FOR THE PARTIAL FULFILAMENT OF THE AWARD OF

MASTER OF BUSINESS ADMINISTRATION

(2008-2009)

SUBMITTED BY

VICKY SHARMA
Roll No. MB07 102456
Institute of Engineering & Technology,
MIA, Alwar

1
The research work I undertook was an attempt to
over come the boundaries of books before I take
up this as my profession and start my carrier as a
practicing Manager.
My sincere thanks to all those gentlemen who by
their experience enriched my knowledge of
working in the Bhiwadi. I would like to thanks my
staff members who give me an idea to go ahead
with this research topic.
My special thanks to Mr. KRISHANA KARIWALA ,
Marketing DGM of KEI Industries Ltd. For his
valuable guidance towards making the final
report. I awe my deep sense of gratitude to
Mr.Gaurav, Sr Exicutive of marketing for
guiding me throughout the project study without
whose pain staking efforts support and guidance
the report would not have resulted in the present
form.
Heartily Thanks to Management department of
KEI Industries Ltd, whose give a platform for
make project report.

2
 VICKY SHARMA

I, VICKY SHARMA Student of M.B.A.,

Institute of Engineering & Technology,
MIA, Alwar (Rajasthan) herely declare that
all the information facts and figures
produced in this report is based on my own
experience and study during my open
Organization research in analyzing the
“ORGANISATIONAL CLIMATE SURVAY.”

I further declare that all the information

and facts furnished in this project report are
based on my intensive research findings.
They are first hand and original in nature .

VICKY SHARMA

Student of M.B.A. I
Year,
Place: MIA, Alwar

3
 Institute Of
Engineering
& Technogy

PREFACE
Marketing activities can be regarded as lifeblood
of all business concern. In order to enhance the
performance of marketing department and overall
success of a business concern, study of sales and
distribution channels, market survey, customer
satisfaction and competitive advantages. The
performance of a company very much depends on
marketing department. Therefore these activities
very much important for an organization.
No study can be termed complete if there is no
practical experience. Hence need for training has
become a real necessity. The training aim to
prepare students through a process of practical
experience. Practical exposure no doubt has
contributed a significant amount of knowledge to
me along with real life experience & was an ideal

4
 combination of academic knowledge & practical
experience.
KEI Industries Ltd. is infects a very ideal location
to gain practical experience. The experience
gained short duration, I am sure will go a long
way in all my future endeavors.

EXICUTIVE
SUMMARY

Our Success Mantra

"We are benefiting from our leading market positions in certain core sectors
of the economy. The Steep rise in our revenues reflects growing confidence
of our customers in our products in raising productivity and build modern
energy-efficient power networks. Improvements in operational performance
and management of key projects are clearly showing up in our earnings."

Mr. Anil Gupta

Chairman & Managing Director

5
 COMPANY PROFILE
HISTORY OF KEI

A Humble Beginning
1968: Established as a Partnership Company.
1968: Started manufacturing Switch Board Cables for DOT.
1985: Started manufacturing Control, Instrumentation and Thermocouple Cables.
1993: Added manufacturing of PVC/XLPE Power cables up to 3.3 KV .
Our Grow th Story
1994: Diversified into Stainless Steel drawings with Pilot Plant
1995: Came up with First IPO.Became Public Ltd Co.
1996: Installation of Major SSW plant at Bhiwadi
1997: Another plant added at Bhiwadi for LT PVC / XLPE Cables.
2001:Started manufacturing Rubber Cables upto 11 KV.
2002:Established JFTC Plant at Silvassa
2005:Converted JFTC Plant in Silvassa into manufacturing of existing cable
range. – Rebalancing Act
2006: Expanded Bhiwadi unit which is equipped to manufacture upto 33 kV HT
XLPE Cables with Dry curing inert nitrogen gas and with tripple extrusion
(Single cross head) process.
2006: ERP Baan S/W system implemented in the organization to ensure
Transparency and efficacy.
2007: Ongoing Expansion at Bhiwadi Unit for up gradation of HT power cable up to
132 kV & LT cable.
2007 : Proud recipient of Corporate Governance Rating

6
OF

7
KEI Industries Limited on ISO 9002 : accredited company, started production of
Stainless Steel Wire in 1994. Since its beginning KEI has used state –of –the -art
technology with strong emphasis on product quality and customer satisfaction . As a
result of continuous improvement in every aspect of business within a short span of time
KEI has become one of the leading Manufacture & Exporter of Stainless Steel Wire in
Northern India. Continuous product innovation with regular upgradation of production
process KEI has achieved Brand name in the Domestic & International Market. We
export our products to various countries like United kingdom, USA, Mexico, European
Countries and the far east.

8
KEI’s Stainless steel Wire division has a manufacture capacity of 3600 MT per year
ranging from wire diameter 6.00 mm to 0.10 mm in various grades like 304, 304L ,316,
,316L,302,321,304HQ,302CHQ,430,434 and Eltrodes grades AWS 308L,309L, 316L,
310 ,312 , 430L.
These wires are available in different finishes such as soft, quarter hard, half hard, ¾ hard ,
Full hard , depending upon its finil application, and surface finishes such as bright, matte,
coated, decoated and as per customer’s specification.

KEI industries limited is an established player in the power

cable segment and among the largest cable manufacturing
companies in India. KEI industries limited manufactures high
and low tension cables (EHT, HT & LT), control and
instrumentation cables, house wires and stainless steel wires.
KEI is one of the few companies in country to manufacture
speciality cables including braided cables, fire survival and Zero
halogen cables.

Electrical Cables Housewires Stainless Steel

Wires
Know more about our Watch out our new
HT pack- Check out our stain-
Cables manufactured aging for HOMECAB less steel wires for
(Upto 66KV) a flame retardant various industrial
using German product. applications.
Technology.

9
KEI industries limited is an established player in the power cable segment
and among the largest cable manufacturing companies in India. KEI
industries limited manufactures high and low tension cables (EHT, HT &
LT), control and instrumentation cables, house wires and stainless steel
wires. KEI is one of the few companies in country to manufacture
speciality cables including braided cables, fire survival and Zero halogen
cables.

Housewires
Electrical Cables Stainless Steel Wires
Watch out our new
Know more about our HT Check out our stain-
pack-
Cables manufactured less steel wires for
aging for HOMECAB
(Upto 66KV) various industrial
a flame retardant
using German applications.
product.
Technology.

Genesis

• 1968: Established as a Partnership Company.

• 1968: Manufacturing of Switchboard Cables for DOT starts.
• 1985: Manufacturing of Control, Instrumentation and
Thermocouple Cables begins.
• 1993: Manufacturing of PVC/XLPE Power cables up to 3.3 KV
added to existing portfolio.

Evolution

10
 • 1994: Diversified into Stainless Steel drawings with Pilot Plant
• 1995: Launch of the First IPO, went Public.
• 1996: Installation of Major SSW plant at Bhiwadi
• 1997: Installation of another plant at Bhiwadi for LT PVC /
XLPE Cables.
• 2001: Scaling up with manufacture of Rubber Cables up to 11
KV.
• 2002: Established JFTC Plant at Silvassa
• 2005: Upgraded JFTC Plant in Silvassa to manufacture existing
cable range - Rebalancing Act
• 2006: Expansion of Bhiwadi unit to manufacture up to 33 kV HT
XLPE Cables with Dry curing inert nitrogen gas and with triple
extrusion (Single cross head) process.
2006: Introduced ERP Baan S/W system in the organization to
ensure Transparency and efficacy.
• 2007: Upgrading Bhiwadi Unit to manufacture HT power cable
up to 132 kV & LT cable.
• 2007: Proud recipient of Corporate Governance Rating

• 2007: Setting up of 100% EOU at Chopanki

11
 KEI CABLING SOLUTIONS SPECTRUM

KEI has earned a formidable reputation by nurturing

relationships, ensuring timely execution of orders and
becoming a reliable partner in executing client projects.
Repeat orders received year after year from satisfied
customers bear testimony to our uncompromised quality and
customer commitment.

Our cost-effective quality and reliable products range that

meets rigorous technical requiresments of our customers
has made us an undisputed industry leader. KEI has
invested in building an intelligent infrastructure which
ensures clients receive products that conform to their
stringent requirements.

KEI is perhaps one of the few companies in India to offer

customers a unique range of specialty cables such as fire
survival cables, zero halogen cables and braided cables. An
ability to utilize more than 90% of its resources makes KEI
one of the most efficient players in the industry. KEI enjoys a
unique flexibility to switch production between HT and LT
cables depending on prevailing market conditions and
demands.

An ISO 9001:2000 certified company; KEI carries out

stringent quality control measures under surveillance of a
competent team of technocrats and quality enablers.
Continuous Product Innovations and cutting-edge R&D at
KEI's in-house labs is what contributes towards constant
evolution in our offerings and services. All KEIs cables and
wires are of a superior quality, a reason why they have been
12
accredited and certified by Testing Agencies across the
globe.
KEI Industries Limited strives to earn the trust of its shareholders, and provides
regular, complete, and transparent information using a variety of means for
different shareholder needs:

• KEI Industries Limited publishes Annual Report with annual financial &
operational Highlights. These documents give insight into the Group’s
operations, as well as a commentary on the Group’s results and other
important issues.
• All of KEI’s shareholder information is available on the Group website,
www.kei-ind.com, with a Shareholders Corner under “Investor Relations” on
the home page.
• KEI’s senior executives regularly hold meetings with analysts and investors.

Credit Analysis and Research limited (CARE) has

assigned “CGR 3” {CGR THREE} rating to the corporate governance practices of
KEI industries limited. This is on a rating scale of CGR 1 to CGR 6 where CRG 1
denotes the highest rating. The rating of CGR 3 implies that in CARE’s opinion,
the company has adopted corporate governance practices which would provide
its stakeholders average level of comfort on the degree of corporate governance.

13
Select the cable suiting your needs. Whether your need is copper core or
aluminium core; whether you want armoured or unarmored cable, find them all
here confirming to different standards. If you don't find what you are looking for.
Contact us, we also provide custom-manufactured speciality cables.

• HT Cables
• LT Cables
• Control Cables
• Instrumentation Cables
• Thermocouple Extension/Compensating
• Rubber Cables
• House Wires
• Single/Multicore Flexible Wires
• Winding Wires

• Stainless Steel Wires

The widest and most comprehensive spectrum of

product offerings with nearly four decades of an unblemished track record is what
makes KEI one of the forerunners in the industry today. Having secured the LT &
HT cable domains, KEI is now ready to take up Extra High-Tension Cables
manufacturing for modern power transmission - few companies in India have this
capacity.

KEI is perhaps one of the few companies in India to offer customers a unique
range of specialty cables such as

• Fire survival cables,

14
 A CGR 3 rating has been assigned to the
corporate governance practices of KEI Industries Limited. This is
on the rating scale of CGR 1 to CGR 6 where CGR 1 denotes the
highest rating. The rating of CGR 3 implies that in care’s opinion,
the company has adopted corporate governance practices which
would provide its stake holders average level of comfort on the
degree of corporate governance.

The rating reflects KEI’s clear and distinctly identifiable ownership

pattern, well defined organizational structure with experienced
professionals at the top, delegation of powers with good clarity and
purpose, adequate MIS suitable to the business of the company,
good track record of debt servicing and general compliance with
the statutory and regulatory requirements. The rating also factors
in the scope for improving the level of participation of independent
directors in formulation of business goals, policies, policies and
strategies and improving oversight of the board.

Care’s Corporate Governance rating (CGR) is an opinion on the

relative standing of an entity with regard to adoption of corporate
governance practice of an entity. It provides information to
stakeholders as to the level of corporate governance practice of an
entity.

15
At the heart of kEI’s strategy, human resources demand a strong
proactive approach focused on activities and skills and related to local
job market conditions. This approach intends to bring dynamism to
HR processes and emphasizes the “business” dimension.

Be a part of a Sucessful Group

To drive its growth and prepare for the future, KEI strives to develop
and promote quality employees and adopt a voluntarist Human
Resources approach. Its goals :

• Build teams’ commitment

• Develop skills
• Share knowledge and best practices
• Encourage mobility
• Reinforce customer orientation
• Increase the Group’s attractivity for its emp

Training

KEI Allow each employee to enrich his or her skills and performance
through a targeted training program means.

• Mobilize personnel around shared values, goals and methods.

• Contribute to the Organisations’s success.

16
For the past four years, KEI has been continuously
strengthening its financial results year after year
demonstrating the successful deliveries of its strong
strategies and the quality of its overall operational
performance.
Net sales increased 101 per cent to Rs
6039.10 mn (2006 : Rs 3001.65 mn)
PBIDTA up from Rs 458 mn in 2005-06
to Rs 874 mn in 2006-2007, an increase
of 91 per cent.
Profit After tax up 54 per cent to Rs.
401.68 mn (2006: Rs 260.07 mn)
Earning Per share increased by Rs, 1.95
from Rs. 5.72 in 2005-06 to Rs. 7.67 in
2006-07.

Organization’s export revenues grew by an impressive 270

per cent an increase from Rs 226 mn in 2006 to Rs 835 mn
in the current fiscal year. Besides this, the company raised
USD 36 mn (Rs. 1640 mn) through a Foreign Currency
Convertible Bond (FCCB) issue in November 2006. The
bonds have been issued at 1% coupon rate and are
convertible within 5 years at the price of Rs. 86/-.

OUR MISSION
17
To emerge as one of the world’s leading electrical cable
& wire company, offering our esteemed customers to
use our electrical Wires & Cables effectively and
increase industrial productivity in a sustainable way.

Our Vision 18
KEI , with its strong technology competence in Cables & Wires
business, broad application know how & ability to provide
customized power cable solutions shall deliver an attractive &
profitable growth by providing its customers with best cable & wire
products. We shall help our customers to improve their
performance and productivity by minimizing power losses &
lowering environmental impact.
Continuous Product Innovations & R&D are the key
characteristics of our product offerings and services. We believe in
building long lasting & value creating partnerships with our
customers and suppliers.
KEI is committed to attracting & retaining dedicated & skilled
professionals offering its employees an attractive work culture
and developmental opportunities.

By 2010,KEI Industries Limited will be recognized as

India’s top electrical cable & Wire manufacturing
company in terms of growth and profitability, value
creation, sustainability and ethical behaviour.

Fact KEI: File

19
 • Among the leading Electrical
power cable company in India
with strong market positions in
its core business
• Core business organized into LT
& HT Cables, Control &
Instrumentation
Cables,Elastomeric Cables and
Single & Multicore Flexible wires
& House wires.

• Headquarters at : New Delhi,

India
• More than 2000 employees
across the country
• Gross Sales FY 2007: 159 US $
m
• EBITDA : 20.3 US $ m
• Market Cap. : US $ 127 m
• Listed on : NSE, BSE, DSE, CSE
& Luxembourg Stock Exchange
through GDR & FCCB

Who we are

20
KEI is among leading players in Electrical Cable
industry that enable industrial & domestic customers
with one stop shop for electrical cabling solutions.

Our goal is to create value for our stakeholders by

meeting the stated & implied needs of our customers,
employees and the communities where we exist & do
business.

21
 BOARD OF DIRECTORS
KEI Industries Limited mainly Belongs to Eight Members in
their Organizational Structure:

1. Mr. Anil Gupta

2. Archana Gupta

3. Sunil Gupta

4. Vikram Bhartia

5. K.G Somani

6. Pawan Bhulsoria

7. Vijay Bhushan

8. Rajeev Gupta

KEI Today

22
Our Finest Facilities Our Amazing Capacities

Delhi
Bhiwadi Chopanki (100% EOU)

Silvassa

Production Capacities in Kms

250000 HT Power Cables

(PVC/XLPE)
LT Power Cables ( PVC /
XLPE)
Control Cables ( PVC /
XLPE)
Instrumentation Cables (
PVC / PE)
Rubber Cables

House Wires
3000 15000
12000
7000
3000

23
KEI’s Pan India Presence : Our Sales & Distribution offices

Ludhiana

Chandigarh

Delhi

Jaipur Assam

Baroda
Kolkata

Mumbai
Pune

Hyderabad

Bangalore
Chennai

Our Sales & Distribution covers

All major Metros & A Class Cities
to serve our esteemed
Customers

KEI’s Global Footprints : Our Overseas Markets

24
 GERMANY

CANADA
FRANCE

UNITED STATES CYPRUS

PHILIPPINES
IRAQ
ITALY IRAN
VIETNAM
UAE BANGLADESH
QATAR
SAUDI ARABIA
MEXICO
NIGERIA KUWAIT
MALAYSIA
SRI LANKA
GHANA

KENYA
AUSTRALIA
MAURITIUS

25
KEI Today : Our Sales & Product Wise Share in Markets

KEI Key M arkets KEI Product Wise Sales Break-Up

12%

20%
70%

88%
10%

Cables & Wires SSW

International Markets Institutional Sales Retail

Strong Presence in B2B Domain Power Cables & Wires : The

Backbone of our Organization

With the Organization already enjoying strong foothold in the

institutional sector, KEI is all geared up to set up its marketing and
distribution efforts to establish its house wires a household brand
name
INTRODUCTION OF TOPIC

26
 MARKET SURVEY

OBJECTIVE OF THE SYUDY

27
28
RESEARCH METHODOLOGY

DATA COLLIONECT

Primary Data - primary data are those

data which is collect first time through :-

1. Direct Interview

2. Telephone Interview

3. Market Survey

4. Observation Method

29
 SURVEY METHODOLOGY

For carrying out this research both secondary and primary data
were used Secondary data are that information ,which management
already has been in the form of annual review ,journals, and
research carried out by marketing Syndicate firms.

In order to ensure the survey result a standard questionnaire has

been prepared for a suitable score from rating given for each
question. Primary data can be gathered by survey, visit to company
to get the primary data. This is needed for successful completion of
study.

QUESTION

Question have been used in the questionnaire provide a

respondents a fixed selection of answer the choose form. These
questionnaire are easier to administer and analysis. It also offers the
least scope for interviewer to produce data for rating and quality the
strength to response.

SAMPLING

30
 The purpose of sampling is to select a small numbers of
units from the target population in such a way that the sample truly
represents the total population being surveyed. The exact customers
to be surveyed were carefully selected before actually meeting them
in person. This method is simple, since one need only to ask the
customer and then try to look into the meaning that is assigned by
him to the product.

The primary data collected not only give first hand information
about the customer ‘s view of the product but also give valuable
information about their awareness about the competitor’s
product.

SAMPLING TECHNIQUE

In determining the technique for drawing the sample three

important aspects were paid attention to:-

• Sampling unit:

“Who is to be surveyed” The sampling unit defines

the target population. In the present research all the companies
those uses of S.S Wire of any grades and any Diameter in their
products in Bhiwadi, Kishangarh, Tijara, Alwar and Jaipur
constitute the entire population.

31
32
33
 Varun Beverages limited one of the leading of Pepsi Cola
Company. The group has all around experience in setting up and
running per bottling plants in India and Nepal. The past experience
of the family in Beverage industry in sixties when it had the
franchise Agra. Family has in total 19 Bottling plants in India and
produces and markets 44% of Pepsi requirement in India.

The group also became the first franchisee for Yum restaurants
International in India. It has total 38 Pizza Hut Restaurants under.

34
All these restaurants are making good profits and are dominating the
Market.

Promoters and founders of Varun Beverages

Limited
The Main Father of Varun Beverages is to Mr. Jaipuria. He was
presented the prestigious Pepsi Co “International Bottler of the Year
for the year 1998 at a glittering award ceremony at PepsiCo
Centennial year celebrations at USA, The award was presented by
Mr. Donald M. Kedall, Founders of PepsiCo group in the of Mr.
George Bush, the 41 s t president of USA, Mr. Roger A.Enrico,
chairman of the board PepsiCo Inc. and Mr. Craig Weather up,
President of Pepsi Cola Company .

Varun Beverage Limited mainly Belongs to five Members in

their Organizational structure:

1. Mr. R.K. Jaipuria

35
2. Mr. K. shankar

3. Mr. C.K. Rastogi

4. Mr. K.K. Mudgil

5. Ms. Devyani jaipuria

36
37
 BUSINESS SEGMENT

Divided in to three Business Segment

It is a truism that with out competition these would be no market to

meet the emerging challenges of the market place consolidation of
shareholding pattern is some thing of an absolute must. The group
has taken initiative is this direction which will go a long way in
becoming a leading market player.
The businesses are being managed though the following entities: -

RKJ Group Investment Companies

Beverage Food Education

Varun beverage Ltd Deyani international Champa Devi Jaipuria
Private Ltd. Charitable trust
Goa Bottling co.Pvt. Pizza Hut DPS, Gurgaon
Ltd.
Varun beverage Costa DPS, Jaipur
(Nepal Pvt. Ltd.) MMI, Gurgaon
Nectar beverage MMI, GK II
Pvt. Ltd.

38
Pizza Hut Pepsi Bottling Plant Education

1. Jaipur, M I Road 1. Goa, Salcete 1. DPS Gurgaon

2. Delhi, Defense Colony 2. Karnataka, Dharwad 2. DPS Jaipur

3. Delhi, Greater Kailash-I 3. Rajasthan, Bhiwadi 3. MMI Gurgaon

4. Agra, Handicraft Nagar 4. Rajasthan, Jodhpur 4. MMI New Delhi

5. Noida, Sector-18 5. Rajasthan, Jaipur

6. Delhi, Alaknanda Delhi 6. Rajasthan, Alwar

7. Uttar Pradesh, Greater

7. Delhi, Green Park Delhi
Noida

8. Chandigarh, Sector-35 8. Uttar Pradesh, Kosi

9. Delhi, Basant Lok 9. Kathmandu, Nepal

10. Delhi, Connaught Place

11. Chandigarh, Sector-26

12. Delhi, Karol Bagh

13. Delhi, New Friends

Colony

14. Delhi, Vikaspuri

15. Kolkatta, Ballygunge

16. Kolkatta, Camac Street

17. Delhi, Saket

18. Noida, Centre Stage

19. Ghaziabad, Kaushabi

20. Jaipur, Amarpali Circle

21. Jaipur, Gaurav Towers

22. Faridabad, Ansal Plaza

23. Ludhiana, Ferozpur

Road

24. Amritsar, Lawrence

Road

25. Jallandhar, B.M.C Chowk

26. Lucknow, M.G Road

27. Gurgaon, DLF City

Centre

28. Gurgaon, Metropolitan

Mall

39
29. Gurgaon, Sushant Lok

30. Kolkatta, Forum Mall

31. Chandigarh, Manimagra

32. Delhi, Connaught Place

33. Delhi, Pitampura

34. Lucknow, Eastend Mall

Multiplex

35. Dehradun, Rajpur Road

36. Calcutta, Salt Lake

37. Delhi, Janakpuri

38. Noida, Sector 61

PROJECT AT A GRANCE

40
1. Name of the industrial concern VARUN BEVERAGES LIMITED
UNIT-11 (BHIWADI)

2. Constitution Limited Company

3. Registered/Head Office F- 2/7,Okhla Industrial Area,

Phase-11, new delhi-110020

4. Factory Plot No. SP-646 & F-647 –653,

RIICO Industrial estate,
CHOPANKI BHIWADI,
ALWAR(Rajasthan)

5. Name of the directors Mr. R.K. Jaipuria

Mr. K. Shankar
Mr. C.K. Rastogi
Mr. K.K. Mudgil
Ms. Devyani jaipuria

6. Industry Soft Drinks

7. Product soft drink under license from PEPSI

- Pepsi
- Mirinda orange
- Mirinda lemon
- 7 up
- Evervess soda

8. Area of operation Rajasthan, & Northern Madhya

Pradesh.

41
 9. Cost of project (RS. In lacks)
Land 69.00
Land development 100.26
Building 477.90
Plant & machinery
-- Imported 155.57
-- Indigenous 437.54
Electrical fitting & appliances 62.00
Furniture & fixture 04.00
Containers bottles & shells 45.00
Contingencies 25.57
Pre—operative expenses 23.17
Margin money for working capital 50.00
TOTAL 1450.00

10. Means of finance:

Preference shares/ long term loan 450.00
From promoters
Term loan from bank 1000.00
-----------
TOTAL 1,450.00

11. Proposed programmer and The proposed programme

Production capacity involves setting up a
plant with following
capacities soft drinks.

42
 - 300 ml bottles
- 400 bottles per
minute

12. Capacity utilization year % of

utilization
1 s t year 71.4
2 n d year 80.4
3 r d year 84.8
4 t h year 89.3
5 t h year 93.8

13. No. Of working days 336 days p.a.

14. No. If shifts Peak season Triple shift

(4 months) working
Average season Double shift
(4 months) working
Sleek season single shift

15. Manpower utilization 120 person

16. Implementation period 6 months

17. Cost of production Rs.1160.73 Lacks

(In 3 r d year)

43
18. Net sales including fright Rs.2146.13 Lacks
& Rent on containers. (In 3 r d year)

19. Net profit after tax Rs. 285.40 Lacs

(In 3 r d year)

20. Technical consultant/ M/s Pepsi foods limited,

Franchisers 3-B, DLF CorporatPark,
S Block, phase-111,
Qutab Enclave,
Gurgaon, Haryana
(India)

21. Brand name of product Pepsi, Mirinda orange &

Lemon, 7up, Evervess
soda.

22. Technical aspects The key plant machinery

for the unit comprises of
Bottle washer, counter
pressure filler,
refrigeration plant,
intermix unit, boiler,
generator, water

treatment plant, and

syrup tank. The
equipments are acquired

44
 under the guidance of
PEPSI FOODS
LIMITED from
approved sources. The
Industrial shed and
building are being
constructed under the
supervision of very
competent Associates
Pvt. Ltd.
New Delhi and in
consultation with
Technical consultant for
the systematic housing
of aforesaid machines.
The erection of the plant
and machines are being
carried out by the plant
suppliers under the
supervision of technical
team in consultation
with the technical
department of PEPSI
FOODS LIMITED.

23. Raw Material Sugar, concentrate CO2

Gas, crown corks and
chemicals constitute the

45
 main raw materials for the
product. The unit has been
assured for the adequate
supply of concentrate from
PEPSI FOODS LIMITED
under the franchise
Arrangement. The other
raw materials like sugar,
crown corks, CO2 gas and
other chemicals are
easily available in Local
markets.

24. Sales Tex The Company shall

Avail the benefit of
sales tax exemption s
per rules in Rajasthan,
which presently provide
sales tax exemption on
turnover equal to 100%
of fixed capital
investment.
THE PROJECT AND LOCATION

The proposed project is to set up a complete new plant for

manufacturing of bottled carbonated soft drinks at Alwar,

46
Rajasthan, the capacity of the proposed plant shall be 400 bottles
per minute for soft drinks. Considering the demand pattern that is
being followed by this product, the workable annual installed
capacity is around 22.40 lacs creates of bottled soft drinks. The
utilization of the installed capacity has been assumed on highly
conservative, workable and down to earth basis and based on
demand and past performance of the similar plants.

END PRODUCT
The end products of the project are carbonated beverages marketed
under the brand names viz: “Pepsi”, “Mirinda orange”, “Miranda
lemon”, “7up”, “slice”, etc.

Following product mix has been assumed for the purpose of this
project report: -
Flavors Brand names % Share
COLA Pepsi 70%
ORANGE Mirinda Orange 12%
CLOUDY LEMON Mirinda Lemon 7%
LEMON 7up 3%
SODA Evervess Soda 8%
It is expected that sixty percent of production will be achieved
during peak season i.e., march to June.

47
Area of Operation

The project will cater to the following areas.

Rajasthan

All the districts of Rajasthan.

Madhya Pradesh

1. Gwalior

2. Bhind

3. Shivpuri

4. Dhatia

5. Dabra

ECONOMIC CONSIDERATION AND LICENSING REQUIREMENT

1. F.P.O. LICENCE

48
 The company shall make necessary application to Ministry of
food processing, New Delhi For grant of F.P.O. License.

2. PREVENTION OF FOOD & ADULTERATION LICENCE

The company shall make necessary application to prevention

of food and adulteration Department (PFA) Local health
authority for grant of license.

3. BOILER LICENCE

Boiler License is not required s the capacity of each of the

boiler is less than 1,000 Kgs.

4. EXCISE DUTY

Necessary application shall be moved with the collector and

asstt. Collector, Customs &
Central Excise, Jaipur (Rajasthan) for grant of Excise No.

5. SALES TAX

The Company shall apply for sales tax registration with sales
tax department.

6. INCOME TAX

The Company will be entitled to all deductions under section

80 as per Income tax Act, 1961, for simplicity in working,
income tax is considered @ 35 % of profit.

7. POLLUTION

The company shall obtain No- Objection Certificate from

pollution Board, Alwar (Rajasthan).

8. FACTORY ACT LICENCE

49
 The company shall make necessary application with the chief
Inspector of Factory/ Directorate of Factory, Alwar
(Rajasthan) to obtain the License.

9. S.I.A. REGISTRATION, NEW DELHI:

S.I.A. Registration application shall be made to Department of

Industries, New Delhi.

RAW MATERIAL

50
The main raw material of the unit is sugar, beverage base
(concentrate) crown corks and CO 2 processing/treatment chemicals
like caustic soda. Sugar is available in the open market. The supply
of beverages base is ensured to the unit as per the franchise
agreement with Pepsi food limited. Being closely linked with
market, procurement of chemicals, crown corks and CO 2 gas shall
not be a problem. Detailed estimates of raw material requirements
are given in the annexure.

MANUFACTURING PROCESS OF SOFT DRINKS

The term soft drinks normally denote carbonated flavored drinks.

The soft drinks are in great demand not only because of the

51
desirable qualities of taste and flavour but also because they are
readily available in sterile bottles and there fore are safe for
quenching the thirst anywhere out doors.

WATER
The water available either from the municipal supply or from bore
well is related by demineralization or reverse osmosis process to
obtain germ free soft water both for manufacturing the beverage and
for washing the bottles. The water treatment there fore, consists of
chemical treatment, filtration through send and carbon filters and
softening with a softener or a demineralization plant or reverse
osmoses depending on the water characteristics.

SUGAR SYRUP PREPARATION

The next step is the preparation of raw syrup. This is prepared by
dissolving measured quantity of sugar in the treated water.
For this purpose a steam jacketed stainless steel tank of adequate
capacity with an agitator is used where in the sugar is dissolved in
hot water unto 850 C for about 20 minutes to kill the
microorganisms.

This syrup is then filtered through a filter press using additives like
activated carbon and high-flown super cell so that syrup after

filtration is free from impurities. The hot filtered syrup is then

passed through S.S. Platter Heat Exchanger to cool it to room
temperature.

52
FINISHED SYRUP PREPARATION
The next step is the preparation of ready syrup. In this step the raw
syrup room after filtration and cooling is taken is S.S. Tanks in
which the correct quantity of additional
Treated water and the essence (non alcoholic beverage base
supplied by PEPSI FOODS LIMITED) are also added. This ready
syrup is mixed thoroughly with a agitator provided in the S.S. tank
and allowed to mature according to maturation period specified for
each type of flavour.

BEVERAGE PREPARATION
The ready syrup after the maturation is pumped into the Syrup-
mixing unit (Majonier Carbo- cooler) where the ready syrup is
further diluted by addition of treated water so that the beverage is
ready. This beverage is then chilled to very low temperature (IC)
and then pumped into a saturator (Carbonator.).Carbonator is a
pressure vessel made of stainless steel and consisting of number of
S.S. film plates to form a very thin film of the beverage for
absorption of carbon – di-oxide that is injected in the carbonator
vessel. After carbonation the soft drinks is ready for filling in the
bottles.

FILLING
Filling is done through automatic counter pressure fillers which fills
at a very repaid speed the

53
Bottles on continuous basis to the exact filling level and the bottles
are crowned with crown caps automatically.

BOTTLE WASHIHG
The bottles received from the market are first washed through a
bottle washer, which consists of soaking compartments containing
caustic soda and number of jets where soft water and hot caustic
soda solutions are used for thoroughly cleaning the bottles. The
cleaned bottles are inspecting before they are passed to the filler on
a bottle conveyor. Similarly, the filled bottles are also inspected
before they are packed in crates of 24 bottles each, and are released
to the market.

QUALITY CONTROL
The success of a product in the market place depends mainly on its
quality. The soft drink industry adopts strict quality control
procedures to analyses quality of the product that is being bottled.
Here the product is picked up after filling and tested out for gas
content, sugar content, organoleptic microbiological quality. Hence
the quality invariable remains constant because of continuous on-
line checking.

MANUFACTURING PROCESS

54
 PROCESS FLOW CHART

WATER TREATMENT SUGER RAW Q.C.

AND SOFTENING SUGAR TESTING
CHEMICALS & SYRUP
ADDITIVES

PEPSI FINISHED SUGAR Q.C.

CONCENTRATE SYRUP

BEVERAGE BEVERAGES Q.C.

CHILLING PREPARATION TESTING

CO2 CARBONATION OF BEVERAGE

BOTTLE INSPECTION BOTTLE FILLING

WASHING & CROWNING

CODING

INSPECTION Q.C.

DESPATCH

EFFLUENTS

55
The unit does not discharge any unpleasant effluents. The waste
water from the plant will be collected and systematically treated
through an effluent treatment plant wherein the suspended solids,
BOD, COD, Total Solid a & PII will be brought down to the
standards as laid down by the Utter Pradesh Pollution Control
Board. Rajasthan Pollution Control Board is applying the project for
clearance.

PROMOTERS

56
The company is being promoted by the famous Jaipuria group, who
has more than 35 years experience in bottling line. At present
Jaipuria group has bottling plants at greater Noida, Jaipur, Kosi,
Agra, Nagpur, Hyderabad, Delhi, Bhopal, Cuttak, Jamshedpur,
Guntur, Vishakhapatnam, and Raipur.

These plants contribute to more than 40% of total sale of Pepsi in

India. The group also has interest in lce cream and food sector. It
has two units for the manufacture and marketing of lce cream as
mentioned under:

NAME OF THE COMPANY LOCATION

1. DEVYANI FOODS LIMITED AGRA

2. NAGPUR FROZEN FOODS PVT. LID. NAGPUR

These companies manufacture ice cream under the brand name of

“Walls” and are marketed by LEVERS through their associate
company brook band Lipton (India) Ltd.

PEPSI Foods group is the other major promoter of the project and
has participated in the equity to the extent of 26% Pepsi is one of
the largest soft drinks manufacturer in the world having presence in
about 147 countries.

MANAGEMENT AND MANPOWER UTILISATION

The company shall be professionally managed. All the department

heads will be professionally qualified having good experience. For

57
various other positions local talent will be attracted. At present the
company is working on these lines and recruitments of personnel is
under process the top management of the company consists of three
Directors. The hierarchy of other management personnel and staff is
as under.

BOARD OF DIRECTORS

EXECUTIVE DIRECTORS

PRODECTION MARKETING ACCOUNTS MGR ADMINISTRATIVE

WORKS MGR. SALES MGR. COMPANY SCY. MGR.

SALES CHIFE A/CANT ADMN. STAFF

CHIEF Q.C.
ENGINEER EXEC. CLERKS CASHIER

SHIFF ENG CHEMISTS PEON

FOREMAN SHIPPING PURCHASE STORE

EXCISE INCH. MGR. INCHARGE

OPERATORS ASST. CLERKS ASSISTANT ASSISTANT

PURCHASE MGR. CLERKS

The security aspect of the plant will be looked after by a

professional security agency.

58
This being seasonal industry, the labor force will be at its peak only
during season that is from March to June with a strength of about 80
laborers while during off season about 40 laborers will be engaged.

THE MANPOWER REQUIREMENT FOR THE PROJECT IS

ESTIMATED AS UNDER.

S.NO. DESIGNATION NUMBER

1 V.P.Operations 1
2 General Manager Accounts 1
3 Manager HRD 1
4 Marketing/Purchase Manager 1
5 Quality Control/maintenance Manager 1
6 Shipping &Excise Manager 1
7 Store Incharge 3
8 Clerical Staff 12
1. Administrative 3
6
2. Accounts
3
3. Shipping
9 Cashier 2
10 Peons 6
11 Security staff 6
1. Supervisor 1
5
2. Watchman

The staff will be entitled to provident fund, ESI, Bonus Earned

leave and other benefit according to norms laid down under various
provision of labour law and also general trend prevailing in

59
industries at Rajasthan. The expenditure towards these are assumed
to be 235 of their salaries. It is also expected that the annual
increase in salaries and wages will be around 10% of the previous
years salaries/wages.

MARKETING AND SELLING ARRANGEMENTS

In these progressive days, soft drink has become a part and parcel of
one’s daily life. one does not consider soft drink as a luxury any
more. This has resulted in the increase in perception consumption of

60
soft drink which is now almost a couple of liters/person/year from a
meager one bottle (quarter liter)/person/year. It is envisaged that
this industry will have growth rate of 20% especially with the
arrival of international giants like PEPSI & COCK. In urban as well
as rural market, soft drink is available at an arms length. Thanks to
the systematic distribution system, which is making chilled
available in remote parts of our country.

The promoters are having PEPSI franchise for 29 district of which

16 are in Utter Pradesh, 6 in Haryana, 7 in Madhya pradesh, whole
in Rajasthan. VARUN BEBERAGE will supply its product in
districts of Rajasthan and Northern Madhya pradesh.

At present the entire area allocated to the promoter of the project

and it met out by his or her own soft drinks plant at Agra & Jaipur,
which due to capacity constraints/cost effectiveness & freight, is
unable to concentrate to desire level of profits. With the demand
increasing every year substantially, a new plant with sales tax
benefit in Rajasthan is fully justified, as the product has not yet
reached across the length and breath of Rajasthan. There is sample
scope for horizontal spread for the next three year to four year.

In nut shall the real potential of Rajasthan is still unknown to the

soft drinks marketing companies.

DISTRIBUTION SYSTEM

61
Participation of Pepsi Food Ltd. In the project will ensure firm and
committed support in sales promotion, advertising and publicity,
introduction of innovative concepts and the Company will be able to
draw on their international expertise in marketing and technical
Know-how. The present set up at Jaipur will be distributing their
products through marketing companies. These marketing companies
will distribute the products to the distributors appointed in various
towns. The distributors in turn will be plying their own vehicles in
their respective market and distribute the full range of products to
the retailer who in turn will sell it to the customers.

Soft Drink is a seasonal business and 60% of sales are achieved

during April, May, June & July. Balance 40% is achieved during the
balance 8 months.

The Sales pattern due to season ability of the products is likely to

be as under.

MONTH %AGE OF ANNUAL SALE

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 January 2%
February 3%
March 10%
April 12%
May 20%
June 18%
July 10%
August 7%
September 7%
October 5%
November 3%
December 3%

TOTAL 100%

IMPLEMENTION SCHEDULE AND PRESENT STATUS

63
The project management and planning has a direct impact on
construction schedule. The length of the gestation period determines
the quantum of financial charges such as interest and establishment
expenses.
It affects the provisions for contingencies, which are linked with the
prices of concerned products.
Any extension in time schedule may also alter the market structure
with the new competitors. It is expected that the total project will
be completed within six months. The Unit shall be ready for
commercial production by Februaaary/March”2000.

IMPLEMENTATION
A detailed chart showing the time required for each work and
production target is follows:
S. PROJECT ACTIVITY PERIOD IN LAST
NO. MONTHS DATE OF
COMPLE.
1. Company Incorporation Already complete --------
2. Procurement of Land Already complete --------
3. Selection of plant& M/c Already complete --------
4. Placing order for M/c & Pro. In Progress Sep, 1999
5. Construction Of Factory Being taken-up Dec, 1999
6. Installation of Machinery Five months Jan, 2000
7. Trial Run and Stabilities Six months Feb, 2000
8. Starting Commercial prod. Six months Fe/Mr,2K

TECHNICAL KNOW-HOW AND TRADE MARK

AGREEMENT

64
The Company shall enter into a Franchise Agreement with M/s
PEPSI FOODS LTD.having its Regd. Office at 3-B, DLF Corporate
Park, S Block, Phase III, Qutub Enclave, Gurgaon, Haryana (India).
The formal consent for providing technical guidance and allocation
of franchise area has already been given by M/s PEPSI FOODS
LTD.
The principals shall provide necessary technical information data;
process Know-how for the manufacture of the product. They will
give general advice on manufacturing process, methods of
analytical, testing of finished products, quality control etc.
Reference covenants M/s PEPSI FOODS LTD. has granted the
company rights to use the said trademark during the period of the
agreement in the all districts of Rajasthan & Northern Madhya
Pradesh

CONCULUSION

65
The survey work has done on the project topic “THE IMPACT OF
LOCAL SOFT DRINKS ON PEPSI” out with the following
conclusion.

In survey work I covered near about 100 to 150 out lets in Alwar
Region. The following conclusions come out after the survey work:-

 Most of the customer satisfied with the taste of the Pepsi

products.

 The Pepsi product mainly focuses on the youth generation &

mostly child segment.

 Through the retailers and users satisfied with the sale and taste
of Pepsi Product but there are many problems, which come
into picture after the finding.

 Mainly in Rural area the Pepsi sale is less then urban area.

THE PROBLEMS ARE RELATED TO THE

66
1. Consumer: -

 Mainly rural area customer thinks that the price of the Pepsi
product is very high then Local soft drink (Jayanti soft
drinks). Pepsi Soft Drinks provide in market Rs.10 (300ml)
and Jayanti Soft Drinks provide in market in Rs.5 (300ml).

 The availability of the product is not appropriate which make

the product not reachable to them.

 In urban area people also unhappy with the price of Pepsi so

they switch out of other soft drinks.

 Some Customers are not satisfied with the current

Taste/Quality of the product.

2. Retailers: -

67
  Retailers are also not satisfied with the current price of the
product.

 The advertising materials are very less to provide to the all

the retailers.

 Most of the retailers are not aware of the schemes provided

by the company.

 Profit is very less in Pepsi then local brand, like Pepsi gives
Rs.1/bottle (Rs.10) and Jayanti gives Rs.1.25/bottle (Rs.5)
as a profit so retailers prefer Local soft drinks.

Because of these problems the sale of Pepsi is very much affected.

Therefore constructive steps should be taken to make the sale
smooth.

SUGGESTIONS

68
The following suggestion can be used for solving these
problems:

Customers :

 Company should change in the price of the Pepsi product,

because the price of the local soft drinks is very cheap then
Pepsi soft drinks. The price should be like as:

200 ml --- Rs.5

300 ml --- Rs.8

 Company should make more investment on advertisement to

make it more effective.

 Regular advertisement should be done.

 Effective distribution should be used mainly for rural area.

 Provide some scheme for customers.

Retailers : -

69
 Company should make changes in the price of the Pepsi
product.

 Company should pay to attention to make the advertising

material available to all the retailers.

 The company should focus on more the distribution of the

product and make the supply on time (mainly rural area).

 Company should gives the scheme and make sure that the
schemes for the retailers be known to all retailers.

 Company should give the appropriate profit to the retailers

therefore they take interest to the sale Pepsi soft drinks.

Reference

70
 Mr. Yogendra sisodia (Sr. Executive – HR)
Pepsi, Alwar

 Mr. Shishir (TDM, Marketing & sale)

Pepsi, Alwar

 Mr. Sanjay Tiwari (HOD, of MBA Deppt.)

L.I.E.T., Chikani

 Mr. Hemanth (Faculty of marketing MGT.)

L.I.E.T. Chikani

 & Pepsi Employee.

 & some good friends.

SURVEY METHODOLOGY

71
For carrying out this research both secondary and primary data
were used Secondary data are that information ,which management
already has been in the form of annual review ,journals, and
research carried out by marketing Syndicate firms.

In order to ensure the survey result a standard questionnaire has

been prepared for a suitable score from rating given for each
question.

Primary data’s most important role is in knowing the

• Demographic and socioeconomic characteristics

• Attitude and opinions

• Customer awareness about the product/brand.

In order to know the customers perception about Pepsi is the best

soft drink primary data are required. Primary data can be gathered
by survey, visit to customers to get the primary data. This is needed
for successful completion of study.

QUESTION

72
 Question have been used in the questionnaire provide a
respondents a fixed selection of answer the choose form. These
questionnaire are easier to administer and analysis. It also offer the
least scope for interviewer to produce data for rating and quality the
strength to response.

73