1

CHAPTER 1 INTRODUCTION

1.1 INTRODUCTION

Carborundum Universal was established in 1954 as a joint venture between the Murugappa Group, India, the Carborundum Co., USA, and the Universal Grinding Wheel Co. Ltd, U.K. The main business activity of Carborundum Universal involves manufacture of coated abrasives, bonded abrasive, super-refractories, electro-minerals, industrial ceramics, and ceramic fibers. Further, CUMI produces about 20,000 different varieties of abrasive products, refractory products, and electro-minerals. Carborundum Universal Ltd. has 10 manufacturing facilities across India and these manufacturing facilities are meticulously connected with a wide network of distributors and subdistributors. CUMI is known to be an innovator and exports its products to 43 countries spread across North America, Europe, Australia, South Africa, and Asia. All the manufacturing facilities of Carborundum Universal are ISO 9001:2000 and ISO 14001 certified for quality standards and environment-friendly manufacturing practices respectively. Carborundum Universal Ltd. is equipped with a state-of-the-art Research and Development center which works aggressively on product development and enhancement.

1.2. SCOPE OF THE STUDY:

The study has been conducted at Carborundum Universal Ltd, Edappally, Ernakulam, Kerala, during the period of May, 2011.The study focuses on overall understanding of how the various departments in the organization function.

1.3. OBJECTIVES OF THE STUDY:

To study the functions of various departments To understand the process flow in each departments To understand hierarchical structure of various departments To do SWOT analysis of organization To have an exposure to the working environment

1.4. REASONS FOR SELECTING THE COMPANY:

Carborundum Universal Ltd is one of the major players of the abrasives and refractories industries in the world. The company has undertaken several joint ventures and also several major acquisitions. It is a venture of the Indian based Murugappa group.

1.5. STUDY PLAN:

Visit the EMD plant of CUMI located at Edappally and interact with the officials. Collect information about the organization structure and the functions of various departments.

1.6. METHODOLOGY:

The information was collected by means of direct interaction with the top officials and employees. Secondary data are collected from annual reports or unpublished source that is through quality reports, brochures, company records and Internet. Collection of data for the purpose of studying functioning of various departments and the organization as a whole is based on two types of data .They are :1. Primary. 2. Secondary.

Primary Data
Primary Data is a data collected by the investigator himself for the purpose of a specific enquiry or study. Mainly data is obtained through Direct Observation and Direct interview method. Observation: - mainly done by observing the general environment and day to day operation of the company. Interview: - Conducted face to face interview with mangers and company employees.

Secondary Data
Secondary Data is obtained from sources like Company Annual Report Company Records Previous reports Websites Magazines etc

1.7. LIMITATIONS:
Due to the short span of time allotted for project work an intense study was not possible. Difficulty in meeting the officials because of their busy schedule. Management did not disclose the confidential data. Busy schedule of the officers prevented lengthy discussions.

1.8 CHAPTER SCHEME

Chapter1: The First chapter contains details regarding the introduction, scope of the study, objective of the study, reason for selecting the company, study plan, methodology , limitation of the study. Chapter 2: chapter contain the details regarding the industry profile ,About world, Indian and state scenario. Chapter 3: This chapter deals with details about company profile . Chapter 4: This chapter deals with different departments. Chapter 5: This chapter has a complete swot analysis .Also includes the Observations made and some suggestions also included. Chapter 6:- This contains the conclusion of the report

10

CHAPTER 2 INDUSTRY PROFILE

11

2.1. INDUSTRY PROFILE

Aluminium oxide industry is one of the major Industries in India. Alumina is the most widely used oxide ceramic material. Its applications are widespread, and include spark plugs, tap washers, electronic substrates, grinding media, abrasion resistant tiles, cutting tools, bioceramics, and laboratory ware and wear parts etc. Fused alumina is made in electric arc furnaces by passing a current between vertical carbon electrodes. The heat generated melts the alumina. The furnace consists of a water-cooled steel shell and 3-20 tone batches of material are fused at any one time. The fused alumina has a high density, low porosity, low permeability and high refractoriness. As a result these characteristics, it is used in the manufacture of abrasives and refractories. Bauxite is the ore of Aluminium metal, which is the basic raw material for producing fused alumina. Bauxite is naturally occurring heterogeneous material comprised primarily of Aluminium oxide minerals, various mixtures of silicon dioxide, Titanium dioxide, Iron oxide, aluminosilicates, & clay etc.Bauxite is typically classified according to its intended commercial application, such as abrasive, cement, chemical, metallurgical, and refractory. Of all bauxite mined, approximately 85% is converted to alumina for the production of aluminum metal, and an additional 10% is converted to various forms of specialty alumina. The remaining 5% is used directly for non-metallurgical bauxite applications. Worldwide, bauxite is the only raw material used in the production of alumina on a commercial scale. There are several types of bauxite with alumina content ranging from 35% to 60%. World bauxite resources are estimated to be 55 to 75 billion tones, located in South America (33%), Africa (27%), Asia (17%), Oceania (13%), and elsewhere (10%).

12

World Bauxite Distribution

Source : www.murugappa.com Chart No.1 About 89% of India's recoverable bauxite reserves are of metallurgical grade. Orissa, Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra and Bihar are the principal States where bauxite deposits are found in the country, with Orissa and Andhra Pradesh accounting for the bulk of it.

An abrasive is a hard, tough and wear resistant substance for grinding and polishing operations. Manufactured through a complex and high technology process, these abrasives are used in metal removal, cutting and finishing operations in almost all industries.

13

2.2.MAJOR PRODUCTS OF FUSED ALUMINA AND ITS USES:

PRODUCTS WHITE ALUMINIUM OXIDE( Alumina) BROWN ALUMINIUM OXIDE Alumina) High Cement Alumina (brown white

USES Manufacturing of grinding wheels, coated abrasives, paints, fused titles etc Manufacturing grinding wheels, polishing purpose, shot fused blasting purpose etc

Refractory It is used as a binder for all types of castable refractories.

TABLE NO.1: major products of alumina

14

2.3. MARKET SCENARIO OF THE INDUSTRY:

In recent years, there has been a considerable increase in the production capacity in the Asia-pacific region in particular in China, India, South Korea & Australia. Price and quality are the major competitive parameters in this industry. The main customer industries are: Automobile industry General metal cutting industry Polishing of metal surfaces Marine paints

15

2.4. MAJOR ALUMINA PRODUCING COMPANIES & ITS MARKET SHARE:

Grindwell Norton Ltd Snam Abrasives Pvt Ltd Orient Abrasives Carborundum Universal Ltd

30% 10-15% 20% 35-40%

TABLE NO. 2 : major alumina producing companies

2.4.1. Grindwell Norton Ltd

Grindwell Norton Ltd is a part of Saint Gobain. In 1941, Grindwell made the first grinding wheel in India. It has since been offering the best abrasives technology to Indian industry. Today, Grindwell Norton is India's leading manufacturer and the only one who offer a full line of abrasive products. Grindwell Norton also manufactures industrial ceramics, electro- minerals and total solutions for wastewater treatment. Grindwell Norton's abrasive grains are the industry standard in India. And against strong international competition, Grindwell has gained preference with customers in Europe, Australia, Japan and South-East Asia

2.4.2.

Snam Abrasives Pvt Ltd

Snam Abrasives produces mainly on varieties of Silicon carbide grains was promoted in 1985 to manufacture Silicon carbide micro grits up to 400 meshes. Its production capacity of 300 M.T per year. Presently, its plant is catering to the exacting requirements of many micro grit uses.

16

Major products of Snam Abrasives:

Ferro Silicon Ferro Silicon Magnesium Snam Micro Abrasives

2.4.3.

Orient Abrasives Ltd

Orient Abrasives Limited, an ISO 9001 Quality Certified Company, is engaged in the business of manufacturing and selling Calcined and Fused Alumina Products; Refractories and Monolithics.

Major products of Orient Abrasives:

Brown fused Alumina White fused Alumina High Alumina Refractory Cement

2.4.4. Carborundum Universal Ltd

Carborundum Universal Limited manufactures the widest range of Bonded and Coated abrasives in the world. The Rs 314 crore, the company pioneered the manufacture of coated and bonded abrasives in India, besides super refractories, electro minerals, industrial ceramics and ceramic fibers. CUMI makes over 20,000 different varieties of abrasives, refractory products and electro-minerals, manufactured at 14 locations. CUMI has the distinction of having all its manufacturing units ISO 9001: 2000 certified.

17

Major products of Carborundum Universal Ltd:

White fused Alumina (CUMITE-W) Brown fused Alumina (CUMITE-B) Silicon Carbide.

In export market, the major threat is the products from the China. They can sell products at lower price because their cost of production & cost of labour is very low. World total production of Alumina comprises 40% from China.

Industry overview
Competition is increasing day by day so that the product development will be the main criteria. Our mineral resources are limited so there is a challenge in future development. High capital investment, limited market, sophisticated technology, availability of substitute products, product differentiation & import are the principle challenges in this industry.

18

2.5 WORLD SCENARIO:

The world market for Bonded and Coated abrasives is estimated at Rs. 4500 crores and Rs. 6000 crores respectively. The major players are Norton, Baystate and 3M from the USA, Tyrolit and Treibacher from Austria, and Noritake from Japan. Norton Co. is the world leader in abrasives and manufactures the entire range of products in bonded and coated abrasives. The estimated consumption of abrasives by Eastern Europe & the erstwhile Soviet bloc is 27% of the world market, Asia 25%, North America 21%, Western Europe 17%, Latin America and Africa (5% each) and Australia (1%). The application of grinding as a material removal process has become mature with very few niches remaining for exploitation. As such the world grinding wheel market is not expected to grow in the near future. The US market is shrinking by 1 -2% every year and the shrinkage in much more in Europe.. However, demand in developing countries is on the rise. Abrasives manufacturers worldwide have focussed their efforts on grain development, newer and stronger adhesives for product durability and better productivity. Other developments have been in High Speed vitrified wheels of more than 150 mps and diamond & CBN wheels. In the case of coated abrasives, the latest developments have been in non-woven abrasives and scouring pads. Global demand to climb 5.9% yearly through 2013Global demand for abrasive products is forecast to climb 5.9 percent annually through 2013 to $38.2 billion. Market advances in developing parts of the Asia/ Pacific region, the Africa/Mideast region, Eastern Europe and Latin America will considerably outperform demand in the US, Western Europe and Japan. China, India and Russia will post some of the biggest sales gains. China, which recently surpassed the US to become the largest national market for abrasives, will account for two-thirds of all additional product demand through 2013. Sales advances are also expected to be healthy in Indonesia, Thailand and Turkey. Market conditions will be much less favorable in developed parts of the world, dampened by relatively sluggish durable goods manufacturing activity. Abrasives demand in the

19

US, Italy and France will expand less than one percent annually through 2013, while annual product sales are expected to decline in Germany, Japan and the UK. However, higher per capita incomes will result in increased consumer expenditures for a variety of products made using abrasives, providing some offsetting support. The sales outlook is somewhat stronger for Canada, South Korea and Spain due to comparatively healthy growth in manufacturing output in these nations. Nonmetallic abrasives to outpace metallic products Overall abrasives demand is dominated by nonmetallic products, which include bonded abrasives, coated abrasives, and loose abrasive grains and powders. Nonmetallic abrasives are also expected to register larger sales gains through 2013 than metallic products such as steel shot and grit, and wire brushes and wheels. Loose abrasive grains and powders will post the strongest increases of any major product type, bolstered by their use in several markets with above-average growth prospects, including semiconductor manufacturing and microderm abrasion, and an ongoing trend toward the use of higher value products like specialty silica and synthetic diamond. Bonded abrasives demand will climb at the next fastest rate, benefitting from strong sales growth in China and other fast-growing developing markets where bonded abrasives account for the largest single share of sales, as well as by increased use of super abrasive products. However, coated abrasives will remain the biggest product category on a global basis, supported by an ongoing trend toward the use of more sophisticated manufacturing processes, in which products are machined closer to their final shape, boosting use of coated abrasives in finishing operations. Transportation equipment to be fastest growing durable goods market durable goods manufacturing is far and away the largest market for abrasives, accounting for more than three-quarters of all product demand.

2.6 INDIAN SCENARIO:

20

The Indian bonded abrasives has eight units in the organized sector with a total installed capacity of 13381 tonnes per annum. A large number of units exist in the unorganised sector and their capacity is 2500 tonnes. The overall capacity utilisation in the bonded abrasives industry is estimated to be about 85%. The total size of this market is estimated to be about Rs. 190 crores in value. The coated abrasives industry has six units in the organised sector with a total installed capacity of 540,000 reams per annum. The unorganised sector caters to the lower-end requirements and has a capacity of about 75,000 reams per annum. The capacity utilisation in this industry is about 60%. The total size of this market is estimated at about Rs. 110 crores by value.

Carborundum Universal Limited and Grindwell Norton have a range of over 20,000 different products and have a dominating presence in all the segments of the industry. These two account for 70% of the bonded and coated abrasives market, which in terms of value is estimated at about Rs. 300 crores. The other players cater predominantly to localized demand, manufacturing specific categories of products. The main problems faced in respect of exports are those of price, credibility and delivery schedules. However, the industry forecasts an annual growth rate of 25% with the emphasis shifting from exporting abrasive grains to exporting value added finished products. Most of the manufacturers have foreign technical collaborations. The collaborators provide R&D support through product/process upgradation and manpower training. Indigenous manufacturers have been successful in bringing out internationally used products and adapting them to local needs. This has been due to a continuous dialogue between the manufacturers and the user industry. However, the initiative lies with the user industry, who with their foreign collaborators, identify new products and processes

21

in use internationally, and then communicate this to indigenous manufacturers who react by developing them. The raw materials used are abrasive grains of Aluminium Oxide, Silicon Carbide and Zirconia of grit size of 8 to 1200. Grains of grit size more than 600 are imported. Fine grains can be manufactured in house but the low volumes do not justify high investment in machinery. The conventional abrasives are also expensive compared to the internationally available products because of higher raw material and power costs. Raw materials used in coated abrasives, that are imported, are special paper for waterproof backing, fibre and splicing agents. The major manufacturers have well equipped in house R&D setups with the main objective of developing new products and processes aiming at cost reduction and productivity improvement. The expenditure on in house R&D for the major players is about 2% of annual sales turnover. None of the research institutions like IITs & CMTI are doing any research in areas related to bonded and coated abrasives, but for some work related to super abrasives at CGCRI and NPL.

22

CHAPTER 3 COMPANY PROFILE

23

3.1. COMPANY PROFILE

Carborundum Universal, also known as Carborundum Universal Ltd (CUMI) is an India-based coated and bonded abrasive manufacturing company. Carborundum Universal was established in 1954 as a joint venture between the Murugappa Group, India, the Carborundum Co., USA, and the Universal Grinding Wheel Co. Ltd, U.K . The main business activity of Carborundum Universal involves manufacture of coated abrasives, bonded abrasive, super- refractories, electro-minerals, industrial ceramics, and ceramic fibers. Further , CUMI produces about 20,000 different varieties of abrasive products, refractory products, and electro-minerals. Carborundum Universal Ltd. has 10 manufacturing facilities across India and these manufacturing facilities are meticulously connected with a wide network of distributors and sub-distributors.

The company pioneered the manufacture of Coated and Bonded Abrasive in India in addition to the manufacture of Super Refractories, Electro Minerals, Industrial Ceramics and Ceramic Fibres. Today the company ranges over 20,000 different varieties of abrasives, refractory products and electro-minerals are manufactured in ten locations across various parts of the country.

24

3.1.1. CUMI-Business Distribution

Source: www.cumi-murugappa.com Chart No.2 CUMI is known to be an innovator and exports its products to 43 countries spread across North America, Europe, Australia, South Africa, and Asia. All the manufacturing facilities of Carborundum Universal are ISO 9001:2000 and ISO 14001 certified for quality standards and environment-friendly manufacturing practices respectively. Carborundum Universal Ltd. is equipped with a state-of-the-art Research and Development center which works aggressively on product development and efficacy enhancement. CUMI has its own bauxite mines at okha and Bhatia in Gujarat that fills the abrasives and refractory grains requirements. Mining operations began in 1963 and ever since these mines have supplied the basic raw materials. The raw material bauxite mined is calcined at CUMIs plants at Edappally and Koratty. The plants were commissioned in 1965, which are ISO 9000 certified, manufacturing a wide range of superior quality aluminum oxide and silicon carbide grains.

25

CUMI also exports white Aluminum Oxide and Silicon Carbide abrasive grains to international market. The R & D wing comes out with constant innovations and product up gradations of products, which makes the company a world leader in grinding technology. Its core competence provides total grinding solutions which enables maximum grinding efficiencies and reduced cost for customers.

26

3.2. OBJECTIVES OF THE COMPANY

Financial objectives

Growth in revenues Growth in earnings Wider profit margins Bigger cash flows Higher returns on invested capital Attractive economic value added (EVA) performance Attractive and sustainable increases in market value added (MVA) A more diversified revenue base

Strategic market objectives

A bigger market share Quicker design-to-market times than rivals Higher product quality than rivals Lower costs relative to key competitors Broader or more attractive product line than rivals A stronger reputation with customers than rivals Superior customer service Recognition as a leader in technology and/or product innovation Wider geographic coverage than rivals Higher levels of customer satisfaction than rivals

27

3.3. COMPANY HISTORY

YEAR EVENTS
1954 - The Company was Incorporated at Chennai. The Company manufacture bonded and coated abrasive products refractories refractory grains calcined bauxite etc. 1962 - 20 000 No. of equity shares issued at a premium of Rs 25 each. 1991 - 713 shares issued to the shareholders of Wendt (India) Ltd. in ratio of 3 shares of the Company + Rs 50 cash for every 5 shares of Wendt (India) Ltd. 1992 - The Company offered 15% secured redeemable partly convertible debentures of Rs 130 each on right basis to the existing shareholders in the ratio of 2 debentures for every five equity share held. Another 1 29 748 debentures were offered to the employees. All were accepted. - Part-A of Rs 60 per debenture was converted into one equity share at a premium of Rs 50 per share on 1.4.1993. Part-B of Rs 70 per debenture was to be redeemed in three instalments of Rs 23 Rs 23 and Rs 24 from 7th 8th and 9th year respectively from the date of allotment. - The Company acquired 4 740 preference shares and 1, 24,800 equity shares of Wendt (India) Ltd. and 10 lakhs Units of Unit Trust of India under the 1964 Scheme.

28

1994 - The Company commissioned a wind farm of 2 MW capacity at Perungudi and Tamilnadu. During the year a project for manufacture of brown aluminium oxide grains was commissioned with additional capacity of 8 000 tonnes at Edappally. 1995 - Four wind mills were also added for increasing the capacity to 2.925 MW in order to meet power requirement of Hosur factory. - During the year the Company had entered into a technology transfer agreement relating to manufacture of nitride bonded silicon carbide refractories. 1996 - The performance of electrominerals division was affected by the continuous steep power cuts in Kerala increase in power traffics and freight charges. - A new facility for manufacture of new generation monolithics for steel plants was being established at Visakhapatnam. - Murugappa Morgan Thermal Ceramics Ltd. a subsidiary in which the Company held 70% shareholding has implemented a new project for 3000 tonnes Spun Ceramic Fibre

1997 - During the year a technology transfer agreement has been entered into with Answer Technology Inc. USA for manufacture of new generation monolithics for steel plants. - The Company has collaborated with leading research institutions like Regional Research Laboratory Babha Atomic Research Centre and Pennsylvania State University for the development of new ceramic materials and process technology.

29

- The Company's shares have been admitted to the depository system consequent to an agreement being signed with National Securities Depositories Ltd. (NSDL) in November. - The Company is to set up a unit in Visakhapatnam for the manufacture of special refractories for the steel industry. - The company also set up four windmills during the year. - The Ranipet unit manufacturing super refractories received the ISO 9002 certification. - The Company part of the Murugappa Group Chennai has become the first Indian company to have got the approval of the Directorate of Civil Aviation for plasma coating aircraft propellers and turbine blades. - The Company is merging the three companies that it acquired last year - Cutfast Abrasive Tools (CAT) Cutfast Polymers (CPL) and its arm Eastern Abrasive (EAL). 1998 - Eastern Abrasive Ltd and Carborundum Universal Investments Ltd. are subsidiaries of Carborundum Universal Ltd. - The Company has established a wholly owned subsidiary in the U.S.A by name CUMI America Inc. for marketing the Company's products in the American markets.

2000 - The Company has sold its refractory unit in Visakhapatnam for a sum of Rs 7.8 crore. 2002 -Mr M V Murugappan steps down as the Whole Time Director on the Board of the company. -Sells its Electrocast refactories unit at Palakkad for Rs.31 crs.

30

2003 -Appoints Mr Ramesh Agarwal as the Manging Director of the company. -The Company has acquired a 51% stake in CUMI Australia Pty Ltd. 2004 -M.M. Murugappan new MD for Carborundum Universal -Gets award for industrial safety instituted by National Safety Council Kerala Chapter in other industries sector in the small industries category 2005 -Carborundum Universal Ties up with South African firm Cerdak -Carborundum Universal Ltd sets up 100% subsidiary in Ras Al Khaimah U.A.E for marketing its products namely Abrasives Ceramics Refractories and Electrominerals in Middle East 2006 -Carborundum Universal enters into a Joint Venture with CEEB to take a 49% stake in Jingri Yanjiao China 2008 -Carborundum Universal Ltd has entered into a Business Purchase Agreement with IVP Ltd for the acquisition of its industrial ceramics division at Aurangabad Maharashtra

3.4. ORGANISATION STRUCTURE

31

MD

PresidentEMD

VP-EMD

GM-Mktng

GMTechnical

AGMMfg&Pro

AGMAccnts

Sr Mngr-HR

AGM-Mftng KOR

Sr Mngrs

Managers

Dy Mngrs

Executives

Jr officers

Staff Chart No. 3 : Organization Structure

GMMktng

GMTechnical

Jr AGMExecutive Managers Sr. Mngrs Staffes Officers & s mfg

AGMAccnts

Sr MgrHR

AGM Mfg KOR

32

3.5. DIFFERENT PHASES OF DEVELOPMENT:

In 1992 The Company acquired 4 740 preference shares and 1, 24,800 equity shares of

Wendt (India) Ltd. and 10 lakhs Units of Unit Trust of India under the 1964 Scheme.
In 1994 The Company commissioned a wind farm of 2 MW capacity at Perungudi and

Tamilnadu. During the year a project for manufacture of brown aluminium oxide grains was commissioned with additional capacity of 8 000 tonnes at Edappally.
In 1995 Four wind mills were also added for increasing the capacity to 2.925 MW in order to meet power requirement of Hosur factory. In 1996 A new facility for manufacture of new generation monolithics for steel plants was

established at Visakhapatnam and Murugappa Morgan Thermal Ceramics Ltd. a subsidiary in which the Company held 70% shareholding has implemented a new project for 3000 tonnes Spun Ceramic Fibre In 1997 The Ranipet unit manufacturing super refractories received the ISO 9002 certification.
In 1998 The Company established a wholly owned subsidiary in the U.S.A by name

CUMI America Inc. for marketing the Company's products in the American markets. In 2003 The Company has acquired a 51% stake in CUMI Australia Pty Ltd In 2005 Carborundum Universal Ltd sets up 100% subsidiary in Ras Al Khaimah U.A.E for marketing its products namely Abrasives Ceramics Refractories and Electrominerals in Middle East In 2006 Carborundum Universal enters into a Joint Venture with CEEB to take a 49% stake in Jingri Yanjiao China

33

CHAPTER 4 DEPARTMENTAL DETAILS

Departments

34

1. HUMAN RESOURCE DEPARTMENT 2. PRODUCTION DEPARTMENT 3. COMMERCIAL DEPARTMENT 4. ACCOUNTS DEPARTMENT 5. MARKETING DEPARTMENT

4.1. HUMAN RESOURCE DEPARTMENT

35

4.1.1. HR Department Hierarchy GM

HR MANAGER

DY HR MANAGER

HR EXECUTIVE

STAFF

Chart No.4 : Human Resource Department Hierarchy

4.1.1. Human Resource Department

36

Human resource has always been one of the focus points in business strategy. HR strategy is carefully linked to the vision, mission and overall business strategy of the company. In CUMI , the HR department is responsible for putting together the HR plan based on corporate plan. It is responsible for recruitment, selection of employees, transfers, payroll processing, canteen, and legal proceedings. Human Resource Planning is done with the 3+1+3 business plan (3-past 3 years performance, 1- current year performance,3-forecast of future 3 years performance). The company evaluates the HR requirements estimated by a series of analysis. The basic objective of this department is effective utilization of Human Resource, desirable working relationship among all employees and maximum individual development. The most appreciating feature of CUMI is its profound flexibility in communication between any subordinate and superior. This contributes to a friendlier cooperating environment. CUMI has a group of very committed employees. It has strength of 143 employees, 85 permanent employees & 47 temporary employees.

4.1.2. HR Values
Concern for people Integrity Customer orientation Continuous improvement Executive excellence

4.1.3. HR Principles
Whether workers or management staff, employees are employees. They are not different bloc, but two faces of the same coin.

37

Employee Unions are treated with respect and are partners in the progress. Harmony and peace cannot be at the cost of dilution of organization ethos. Fairness and firmness will govern all employee relations. Communication and dialogue would be the essence of managing relationships. A proactive approach and a state of mental and physical preparedness would help in managing unpleasant issues.

4.1.4. HR Functions
Recruitment & selection. Preparing appointment letters. Arranging training and development programs for the employees. Keeping all statutory obligations. Collecting data from all other factories to enable them prepare details for long term negotiation. Informing the concerned department about the change of factory rules & other related acts. Maintaining strict discipline. Making daily attendance of the employees, pay and overtime, this department also does all correspondence relating to the ESI and PF. Running of canteen.

4.1.5. Recruitment & Selection

38

Recruitment and selection is based on integrity, competency and the ability to work in a team. Company takes value fit individuals with group into consideration. Individuals are placed under 1 year probation in which the superior accesses his/her abilities, teamwork, and performance in pressure situations. But successful completion of probation does not imply on assurance for permanent employment. Based on experience and qualification selection of managers is done at the Head office, Chennai. The management gets people through campus recruitments, personal references etc.

Line managers are expected to prepare job description and job specification in respect of job to be filled, HR department is expected to oversee and ensure proper compliance with statutory and organizational requirement and policies. The recruitment process is a three tier method-direct, indirect and third party. The sources of recruitment included both internal & external. The internal source includes transfer and promotion, which is more preferred by the company. The management chooses external source like campus recruitments, personal references etc.

4.1.6. Induction
The workers are recruited and selected is given an individual program; introducing them to the plant, their work and to the concerned department. For managerial personnel, the induction method used is apprenticeship-training method; immediate supervisor trains employees. For workers shop floor training is given. There is three level of induction at CUMI: Corporate induction: mainly for corporate personnel. Given in Head Office (Chennai). Induction across unit: Given for management staffs across the units in order to know the various dynamics exist in the group. Department/functional unit induction: This is given for both management and non-management staffs; each department managers or supervisors give this.

39

4.1.7. Training and Development

The need for training is determined by identifying the gap between present performance of an employee and the desired performance. In CUMI, it is done on the basis of skill matrix. Training needs identification procedure:

Business Plan/ Long Term Strategy

Policy Deployment

Skill matrix for operatives/ Competency requirement for managers

Competency gap

Training need identification

Chart No.5: Training Need Identification Procedure

40

4.1.8. Skill Matrix:

The objective of the skill matrix is to have a scientific analysis of skill level. The aim is that technology changes fast and new technology demands new skill. Therefore, this helps employees to progress his career plan. Skill matrix measures five aspects of an individual/personal characteristics, discipline, skill work performance and participation in management. The skill matrix is to find out the attitude of individual towards work and the skill of the person to perform. It is to identify scientifically the skill level existing in the organization and to develop the skill levels pattern to meet the business requirements. In skill matrix, the department head and the employee are rated based on certain parameters. In rating the performance, it is classified into three -good performance, average performance and poor performance.

4.1.9. Training for Management staffs

Two functional and one Personal Effectiveness Training Program as a part of corporate initiative. Specific program against the requirement- Division/unit HR. Advanced TQM orientation Negotiation skill. Out bound training. SHE programs.

4.1.10. Training for non-management staffs

41

Behavioral training Skill improvement training Multi skilling Process orientation Energy management conservation TQM orientation

4.1.11. Performance appraisal

The methods used in CUMI are supervisory rating and self-rating. Performance appraisal for the managers is called Policy Deployment. This system is based on factors like business result, quality systems, total employee involvement, waste elimination and customer satisfaction etc. In this system, the objectives of the GM will be the measure of his next subordinate and this flow down accordingly until the final objective is attained. The Performance Management System is based on the Balance Score Card .The Balance scorecard is the culmination of the Business Plan and is the complete strategic indicators and thrust areas of business. Appraisal for staffs consists of knowledge of methods and procedures, quality of work, attendance and punctuality, resourcefulness, good manners, team spirit etc.

4.1.12. Promotion Policy

Suitability and merit are the criteria for promotion. Promotion policy has been drawn taking into consideration of performance and not seniority.

4.1.14. Workers participation in management

CUMI takes suggestions from employees mainly relating to the cost reduction. The better suggestions will be considered by the management and rewarded properly.

4.1.13. Grievance handling

42

Company policy: Redressal of day-to-day grievances can motivate employees to be more effective. Grievances should be settled reasonably, swiftly and transparently. Scheme: Applicable to all employees. It can be in the form of oral or written.

4.1.14. Welfare benefits:

Welfare fund Management agrees to contribute towards employees welfare fund at the rate of Rs.15.00 20.00 month with effect from 1st September, 2006. Advances Management agrees to increase advance from Rs.5750.00 to Rs.7500.00 per annum, which is to be paid in three installments of Rs.6000, Rs.3500 and Rs.1000 as Onam advances and school advances and special advance respectively. Safety shoes: Additional one pair of safety shoes per year to plant operatives considering safety requirements. Leaves: (a) earned leave - strictly as per factory act (b) casual leave - Maximum 13 days per annum

43

(c) medical leave - Maximum 12 days per annum

Hospitalization schemes: Scheme for employees, spouse children. Introduced for those employees who are out of purview ESI scheme consequent to exceeding the prescribed salary limit of Rs.10, 000.

Tour subsidy: The annual tour subsidy is revised from 17,500 to 22,500. Terms and conditions unchanged. Wages and allowance: Applicable to all permanent employees with effect from 1st September, 2006 Dearness allowance: DA is revised from Rs.4.35 to Rs.4.78 per point over and above 83 points of the consumer price index (1970=100) published by the Director of Statistics, Kerala for Ernakulam.

House rent allowance: The house rent assistance is revised from Rs.390.00 to Rs.554.00 per month

44

Conveyance allowance: The conveyance allowance is revised from Rs.355.75 to Rs.523.75 per month.

Night shift allowance Revised from Rs.10.00 to Rs.15.52 per shift for those who work between 4 pm and 12 midnight shift. Revised from Rs.13.00 to Rs.19.88 per shift for those who work between 12 midnight and 8.00 am Attendance bonus An amount of Rs.50.00 per month will be paid to eligible employees in addition to the present practice of paying one day basic pay as attendance Incentives Normal maximum amount earned for good performance per month is Rs.660. variable pay base on 3 criteria namely process criteria, company criteria and individual criteria. Overtime Overtime allowance is given to the workers on the basis of mass hours. Overtime=Basic+DA *attendance hours/240

4.1.15. Trade unions

45

Carborundum Universal Employees Union (INTUC) Carborundum Universal Workers Union (CITU) Carborundum Universal Employees Association Carborundum Universal Staff Union Edappally Carborundum Universal Thozhilali Union.

4.1.16. Industrial relation

In CUMI, the HR department plays a vital role in maintaining harmonious industrial relations. A very good relationship exists between the management and the employees. Since1987, no strike were reported. Inter as well as intra union rivalry is very low.

4.1.17. Performance management system

The performance management system is based on the score card. The balance score card is the culmination of the business plan and is the complete strategic map which identifies the strategic indicators and thrust areas of the business. This balance score card is the authentic document approved by the Murugappa Corporate Board. Based on the approved score card the functional score card are evolved. The monthly plans are then evolved from the above. These plans are reviewed on a monthly basis against the plan. The feedback and the learnings from the monthly reviews and course corrections are incorporated. The Performance Management System is on line with Policy Deployment. The steps involved in policy deployment or Hoshin Kanri is explained in the table.

46

The system is designed to capture the objectives and measures in the policy deployment table drawn up for the current year. The objectives and measures are to be clear cut, specific and quantifiable. The appraiser and the appraisee will jointly discuss and arrive at the best regrouping possible of the objectives. In the discussions, the appraiser and the appraisee agree on a action plans including resources and support. This is summarized and signed off by both the appraiser & the appraisee. A review mechanism is also built in the system to ensure frequent monitoring of objectives and course correction, if necessary. The review calendar is drawn up to regularly monitor the progress of the objectives and provide resources if any on the part of the appraisee Control charts are maintained at agreed frequency and reviewed.

4.2. PRODUCTION DEPARTMENT

4.2.1. Production Departmental Hierarchy SVP

47

GM

SENIOR MANAGER MANAGER

DY MANAGERS

EXECUTIVES

JUNIOR OFFICERS

SUPERVISORS

JUNIOR SUPERVISORS

WORKERS

48

Electro minerals division (EMD) at Edappally has two plants:Plant 1 deals with BFA (Brown Fused Alumina) and Plant 2 deals with WFA (White Fused Alumina).

4.2.2. Production capacity:

Production capacity of the Plant 1is 1000 tons per month and the Plant 2 is 850 tons per month. Plant 1 produces Brown fused Alumina, which is used as the raw material for grinding wheels, Emery paper etc. Calcined Alumina, Coke and Iron boring are the raw material used for the production of Brown Fused Alumina. Plant 2 produces White fused Alumina, which is used as Vitrified abrasives and highly purity Alumina refractories. Calcined Alumina electrodes and electricity are the raw materials used for the production of White fused Alumina. Production process of White fused Alumina and Brown fused Alumina are same.

4.2.3. Production Process Raw material storage

49

Raw material handling Weighing

Raw material mixing

Furnacing Pig Cooling Breaking Sledging

Shell Cooling

Scrap recycling

Crushing Crude forwardin g

Magnetic Separation

Weighing

Chart No.7 : Production Process(Source: Company Records

50

4.2.4. Production Process

Raw materials are taken from the godown through elevator to the storage bin. The raw materials for producing Brown fused Alumina are calcined Alumina, iron borings, char fines and scrap etc. In case of the White fused Alumina, the raw material is calcined Alumina alone. The raw materials are taken through blender where all these are blended for 6 minutes. From blender through elevator this mixture is stored in bins out of which 11 bins are carried to furnace as 4:3:3 ratios. For producing Brown fused Alumina, the raw materials are furnacing at 2150c for 17 hrs. In the case of white fused Alumina, the raw material is furnacing at 1450c for 6hrs. Then the furnace is cooled for 3hrs .Then it is rolled out and the shell is removed with the help of a crane and pig is obtained (pig is the fused state of Alumina). The pig is shifted to pig yard and allowed to air cooling for five days. From the pig yard the pig is taken to the break yard. In the break yard the pig is broken by dropping an iron ball weighing about 2.5 ton, which is lifted with the help of electromagnet. The pig is thus broken and crushed. From it, the good parts for further processing like the crude are selected and the remaining scrap is separated for using it as a part of raw materials. The crude is the fed into the jaw crusher, which breaks it into small pieces. The crude is the conveyed to the grain processing plant. One pig gives 8-9 tonnes of Aluminium oxide.

4.2.5. Grain Processing Unit

51

Silo

Jaw Crusher

Roll crusher

Group grading

Packing

Quality checking

Final material

Individual grading

Chart No.8: Grain Processing Unit The basic operations taking place in grain processing are crushing and grading. The sizes 4 inches are the inputs to grain producing plant. In the first stage the crushed crude is passed through 36 tons crusher where its size is minimized to 0.75mm. After this a series of primary as well as secondary roll crushers takes place. From the secondary roll crusher the grains are passed on scalper. Grains used for bonded and refractories are then passed through canary mills for shaping the grains. With the help of magnet the grains are passed through graders, where the grains are separated into difference sizes and collected into bins. For manufacturing verified abrasives grains are further passed through a high intensity magnet separator. The grains are passed to deck grader where the grain are separated and collected into bins. Then the quality is checked and packing is done as per customer specifications.

4.2.6. Work shifts:

52

The company works in three shifts; 8am-4pm, 4pm-12am, and 12am-8am

4.2.7. Application of products

Bonded Abrasives: Brown Fused Alumina (BFA) is used for manufacturing of grinding wheels, which are used on metal of high tensile strength and in paper and clothes. Bonded abrasives industry is mainly meant for auto ancillaries, bearings, and other engineering industries. Coated Abrasives: The coated Abrasive industry makes parts for automobiles, hand tools, sanitary fittings, wood and leather pads.

53

4.2.8. PLANT LAYOUT

( ) - Production line

Source: www.murugappa.com

54

Locations
1- Recreation club. 2- Foot ball ground. 3- HR Department. 4- Four wheelers parking. 5- Two wheelers parking. 6- Weigh bridge. 7- Water cooling furnace systems. 8- Finance department. 9- GM office. 10- Visitors cabin. 11- Marketing department. 12- Systems department. 13- Godown (Bauxite). 14- Chemical lab (quality checking). 15- Employees rest room. 16- Pig yard. 17- Furnace. 18- Break yard. 19- Crusher. 20. Grain Processing Unit 21. Shipping Department 22. Mechanical Workshop 23. Maintenance Department 24. Store 25. Safety Equipment Store 26. Physical Lab 27. Visitors Rest room 28. Time Office 29. Security 30. Shipping Department Office 31. Canteen 32. R&D Department 33. Furnace Testing Lab 34. Electrical Maintenance Department 35. Employees Rest Room

4.3. COMMERCIAL DEPARTMENT

55

4.3.1. Commercial departmental Hierarchy

AGM SENIOR MANAGER (commercial) COMMERCIAL MANAGER 1 SUPERVISOR FOR EACH PLANT

Chart No.10: Commercial Department Hierarchy The main function of this department is procuring the raw materials and other required materials for the company. Commercial department invites quotation from various suppliers and make a vendors list on the basis of some criteria. Commercial department also rates the each vendor based on their previous experience, quality of the product, delivery speed and price, which is called vendor rating. Commercial department issues materials as per the order given by the concerned department through material requisition. If the required material is out of stock, the commercial department head invites quotations from the vendors. The best quotation is chosen and the purchase order is placed. On the arrival of the material, it is checked and issued to the concerned department.

4.3.2. Purchase procedure:

56

Purchase request

Authorization

Quotation

Takes the least quotation

Purchase order

Material collection

Payment for the material

Chart No.11: Purchase Procedure Purchase request: If the departments require any materials, they will place a material requisition to the commercial department. If the required material is not in the store, the store manager places a purchase requisition (PR) to the plant manager. Authorization: Purchase requisition is checked by the plant manager and approved for the quotation.

57

Quotation: Commercial department invites the quotations from the vendors. Takes the least quotations: Commercial department selects the least quotations Purchase order (PO): Commercial department takes the least quotations with the consideration of their previous experience, quality of the product and delivery speed then placing a purchase order to the appropriate vendor. Material collection: When the materials are reached to the company, the store manager inspects the materials and then issued to the concerned department.

4.3.3. Store:
The main raw material is alumina calcied supplied mainly by INDALCO, NALCO. The company is considering purchase from other sources also.

Every item is attached with a Bin Card, which has UNIX CODE NUMBER consisting of 14 digits. The card has description of the item, date of receipt, date of supply, balance, signature, remarks and stock number.

In this store, they also follow Just In Time (J I T) inventory systems. It means that the materials are being purchased only for the requirements. So there is no need to the materials are kept for long period. In this store, they purchase materials only after getting the material requisition. As their vendors are very close to the company, they can purchase materials only according to the requirements. There is no need to the bulk purchase. This Just in time inventory systems helps to avoid the unwanted cost, accumulation of stock and destruction of materials etc.

58

Some of the vendor who supply on time are: Goodwill enterprises Rose bearings S N Industries Group Divya Gas Agency Jos Electricals.

4.4. ACCOUNTS DEPARTMENT

59

4.4.1. Accounts Departmental Hierarchy

AGM (Accounts) Manager (Accounts)

2 junior officers

Dy MANAGER

2 SUPERVISORS

Chart No.12: Accounts Department Hierarchy Duties of the a/c assistant are cash transactions, a/c payable, tax remittance, payments and vouchers etc. Duties of the supervisors are maintaining the trail balance, capital expenditure, and debt management etc. Responsibilities of the manager a/c are making monthly report, auditing and fund management etc. AGM a/c has the full responsibilities of accounts department. The accounts department at Edappally plant does book keeping, accounting and reporting functions. It undertakes the work of pay sheet preparation of staffs and workers, payment of bills, vouchers and other financial transactions. They also prepare financial reports of the company. All the major financial decisions are taken at corporate office (chennai). This department also keeps income and expenditure accounts, which includes the sale and disposal visible cost, contribution, fixed overheads, operating and non-operating income etc.

60

The corporate office provides funds for working capital requirements. Departmental budgeting is also the function of accounts department. Duties of accounts assistant is cash transactions, accounts payable, payment of tax. Trial balance, capital expenditure are maintained by supervisor. Responsibilities of the manager a/c are making monthly report, auditing and fund management etc. AGM a/c has the full responsibilities of accounts department.

4.4.2. Major functions of this department are:

Keeping depreciation account. Preparation of income and expenditure account Preparation of budget for three years. Departmental budgeting Prepare management reports Coordinating the auditing functions To prepare business plan 3+1+3

For this, sales and performance are taken into consideration 3+1+3 i.e.; 3=past 3years performance, 1=current year performance and 3= forecast of the coming 3 years performance

4.4.3. Capital structure:

CUMI capital structure consists of equity share capital, preference share capital, reserve and surpluses, long-term loan, other loan and deferred tax liability.

4.4.4. Sources of funds:

CUMIs main source of fund is from the corporate office (Chennai).Issuing of share and short-term loans from the companys consortium of banks like State Bank of India are the other source of funds.

61

4.4.5. Future investment proposals:

CUMIs investment proposal is 1500 lakhs for capital planning. It includes 100 lakhs for mine purchasing, 500 lakhs for the application of tilled furnace, 500 lakhs for the largescale production of semi friable products and 400lakhs for miscellaneous. Every 3rd of the month cash flow statement, Flash Report consisting of sales contribution, contribution percentage, fixed expenditures, Profit Before Interest and Tax (PBIT) and 8th of every month Management Information System of profitability and Capex progress, Balance Sheet statements are sent to Corporate Office. Last year payment for EMD was rupees 195 crores and rupees 7.8 crores capital expenditure.

4.4.6. Accounting policies:

The company policy has a special accounting policy, which is the basis of the financial statement. It is in accordance with the accounting standards issued by the Institute of Charted Accounts of India.

4.4.7. Deferred revenue expenditure:

Preliminary expenses are amortized over a period of 5 years.

4.4.8. Revenue recognition:

Both income and expenditure are recognized on accrual basis. At the end of the accounting period, works in progress are recognized as revenue based on proportionate completion period.

62

4.4.9. Foreign currency transaction:

Transactions of foreign currency are recorded at the rates of exchange prevailing on the date of transactions and the exchange loss or gain is recorded within the profit and loss account.

4.4.10. Depreciation:
Earlier days Company adopted Written Down Value Method. However, the management felt that straight-line method would be more appropriate. So from 2000 onwards they adopted Straight Line Method.

4.4.11. Investment:
It is meant to be held for long term is accounted at cost.

4.4.12. Retirement Benefits:

The contribution of gratuity fund is based on an annual valuation and to the superannuating is funded to LIC of India.

4.4.13. Fixed assets:

Fixed assets are stated at a cost of acquisition and subsequent improvement thereto inclusive of taxes, dues, freight, and other incidental expenses related too acquisition, improvement and installation.

4.4.14. Borrowing costs:

Borrowing costs are capitalized as part of qualified fixed assets when it is possible that they will result in future economic benefits.

4.4.15. Inventories:
Inventories are valued at lower of cost and net realizable value. Cost includes all direct costs and applicable production overheads to bring the goods to the present location and condition. Excise duty on the finished goods is added to the cost.

63

The company also holds a special Murugappa economic value added method for better operating profit, faster sales growth reduction in incremental fixed capital, reduction in effective tax rate and lower WACC.

4.4.16. Retirement Benefits:

The contribution of gratuity fund is based on an annual valuation and to the superannuation is funded to LIC of India.

4.4.17. Capital structure:

CUMI capital structure consists of equity share capital, preference share capital, reserves and surplus, long-term loan, other loan and deferred tax liability.

64

4.5. MARKETING DEPARTMENT

4.5.1.Marketing Departmental Hierarchy

SVP

AGM AGM (Marketing) (Marketing)

RM (Marketing)

South region

East region

West and north regions

Key accounts manager

Chart No.13: Marketing Department Hierarchy CUMI has a team of marketing executives spread all over the country to facilitate larger sales and customer services. The company has a traditional marketing wing, which looks after the sales and services operations. The team also conducts market surveys and trend analysis, which helps the management to make correct and important decisions. It also helps in making modifications of existing products and introduction of new products. The main responsibilities of this department are the following: Retaining the regular customers Identifying new needs arising in the market Market expansions

65

Payment follow up As a part of market research, the sales executives study the requirements of their customers, both new and existing customers. They collect information from the customers and prospective customers directly. The first 15 days of every month they do the above- mentioned activities and the rest of the days they do the payment follow up. There is a value target and based on this production is carried out.

4.5.2. Main customers:

The main customer industries of the CUMI are: Automobile industry. General metal cutting industry. Polishing of metal surfaces. Marine paints etc. CUMI Vishwa vishal. Mechans in UK. Milthon Indoflogates. Tata refractories.

And the main customer companies are:

4.5.3. Branding:
CUMI made its brand well known in the industry through continuous hard work and determination. This was possible because of the following reasons: Consistent high quality and reliability Fair pricing practices and transparency Relationship management Customized product variants

66

4.5.4.Sales:
Ninety percentage of the sale is done through direct orders from the customers and 10 % is from the dealers. Last year the companys domestic sale was around rupees 45 crore and the export sale was around rupees 11 crores.

4.5.5. Distribution:
CUMI has no formal warehouse. They distribute their products directly to the consumers.

4.5.6. Pricing strategy:

In the domestic market, the company sells products at premium price. However, in the export market the company facing great competition from the Chinese products so in this market the company sells the products at economic price.

4.5.7. Promotion:
Promotion is done using the brochures, brand name, technical journals, and magazines, yellow pages of the internet and relationship management.

4.5.8. Competition:
Price and quality are the major competitive parameters in this industry. In the domestic market, company divides the entire market into four regions i.e. north, west, south and east. Each Dy.manager is being responsible for sales in the particular region. Last year the companys domestic sale was around 45 crore. In the Indian market, 35 % of the share is from CUMI.The main competitors of CUMI are Grind well Norton, Snam abrasives and Orient abrasives. In the export market, the company focuses on South-east Asia, Saudi Arabia, Japan, UAE, US, Canada, Russia and North America.

67

CHAPTER 5 OBSERVATIONS

68

5.1 SWOT ANALYSIS

Strengths

Company owns mines in Gujarat and also a hydroelectric project in Maniyar. This reduces the cost of procuring raw materials and production. The company provides value for money to the customers through their better quality and innovative products. The company treats customers with respect and concern CUMI is having a better organizational climate and manage the environment effectively. The company grows in an accelerated manner with new products and services.

The company has got strong R& D department, which have a policy that 6% of total sales every year should be from new products. R &D enables the company to have an edge over competitors in the new product development.

EMD has a very good working environment. It has got professionally managed personnel department. The company has got professionally managed sales team with strong back up of reputed dealers. ISO 9001 certification also helps in obtaining some orders as well as maintaining the standard of the company. To maintain equality and dignity all employees are provided with uniform and are strictly in need to maintain personal hygiene. The greatest strength of the company comes from the employees who are efficient, energetic and sincere. Dynamic top level management backs them. There is no barrier between management and workers.

69

Weakness

The salinity of water has to be improved. The roads within the company are to be developed so that men and materials can be moved easily. No permanent employees has been recruited for the past 14years , it lacks youth blood. The company has to make strict rules regarding wearing of Personal Protective Equipments like safety shoes , helmets , goggles , gloves , jackets etc. As the significant financial decisions are taken at Head Office at Chennai , the speed and efficiency of the branch is not satisfactory. Tha plant entirely depends on KSEB for power supply, therefore power failure can affect the production.

Opportunities

The company can introduce more of its products in the market. The company can produce new and improved products with less labor and advanced technology. More mines have to be found out. Globalization and liberalization can make its products globally acceptable. The company can employ best brains from top business and technical institutions for better working and management. Foreign acquisitions and mergers make it possible to tap overseas market.

70

Threats

Chinese products threaten the company since it is cheaper. CUMI faces stiff competition from world majors and local players. Power and other equipments are expensive. The demand for abrasives has fallen down because of industrial and economy slowdown.

5.2. OBSERVATIONS

71

The following are the findings of the study: The accounting procedure adopted in CUMI is fully computerized. They have introduced software ERP Ramco System. They do not keep any ledger manually. The total capital employed of the company is increased over the past five years. The total sales of the company are increasing. All the major financial decisions are taken at corporate office (chennai).

5.3. SUGGESTIONS

72

There is tremendous potential for growth in exports for most types of abrasives. Indian manufacturers are required to explore closely the international market, specifically for vitrified products and for labour intensive products "where India is cost competitive.

Machinery and equipment used in the industry has to be modernized to replace outdated existing equipment. The level of automation has to be increased to ensure improved product quality and consistency.

The demand for coated abrasives is likely to grow in the future mainly because of the larger productivities that are possible. Hence, development of machines and equipment suitable for coated abrasive machining should become a thrust area.

capital equipment which is commonly used by all abrasive manufacturers is not available easily and it can be suggested that development of such equipment could be taken up on a consortium basis to benefit the industry as a whole.

A majority of the manufacturers have their own testing facilities. However, a need for setting up common testing facilities is felt. Indigenous production of premium abrasives like zirconia, CBN, should be taken up in order to improve productivity of the products. The equipment for process control inspection, testing and quality control do not meet international requirements. Also, to bring down the cost of grinding' and to bring in new, high quality products, specialized manufacturing equipment will be required.

In house R&D efforts towards import substitutions of products/ processes should be initiated. To ease the situation of shortage of power it was expressed by the manufacturers that usage of LPG for industrial applications should be done Good warehousing facilities abroad, reliable transportation services and better infrastructure should be provided to ensure longevity in export markets.

73

CHAPTER 6 CONCLUSION

6.1.CONCLUSION:

74

There is tremendous potential for growth in exports for most types of abrasives. Indian manufacturers are required to explore closely the international market, specifically for vitrified products and for labour intensive products "where India is cost competitve. The demand for coated abrasives is likely to grow in the future mainly because of the larger productivities that are possible. Carborundum Universal ltd is a major player in the abrasives industry in India as well as the foreign market. It has a huge potential for becoming the world no 1 in the industry. Carborandum Universal Limited (CUMI) is an ISO 9000 certified company. It is excellent employer and producer of world-class abrasives and refractories. This has happened only with the support of staffs and workers in the company. The management is dynamic and supportive and patiently hears the workers voices and acts accordingly. The study has helped me know the objectives, vision and mission, and values rules and regulations followed by the company. Company for the standard functioning follows Japanese concept such as seiri, seition, seiro, seiketsu and shitsuke. The study gave a practical knowledge about the nature of the business firm and it had enabled me to have an exposure to the majority of the topics related to a company functioning, structure, policies, promotional activities, working environment, organizational culture etc. It also helped me to know the practical application of the theories in the business studies.

REFERENCES

75

Heinz Weirich, Harold Koontz Management a global perspective, pp 120-180, Matrix publications Parker P.A, Abrasives, in science encyclopedia, Vol 7, pp 201-207. New York, Aesculapus publishers Stephen P Robbins, Timothy Judge, Seema Sanghi, Organizational Behavior, 13th edition, NewYork, Pearson publications Tjader SW, Coltrane J A, & Taylor (1995), The abrasive industry, executive summary, 50, pp 750-765 retrieved from INFO Database. http://www.murugappa.com http://www..wikipedia.org