arranged by the department.

3.1.6.6 TRADE UNIONISM

UNION Affiliated with Political Party

INTUC I.N.C

AITUC CPI

CITU CPI(M)

KTUC KC(M)

UTUC RSP

BMS BJP

Table 9: Trade Union and Affiliated Political Parties

These are the trade unions which are recognized by the management. CITU is the major trade

union which has the maximum number of members.

3.1.7 QUALITY CONTROL DEPARTMENT

Quality is the most important factor which decides the ultimate fate of the firm and so it

has a very important role to perform in the organization. The Quality Control department in

EICLTVM assures quality of its products till it reaches the hands of the customer. This adds to

the company’s reputation and goodwill.

Quality control refers to those activities which assure the quality creation is performed in

such a manner that the resulting product will perform its intended function. EICLTVM being an

ISO certified company, its quality standard has to be maintained. The department tries to improve

the quality the product according to the specifications given by the customer. Quality Control

Department takes samples from plants to check the following properties:

Quality

Grit

71

Brightness

Moisture

Viscosity, etc.

3.1.8.1 OBJECTIVES

Assurance of quality of incoming raw materials.

Assurance of quality at various stages of production process.

Assurance of quality of end products and its packing.

3.1.8.2 QUALITY CONTROL DEPARTMENT CHART

Chart 9: Quality Control Department Chart

3.1.8.3 FUNCTIONS

Raw material testing: Checks the standard and quality of raw materials (clay) from

mines and on its delivery

Process testing: Assures proper processes in the production of raw materials.

Intermediate testing: Hourly testing to ensure the quality of the product at each stage.

Product testing: Checks the quality of finished products also. Great care is taken to

maintain quality during packing and dispatching. Quality of finished product is measured

by taking 50 g as a sample from every 20 bags.

Some of the important operations performed by quality control department in EICL are

a) Magnetic Separation: it is the process of separating the impurities from the product.

b) Paint matching: it is used to check the brightness of the product as per customer

specifications.

72

GM Quality

Manager Quality Control

Executives

Staffs

The quality control department in EICL assures its quality of its products till it reaches the hand

of the customer. This adds to the company’s reputation and goodwill.

3.1.8.4 QUALITY CONTROL PROCESS:

It starts from the mining process. The matrix is checked whether it meets the stipulated

quality. A sample from every load undergoes quarterisation process. The matrix which does not

meet the required standards is rejected and that meets the standards is stored in stock yards. From

stock yards it goes to production process. Samples are taken at one hour interval and the quality is

checked in the process control lab. If any fault comes during the production process, the quality

control department suggests corrective action. The end product also undergoes quality checks.

EICL maintains quality during packaging and until the product reaches the customer.

If products have not reached stipulated standards, then

Reprocess the product

Find alternatives

Degrade the product

Reject the project

3.1.8.5 QUALITY CERTIFICATION:

The company has been certified to ISO 9002:1994 since 1996 and has now been upgraded

to ISO 9001:2000.

3.1.8 MAINTENANCE DEPARTMENT

Maintenance Department is a service department. The maintenance Department is

responsible for the maintenance and modification of plant and machinery. The main duty of the

department is to ensure that all the machines are available in proper working condition throughout

the year thereby ensuring high quality production. The department has to align machines in a

proper way and has to inspect them daily before work starts and even during the work. It also

takes care of maintenance of automotive and refining process equipment.

3.1.8.1 OBJECTIVES

The objective of having a Maintenance Department is to facilitate the optimum use of capital

equipment through actions such as replacement, repair, services and modification of the

73

components or machinery so that there will continues to operates at a specified availability for as

long as it is beneficial to do so.

3.1.8.2 MAINTENANCE DEPARTMENT CHART

Chart 10: Maintenance Department Chart

The maintenance department of EICLTVM functions under the operations department.

The manager (engineering) is responsible for the activities carried in the optimal and the overall

supervision is carried out by the Senior Manager operation. It is duty of the department to ensure

that all the machines are available in proper working conditions and thereby ensuring high quality

in production.

3.1.8.3 FUNCTIONS

Preventive Maintenance

The maintenance department is responsible for the preventive maintenance of the

machinery in the plant. It involves lubrication from time to time and overall monitoring. The

74

HOD

Senior Manager Operation

Assistant Manager

Executive

Staff

Workers

department ensures that the activities are followed correctly. General shift electrician and

fitters look after the maintenance activity.

Scheduled Maintenance

The maintenance department keeps a schedule of the maintenance work to be

carried out. The schedule has been prepared based on manufacturer’s specifications and

experience of the operating staff. If some work is left complete, it is recorded in the

slippage report for explaining it later to why it was carried out. The different schedules for

different equipment.

Shutdown Maintenance

It is carried out normally twice a year. The plant remains closed for about 5 days.

But due to the proper maintenance of the machinery, this has not been needed in the case

of plant 1 and 2 for the past few years. For the calciner plant, since it is subjected to very

high temperatures, a shutdown maintenance is required.

Breakdown Maintenance

It is carried out during emergencies when a machine breaks down. The

maintenance department tries to prevent it. But in some cases, it doesn’t happen and the

department performs necessary rectification immediately.

Maintenance department does maintenance for lot equipment. The main equipment that

comes under the maintenance perspective are:

Centrifugal pumps for transferring the clay slurry.

Screens to remove oversized particles.

Filters presses for removal of water.

Dryers for drying.

3.1.9 PROJECT DEPARTMENT

The Project Department in EICL was started in the year 2001. This department was

headed by a Chief Project Manager. The rest of the staff in the department has been on deputation

from other departments. They have successfully accomplished the following tasks.

They start up with a view to conduct analysis of various future plans and projects. It also

under takes feasibility analysis of various projects. The overall functioning of the department is

controlled by the Deputy General Manager, Mines.

75

3.1.9.1 PROJECT DEPARTMENT CHART

Chart 11: Project Department Chart

3.1.9.2 FUNCTIONS

Planning and budgeting of projects.

Contract finalization.

Overall coordination and monitoring of projects undertaken by the company.

Assuring quality equipment.

Getting sanctions from government.

76

Marketing Manager

Assistant Manager Industrial Relations

Executives

Assistant Manager Sales

Officer Logistics

Executives

CHAPTER 4

ANALYSIS

4.1 SWOT ANALYSIS

SWOT stands for Strengths, Weakness, Opportunities and Threats of an organization. The

basic assumption of SWOT analysis is that organizations must align internal activities with

external realities to be successful. SWOT analysis calls for matching of capabilities and of

combating the threats to the business.

SWOT analysis takes a close look at important factors such as the economy, the product,

staff resources, competition, technology, legislation, consumer trends, environment and etc., It is

a common tool used in organizational planning and strategy development.

Strength and weakness are essentially internal to the organization and relate to matters

concerning resources and programs within the company whereas opportunities and threats are

external factors confronting a company such as new technologies, competition etc.

An analysis of external and internal directly or indirectly affecting the company can help

identify its position in the corporate world ad explore new areas of development, rectify weakness

if any. The four factors can be described as follows:

Strength : What an organization can do

Weakness : What an organization cannot do

Opportunities : Potential favorable conditions for an organization

Threats : Potential unfavorable conditions for an organization

Here an attempt has been made to assimilate the various factors that have a positive and

negative influence on the performance of EICL. The strength, weakness, opportunities and threats

of the company are summarized as follows:

4.1.1STRENGTH:

Experienced and long term serviced management (about 40 years).

Stable and concrete fund flow.

Minimal wastage of resources.

Superior quality products.

Availability of rich mineral resources.

Experience and expertise of workforce.

77

Utilization of optimum capacity.

Modern infrastructure.

On time delivery of products.

Better customer service.

Competent Research and Development process.

The company owns clay bearing land near TVM taking care of the company for next 25

years.

Built a market leadership position.

Manufactures variety of superior grade China clay for diversified applications.

4.1.2 WEAKNESS:

Susceptible political events.

Presence of 7 trade unions in the company.

Company website has few information regarding the various functional departments.

Poor utilization of information technology

They have to keep large inventories because of lack of supporting industries.

The company is running at full capacity

The company doesn’t follow a proper replacement policy for its machinery.

Dependence of nonrenewable resources.

4.1.3 OPPORTUNITIES:

Competitors are few.

New product development.

Techno commercial advantage due to its graphical location.

Expansion of the market of sand.

Clay produced is of high quality which can be made as trust point in the market.

Adequate support from Government of Kerala and from other agencies.

Rich source of clay available.

Export potential of the company is high.

Building loyalty by identifying regular shoppers and offering benefits to them.

78

Rising of new firms in paint, paper and rubber industry.

Can rise market share technological innovations.

Can attract customers by providing R&D support and new product development.

4.1.4 THREATS:

Changes in the value of rupees and other currency changes.

Delay in supply of critical equipment required for the project may delay the

implementation of the project.

Competition from new players who may enter the market eyeing significant market share

in the industry.

Presence of tourist village in close proximity to the company may raise environmental

concerns.

Seasonal threats in mining process.

Emergence of new companies may lead to competition in the long run.

Changes in the value of rupees and other currency changes.

Possibility of encroachment by railway authorities.

Due to the development of new technology, calcium clay may not find use in many

products.

Competition from foreign companies and unorganized sector.

Scarcity of raw material in the future.

4.2 PORTER’S FIVE FORCE MODEL ANALYSIS

Michael Porter’s five forces of Competitive Position Model provides a simple perspective

for assessing and analyzing the competitive strength and position of a corporation or business

organization. The five forces which determine the competitive intensity and therefore

attractiveness of a market includes three forces from ‘horizontal’ competition; threat of substitute

products, the threat of established rivals and threat of new entrants; and two forces from ‘vertical’

competition; the bargaining power of supplier’s and bargaining power of customers.

79

Fig 1: Porter’s Five Force Model

Porter’s five forces that affects EICL are

1) Threat of substitutes

The existence of substitute products in the market will create threat by increasing the

propensity of customers to switch to alternatives in response to price increases. In ceramics

recipes, in some cases, kaolin can be partially substituted by talc, wollastonite, and mullite and

also synthetic mullite, but mostly these substitutions are financially pretentious. Kaolin is

relatively inexpensive compared to other non-clay commodities when it is produced in bulk

quantities since it can be extracted and processes in bulk without added cost.

2) Threats to new entrants

Markets that can yield high return will attract more producers to the industry, which

will effectively decrease profitability of the firm. The market of enriched kaolin is

characterized with high barriers, connected with the scarcity of the natural resource kaolin. A

possible barrier to the market of intermediary services of marketing enriched kaolin consists

in the vertical restriction of access to the marketed produce.

80

Business Organization

Threat of new entrants

Threat of substitutes

Bargaining power of suppliers

Bargaining power of customers

Competitive rivalry within the industry

3) Competition in the industry

There are seven major competitors from the industry. There is also competition from

unorganized sector, which is able to supply materials at lower costs due to exemptions from

excise duty. The company has many competitors in the starch industry in India and overseas

who may have better financial resources and execution capabilities than the company and

consequently greater capability to win contracts. Competition in the starch industry is often

intense with respect to bidding for new contracts. Further, in most cases bidding takes place

based on specifications provided by the client reducing the scope for product differentiation.

4) Bargaining power of suppliers

The suppliers for inputs are selected by rating the ability to deliver the material as per

delivery schedule, quality of materials, response time etc. Cost of inputs is also a factor in

selecting the supplier. The company maintains good supplier relationship by providing a sense

of commitment to the supplier. The company maintains contact with them for future needs

and to determine how best to satisfy those needs by working together.

5) Bargaining power of customers

Even if there is a competition from other companies and the unorganized sector,

the quality standards kept by the company enable to enjoy adequate customers according

to the capacity of the company. So the company can manage the bargaining power of its

customers. The company is giving importance to maintain the relationship with customers

by providing products according to their needs and necessary technical assistance.

81

CHAPTER 5

FINDINGS, SUGGESTIONS AND CONCLUSION

5.1 FINDINGS

English Indian Clays Ltd is one of the major manufacturers of China clay.

In EICL, all financial ratios show a healthy note, i.e. the firm is financially sound.

The liquidity position of EICL appears to be good during the period of study.

Good service is provided for the customers.

EICL has experienced and loyal workforce.

Well-disciplined staff and employees.

Well-functioning of R&D department.

EICL provides on the job training for employees.

Long term negotiations are maintained between management and trade unions.

EICL has a unique brand value as it has an experience of about 40 years.

5.2 SUGGESTIONS

The company check of the number of trade unions in the long run.

New areas for application of China clay have to be found out.

The company should give due care to environmental and societal concerns.

The company should utilize the advantage of e-business.

Company website has to upgrade with information regarding the various functional

departments.

The company should develop new strategies to attract more customers.

Proper inventory management systems should be evolved.

Company should emphasize on strategic marketing.

The company can think of starting their operations in nearby states and other Asian

companies.

Find new foreign market to increase export rate.

82

Develop value added products to attract new customers.

Develop cost effective formulae to increase sales turn over.

Marketing efforts should be increased especially advertisement and sales.

Interact with foreign research organizations to increase the effectiveness of R&D

functions.

5.3 CONCLUSION

English Indian Clays Ltd, is one of the leading manufacturer of kaolin in India. From the

very modest beginning, the company has reached its present status of glory. As a clay miming,

manufacturing and processing unit, the company’s ability to sustain a steady and time bound

supply schedule coupled with constant striving for excellence has given it that extra edge over all

its competitors in this field.

The study has covered “The English Indian Clays Limited” functions, its organization

structure, various departments, manufacturing of China clay and its marketing activities and

quality control techniques adopted, promotional aspects and other related management activities

EICL gives maximum benefits to the ceramic, glass and paper manufacturers and at the same time

provides high quality value added products to the customers.

With its rich reserves, hi-technology, deep commitment to quality and vast experience of

its motivated employees, EICL is able to keep brand name in the markets. In a state that is

notorious for its militant trade unionism, EICL has succeeded in maintaining a peaceful industrial

climate. The organization is having an effectively functioning organization structure. The

company is able to provide various employment opportunities to the society.

EICL is successful in keeping steady and time bound supply schedule. EICL is all set to

take place of pride in the twenty first century as the preferred source for the best companies in the

business.

BIBLIOGRAPHY

83

REPORTS

Annual report of EICL(2023-2014)

Department manuals of EICL

BOOKS

JohnStorey, Human Resource Management , Eastern Press , 2001 edition

M Y Khan, P K Jain, Financial Management

O P Khanna, DhanpatRai Publications, Industrial Engineering and Manangement

WEBSITES

www.eicl.in

www.wikipedia.com

www.google.com

www.shineindia.com

APPENDIX

84

ABBREVIATIONS

ED - Executive Director

VP - Vice President

EICL - English Indian Clays Ltd

TPA - Tons per Annum

MCR - Material Complaint Report

R&D - Research and Development

ECC - English China Clay

HOD - Head of the Department

QC - Quality Control

SEBI - Securities and Exchange Board of India

PVC - Poly Vinyl Chloride

HDPE - High Density Poly Ethylene

P&A - Personnel and Administration

F&A - Finance and Accounts

HRA - Human Resource and Administration

GM - General Manager

AM - Assistant Manager

PAS - Performance Appraisal System

PF - Provident Fund

ESI - Employee State Insurance

MIS - Management Information System

GPR - Gross Profit Ratio

NPR - Net Profit Ratio

EPS - Earnings per Share

SWOT - Strength, Weakness, Opportunities and Threats

85