Project Management Study on Retrofitting of ...

Bangalore

Project Management Study on Retrofitting of Endosulfan plant for the manufacturing of Glyphosate & Mancozeb plant Capacity Expansion. At Hindustan Insecticides Limited, Cochin

Submitted by Arjun Ajit Registration No: 14010121010

Under the Guidance of Mr. Ganapathyraman .K Dy. Manager (Projects), Hindustan Insecticides Limited & Prof. Ellur Anand Asst. Professor, Alliance University

In partial fulfilment of the Course- Industry Internship Programme-IIP in Semester II of the Master of Business Administration (Batch of 2014-2016)

Master of Business Administration

Industry Internship Programme (IIP)

Declaration This is to declare that the Report titled “Project Management Study on Retrofitting of Endosulfan plant for the manufacturing of Glyphosate & Mancozeb plant Capacity Expansion.” has been made for the partial fulfilment of the Course: Industry Internship Programme (IIP) in Semester II by me at Hindustan Insecticides Limited, Udyogamandal under the guidance of Mr. Ganapathyraman K & Prof. Ellur Anand I confirm that this Report truly represents my work undertaken as a part of my Industry Internship Programme (IIP). This work is not a replication of work done previously by any other person. I also confirm that the contents of the report and the views contained therein have been discussed and deliberated with the faculty guide.

Signature of the Student

:

Name of the Student

: ARJUN AJIT

Registration No

: 14010121010

Master of Business Administration

Certificate

This is to certify that Mr. ARJUN AJIT, Registration No. 14010121010 has completed the report titled “Project Management Study on Retrofitting of Endosulfan plant for the manufacturing of Glyphosate & Mancozeb plant Capacity Expansion.” Under my guidance for the partial fulfilment of the Course: Industry Internship Programme (IIP) in Semester II of the Master of Business Administration.

Signature of Faculty Guide:

Name of the Faculty Guide:

Prof. Ellur Anand

Acknowledgment The internship opportunity I had with Hindustan Insecticides Limited was a great chance for learning. Therefore, I consider myself as a very lucky individual as I was provided with an opportunity to be a part of it. I am also grateful for having a chance to meet so many wonderful people and professionals who led me though this internship period. I am using this opportunity to express my deepest gratitude and special thanks to Mr. K. Ganapathyraman, Dy. Manager(Projects), Hindustan Insecticides Limited, who in spite of being extraordinarily busy with his duties, took time out to hear, guide and keep me on the correct path and allowing me to carry out my Internship project at their esteemed organization. I express my deepest thanks to Prof. Ellur Anand, Asst. Professor, Alliance University for taking part in useful decision & giving necessary advices and guidance. I choose this moment to acknowledge his contribution gratefully. It is my radiant sentiment to place on record my deepest sense of gratitude to Mr. Sebastine Mathew ( Engineering Manager), Ms. S Vijayalakshimi (Training and Development Incharge) Mr. Vijayan G (Dy.Chemical Engineer), Mr. M.C Salikunju (Dy. Engineering Manager), Mr. Shivasankaradu (Asst. Plant Manager), Paul Thachil (Commercial Manager), Praveen P (Assistant Engineer (Chemical)), Dr. V. Babu (Development Chemist (R&D)) from Hindustan Insecticides Limited, Udyogamandal for their careful and precious guidance which were extremely valuable for my study both theoretically and practically. Lastly, I thank almighty and my parents, for their constant encouragement without which this report would not be possible. I perceive this opportunity as a big milestone in my career development. Hope to continue cooperation with all of you in the future.

Arjun Ajit

TABLE OF CONTENTS

Index

Content

Page Number

Executive Summary

1

1 1.1 1.2 1.3 1.4 1.5 1.6

INTRODUCTION & INDUSTRY OVERVIEW Introduction Industry Overview Structure of Agro-chemical Industry Global scenario Indian Scenario Market Share of Companies in Indian Agro-Chemical Industry

2 3 4 5 6 8 13

2

COMPANY OVERVIEW

14

2.1 2.2 2.3 2.4 2.5 2.6

Hindustan Insecticides Limited (H.I.L) Vision Products offered by Hindustan Insecticides Limited (H.I.L) Organisation Structure of Hindustan Insecticides Limited SWOT Analysis on Hindustan Insecticides Limited Porters Five Force Analysis on Hindustan Insecticides Limited

15 17 18 19 20 21

3

PROJECT PROFILE

23

3.1 3.2 3.3.1

24 24 25

3.3.2

Objective Methodology Project 1: Retrofitting of Endosulphan Plant for the manufacturing of Glyphosate. Project 2: Mancozeb Plant capacity expansion

4

OBSERVATIONS AND ANALYSIS

27

4.1.1

Observations on Project 1: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Profitability Calculation of Glyphosate Tech. per MT Detailed breakup cost for Project 1 Project Initiation. Gantt Chart Diagram for Project 1 Network Diagram for Project 1

28

Observations on Project 2: Mancozeb Plant Capacity Expansion Cycle Time comparison Detailed breakup cost for Project 2 Cost of production for 1 MT of Mancozeb Project Initiation. Gantt Chart Diagram for Project 2 Network Diagram for Project 2

36

4.1.2 4.1.3 4.1.4 4.1.5 4.1.6 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 4.2.7

26

30 31 32 34 35

38 39 40 41 43 44

Index

Content

Page Number

5

FINDINGS

45

5.1.

Findings for Project 1: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Finding Profitability or Viability of Project 1 Finding from Gantt Chart for Project 1

46

48

5.2.1 5.2.2 5.2.3 5.2.4

Findings for Project 2: Mancozeb Plant Capacity expansion Finding Profitability or Viability of Project 2 Breakeven Analysis for Capacity Expansion Project Takt Time Analysis Findings from Gantt Chart for Project 2

6 6.1

RECOMMENDATIONS Recommendations

53 54

7 7.1 7.2 7.3

CONCLUSION Conclusion Learning Outcomes References

55 56 57 58

5.1.1 5.1.2 5.2

46 47

48 49 50 52

FIGURE INDEX

Sl No.

Fig. No.

Figure Name

Page No.

1

1.4.1

Leading Trading countries in Agro Chemical Industry, FY 2012 7

2

1.5.1

Comparison on countries for Consumption of Crop protection

8

product 3

1.5.1

Distribution of domestic crop protection market - Product

9

category 4

2.1

Phases of India during Malaria eradication Program

16

5

2.4

Organisation Structure of Hindustan Insecticides Limited

19

6

4.1.1

Glyphosate Manufacturing Process Flow Diagram

28

7

4.1.5

Gantt Chart for Project: Retrofitting of Endosulfan plant for the

34

manufacturing of Glyphosate 8

4.1.6

Network Diagram for Project: Retrofitting of Endosulfan plant

35

for the manufacturing of Glyphosate 9

4.2.1

Flow diagram of Mancozeb manufacturing Plant

37

10

4.2.2

Cycle Time comparison of process on Existing Plant and

38

Upgraded Mancozeb plant. 11

4.2.6

Gantt Chart Diagram for Project: Mancozeb Plant Capacity

43

Expansion 12

4.2.7

Network Diagram for Project : Mancozeb Plant Capacity

44

Expansion

13

5.2.2

Breakeven Analysis for Capacity Expansion Project

49

14

5.2.3.a

Takt Time Analysis for Existing Mancozeb Plant

50

15

5.2.3.b

Takt Time Analysis for Upgraded Mancozeb Plant

51

TABLE INDEX Sl No.

Table

Table Name

Page No.

No. 1

1.5.2

2013- Indian Herbicides Market Estimate

10

2

1.5.2

2013 - Indian Fungicides Market Estimate

11

3

1.5.3

2013- Indian Insecticides Market Estimate

12

4

1.6

Market Share of Companies in Indian Agro-Chemical

13

Industry 5

2.3

Products offered by Hindustan Insecticides Limited (H.I.L)

18

6

4.1.2

Cost for Producing 1 MT of Glyphosate

30

7

4.1.3

Detailed breakup cost including all the required Equipments

31

for Project : Retrofitting of Endosulfan plant for the manufacturing of Glyphosate 8

4.2.3

Detailed breakup cost including all the required equipments

39

for Project: Mancozeb Plant Capacity Expansion 9

4.2.4

Cost of production for 1 MT of Mancozeb

40

10

5.1.2

Finding from Gantt Chart: Project 1: Retrofitting of

47

Endosulfan plant for the manufacturing of Glyphosate 11

5.2.4

Findings from Gantt Chart :Project 2: Mancozeb Plant Capacity Expansion

52

Industry Internship Program Report, M.B.A 2014 - 2016

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Executive Summary This report is a study on two Projects progressing inside Hindustan Insecticides Limited (H.I.L). Projects are Analysed using Project Management techniques. A detailed picture about the projects is presented in this report. The First chapter of this report is an introduction about the industry followed by Industry Overview on Agro Chemical Industry. This chapter include, Global and Indian scenario, Structure of industry, Players in the industry and their Market shares. Second Chapter is about the company, Hindustan Insecticides Limited, here a detailed description about the company and their Vision, Mission, Various Products they produce, Organization Structure, SWOT Analysis, Porters 5 Force Analysis and Market share of company are presented. Third chapter. Project Profile, presents the need and benefit of the project for the company, Hindustan Insecticides Limited. Project 1: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Project 2: Mancozeb plant capacity expansion, are presented In the Fourth Chapter, Observation & Analysis, a detailed description and Analysis about the Projects progressing inside the company is presented. Findings and results of Analysis on the projects are presented in Chapter Five - Findings. Finally Conclusion, Recommendations and Learning Outcomes are presented. References for making the report are presented at the end of report.

Alliance School Of Business, Alliance University, Bangalore


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Chapter 1 INTRODUCTION & INDUSTRY OVERVIEW



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1.1 Introduction World population is expected to increase by 250,000 every day and reach 9 billion by 2050, according to the United Nations. That means there are 9 billion stomachs to feed. Survival of mankind depends on Food or say agriculture. Agrochemicals protect crops against diseases, pests and weeds, thus ensuring a good harvest and plenty of food. Consumers expect the food they buy to be fresh, of high quality and free from disease, moulds and insect damage. Even when using crop protection products, an average of 20 to 40% of the harvest is lost due to diseases and pests. This creates uncertainty and tensions for the farmers. Agrochemical while usage must be safe to humans and domestic animals. There should be no danger to spray workers, inhabitants or animals accidentally contaminated with the insecticide during or after spraying. But the sad truth is, the end user (farmers/ large scale agricultural producers) often neglects it. Also with due course of time, target insects develop resistance to the pesticides and thus agrochemical may lose their effectiveness. If resistance is observed, another insecticide without cross-resistance has to be used. Agrochemical manufacturing companies therefore needs to invest for R&D and build new products. Hindustan Insecticides Limited, A government of India Enterprise has initiated with projects for Manufacture of Glyphosate (Weedicide) and Expanding the capacity of existing Mancozeb (Fungicide) manufacturing plant at their Udyogamandal, Unit. Project Management is an inevitable part for existence of any Organization. Proper Planning, Budgeting, Scheduling, Resource allocation, Team management, Issue management skills are required for managing a project successfully. This report contains a Project management study and analysis on Projects: “Retrofitting of Endosulfan plant for the manufacturing of Glyphosate” and “Mancozeb plant capacity expansion” at Hindustan Insecticides Limited, Udyogamandal Unit.



1.2

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Industry Overview

Pesticides, also referred to as Agro–chemicals, are chemical compounds used for increasing agricultural production by protecting crops from insects, pests, plant diseases and weeds. Agrochemicals are substances manufactured through chemical or biochemical processes containing the active ingredient in a definite concentration along with other materials which improve its performance and increase safety. For application, these are diluted with water in recommended doses and applied on seeds, soil, irrigation water and crops to prevent the damages from pests. There are broadly 5 categories of crop protection products: Insecticides: Insecticides protect crops by killing insects or preventing their attack. Insecticides may attack a particular type of insect or could be broad spectrum insecticides. Insecticides are used to manage the pest population below the economic threshold level.E.g.Chlorpyrifos is used to control insect pests in crops such as cotton, corn almonds, etc. Fungicides: They are used to prevent the deterioration of crops due to fungi infestation. Fungicides are classified as protectants or eradicants. Protectant fungicides prevent or inhibit fungal growth and may have to be applied at regular intervals. Eradicant fungicides kill the pests on application. E.g.Anilazine is used to control fungal attack on lawns and turfs, cereals, coffee and various vegetables and other crops. Herbicides: Herbicides or weedicides are used to prevent the growth of unwanted plants in a crop field. Herbicides could be selective, which kill the unwanted plants without any harm to the crop, or non-selective which kill all the plants. E.g. Glufosinate ammonium, a broadspectrum contact herbicide, is used to control weeds after the crop emerges or for total vegetation control on land not used for cultivation. Bio-pesticides: These are derived from natural substances like plants, animals, bacteria and certain minerals and control pests by nontoxic mechanisms. Bio-pesticides are considered eco-friendly and easy to use. They could be classified as microbial pesticides, plant incorporated protectants and biological pesticides. They are of low volume and high effect formulations and require lesser dosages as compared to chemical pesticides. A growth area for bio-pesticides is in the area of seed treatment and soil amendments. Example of bio-pesticides includes Bacillus subtilis which is used as soil inoculant in horticulture and agriculture. Others (Nematocides, Rodenticides etc.): Fumigants and rodenticides are used to prevent the attack of pests during storage of crops. Plant growth regulators control or modify the plant growth process and are most commonly used in cotton, rice and fruits.



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1.3 Structure of Agro-chemical Industry Multinational companies, Large Indian companies in the public and private sector and the Small sector units comprise the industry. There are around ten Multi– national companies, 57 medium and large companies and over 400 small units engaged in the manufacturing of pesticide formulations. The central public sector unit producing pesticides is Hindustan Insecticides Limited. These crop protection chemicals are manufactured as technical grades and converted into formulations for Agricultural use. The Agrochemical industry consists of Raw material supplier, Technical grade manufacturers, Formulators producing the end products, Distributors, Retailers and End user customers.

In India, there are about 125 technical grade manufacturers (10 multinationals), 800 formulators, over 1,45,000 distributors. 60 technical grade pesticides are being manufactured indigenously. India ranks fourth position as a supplier of agrochemicals in the global market, after USA, Japan and China thereby indicates the significance of agrochemical industries in India. From a modest beginning in 1947, when DDT production started, was first used for malaria control in India, and now Indian agrochemical industry consumption in India has grown to a total market size of over $ 4.25 billion in FY14 of which 50 per cent are exports. The consumption of agrochemicals in India is surprisingly low (0.58 kg/hectare) as compared to USA where the consumption of agrochemicals is as high as 4.5 kg/hectare and Japan with an even higher consumption of 11 kg/hectare.



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1.4 Global scenario The global crop protection market is fairly consolidated with top nine companies accounting for over 80% of the market. Syngenta, Bayer and BASF are the market leaders in the global crop protection market. Global crop protection market is characterized by large number of mergers and acquisitions in the recent years. Several large companies have consolidated their presence in the existing geographies or ventured into newerareas through acquisitions of local companies. Some of the recent acquisitions in 2013 include acquisition of ISEM's fungicide technologies valifenalate by Belchim Crop Protection, acquisition of Alpha Pesticides (Britain) by De Sangosse Group's and acquisition of Plant Syence by Verdesian Life Sciences. Another major acquisition happened in 2011 when United Phosphorus Limited acquired 51% stake in Brazil based DVA Agro Do BrasilfromIsagro (Italy) to consolidate its presence in distinguished Brazilian Market Distribution of global crop protection market – Product Category Herbicides are the most widely used agrochemical products globally, followed by insecticides and fungicides. Fungicides is the highest growing segments as it helps increasing yield, improving quality and in seed treatment. Individual sales of various categories however depend on climatic conditions and crop variance. Herbicides are used in most of the regions of the world. However, major markets for herbicides are North America and Europe due to the favourable climatic conditions in these regions. Insecticides are more prevalent in Asian countries. This is due to higher growth of cotton, cereal, fruits and vegetables in these regions which have higher incidence of insect attacks. Fungicides are used in almost all agriculture markets of the world due to favourable climatic conditions for the fungal growth.



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1.4.1 Global Trade of crop protection products Germany, France, US, China and Belgium are the largest exporters of crop protection products while Brazil, Canada, United Kingdom, Italy and Spain are the major importers.

Leading Trading countries in Agro Chemical Industry, FY 2012 Fig: 1.4.1 Source: TATA Strategic Report on Indian Agrochemicals Industry

1.4.2 Global Industry Challenges Evolution of biotechnology: Development of genetically modified crops in recent years, especially for pest resistance would result in relatively lesser need for traditional crop protection chemicals. However, this could lead to newer strains or pests driving need for other agrochemicals. E.g. new sucking pests have emerged causing significant harm to the BT cotton. Stringent regulations Stringent environmental regulations across all countries increase the cost of developing new products. These regulations are primarily affecting the older products while at the same time resulting in delay in introduction of new products. Mergers and Acquisitions affecting SMEs: Larger companies are acquiring/ entering into strategic alliances with smaller companies to increase their market reach. This poses a threat to local companies who are forced to reduce prices in order to compete, thereby leading to lower margins.



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1.5 Indian Scenario India due to its inherent strength of low-cost manufacturing and qualified low-cost manpower is a net exporter of pesticides to countries such as USA and some European and African countries. Exports formed ~50% of total industry turnover in FY12. The industry suffers from high inventory (owing to seasonal and irregular demand on account of monsoons) and long credit periods to farmers, thus making operations 'working capital intensive.

Domestic consumption Consumption of crop protection products in India is among the lowest in the world. Per capita consumption of crop protection products in India is 0.6 kg/ha compared to 13 kg/ha in China and 7 kg/ha in USA. Some of the reasons for low consumption in India are low purchasing power of farmers, lack of awareness among farmers, limited reach and lower accessibility of products. This presents an immense opportunity for the crop protection industry to grow in India.

Comparison on countries for Consumption of Crop protection product Fig: 1.5.1 Source: TATA Strategic Report on Indian Agrochemicals Industry



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1.5.1 Distribution of domestic crop protection market - Product category Insecticides form the largest segment of the domestic crop protection chemicals market accounting for 65% of the total market. It is mostly dependent on rice and cotton crops. Herbicides are the largest growing segment and currently account for 16% of the total crop protection chemicals market. Sales are seasonal, owing to the fact that weeds flourish in damp, warm weather and die in cold spells. Rice and wheat crops consume the major share of Herbicides. Increasing cost of farm labour will drive sales of herbicides going forward. Fungicides, accounting for 15% of the total crop protection market, are used for fruits and vegetables and rice Farmers moving from cash crops to fruits and vegetables and government support for exports are increasing the fungicides usage. Bio-pesticides include all biological materials organisms, which can be used to control pests. Currently a small segment, bio -pesticides market is expected to grow in the future owing to government support and increasing awareness about use of non-toxic, environment friendly pesticides.

Distribution of domestic crop protection market - Product category Fig: 1.5.1 Source: TATA Strategic Report on Indian Agrochemicals Industry



1.5.2

Sl. No

- 10 -

2013- Indian Herbicides Market Estimate

Top 15 Herbicides 1 Imazethapyr 10 SL

Value (Rs. Volume Mio) at % Share of the (Kl/MT) NRV Molecule 2200 3190 12

2 Clodinofop 15 WP

10000

2900

11

3 Glyphosate 42 SL

8000

2240

8

4 Pretilachlor 50 EC

5000

1875

7

300

1680

6

6 Pendimethalin 30 EC

4000

1240

5

7 Metribuzin 70 WP

1000

1100

4

8 Glyphosate 71% WDG

2000

1000

4

9 Paraquat 24 SL

4000

900

3

10 Quaizalofop ehtyle 5 EC

800

800

3

11 Oxyflurfen 235 EC Imazethapyr 35 + Imazamox 35 12 WG

500

600

2

40

500

2

2000

500

2

500

495

2

3000

450

2

5 Bispyribac Sodium 10 SC

13 Sulfosulfuron 75%WDG 14 Fenoxaprop p-ethyl 9.3 % EC 15 Chlorimuron ethyl 5% WP

2013- Indian Herbicides Market Estimate Table: 1.5.2 Source: KAGASHIN Group report on Indian Agrochemical Industry



1.5.3

Sl. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

- 11 -

2013 - Indian Fungicides Market Estimate

Top 15 Fungicides Tricyclazole 75 WP Propiconazole 25% EC Mancozeb 75 WP Copper Oxychloride 50 WP Carbendazim12% + Mancozeb 3% WP Hexaconazole 5 SC Carbendaziim 50 WP Azoxystrobin 23 SC Hexaconazole 5 EC Copper Hydroxide 50 WP (77% WP) Fenamidone 10 + Mancozeb 60 WG) Chlorothalonil 75 WP Dimethormorph 50% WP Propine 70 WP Kresoxim-Methyle 44.3% SC

Volume Value (Rs. % Share of (Kl/ MT) Mio) at NRV the Molecule 2000 2100 8 2500 1875 8 6000 1560 6 4000 1520 6 3500 4000 3000 200 3500 1000 500 750 150 800 300

1295 1240 1050 1000 875 700 700 563 435 328 100

5 5 4 4 4 3 3 2 2 1 1

2013- Indian Fungicides Market Estimate Table: 1.5.3 Source: KAGASHIN Group report on Indian Agrochemical Industry



1.5.4 Sl. No

- 12 -

2013- Indian Insecticides Market Estimate

Top 15 Insecticides 1 Acephate 75 SP 2 Imidacloprid 17.8 SL Chlorantraniliprole 18.5% 3 Coragen-20 S) 4 Buprofezin 25 SC Flubendiamide 39.35 5 SC(Fame 48 SC) 6 Cartap 4 G 7 Monocrotophos 36 SC 8 Emamectin Benzoate 5% SG 9 Acetamiprid 20 SP 10 Chlorpyriphos 20 EC 11 Thiamethoxam 25 WG 12 Diafenthiuron 50 WP 13 Triazophos 40 EC 14 profenophos 50 EC 15 Imidacloprid 70% WG

Volume Value (Rs.Mio) at % Share of (Kl/MT) NRV the Molecule 20000 7800 13 4000 4800 8 350 4000

3850 3000

6 5

200 50000 7500 500 2000 10000 1500 700 4000 3000 250

2720 2500 2438 2150 2100 2000 1875 1540 1360 1290 1050

5 4 4 4 4 3 3 3 2 2 2

2013- Indian Insecticides Market Estimate Table: 1.5.4 Source: KAGASHIN Group report on Indian Agrochemical Industry



1.6

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Market Share of Companies in Indian Agro-Chemical Industry Company Name

Net Sales in Rs. Cr.

Market Share in Percentage

Bayer CropScien

3,245.20

11.93

PI Industries Rallis India Excel Crop Care

1,594.92 1,518.47 965.6

5.86 5.58 3.55

Meghmani Organi Insecticides

893.28 864.08

3.28 3.18

Dhanuka Agritec

738.41

2.71

Nagarjuna Agric Monsanto India

635.84 581.84

2.34 2.14

Sharda Crop

532.13

1.96

Excel Hindustan Insecticides Limited Bhagiradh Chem

416.92 330.35 173.01

1.53 1.21 0.64

Camson Bio Tech Aimco Pesticide Paushak Ltd

145.63 140.5 56.33

0.54 0.52 0.21

37.24

0.14

Phyto Chem R J Bio-Tech Kilpest (I) Syschem India Other Small and Medium Scale Companies

30.94 28.68 20.99 18.41 14,231.23

0.11 0.11 0.08 0.07 52.32

Total

27,200.00

100.00%

ASIS Logistics

Market Share of Companies in Indian Agro-Chemical Industry Table: 1.6 Source: Economic times news report, Moneycontrol.com & H.I.L Annual Report 2014



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Chapter 2 COMPANY OVERVIEW



2.1

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Hindustan Insecticides Limited (H.I.L)

Hindustan Insecticides Limited was incorporated in 1954 for manufacture of DDT for the control of malaria and has played a pivotal role in improving the rural health of India. “Malaria is a disease that has afflicted humans for more than 10,000 years” (Frederick L. Dunn 2003), “today infects some 300 million people and kills 1 million each year” (Jeffrey D. Sachs 2001). Many argue that improving health, while important in itself, can also lead to higher economic growth and development. John Luke Gallup and Sachs (2001) show that falciparum malaria endemicity is negatively correlated with economic growth for a country DDT was first used in India by the military in 1944 and became available for civilian anti-malaria operations in 1945. India had to import DDT from foreign countries at that time. Successful pilot programs in the late 1940s led the National Planning Commission to endorse the development of a comprehensive, nationwide program, and the National Malaria Control Program (NMCP) was launched in April of 1953. The timing of the program is plausibly exogenous, since it was driven by the advent of DDT. Prior to the eradication program, malaria was considered the greatest health problem facing India. Survey evidence estimates that immediately after partition in 1947, India suffered from 75 million cases of malaria per year (double during epidemic years), and 800,000 deaths were directly attributable to malaria annually. After since Hindustan Insecticides Limited started production of DDT, the 75 million reported cases of malaria per year, have come down to 2 million annually in 2001, thereby saving not only the precious lives and huge spend on the health budget, but also improving the financial health of the rural poor as malaria also results in loss of wages due to absence of work, reduced productivity. Figure 1 illustrates the rapid geographic expansion of coverage as districts were phased into the program. Once a district was incorporated into the program, it remained in the program in all subsequent years.



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Phases of India during Malaria Eradication Program Fig: 2.1 Source: Malaria Eradication in India| American Economic Journal

The success India could achieve in control of malaria due to effective use of DDT had been well appreciated in the public health circles globally. Hindustan Insecticides Limited continues to be the sole supplier of DDT for the National Vector Borne Disease Control Programme of Ministry of Health, Govt. of India and has earned a name as a dependable quality supplier. Expanding the social commitment perspective beyond the national boundaries, HIL decided to focus in Africa where every second a child dies due to malaria. With a renewed focus on DDT as the most



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effective tool in the fight against malaria, which is endorsed by WHO, with more and more countries in Africa choosing to switch back to DDT, HIL finds a great potential and has positioned itself as a global DDT supplier. In the year 2007-08, Hindustan Insecticides Limited started exporting DDT to countries like Mozambique, Gambia, etc. HIL has been exporting its agro products to a number of countries such as Netherland, UK, Jamaica, UAE, Manila, S.Korea, Belgium, Guatemala, France, Germany, Argentina, Ethiopia, Egypt, Spain, etc. for the last more than a decade and its products are well-accepted in the world market. Company has a wide network of marketing throughout the country through its six Regional Sales Offices and good number of dealers. The company has three manufacturing units located at Udyogamandal, near Kochi (Southern India), Rasayani near Mumbai(Western India) and Bathinda in Punjab (Northern India). The company also has a Research & Development complex including an experimental farm at Gurgaon in Haryana. Currently in FY2014-2015, HIL hold 1.2 % market share in Indian Agro Chemical Industry. HIL has 100% global market share in Manufacturing DDT and Dicofol. HIL has also played an important role in improving the agricultural productivity of India. In spite of difficulties and challenges like fragmented land holdings (86% of farms less than an acre), limited access to credit, extension, infrastructure and markets, India has become the second largest food producer in the world. India is also the second largest producer for many principal food crops like rice, wheat, etc. but suffers a crop loss of about Rs. 1,40,000 crores/year and judicious use of pesticides can control this to a very great extent. China whose population size is comparable to India produces 500 million tonnes of food grains though they have lesser agricultural land than India.

2.2

Vision

The vision of the company is to become a leading player in the field of public health and crop care. Though, HIL was incorporated for manufacturing of DDT for control of Malaria and has contributed perhaps more than any other Public Sector Undertaking to improve the rural health, company is also looking at development of alternatives to DDT and has tied up with a leading Institution of the country, and the progress of their work is regularly being monitored by the Company board of directors.



2.3

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Products offered by Hindustan Insecticides Limited (H.I.L)

TECHNICAL NAME Acephate 75 SP Alephacypermethrin 10 EC Bacillus Thuringiencis Var. israelensis Bacillus Thuringiencis Var. kurstaki Buprofezin 25 SC Cartap Hydrochloride 50 SP Chlorpyrifos 2% RTU Chlorpyrifos 20 EC Copper Oxychloride - Technical Copper Oxychloride – 56 DP Copper Oxychloride 50 WP Cypermethrin 25 EC Cypermethrin 25 EC DDT 50 WP DDT 75 WP DDT Technical Deltamethrin 2.8 EC Dicofol 18.5 EC Dicofol Technical Diflubenziron 25 WP Etheephon 39 SL Ethion 50 EC Fenvalerate 20 EC Glyphosate 41 SL Hexaconazole 5 EC Imidachloprid 70 WS Malathion 50 EC Mancozeb 63% Carbendazim 12% WP Mancozeb 64% + Maetalaxyl 8 % WP Mancozeb 75 WP Mancozeb 80 WP Mancozeb Technical Monocrotofos 36 SL Oxycarboxin 20 EC Phorate 10 CG Phosphamidon 85 SL Phosphamidon 40 SL Profenofos 50 EC Quinalphos 25 EC Sulphuur 80 WDG Thiophanate- Methyke 70 WP

TRADE NAME HILPHATE 75 SP HILALPHA 10EC HIL BTI HILBTK HILBLAZE 25SC HILCARTAP 50 SP Chlorpyrifos 2% RTU HILBAN 20 EC Copper Oxychloride - Technical Copper Oxychloride – 56 DP HILCOPPER 50 WP HILCYPERIN 25 EC HILCYPERIN 25 EC HILDIT 50 WP DDT 75 WP DDT Technical Deltamethrin 2.8 EC HILFOL 18.5 EC Dicofol Technical HILMIIN 25 WP Etheephon 39 SL HILMITE 50 EC HILFEN 20 EC TRINNASHSHI 41 SL HILZOLE 5 EC HILMIDA 70 WS HILMALA 50 EC HILPUNCH HILMIL HILTHANE M-45 Mancozeb 80 WP Mancozeb Technical HILCRON 36 SL Oxycarboxin 20 EC HILPHORATE 10 CG HAWK 85 SL Phosphamidon 40 SL HILFOS 50 EC HILQUIN 25 EC HILSULF 80 WDG HILNATE 70 WP

Certified Seed

(Under H.I.L brand name)

Products offered by Hindustan Insecticides Limited (H.I.L) Table: 2.3 Source: H.I.L, R&D Department



2.4

- 19 -

Organisation Structure of Hindustan Insecticides Limited

Organisation Structure of Hindustan Insecticides Limited Fig: 2.4 Source: H.I.L, Personnel Department

CMD – Chairman and Managing Director DM – Director (Marketing) D(F)- Director Finance GM- General Manager DGM- Dy. General Manger MTS- Manager Technical Service Sr. MO- Sr. Medical Officer DEM- Dy. Engineering Manager DEM(S) Dy. Engineering Manager (Safety) Production AM(I)- Asst. Manger(Inst.) EE- Electrical Engineer ME- Mechanical Engineer AE(E)- Asst. Engineer(Elect) AE(I)- Asst. Engineer(Inst.) AE(C)-Asst. Engineer(Civil) MS-Maintenance Supervisor AHO-Asst. Hindi Officer

Commercial CM-Commercial Manager

Personal & Administrative PEM- Personal Manger DMP- Dy. Personal Manager PO- Personal Officer WO-Welfare Officer APO- Asst. Personal Officer A.Ad.O- Asst. Administrative Officer AO(W)- Asst. Officer(Welfare)



2.5

- 20 -

SWOT Analysis on Hindustan Insecticides Limited

Strength:  Goodwill for providing quality products  Consideration from the government because of being Public sector undertaking firm.  Availability of very large number of distributors, as close to 1 Lakh distributors in the country, even at various Taluk levels. An average company in the industry would have only 40-50 thousand distributors available. Weakness  Less capital investments for R&D  Not cost effective manufacturing when compared to competitors  Less number of Human resources. Opportunity  The herbicide and fungicide Products Company is manufacturing are of high demand in Global and Indian market. Therefore increase the capacity of plant and plan for more export.  Genetically Modified (GM) seeds production or marketing of quality seeds tends to have a good scope. And also can widen company‟s product portfolio. Threats  Threat from Genetically Modified (GM) seeds as they have immunity towards pesticides.  Competitors trying to penetrate into the market



2.6

- 21 -

Porters Five Force Analysis on Hindustan Insecticides Limited

1. Degree of Rivalry HIL, as it is owned by the central government of India, they sell their product in a standard low price, and thereby they seal the price of that specific product in the whole market so that other players wouldn‟t increase the price of it beyond HIL‟s price. Customer base often gets lured by the dealer technique of „push sales‟, therefore the margins of generics are shrinking for quality producers like HIL.

2 . Bargaining power of Suppliers Suppliers at HIL

Bargaining power

1. Specialized equipment

High

2. Labour and Construction contractors

Low

3. Electrical suppliers

Low

4. Spare parts

Medium

5. Chemical raw materials-

Medium

6. Civil Consultants-

Medium

7. ERP

High



- 22 -

3. Bargaining power of customers Customers usually don‟t have much bargaining power. But there are many players in Agro-Chemical industry. Hence customer can switch the product brand any time. 4. Threat of Substitutes Threat from Genetically Modified Seeds.

5. Threat of New entrant There are Low entry barriers to enter in Agro-Chemical industry as there are around ten multi– national companies, 57 medium and large companies and over 400 small units engaged in the manufacturing of pesticide formulations.



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Chapter 3 PROJECT PROFILE  Project 1: Retrofitting of Endosulfan Plant for the Manufacturing of Glyphosate  Project 2: Mancozeb Plant Capacity Expansion



3.1

- 24 -

Objective 

The objective of this Report is to study on Project management techniques adopted by the company officials at Hindustan Insecticides Limited, Udyogamandal unit on their projects. Project 1: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Project 2: Mancozeb plant capacity expansion

     

3.2

To Study the practical nature of project. To study the need for Project in the Organization To study the Feasibility and Profitability of the project To find the payback period on capital invested for Project To Track the project flow and project status To Analyse the Takt time for Upgraded and Existing Mancozeb plant

Methodology

All data collected for this report are used for quantitative analysis. Project Management and Operations Management techniques have been used with these data for conducting analysis. Network diagram in this report is created using Microsoft Project 2010. All data for CPM analysis are secondary data and were collected directly form Project Manager and Project status records. Gantt chart is prepared using MS Project 2010 for showing the project status and duration. To prepare Gantt chart, both primary and secondary data are used, and was obtained from project sites and project status file from company. Feasibility of the project is analysed by Profitability calculation and Break even analysis. Data for analysis is taken from the company project record and Finance department of H.I.L. Data for analysing Takt time of Mancozeb production are secondary data obtained from Log book of the Mancozeb production plant. Customer demand and market share information was obtained from the marketing department of the company.



- 25 -

Abstract In concern with growing demand on Agrochemical products and for eliminating the idle capacity in company‟s manufacturing plants, Hindustan Insecticides Limited has initiated with two live projects in their Udyogamandal unit. Project 1: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Project 2 : Mancozeb plant capacity expansion. Projects at H.I.L are not outsourced to third party consultants hence are not a Turn Key project. The Projects are Managed by Dy. Manager (Projects) and Engineering Manager of Hindustan Insecticides Limited, Udyogamanal Unit.

3.3.1 Project 1: Retrofitting of Endosulphan Plant for the manufacturing of Glyphosate. Proposal: Production of Glyphosate Technical at Hindustan Insecticides Limited, Udyogamandal Unit. Glyphosate (N-(phosphonomethyl)glycine) is a broad-spectrum systemic herbicide used to kill weeds, especially annual broadleaf weeds and grasses known to compete with commercial crops grown around the globe. Glyphosate is the single largest pesticide molecule manufactured and sold in the world, which find application in field crop, as well as horticu lture. Glyphosate is effective in killing a wide variety of plants, including grasses and broadleaf and woody plants. It has a relatively small effect on some clover species. By volume, it is one of the most widely used herbicides. It is commonly used for agriculture, horticulture, viticulture, and silviculture purposes, as well as garden maintenance (including home use). Glyphosate is also used to clear railroad tracks and get rid of unwanted aquatic vegetation India is also witnessing a shift towards increasing weedicides consumption due to increasing labour cost, and Hindustan Insecticides Limited would have a strong technical in its product portfolio, If they take up manufacturing of this product. Consequent to the temporary ban on Endosulfan by Hon. Supreme Court, the Endosulfan plant at Udyogamandal unit was lying idle. Only a small part of the plant was being used for the production of para-para DDT for the purpose of Dicofol manufacture. Currently H.I.L is formulating Glyphosate into Soluble Liquid by outsourcing the Glyphosate (Tech). H.I.L, Udyogamandal proposed to put up the facility for the manufacturing the Glyphosate(technical) by retrofitting Endosulfan plant by using the existing reactor and vessels and adding certain other equipments, They can manufacture 2.25 MT of Glyphosate without incurring any major capital expenditure.



- 26 -

Initially the company was planning to put Chlorpyriphos in Endosulfan plant because of almost similar route of synthesis. But, considering the market viability of Glyphosate and also the fact that they shall be manufacturing Chlorphyriphos at their Rasayani unit, it was decided to put up the facility for Glyphosate Technical.

Benefits for H.I.L The company can utilize the idle capacity of Endosulfan plant which is closed due to existing ban on Endosulfan by Hon. Supreme Court. Moreover, it will widen the company‟s product profile.

3.3.2 Project 2: Mancozeb Plant capacity expansion Hindustan insecticides Limited started producing Mancozeb at their Udyogamandal Unit in the year 2001. Mancozeb is a dithiocarbamate non-systemic agricultural fungicide with multi-site, protective action on contact. It is a combination of two other dithiocarbamates: maneb and nabam. The mixture controls many fungal diseases in a wide range of field crops, fruits, nuts, vegetables, and ornamentals. H.I.L markets Mancozeb in the trade names, HILPUNCH, HILMIL, HIL THANE-45 and MANCOZEB 80WP. The Existing plant at Udyogamandal unit has a capacity to produce 1.8 ton of mancozeb in one batch cycle. The cycle time is determined to be 14-15 hours, and every alternate days, 2 and 1 batches of Mancozeb is produced at Udyogamandal unit. With growing demand for mancozeb in Indian and global market, HIL has initiated with a project in Udyogamandal Unit for Expanding their capacity for Mancozeb production plant. The Upgraded plant will have double the output ie. (1.8 x 2) MT = 3.6 MT in one batch cycle. Cycle time is not expected to increase more than an hour while comparing the upgraded plant with existing plant.

Benefits for HIL With insignificant increase in fixed cost on production for Mancozeb, HIL will be capable for producing double quantity output in their Mancozeb manufacturing plant. Breakeven for the project will be achieved in 12 months and invested amount will be recovered.



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Chapter 4 OBSERVATIONS AND ANALYSIS  Project 1: Retrofitting of Endosulfan Plant for the Manufacturing of Glyphosate

 Project 2: Mancozeb Plant Capacity Expansion



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4.1.1 Observations on Project 1: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Glyphosate Manufacturing Process Glyphosate (Technical) is synthesised from the intermediate Phosphine methyl amino di acetic acid (PMIDA).In the first step reaction, oxidation of PMIDA with hydrogen peroxide in presence of a catalyst sodium tungstate. The reaction is carried out in a Glass lined/SS reactor at a temperature of 60° C – 65° C and atmospheric pressure. The product formed PMIDA oxide is then treated with sodium Metabisulphate to remove the excess of hydrogen peroxide present. The PMIDA oxide thus obtained is reacted with Vanadium Sulphate/ ferrous at about 40° C to 60° C (Reduction stage). The Glyphosate thus formed is cooled to 20° C and separated by centrifuging and the finished product is dried and bagged. The ML obtained after the recovery of Glyphosate is concentrated to 50% and is again cooled to 20° C and centrifuge the product. The water recovered is again recycled in this process. The ML after the recovery of Glyphosate is neutralized to remove the inorganic salts present in it and the effluent water this generated is sent to the common effluent system for treatment. The races of Glyphosate present in the Effluent water is oxidised with hydrogen peroxide/ozone/aeration for the removal of Glyphosate

Glyphosate Manufacturing Process Flow Diagram Fig: 4.1.1 Source: H.I.L, R&D department



- 29 -

For Glyphosate manufacturing the following Raw materials are required Raw Materials

Quantity (Kg)

PMIDA (98%)

1600

DM Water

2000 +Washing

H2 O2 (50%)

570

Catalyst(Sodium tungstate)

10.7

Vanadium sulphate

.86

Sodium metabisulphate

10.00

Operations 1. Charge water and stir 2. Charge PMIDA 3. Charge Catalyst 4. Heat to 58-69°C 5. Charge Hydrogen peroxide for 4-6 hours under cooling. Rate of addition should be uniform. 6. Cool to 30° C 7. Charge 20% solution of Sodium Metabisulphate and destroy the excess of hydrogen peroxide 8. Test the completion of reduction by iodine test 9. Charge vanadium sulphate by iodine test a) 16.5 g (1.65L 1% solution) for 3 hours stirring at 30°C b) When the temperature reached 40°C, start chilled water cooling jerks and achieve temperature below 60°C c) Charge 27.5 g (2.75 L 1% solution) under full chilling. d) Charge balance quantity 956 g (95.6 L) for 1-2 hours. e) Start cooling to 45°C and maintain until PMIDA is less than 1.0% 10. Cool to 20°C and start filtration as possible.



- 30 -

4.1.2 Profitability Calculation of Glyphosate Tech. per MT Cost for Producing 1 MT of Glyphosate

Particulars

Unit

Current

Consumption per

Rate(Rs.)

MT

Amount(Rs.)

Raw material: Nphosphonomethyliminodiacetic acid (PMIDA)

MT

195000

1.7

331500

Liquid Ammonia

MT

14000

0.26

3640

Hydrogen Peroxide(H2 O2)

MT

35000

0.66

23100

Sulphuric Acid

MT

7000

0.5

3500

Ferric Sulphate

MT

8000

0.047

376

Catalyst (Na-Tungstate)

MT

700000

0.012

8260

Total Raw-material Cost

370376

Utilities: Power Water Steam HSD/ Furnace Oil Total Utilities cost

24770

Variable Cost :

395146

Fixed Overheads

23690.4

Packing & Forwarding

10000

Total Cost

428836.4

Selling Price

440000 11163.6

Margin per MT Cost for Producing 1 MT of Glyphosate Table: 4.1.2 Source: H.I.L, Project File



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4.1.3 Detailed breakup cost including all the required Equipments for Project :

Retrofitting of Endosulfan plant for the manufacturing of Glyphosate

Sl. No

Estimated Cost in Rs. 15,00,000

Description of Works 1 Guniting 2 Equipment cost SS Rector DM water plant Cooling Tower Chilling Unit Spin Flash Drier(SFD)

42,00,000 3,53,000 5,00,000 18,00,000 28,25,000

3 Equipment Erection SS Reactor DM water plant Spin Flash Drier(SFD)

1,00,000 50,000 1,00,000

4 Centrifuge front door overhauling 5 Pipe and Pipe fitting procurement 6 Laying of pipe and pipe fittings

3,00,000 5,00,000 3,00,000

7 Civil Work Structural roofing for DM water plant Structural roofing for Spin Flash Drier

1,00,000 1,50,000

Miscellaneous civil work including painting 8 Electrical and Instrumentation including statutory approval Obtaining initial permit and stability certificate from factories 9 inspectorate

Total

6,00,000 1,50,000 1,50,000

1,36,78,000

Detailed breakup cost including all the required Equipments for Project Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Table: 4.1.3 Source: H.I.L, Project File



- 32 -

4.1.4 Project Initiation. Note: Activities listed below are already completed or in progress or yet to be completed activities. 1.

2.

3. 4. 5. 6. 7. 8. 9. 10.

Project, Retrofitting of Endosulfan plant for the manufacturing of Glyphosate, commenced on 10th of March 2014. Approval from statutory authority is required to start the project hence an application for EIA study and consent to establish the project was applied to Kerala State Pollution Control Board. Consent for the project from statutory authority was received on 25th of September 2014. Parallel to the above activity Project site appraisal and Tenders for procuring Spin Flash dryer, DM Water plant and SS reactor was carried out. Company is bound to follow the Purchase procedure/policy to make any procurement. Tender was opened and revised price bid was issued to technically suitable supplier for Spin Flash dryer, DM Water plant and SS reactor. Purchase order was issued and advance amount was paid against bank guarantee from supplier. Equipment erecting work started on 1st March 2015, it includes cleaning the vessels in the plant, reposition of existing vessels, fixing the vessels etc. Pipe Erecting work started on 1st of April 2015. Work includes pipe fabrication, setting pipe connections to vessels according to manufacturing process layout etc. Between 2nd of April 2015 and July 5th 2015, Delivery of DM water plant, Spin Flash Dryer, SS Reactor and their installation on Plant were progressing. The building had to be reinforced, therefore Guniting process on the building from 6th May 2015 till 20th June 2015 Painting work started on 20th of May 2015 and was over by July 5th 2015 The project will be completed on the July 15th 2015; The Plant will be handed over to the production department. Production department under the supervision of R&D department will be testing the plant by running trail batch of production for manufacturing Glyphosate.



- 33 -

Project Analysis The Project: “Retrofitting of Endosulfan plant for the manufacturing of Glyphosate” have been analysed using Critical Path Method and Gantt Chart. Gantt chart A Gantt chart is a horizontal bar chart developed as a production control tool. Frequently Gantt charts are used in project management, a Gantt chart provides a graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project. CPM Diagram The critical path method (CPM) is an algorithm for scheduling a set of project activities. The essential technique for using CPM is to construct a model of the project that includes the following: A list of all activities required to complete the project (typically categorized within a work breakdown structure),   

The time (duration) that each activity will take to complete, The dependencies between the activities and, Logical end points such as milestones or deliverable items.

Fig: 4.1.5 depicts the Gantt chart and figure Fig: 4.1.6 depicts Gantt chart of the project respectively.



- 34 -

4.1.5 Gantt Chart Diagram for Project: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Gantt Chart and Network diagram are created using MS Project 2010. The activities and its duration mentioned in the diagram are obtained from the company‟s Project files and from direct inputs by the Project Managers and Engineers at Hindustan Insecticides Limited and from Project sites.

Gantt Chart for Project: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Fig: 4.1.5


Glyphosate

Project 1: Retrofitting of Endosulfan plant for the manufacturing of

Network Diagram

Source:

- 35 -

Fig: 4.1.6




- 36 -

4.2.1 Observations on Project 2: Mancozeb Plant Capacity Expansion The manufacturing process of Mancozeb consist of seven stages 1. Nabam reaction The reaction in this stage are carbon disulphaphide, ethylenediamine(EDA) and caustic soda Iye. Carbon disulphide and water is taken in the reactor and agitate the water CS2 mixture to form an emulsion. Dilute EDA and caustic soda Iye are added at controlled rates to the reactor to form Nabam. The reaction temperature is 40-43 C and the final PH of Nabam should be between 8.5 and 9.5

2. Maneb reaction The Nabam formed in the 1st stage is reacted with 27% solution of Manganese sulphate solution to form Maneb. The reaction is carried out at a temperature of 50-55° C 3. Mancozeb reaction The Maneb formed in the second stage is filtered to remove the by-product Sodium sulphate and washed in a Nutsche filter. The washed Maneb is reslurried with fresh water and transferred to Mancozeb reactor. Here we add Zinc sulphate solution solution to form Mancozeb. Mancozeb is formed as slurry in water. The reaction is carried out at room temperature. 4. Spray drying The water contained in the slurry is removed in the spray drier operated at an inlet temperature of 240 °C and out let temperature of 100°C. The powder is collected in a storage Bin. 5. Rotary Vacuum Drier(RVD) The final traces of moister from the spray-dried powder are removed in the RVD where the moister content of the powder is brought down to less than 1.0%. the operating temperature is 80°C. The jacket temperature of RVD is maintained below 120°C. 6. Blending The powder after the RVD operation is dropped to a Blender where they add some additives(surfactants and stabilizers) for achieving the prescribed qualities of the product. 7. Bagging The blended powder is then bagged in Paper bags/HDPE bags and shifted to ware house for sales.



- 37 -

The Flow diagram of Mancozeb manufacturing Plant

Flow diagram of Mancozeb manufacturing Plant Fig: 4.2.1 Source: H.I.L, R&D Department



- 38 -

4.2.2 Cycle Time comparison of process in Existing Mancozeb Plant and Upgraded Mancozeb plant. Existing Plant Reaction Process Nabam Reaction Maneb Reaction Neutsche Filter Mancozeb Reactor Spray Drier Rotary Vacuum Drier Blender

Cycle Time in Hours 2 3 5 2 3 14 2

Upgraded Plant Reaction Process Nabam Reaction Maneb Reaction Neutsche Filter Mancozeb Reactor Spray Drier Rotary Vacuum Drier Blender

Cycle Time in Hours 2 3 8 2 3 15 3

Cycle Time comparison of process in Existing Plant and Upgraded Mancozeb plant. Fig: 4.2.2 Source: H.I.L, Mancozeb Production Plant Log Book



- 39 -

4.2.3 Detailed breakup cost including all the required equipments for Project: Mancozeb Plant Capacity Expansion

Sl. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

Particulars Building (24m X 8m X 16m) (h x w x l) RVD and Accessories Ribbon Blender Manganese Sulphate Batch vessel Vacuum Pump Load Cell, Valves, Duct etc. Nitrogen Generator Electrical Instrumentation Equipment Erection Bagging Machine Powder Bin 4.0 MT cap Nitrogen Receiver Slurry Tank with Agitator Pipes and Fittings Preparation of Drawings Electrics (motor, cables, MCC, Panel board etc.) Miscellaneous Items Total Cost

Value in Rs. Lakhs 75 85 30 10 30 10 14 10 20 10 15 6 25 10 3 20 37 410

Detailed breakup cost including all the required equipments for Project: Mancozeb Plant Capacity Expansion Table: 4.2.3 Source: H.I.L, Project File

Total Cost for Project = Rs. 4.1 Crores



- 40 -

4.2.4 Cost of production for 1 MT of Mancozeb Particulars Raw material:

Amount(Rs.)

36812 41885 2799 24642 1653 1689 2569 8790 268 121107

Carbon Di Sulphide Ethylene diamine Zinc Sulphate Manganese Sulphate Calcium Lingo Sulphonate Hexamine Jeemol Caustic Soda Lye CC Tech Total Raw Material Cost Utilities: Power Water Furnace Oil Fuel Oil Total Utilities cost

8380 2495 4123 8407 23405

Total Variable Cost Conversion Cost: Employee Repairs Factory Overheads Admin Overheads H.O Expenses Pollution Control Depreciation Interest Total Conversion Cost

144512

Total cost per MT

194938

26117 4129 2672 1666 1899 54 1885 12004 50426

Cost of production for 1 MT of Mancozeb Table: 4.2.4 Source: H.I.L, Finance Department

Total Cost of production for 1 MT of Mancozeb at Hindustan Insecticides Limited = Rs. 194938



- 41 -

4.2.5 Project Initiation. Note: Activities listed below are already completed or in progress or yet to be completed activities. 1.

Project, Mancozeb plant capacity expansion, commenced on 12th of July 2012. Approval from statutory authority is required to start the project hence an application for EIA study and consent to establish the project was applied to Kerala State Pollution Control Board. Consent for the project from statutory authority was received on 7th of December 2012.

2.

After receiving the approval from KSEB, Tenders are floated for procuring RVD , Ribbon Blender, Bagging Machine, Pilling for super Structure, Construction of Building were carried out. Company is bound to follow the Purchase procedure/policy to make any procurement. Enquiry for procuring vessel, powder bin, Cyclone, rotary valves

3.

Tenders were opened and revised price bid was issued to technically suitable supplier for RVD, Ribbon Blender, Bagging Machine, Pilling for super Structure, Construction of Building Several Meeting are arranged with the suppliers and Project Engineers for correction of equipment design drawing and deciding the specifications.

4.

5.

Purchase order was issued to supplier and advance amount was paid against bank guarantee from the supplier.

6.

Equipment erecting work started on 2nd of March 2013.

7.

Pilling Work started on 14th May 2014 and Building super structure works commenced on 9th September 2014.

8.

Between 12th of December 2013 and 16th of June 2015, Delivery of Ribbon blender, Bagging Machine, electrical Motors, Panel Boards, Cables, Light Fittings, Cable racks, Cooling racks and their installation on Plant were progressing.

9.

Delivery of Rotary Vacuum Drier( RVD) by the supplier to the project site prolonged the whole project. Supplier took 394 days to deliver the equipment from the date company handed over the equipment drawing.

10.

The project is expected to be completed on 5th of August 2015; The Plant will be handed over to the production department. Production engineers would start the commission of Plant.



- 42 -

Project Analysis The Project: “Mancozeb Plant Capacity Expansion” have been analysed using Critical Path Method and Gantt Chart. Gantt chart A Gantt chart is a horizontal bar chart developed as a production control tool. Frequently Gantt charts are used in project management, a Gantt chart provides a graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project. CPM Diagram The critical path method (CPM) is an algorithm for scheduling a set of project activities. The essential technique for using CPM is to construct a model of the project that includes the following: A list of all activities required to complete the project (typically categorized within a work breakdown structure),  The time (duration) that each activity will take to complete,  The dependencies between the activities and,  Logical end points such as milestones or deliverable items. Figure 4.2.6 depicts the Gantt chart and figure 4.2.7 depicts Network Diagram of the project respectively.



- 43 -

4.2.6 Gantt Chart Diagram for Project: Mancozeb Plant Capacity Expansion Gantt Chart and Network diagram are created using MS Project 2010. The activities and its duration mentioned in the diagram are obtained from the company‟s Project files and from direct inputs by the Project Managers and Engineers at Hindustan Insecticides Limited.

Gantt Chart Diagram for Project: Mancozeb Plant Capacity Expansion Fig: 4.2.6


- 44 -

Network Diagram Project 2 : Mancozeb Plant Capacity Expansion

Fig: 4.2.7




- 45 -

Chapter 5 FINDINGS  Project 1: Retrofitting of Endosulfan Plant for the Manufacturing of Glyphosate  Project 2: Mancozeb Plant Capacity Expansion



- 46 -

5.1 Findings for Project 1: Retrofitting of Endosulfan plant for themanufacturing of Glyphosate Cost of Project For the production of 2.25 MT per day of Glyphosate Technical, all major manufacturing equipment required for the process are already available in existing Endosulfan plant. The total expenditure estimated is Rs.1,36,78,000. (Refer Fig 4.1.3, Page 31)

5.1.1 Finding Profitability or Viability of Project Per day, Plant has capacity to produce 2.25 MT of Glyphosate The profitability analysis shows margin of Rs. 11163.60 per MT of Glyphosate. (Refer Fig 4.1.2, Page 30) Total margin per day = 11163.60 X 2.25= Rs. 25118.1 Pay Back Period = 1,36,78,000 / 25118.1 = 545 days Pay Back Period work out to be around 545 days or say 18 months The profitability has been calculated considering the current Selling Price of Glyphosate to be Rs. 440/- per Kg.



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5.1.2 Finding from Gantt Chart Project: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Table: 5.1.2 contains all the Tasks and their Duration for completion, obtained from the Gantt chart. (Refer 4.1.5, Page 34)

Tasks 

Duration in days

Application for consent to Establish from KSPCB Site appraisal

144

16



Tender floated for procuring spin flash dryer, DM plant, SS reactor Technical bid opened and technical suitability evaluation for spin flash dryer Technical bid opened and Technical suitability evaluation for SS reactor Revised price bid opened for spin flash drier. Revised price bid for DM Plant. Revised priced bid opened for SS Reactor. Raising PO and delivery period of equipment erection. Equipment Erection



Piping Erection.

42



27



DM Water Plant delivery on Site and installation Guniting



SS reactor delivery on site and installation

19



19



Spin Flash drier delivery on site and installation Commissioning of plant



Formulation for Glyphosate

27

       

74

23 26 7 10 10 130 41

34

26

Finding from Gantt Chart: Project: Retrofitting of Endosulfan plant for the manufacturing of Glyphosate Table: 5.1.2

Total days for Project completion, if the succeeding Tasks were starting only after the completion of Preceding Tasks = 674 days. Actual duration for the Project Completion = 524 days. The Gantt chart diagram Refer (4.1.5, Page 34) shows many Tasks in Project progressed simultaneously thereby shortened the duration for project completion.



5.2

- 48 -

Findings for Project 2: Mancozeb Plant Capacity expansion

Cost of Project For enhancing the capacity of Mancozeb production, all manufacturing equipments in Nabam reaction, Maneb reaction, Mancozeb reaction are already equipped with capacity to double the production output, except for Rotary Vacuum Drier and Blending Process. Total expenditure for Capacity expansion project is estimated to be Rs. 4.1 Crores (Refer Fig 4.2.3, Page 39)

5.2.1

Finding Profitability or Viability of Project

Per batch output in Capacity expanded Plant will produce 3.6 MT of Mancozeb and every alternate days 1 and 2 batches of Mancozeb will be produced. Considering the work breakdown and Planned down time, the company will at least produce 70 MT of Mancozeb every month in the existing plant. And the Upgraded plant will produce 140 MT of Mancozeb every month. Company will cross their breakeven making a profit margin of 4.27 Crores over initial project investment of Rs. 4.1 Crores within 12 months.

Breakeven Analysis have been worked out using MS excel. (Refer Fig 5.2.2, Page 49)



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5.2.2 Breakeven Analysis using MS Excel for Capacity Expansion Project No of units Produced after doubling capacity (Unit in MT) 1 2x1 2x2 2x3 2x4 2x5 2x6 2x7 2x8 2x9 2 x 10 2 x 11 2 x 12 2 x 13 2 x 14 2 x 15 2 x 16 2 x 17 2 x 18

Cost of Production (in Rs.)

Market Selling price (in Rs.)

Profit (in Rs.)

194938

170000

-24938

339450 628474 917498 1206522 1495546 1784570 2073594 2362618 2651642 2940666 3229690 3518714 3807738 4096762 4385786 4674810 4963834 5252858

340000 680000 1020000 1360000 1700000 2040000 2380000 2720000 3060000 3400000 3740000 4080000 4420000 4760000 5100000 5440000 5780000 6120000

550 51526 102502 153478 204454 255430 306406 357382 408358 459334 510310 561286 612262 663238 714214 765190 816166 867142

13056506 15300000 2243494 2 x 45 20282106 23800000 3517894 2 x 70 242830586 285600000 42769414 2 x 840 Breakeven Analysis for Capacity Expansion Project Fig: 5.2.2

1 Month 12th Months

Finding Company while selling only 1 MT of Mancozeb, needs to pay contribution of Rs. 24938 , as the Cost of Production for 1 MT of Mancozeb is Rs. 1,94,938 and Market selling Price is only Rs.1,70,000 per MT. But by the sale of more than 2 MT of Mancozeb, company will cross their breakeven point in manufacturing and starts making profit margin (Refer Fig: 5.2.2, Page 49 and Fig: 4.2.4, Page 40) From the analysis, in the 12th month the company will make profit margin of Rs. 4,27,69,414. Therefore Payback period is calculated to be 12 Months.



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5.2.3 Takt Time Analysis Takt time is an expression of Company‟s customer demand normalized and levelled over the time company choose to produce. Takt time = Net available time / Customer Demand Here Takt time is calculated considering, Existing Mancozeb plant produces average of 2.7 MT of Mancozeb per day and Capacity expanded plant will produce average of 5.4 MT of Mancozeb per day.

Existing Plant

Takt time = 8.51 Hours for producing 1 MT of Mancozeb

Takt Time Analysis for Existing Plant Fig: 5.2.3.a



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Capacity Expanded Plant

Takt Time = 4.25 Hours for producing 1 MT of Mancozeb

Takt Time Analysis for Upgraded Plant Fig: 5.2.3.b

Finding After Capacity expansion project, Takt Time has reduced from 8.51 hours to 4.25 hrs. Or say, in the Upgraded plant, to produce 1 MT of Mancozeb will take only 4.25 hrs.



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5.2.4 Findings from Gantt Chart Project: Mancozeb Plant Capacity Expansion Table 5.2.4 contain all the Tasks and their Duration for completion, obtained from the Gantt chart. (Refer 4.2.6, Page 43)

Tasks in the Project   



  

   

Application for consent to establish from KSPCB Site Appraisal Tender floated for procuring RVD, Ribbon Blender, Bagging Machine, Pilling for super Structure, Construction of Building Technical bid opened and technical suitability evaluation for: Pilling and construction of super structure of building, RVD, Ribbon blender, Bagging Machine Technical suitability given for Pilling & Construction, RVD, Ribbon Blender, Bagging Machine Enquiry floated for vessel, powder bin, Cyclone, rotary valves Delivery of Ribbon blender, Bagging Machine, electrical Motors, Pannel Boards, Cables, Light Fittings, Cable racks, Cooling racks Erection of equipments, piping and electrical Pilling Work Building super structure works Delivery of RVD, erecting and Commissioning of Pant

Duration in Days 111 3 302

413

407

14 394

622 82 245 394

Findings from Gantt chart: Project 2: Mancozeb Plant Capacity Expansion Table: 5.2.4

Total days for Project completion, if the succeeding Tasks were started only after the completion of Preceding Tasks = 2987 days or 8 Years, 2 months. The Gantt chart diagram (Refer 4.2.6, Page 43 ) shows many Tasks in Project progressed simultaneously thereby shortened the duration for project completion. Actual duration for the Project Completion = 1126 days or 3 years, 1 month.



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Chapter 6 RECOMMENDATIONS



6.1

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Recommendations

1. It could be suggested that instead of strictly adhering to the purchase procedure/policy of company, the Projects could be exempted from it. Project managers must have the privilege to choose the Suppliers for the projects as they know the right supplier for their project, Also an anti-corruption wing could be appointed to make sure the company officers make their decision only for the best interest of organization. This would ensure that suppliers would not delay the delivery of equipments or compromise on the work quality as they need to build the trust factor before the company so that company would enlist them as a trusted supplier and provide them with more orders in future. 2. Incentivizing the supplier would motivate them to deliver the Equipments on or before delivery date. This could ensure that the Project would not go into halt due late delivery of equipments or materials by the supplier. 3. Projects are initiated as they are of high importance for the existence of the organization therefore must be allotted with sufficient resources including Human Resource and Capital Resource. 4. As the company is wide spread across acres in area. The project engineers to walk out from their office room to the project sites to and fro consume their time and energy. I suggest that a Special permission needs to be granted for Project Engineers to use vehicle (two-wheeler) for their movement within the company for the project purpose only could be allowed. This would ensure the project engineers can be at their project sites at all working times. 5. It is remarkable that over the last many decades Hindustan Insecticides Limited, Udyogamandal Unit consecutively gets appreciation letter from Kerala State Pollution Control Board for “Substantial Improvement in Pollution Control Activities”. The company could be brought up to the 1st position for receiving this award in the coming up years, by better management on disposal of the chemical wastes and more capital investment into Effluent Treatment Plant. As the ancient Indian proverb says “We do not inherit the Earth from our Ancestors, we borrow it from our Children.”



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Chapter 7 CONCLUSION



7.1

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CONCLUSION

This report has discussed about the project management on “Retrofitting of Endosulfan plant for the manufacturing of Glyphosate” and “Mancozeb plant capacity expansion” at Hindustan Insecticides Limited, Udyogamandal. Projects are crucial for the existence any company therefore they need to be well managed and executed. Increase in population and to feed the billons of masses eventually accounts to the huge demand for agrochemical products in Indian and global markets. It is known that, even after the usage of crop protection products, an average of 30 to 40% of the harvest is lost due to diseases and pests. Currently around ten Multi–national companies, 57 medium and large companies and over 400 small units are engaged in the manufacturing of pesticide formulations. And the central public sector unit producing pesticides is Hindustan Insecticides Limited. Invention of Genetically Modified seeds has been the Phase changer for the industry. In 2014 the largest review yet concluded that GM crop‟s effects on farming were positive. The meta-analysis considered all published English-language examinations of the agronomic and economic impacts between 1995 and March 2014. The study found that herbicide-tolerant crops have lower production costs, while for insect-resistant crops the reduced pesticide use was offset by higher seed prices, leaving overall production costs about the same. This results into Agrochemical chemical companies tending to diversify their business into GM seeds business. GM seeds to reach every consumers or farmers over the world would take several years. Until then Agrochemical products are needed for the agriculture production. Man needs food for survival, Agriculture has to sustain for sustaining mankind.



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Learning Outcomes

7.2 

Being a student with under graduation in Information technology and work experience in the same, the 2 months Internship period at Hindustan Insecticides Limited gave me a wonderful Exposure to Manufacturing sector.

It was my first-hand experience into a production

company. 

Had the opportunity to visit every production plants in the company. Learned the operations of every plant. Also had the opportunity to reach each and every department in the company.



Being a student who wishes to build career in Project Management profile. It was a golden opportunity for me to be at the project sites and discusses about the projects with Managers and staffs. I was able to learn the real nature of projects when it goes live. I witnessed many constraints happen during the project at the project site. A calm mind and broad picture making skills are essential for becoming a great Project Manager. Also good Technical knowledge is required.



The Organization study I made on Hindustan Insecticides Limited, gave me an insight and knowledge into how a manufacturing organization s would be running.



Experience sharing from the Managers and the workers was indeed a good learning.



7.3

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References

David Cutler, Winnie Fung, Michael Kremer, Monica Singhal, and Tom Vogl (April 2010) Earlylife Malaria Exposure and Adult Outcomes: Evidence from Malaria Eradication in India American Economic Journal Retrieved from Harvard website: http://hks.harvard.edu/fs/msingha/malaria_apr2010.pdf Agrochemical Industry In India (October 6th 2015) Agrochemical Industry In India 2012-13: An Overview | Retrieved from The maps of India website: http://www.mapsofindia.com/myindia/government/agrochemicalindustryinindiaanoverview Indian Agrochemical Industry -Imperatives of Growth (July 2013) Knowledge and Strategy paper rd released at 3 National Agrochemical Conclave, Retrieved from Tata Strategic Management report Indian agrochemical industry to reach $7.5 billion by FY19: Report (Aug 25th 2014) Indian Retrieved from Economic times website: http://articles.economictimes.indiatimes.com/20140825/news/53205057_1_cropprotectionindustryagr ochemicals2014report Indian Agriculture a Snapshot (May 2014)

Released by –Kagashin Global Network Pvt Ltd

Top Pesticides Agro Chemicals Companies in India (June 2015) Top Pesticides Agro Chemicals Stocks in India by Net Sales Retrieved from Moneycontrol website: http://www.moneycontrol.com/stocks/marketinfo/netsales/bse/pesticidesagrochemicals.html Tim Gutowski Brian Bowers (Year: 2004) ,Machining Operations Cycle Time Module 8.2, Lean/Six Sigma Systems. Retrieved from MIT Open courseware website: http://ocw.mit.edu/courses/engineering-systems-division/esd-60-lean-six-sigma-processes-summer2004/lecture-notes/8_2maching_optime.pdf E-Tenders, Hindustan Insecticides Limited (June 2015) Retrieved from H.I.L website: http://www.hil.gov.in/(S(bdpialunmxmuf545bldqik55))/Tender.aspx Annual Reports, Hindustan Insecticides Limited (June 2015) http://www.hil.gov.in

Retrieved from website:

Caroline Smith (Year :2004) Critical Path Analysis and PERT Charts- Planning and Scheduling More Complex Projects Retrieved from Mindtool website: http://www.mindtools.com/critpath.html

Douglas West, John Ford, Essam Ibrahim (2009), Porter Generic Competitive strategies, Strategic Marketing Creating Competitive Advantage, Oxford University press.
