CONTENT
INDUSTRY OVERVIEW
ECONOMICS
ORGANISATIONAL BEHAVIOUR
FINANACE
MANAGEMENT INFORMATION SYSTEM
MARKETING
REFERENCES
INDUSTRY
OVERVIEW
THE INTERNATIONAL SESAME INDUSTRY:
Introduction:
Sesame seeds (or sesamum or benniseed) are the seeds of the tropical annual Sesamum indicum. The species has a long history of cultivation, mostly for its yield of oil. The original area of domestication of sesame is obscure but it seems likely to have first been brought into cultivation in Asia or
The plant is usually 60 to 120cm tall and the fruit is a dehiscent capsule held close to the stem. When ripe, the capsule shatters to release a number of small seeds. The seeds are protected by a fibrous ‘hull’ or skin, which may be whitish to brown or black depending on the variety. 1000 seeds weigh some 4-8g. The seeds have a high oil content of 44-60%.
The plant is deep rooting and well adapted to withstand dry conditions. It will grow on relatively poor soils in climates generally unsuitable for other crops, and so it is widely valued for its nutritional and financial yield from otherwise inclement areas. It is well suited to smallholder farming with a relatively short harvest cycle of 90 –140 days allowing other crops to be grown in the field. It is often intercropped with other grains.
Sesame is now cultivated around the dry tropics between the latitudes of 40° N and S. It is scarcely cultivated in the
Sesame is commercialized in a number of forms. Most sesame is processed directly into oil by the grower or within the producing region, but can also be sold in various stages of processing, for various uses, such as meal, paste, confections, and bakery products. Once harvested, the seed is cleaned and dried to about 8% moisture and may then be stored before crushing.
EDIBLE OIL INDUSTRY IN
Climatic conditions in
supply gap and the political need to keep the domestic industry in good health.
Unorganized, medium and small players dominate the industry. Hence, quality remains a concern. There is need for better regulatory control to protect consumers.
An average Indian's yearly edible oil requirement has gone up from 7.0 kg in 1996-97 to 11.8 kg in 2000-01. Despite the variety of oilseeds grown in
Oilseeds in
The amount of oil extracted from the seed varies with the type and quality of seed. In many cases, the oil recovery rate is upwards of 30.0 percent with Sesame accounting for a high 45.0 percent.
Domestic consumption of edible oils has been growing at 4.0-5.0 percent a year. The consumption in 2001-02 was around 25.75 million tons. Non-packaged oils account for nearly 50.0 percent of consumption in both urban and rural markets. In the remaining 50.0 percent contributed by packaged oils, branded oils constitute a small portion of approximately 10.0-15.0 percent.
Importance of Edible Oils in the Country’s Economy:
Oilseeds and edible oils are two of the most sensitive essential commodities.
Types of Oils commonly in use in
( In lakh Tonne)
| Oil Year (Nov.- Oct.) | Production of Oilseeds | Net availability of edible oils from all domestic sources | Consumption of Edible Oils (from domestic and import sources) |
| 1998-1999 | 247.48 | 69.60 | 95.82 |
| 1999-2000 | 207.15 | 60.15 | 102.11 |
| 2000-2001 | 184.40 | 54.99 | 96.76 |
| 2001-2002 | 206.63 | 61.46 | 104.68 |
| 2002-2003 | 148.39 | 46.64 | 90.29 |
| 2003-2004 | 251.86 | 71.40 | 124.30 |
| 2004-2005 (Est.) | 243.54 | 72.47 | 117.89 |
| 2005-2006 Prov. | 266.97 | 79.11 | 120.86 |
Source : (i) Production of oilseeds : Ministry of Agriculture
(ii) Net availability of edible oils: Directorate of Vanaspati, Vegetable Oils & Fat
Consumption Pattern of Edible Oils in
Major Features of Edible Oil Economy:
There are two major features, which have very significantly contributed to the development of this sector. One was the setting up of the Technology Mission on Oilseeds in 1986. This gave a thrust to Government's efforts for augmenting the production of oilseeds. This is evident by the very impressive increase in the production of oilseeds from about 11.3 million tonnes in 1986-87 to 24.8 million tonnes in 1998-99. There was some setback in 1999-2000 because of the un-seasonal rain followed by inclement weather. The production of oilseeds declined to 20.7 million tonnes in 1999-2000. However, the oilseeds production in 2005-06 is estimated to be 26.70 million tonnes. The other dominant feature which has had significant impact on the present status of edible oilseeds/oil industry has been the programme of liberalisation under which the Government's economic policy allows greater freedom to the open market and encourages healthy competition and self regulation rather than protection and control. Controls and regulations have been relaxed resulting in a highly competitive market dominated by both domestic and multinational players.
ECONOMICS
The oil industry provide multifarious opportunities to potential investors in this Sector, both domestic and foreign. As several policy initiatives are undertaken by the Government of India since liberalization in August 1991, the industry sectors have witnessed unprecedented growth in most of the segments.
The consumer products industry is the complex, global collective of diverse businesses that together supply much of the food, oil, gas energy consumed by the world population.
The edible oil industry is one of the largest industries in
Edible oil Industry is of enormous significance for
The entries of multinationals, aggressive rise of commodity branding and low cost of technology are changing the economics of the Indian edible oil industry. The rise of aggressive regional players making forays into categories where entry barriers are low and a boom in Indian Fast Moving Consumer Goods (FMCG) markets and the rising need for these products are the key reasons for this growth in oil business.
In Store…The Indian oli market is approximately Rs 2, 50,000 crore ($69.4 billion), of which value-added oil products comprise Rs 80,000 crore ($22.2 billion). Despite oil production in the country is expected to double by the year 2020. With oil production expected to double by 2020, large investments are already going into oil and oil processing technologies, skills and equipment.
The Government has formulated and implemented several Plans and Schemes to provide financial assistance for setting up and modernizing of oil processing units, creation of infrastructure, support for research and development and human resource development in addition to other promotional measures to encourage the growth of the processed oil sector.
A Goldman Sachs report ('Dreaming with BRICs: The Path to 2050') states that among Brazil, Russia, India and China, India will grow the fastest over the next 30 to 50 years by leveraging its demographic advantages and through continued development. At its present rates of growth, the burgeoning market in the country "would be adding nearly one
Different laws govern the oil processing sector in
Multiple laws/regulations prescribe varied standards regarding oil additives, contaminants, oil colours, preservatives and labelling. In order to rationalize the multiplicity of food laws, a Group of Ministers (hereinafter referred as “GoM”) was recently set up to suggest legislative and other changes to formulate a modern, integrated food law, which will be a single reference point in relation to the regulation of oil products. The food laws in
There are various food laws applicable to food and related products in
• Prevention of Food Adulteration Act (PFA), 1954 and Rules (Ministry of Health & Family Welfare).
• The Standards of Weights and Measures Act, 1976, and Standards of Weights and Measures (Packaged Commodities) Rules, 1977
• Agriculture Produce (Grading & Marking) Act (Ministry of Rural Development).
• Essential Commodities Act, 1955(Ministry of Food & Consumer Affairs).
• Fruit Products Order (FPO), 1995.
• Meat Food Products Order, 1973 (MFPO).
• Milk and Milk Products Order, 1992.
• The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992 and Rules 1993.
• The Insecticide Act, 1968.
• Export (Quality Control and Inspection) Act, 1963.
• Environment Protection Act, 1986.
• Pollution Control (Ministry of Environment and Forests).
• Industrial Licenses.
• BIS Act, 1986.
• VOP (Control) Order – 1947.
• SEO (Control) Order -1967.
The Prevention of Food Adulteration Act (PFA), 1954 focuses primarily on the establishment of regulatory standards for primary edible oil products, which constitute the bulk of the Indian diet. The Central Committee for Food Standards, chaired by the Director General of Health Services, is the decision making entity. The appeals process, however, is cumbersome and time consuming. All imported products must adhere to the rules as specified in the regulation, including the labeling and marking requirements.
The Standards of Weights and Measures Act, 1976 and Standards of Weights and Measures (Packaged Commodities) Rules, 1977 are legislative measures are designed to establish fair trade practices with respect to packaged commodities. The rules prescribe that the basic rights of consumers regarding vital information about the nature of the commodity, the name and address of the manufacturer, the net quantity, date of manufacture, and sale price are provided on the label. There are additional mandatory labeling requirements for food items covered under the PFA. The Department of Consumer Affairs in the Ministry of Consumer Affairs, Food, and Public Distribution is the regulatory authority and enforcement agency.
The fruit and vegetable processing sector is regulated by the Fruit Products Order, 1955 (FPO), which is administered by the Department of Food Processing Industries. The FPO contains specifications and quality control requirements on the production and marketing of processed fruits and vegetables, sweetened aerated water, vinegar, and synthetic syrups. All such processing units are required to obtain a licence under the FPO and periodic inspections are carried out. Processed fruit and vegetable products imported into the country must meet the FPO standards.
Meat Food Products Order, 1992 administers the permissible quantity of heavy metals, preservatives, and insecticide residues for meat products. This order is equally applicable to the domestic processors and importers of meat products. However, its implementation is weak due to unorganized production in the domestic market and fewer imports.
Milk and Milk Products Order, 1992 order regulates the production, distribution, and supply of milk products; establishes sanitary requirements for dairies, machinery, premises; and sets quality control standards for milk and milk products. Standards specified in the order are also equally applicable to imported milk products.
The Destructive Insects and Pests Act, 1914, and Plants, Fruits, and Seeds (Regulation of Import in
After the enactment of the proposed Food Safety and Standards Bill, 2005 in
Policies and Regulations :
Since liberalization several policy measures have been taken with regard to regulation & control, fiscal policy, export & import laws, taxation, exchange & interest rate control, export promotion and incentives to high priority industries. Food processing and agro industries have been accorded high priority with a number of important reliefs and incentives.
At present,no industrial license is required for almost all of the food & agro processing industries except for some items like: beer, potable alcohol & wines, cane sugar, hydrogenated animal fats & oils etc. and items reserved for exclusive manufacture in the small scale sector. Items reserved for Small Scale Industry (hereinafter referred as “SSI”) include pickles & chutneys, bread, confectionery (excluding chocolate, toffees and chewing-gum etc.), rapeseed, mustard, & groundnut (except solvent extracted), ground and processed spices, sweetened cashew nut products, tapioca sago and tapioca flour.
In order to boost the food processing sector, the Centre has permitted under the Income Tax Act a deduction of 100 per cent of profit for five years and 25 per cent of profit in the next five years in case of new agro processing industries set up to package and preserve fruits and vegetables. Excise Duty of 16 per cent on dairy machinery has been fully waived off and excise duty on meat, poultry and fish products has been reduced from 16 per cent to 8 per cent.
Fiscal Policy & Taxation :
Wide ranging fiscal policy changes have been introduced progressively. Excise & Import duty rates have been reduced substantially. Many processed food items are totally exempt from excise duty. Custom duty rates have been substantially reduced on plant & equipments, as well as on raw materials and intermediates, especially for export Production. Corporate taxes have been reduced and there is a shift towards market related interest rates.
There are tax incentives for new manufacturing units for certain years, except for industries like: beer, wine, aerated water using flavouring concentrates, confectionery & chocolates etc. Indian currency (rupee) is now fully convertible on current account and convertibility on capital account with unified exchange rate mechanism is foreseen in coming years. Repatriation of profits is freely permitted in many industries except for some, where there is an additional requirement of balancing the dividend payments through export earnings
Custom clearance: Food items
Customs Department in
Apart from the checks on all the consignments of edible/food products imported through Ports, Inland container Depots, Air Cargo Complexes, Container Freight Stations and Land Customs Station the samples of imported food products are required to be referred to the Port Health Officer for testing. For alleviating the difficulties of importers, it has been decided that pending receipt of the test repot, such consignments be allowed to be stored in warehouses under Section 49 of the Customs Act, 1962.
New Opportunities: In
The Government has recently established Special Economic Zones with the purpose of promoting exports and attracting FDI. These SEZs do not impose duty on imports of inputs and they enjoy simplified fiscal and foreign exchange procedures and allow 100% FDI.
The Government is also moving towards introducing an integrated food law, which is expected to help meet the requirements of international trade and make the Indian food and oil industry competitive in the global market. To harness the value-creating potential of agro processing, superior market mechanism and infrastructure are required to be created. State governments have already begun to actively encourage the creation of aggregators by encouraging companies to engage in agriculture marketing. It is believed that this may provide the basis to jumpstart private investment into cold chain and other supply chain infrastructure.
ORGANISATIONAL
BEHAVIOUR
Motivation:
The combination of a person's desire and engergy directed at achieving a goal. It is the cause of action. Influencing people's motivation means getting then to want to do what you know must be done.
Often the employee knows how to perform the desired behavior correctly, the process is good, and all resources are available, but for one reason or another, chooses not to do so. It now becomes a motivational issue.
Motivation is the combination of a person's desire and energy directed at achieving a goal. It is the cause of action. Motivation can be intrinsic - satisfaction, feelings of achievement; or extrinsic - rewards, punishment, or goal obtainment. Not all people are motivated by the same thing and over time their motivations might changes.
People can be motivated by such forces as beliefs, values, interests, fear, and worthy causes. Some of these forces are internal, such as needs, interests, and beliefs. Others are external, such as danger, the environment, or pressure from a loved one. There is no simple formula for motivation -- you must keep a open viewpoint on human nature. There is a complex array of forces steering the direction of each person and these forces cannot always be seen or studied. In addition, if the same forces are steering two different people, each one may act differently. Knowing that each person may react to different needs will guide your decisions and actions in certain situations.
Incentives motivate learning:
Incentives include privileges and receiving praise from the instructor. The instructor determines an incentive that is likely to motivate an individual at a particular time. In a general learning situation, self-motivation without rewards will not succeed. Students must find satisfaction in learning based on the understanding that the goals are useful to them or, less commonly, based on the pure enjoyment of exploring new things.
Some individuals , some adults have little capacity for internal motivation and must be guided and reinforced constantly. The use of incentives is based on the principle that learning occurs more effectively when the person experiences feelings of satisfaction. Caution should be exercised in using external rewards when they are not absolutely necessary. Their use may be followed by a decline in internal motivation.
It is recognized that no grand theory of motivation exists. However, motivation is so necessary for learning that strategies should be planned to organize a continuous and interactive motivational dynamic for maximum effectiveness. The general principles of motivation are interrelated. A single teaching action can use many of them simultaneously.
People seek others with whom to compare their abilities, opinions, and emotions. Affiliation can also result in direct anxiety reduction by the social acceptance and the mere presence of others. However, these motivators can also lead to conformity, competition, and other behaviors that may seem as negative
Performance Appraisals:
A lot of people consider giving performance appraisals as being quite uncomfortable. However, it is not the judging of people that is really uncomfortable, rather it is the judging of bad performance that is uncomfortable. Thus, eliminate poor performance in the first place, and performance appraisals become a lot more pleasant to give. Now of course you are not going to eliminate poor performances completely, however, with a little bit of planning they can be greatly reduced.
Performance has often been described as "purposeful work" -- that is, a job exists to achieve specific and defined results. And what bad performers really do is perform "work activities" (busy work), rather than activities that contributes to effective performance.
The first step in performance planning is to determine the results that you want the performer to achieve. After all, workers generally want to know what they need to do, how well you need them to do it, and how well they are actually doing it (feedback).
In addition, a worker should not walk blindly into a performance appraisal. Past counseling sessions, feedback, and one-on-ones should give her a pretty clear understanding of what to expect from the appraisal. If you blind-side her, you have not done your job as a leader. Helping your team grow is not a once or twice yearly task, but a full-time duty.
The appraisal should be a joint effort. No one knows the job better than the person performing it. By turning the appraisal into a real discussion, rather than a lecture, the leader may learn some insightful information that could help boost his or her performance in the future. Before the meeting, have the worker complete her own self-appraisal. Although you might think they will take advantage of this by giving themselves unearned high marks, studies have shown that most workers rate themselves more critically than the leader would have.
FINANCE
Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. The term "finance" may thus incorporate any of the following:
- The study of money and other assets;
- The management and control of those assets;
- Profiling and managing project risks;
- The science of managing money;
- As a verb, "to finance" is to provide funds for business or for an individual's large purchases (car, home, etc.).
Finance is one of the most important aspects of business management. Without proper financial planning a new enterprise is unlikely to be successful. Managing money (a liquid asset) is essential to ensure a secure future, both for the individual and an organization.
Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments, with consideration to their institutional setting.
Financial management is duplicate with the financial function of the Accounting profession. However, financial accounting is more concerned with the reporting of historical financial information, while the financial decision is directed toward the future of the firm.
The activity of finance is the application of a set of techniques that individuals and organizations (entities) use to manage their money, particularly the differences between income and expenditure and the risks of their investments.
MANAGEMENT INFORMATION SYSTEM
Management Information Systems sometimes referred to as Information Management and Systems, are the discipline covering the application of people, technologies, and procedures — collectively called information systems — to solving business problems. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.
The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making. MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science. IT service management is a practitioner-focused discipline. MIS has also some differences with Enterprise Resource Planning (ERP) as ERP incorporates elements that are not necessarily focused on decision support.
In their infancy, business computers were used for the practical business of computing the payroll and keeping track of accounts payable and receivable. As applications were developed that provided managers with information about sales, inventories, and other data that would help in managing the enterprise, the term "MIS" arose to describe these kinds of applications. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications, project management, and database retrieval applications.
The organization has sufficient computers for their business. They planed to install Enterprise Resource Planning software so that the organization may try to decrease the man power and improve their efficiency to complete the work with a shorter period. Also the company wages to workers will be decreased.
MARKETING
MANAGEMENT
Marketing is a societal process that is needed to discern consumers' wants; focusing on a product/service to those wants, and to mould the consumers towards the products/services. Marketing is fundamental to any businesses growth. The marketing teams (Marketers) have the task to create the consumer awareness of the products/services through marketing techniques; if a business does not pay attention to their products/services and their consumers' demographics, the business would not be able to endure longevity.
Marketing tends to be seen as a creative industry, which includes advertising, distribution and selling. It is also concerned with anticipating the customers' future needs and wants, often through market research.
A market-focused, or customer-focused, organization first determines what its potential customers desire, and then builds the product or service. Marketing theory and practice is justified in the belief that customers use a product or service because they have a need, or because it provides a perceived benefit.
Two major factors of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management). Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place, and improving the product/service continuously to protect the business from competitive encroachments.
Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Anthropology is also a small, but growing, influence. Market research underpins these activities. Through advertising, it is also related to many of the creative arts. Marketing is a wide and heavily interconnected subject with extensive publications. It is also an area of activity infamous for re-inventing itself and its vocabulary according to the times and the culture.
Within most organizations, the activities encompassed by the marketing function are led by a Vice President or Director of Marketing. A growing number of organizations, especially large
Marketing communications breaks down the strategies involved with marketing messages into categories based on the goals of each message. There are distinct stages in converting strangers to customers that govern the communication medium that should be used.
Many companies today have a customer focus (or customer orientation). This implies that the company focuses its activities and products on consumer demands. Generally there are three ways of doing this: the customer-driven approach, the sense of identifying market changes and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no point spending R&D funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.
In a product innovation approach, the company pursues product innovation, then tries to develop a market for the product. Product innovation drives the process and marketing research is conducted primarily to ensure that a profitable market segment(s) exists for the innovation. The rationale is that customers may not know what options will be available to them in the future so we should not expect them to tell us what they will buy in the future. However, marketers can aggressively over-pursue product innovation and try to overcapitalize on a niche.
Core marketing elements such as segmentation, targeting and positioning are still relevant in the modern (or post-modern) world. However, they are complex topics that need a high level of effort, intelligent thinking as well as resources to be implemented successfully. A definitive statement cannot be made whether the conventional marketing concept is applicable in today’s environment. Its relevance is very much situational and depends on many factors such as the product, the segment, time, location, political and economic conditions and the inner workings of a company.
Marketing has helped create value through customized products, no-questions-asked refund policies, comfortable cars, environmental attention, shopkeepers’ smile, and guaranteed delivery dates. Even some government departments address the public not as ‘the Queen’s subjects’ or ‘the applicants’ any more but as ‘customers.' Of course all of the above is done for economic or political gain, for better or worse. Despite all this achievement, to dismiss marketing as a failure is unfair.
Marketing also helps companies avoid unnecessary R&D, operational and sales costs by helping to develop products because customers want them, not for the sake of innovation. Another success is the now commonly implemented value-pricing principle, whereby a product or service is sold for the price the customer is willing to pay, not on a cost-plus basis. This way, both suppliers and customers get a fair deal.
Due to increased competition, privatization and globalization, marketing and business development have become increasingly important functions in all construction organizations. Marketing research, corporate branding and public relations are increasingly being seen as vital in a marketplace typified by sophisticated and demanding clients and customers, and a socially and environmentally aware general public and media.
REFERENCES
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