PROJECT REPORT

Topic: - Feasibility Study and Analysis of the Edible Oil market in Consumer s Segment

Name: Institute: Business Unit: Function: Project Guide:

Ekta Thakur Lovely Professional University, Jalandhar. Bhatinda Chemical Limited Industries Marketing Mr S.N Goyal

ACKNOWLEDGEMENT

This is a humble effort to express my sincere gratitude towards those who have guided me to complete this PROJECT REPORT, which is the culmination of the degree of M.B.A, Lovely Professional University, Jalandhar. I wish to express my heartful appreciation to Mr. S.N Goyal (my project guide) for her valuable guidance i.e. essential for improvement and completion of the project. Last but no means the least, I acknowledge the help and the advice received from my friends, with whom I have discussed the project from time to time and they gave the fruitful suggestions.

EKTA THAKUR

Content:
           Introduction Company History Mission /vision of the company Product mix of company Demand for edible oils Deliverables Literature Review Methodology Characteristics of Edible oil industry Business Concerns Key factors - Social Factors - Political factors - Economic factors Consumers expectations Understanding the customer Observations and Recommendations Key Learnings References

    

INTRODUCTION
BCL Industries & Infrastructures Ltd is one of the largest agro-based industries of North India. The company is one of the leading vertically integrated plants in the country. The company is engaged in the business of edible oils includes refined oil in the name of Homecook, Vanaspati, Do Khajoor and Mustard as Murli. They are having their manufacturing unit located at Bhatinda in Punjab. Homecook brand offers a wide range of refined oils, which includes soyabean oil, sunflower, cottonseed oil and rice bran oil. Different crude edible oils are imported like palm oil etc. every year for blending and refining with other edible oil based products.BCL Industries and Infrastructure Ltd was incorporated on February 3, 1976 as a private limited company with the name Bhatinda Chemicals. In September 3, 1992, the company was converted into a public limited company. During the year 1991-92, the company installed a new solvent extraction plant. They also installed a Vanaspati plant. During the year 1992-93, the company increased the production capacity of Vanaspati. In June 30, 2007, the company received Shri B K GoenkaSEA Award for Refined Rice Bran Oil for the year 2006-07 at the 10th National Seminar on Rice Bran Oil at Chennai. During the year 2007-08, the company set up a Deodorising system to achieve excellent quality of Rice Bran refined oil. In August 3, 2008, they received Shri B K Goenka-SEA Award for Refined Rice Bran Oil for the year 2007-08 at the 11th National Seminar on Rice Bran Oil at Kolkata. During the year 2008-09, the company had done the modernization of their existing Plant & Machinery. They upgraded their parboiled unit to get better quality of parboiled rice with less broken percentage. In November 2009, the company changed their name from Bhatinda Chemicals Ltd to BCL Industries & Infrastructures Ltd. The project of cogeneration system i.e. steam boiler and turbine is under process and on completion of the same the company will generate their own power/electricity to run the plant uninterrupted and smoothly. As of March 31, 2011, the Company had an installed capacity to produced 30,000 metric tons of vanaspati and 15,000 metric tons of refinery. During the fiscal year ended March 31, 2011, the Company produced 12,328 metric tons of ghee.

Company History
YEAR EVENTS 1976 - The Company was incorporated on 3rd February as a Pvt. Ltd. Company under the name of Bhatinda Chemicals and Vanaspati Mills Pvt. Ltd. with the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh at Jalandhar which was later on changed to Bhatinda Chemicals Pvt.Ltd on 6.5.1985. - Bhatinda Chemicals Ltd was promoted by Mr. Dwarka Das Mittal and his associates. - The company is engaged in manufacturing of Vanaspati Ghee, Refined edible oils, Solvent extracted oils, Rice Bran oils, and Parboiled rice, Rice Bran De-oiled cakes. 1979 - The capacity of the Sovent plant was doubled to 80 TPD and 12 TPD Hydrogenation plant was financed by PSIDC. 1989 - The Company was converted into a deemed Public Ltd. Company on 2nd January and

further converted into Public Ltd. Company w.e.f. 4.4.1992 vide order of Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh dated 3.9.92. - The Company initially started solvent extraction with the capacity of 40 TPD. The project was financed by Punjab Financial Corporation. 1980 - The company further diversified its activities by installing refinery and oil mill from its own sources and capacity of solvent extraction plant was raised upto 100 TPD. 1990 - The Company further enhanced the capacity of solvent extraction from 100 TPD to 150 TPD by raising loan of Rs 80 lacs from PSIDC 1991- In August, the company was sanctioned Rs. 120 lacs from PSIDC for installation of fresh solvent extraction plant of 200 TPD and the capacity of Hydrogenation plant was raised from 12 TPD to 25 TPD. - With the delicensing of Vanaspati Ghee in New Industrial Policy announced on 25/07/1991, the Company stopped manufacturing hard oil and the hydrogenation plant of the company was modified so as to facilitate the manufacturing of Vanaspati. 2000 - The Board has decided to issue further equity shares to the extent of 44,00,000 No. of equity shares of Rs 10 each at par on preferential basis to individuals, promoters, the relatives and associates of promoters, corporate bodies or various persons including existing shareholders and other entities, subject to necessary approvals. 2008- Company name has been changed from Bhatinda Chemicals Ltd to BCL Industries & Infrastructures Ltd.

Objectives of the Project

y y To study the oil market and find out if there is an opportunity in the market for the oil products. To figure out the kind of solutions that we need to provide to the clients

Mission /vision of the company

We aim to be a reliable marketing company of vegetable oils and agri products in domestic market by providing them quality products with reliability, ethical value and strong support service so as to create a strong group and build on term relationship with our clients.

Product mix of company

Refined oils: y Soyabean oil y Sunflower oil y Cottonseed oil y Rice bran oil. Crude edible oils: y Palm oil etc. Others: y Vanaspati y Mustard

Demand for edible oils

Vegetable oil consumption in the country is continuously rising and has sharply increased in the last couple of years to roughly 11.2 kg/head/year. This is still lower than the world average consumption level of 17.8 kg and that in neighboring countries like Pakistan (16.1 kg). The developed western world has a per capita consumption of 44 to 48 kg/year. According to projections from the National Council of Applied Economic Research (NCAER), per capita consumption of edible oils is likely to reach 13.95, 14.83 and 16.17 kg by 2009-2010 if per capita income grows by 4%, 5% and 6% respectively.

Literature Review
According to the Uruguay Round (UR) of the WTO Agreement, India has removed all quantitative restrictions on imports of edible oils in the new EXIM policy of 2001. Under the bound tariffs of UR, India can impose a maximum import tariff of 300 per cent on palm oil, 100 per cent on other vegetable oils, but only 45 per cent soyoil (Hegde, 2004) . Depending upon the indigenous production, export and import balance, tariff was cut in 1995 but raised in 2000. Though the UR bound tariffs were not required to be reduced till 2004, by the year 2001 the import tariffs on soyoil and palm oil were far below the bound rates. Mistrys suggested that India should rework its duty structure to reflect GM- and non-GM soyoil, applying 45 per cent duty to non-GM soyoil, while the GM soyoil be placed on par with crude palm oil. Unless the exporter declares that the oil is from a GM source, there is no way of proving the origin of an oil, since expressed oil does not contain any protein or nucleic acids to

determine if it is a GM(Genetically Modified) product. An importing state can insist on such a declaration under the Cartagena Protocol, but in practice it is difficult to segregate a GM oil from a non-GM oil. Mistrys suggestion is also risky since once a product is branded GM, the Indian anti-tech lobbies would work for a ban on such imports. In India the consumer does not take any marketed edible oil, as edible oil preferences vary from household to household. Mustard oil is widely used in the north Indian States. In North India groundnut oil, sunflower oil and Soyabean oil and Vanaspati are preferred. Both palm oil and soyoil are alien to the Indian psyche, more so the soyoil and it is difficult to make people to consume these oils as easily as other familiar oils. The marketing strategy on soyoil and palm oil was not very effective in enhancing household usage.

Deliverables
y y Primary market research with the consumers to take inputs regarding the product to take the knowledge of the product. Analysis, findings and recommendations after collective analysis of all the Information, which includes primary research.

Methodology
y y After the research, I was able to find out the peoples perception and expectations about the BCL industries oil products. The project started with listing down small objectives, drafting the questionnaire for the primary research, and collating the contact addresses of the various customers that could be our prospective clients. The primary research was carried out by visiting the various consumers in the region. The stress was primarily on the customers consuming higher quantity of the product, which was in harmony with the quality and positioning of the physical product and the services that we provide. Analysis of the findings was done using the various MS office tools, which helped in drawing various observations and conclusions to finally provide the recommendations.

Characteristics of Edible oil industry

y y y Oil is primarily a commodity which is sensitive to market-price. Effective distribution chain-through a complex network of wholesalers/stockists and retailers (kirana shops, supermarkets) Oil sold in bulk(tin, HDPF containers) to institutions;

y y y y y

In retail packs(PET bottles, cans, jars ,pouches) to small customers Most vegetable oil is purchased by household or Industrial buyers, food processors, restaurants and hostels. Seasonal demand for oils and Vanaspati- September to November (peak season). Regulation: Under the edible oils packaging (Regulation) order, 1998, edible oils cannot be sold loose, but can be sold only in packed form. Oil consumption North is the largest marker, followed by South, West & East India.

Business Concerns
y y y Excessive imports may lead to unremunerative prices. Farmers have recently shifted to other crops. Increasing health awareness has impacted the sales of certain categories of oil.

Key factors
1. Social Factors:
y y y Change in per capita income and population. Change in taste and preferences. Increased Health Consciousness and low-cholesterol cooking medium

2. Political factors:
y Liberal policies for edible oil exports

3. Economic factors:
y y y y y Annual Rainfall in time and areas under oilseed crop. Increasing (increase) in Tariff, increases the prices and depresses (decreases) the consumer surplus. Global oil prices fluctuations. While tariffs can increase producers revenue the impact on profit depends on oilseeds a price (which also increases). Cost of raw materials, Raw materials cost is 70% of Sales prices.

Consumers expectations:
y y y y The oil should not smoke even on being super heated. Spent oil (Oil which has been used for frying once) should retain its colour and flavour. Cooked food should be good to eat even when consumed after a long time. Fried goods should retain essence longer on being fried.

Understanding the customer:

The following factors are dependent on customer: y Price sensitivity. y Brand loyalty. y Desired tangible attributes: Taste, Quality, Health and Value For Money Intangible promises: Healthy Family, Affection, Loving Mother, Great Cook. y Target Consumer: 21-44 year old, modern, aware, educated housewife using refined branded groundnut oil, concerned about family well being.

Observations and Recommendations

The Indian edible oil market is the worlds fourth-largest after the USA, China and Brazil. A growing population, increasing rate of consumption and increasing per capita income are accelerating the demand for edible oil in India. This paper analyses the trend in edible oil consumption and the prospects for the Indian edible oil market in the coming year. After going through the series of the various steps required for carrying out the project in an effective manner and discussing with the people who use the company products, I could come up with the various observations and conclusions. y y There is a huge potential of the companys product in the oil market. This was corroborated by both the primary research and the secondary research data. The general perception in the market is that the companys product is of low quality because it has been underpriced as compared to that of other big players. The knowledge of the companys product needs to be made more widespread. If possible, we can be a bit flexible in the price of the oil, because there is scope for a lot more production of edible oil in our plants as we currently produce less than what we can produce. We need to have a look at the ratio of the fixed and variable costs that are involved in producing one unit of oil. We need to make sure we have a motivated sales team representing the company, because, if the sales members themselves think that the product is over-priced and are not clear of the products internal details, or are not able to effectively communicate the features of the product, then, there is no use of having those features in the product.

Key Learnings
Working as an intern in BCL allowed me to learn a lot of things on a personal front. The basic learning from the project was that I was able to understand the nature of the oil market, the production process and the features of our products and services. I had a practical experience of carrying out the complete primary market research, right from drafting the questionnaire to providing recommendations, and this helped me understand better about what I learned about marketing research in theory. For a fresher like me, it was a great learning experience just to interact with a large number of vendors and customers working with a corporation, being in the office for two months, and working under the guidance of the heads of the department. Taking charge of the promotional stall at the conference allowed me to read peoples perception and doubts relating to the product and services, and helped me in honing organizational and personal skills. It was a truly enriching experience that helped me identify, develop and hone my various skills!

References
-economictimes.indiatimes.com

-www.indiainfoline.com -info.shine.com -www.edelbusiness.in

FEASIBILITY STYDY AND ANALYSIS OF EDIBLE OIL MARKET IN CONSUMER S SEGMENT

Name: Age: Gender: Occupation:

OBJECTIVE:
To find out:
y
y

To study the oil market and find out if there is an opportunity in the market for the oil products. To figure out the kind of solutions that we need to provide to the clients.

Questions
1) Are you regular user of the BCL edible oil products? a) Yes b) No

2) How much quantity of oil you use in a month? a) less than 1litre b) 1 to 5 litres c) More then 5 litres

3) Do you think it is beneficial for you? a) Yes b) No

4) Which factor makes you to buy the particular category of oil the most? a) Health b) Expensiveness c) Brand Value d) Ease of avaibility

Rank I II III IV

Items

5) Do you think that the product of the BCL industries is advertised enough? a) Yes b) No

6) Which class of the society consumed the maximum amount of oil? sr.no Likert scale items Strongly disagree Disagree Neither agree nor disagree Strongly agree Agree

1 2 3

High class Middle class Low class

7) Do you think that the price tag of the company s product is reasonable? a) Yes b) No

8) Which city of India BCL Industries are based? a) Bathinda b) Chandigarh c) Haryana

9) Which category of oil has the highest demand in the market? a) b) c) d) e) Fortune Dhara Safola Sundrop Murli Rank I II III IV V Item

10) Which is the most consumable category of edible oil? a) b) c) d) Vanaspati oil Mustard oil Sunflower oil Soyabean oil

Rank I II III IV

Items

11) What do you think which outstate receive the supply of oil from BCL Industries? a) b) c) d) Haryana Punjab Himachal Pradesh J&K

12) Which city of India BCL Industries are based? a) Bathinda b) Chandigarh c) Haryana