Fore School of Management

Report on Industrial Visit

Submitted by:

Dhiren Patel (191137)

 Report on industrial visit

Parle products Ltd (Bahdurghar, Haryana)

INTRODUCTION

In 1929 a small company by the name of Parle products emerged in British dominated India. The
intent was to spread joy and cheer to children and adults alike, all over the country with its
sweets and candies. The company knew that it wouldn’t be an easy task, but they decided to take
the brave step. A small factory was set up in the suburbs of Mumbai, to manufacture sweets and
toffees. A decade later it was upgraded to manufacture biscuits as well. Since then, the Parle
name has grown in all directions, won international fame and has been sweetening people's lives
all over India and abroad.

Apart from the factories in Mumbai and Bangalore Parle also has factories in Bahadurgarh in
Haryana and Neemrana in Rajasthan, which are the largest biscuit and confectionery plants in the
country. Additionally, Parle Products also has 7 manufacturing units and 51 manufacturing units
on contract.

Parle Products has been India's largest manufacturer of biscuits and confectionery, for
almost 80 years. Makers of the world's largest selling biscuit, Parle-G, and a host of other
very popular brands, the Parle name symbolizes quality, nutrition and great taste. With a
reach spanning even the remotest villages of India , the company has definitely come a very
long way since its inception.

Many of the Parle products - biscuits or confectioneries, are market leaders in their category
and have won acclaim at the Monde Selection, since 1971. With a 40% share of the total
biscuit market and a 15% share of the total confectionary market in India , Parle has grown
to become a multi-million dollar company. While to consumers it's a beacon of faith and
trust, competitors look upon Parle as an example of marketing brilliance.

PARLE BRANDS
Biscuits Confectionary Snacks
Parle G Melody Must Bites
Monaco Mango Bite Sixer
Kreams Poppins Jeffs
Chox Kismi Toffee Sixer jeera
Nimkin Orange Kandy Monaco Smart Cheeps
Hide & Seek Bourbon Kismi Gold
Parle Marie
 We visited Bahadurgarh Haryana Factory of Parle which is producing Biscuits brands of
1. Parle G
2. Monaco
3. Krack Jack

MARKET SCENERIO:-

 Market share data for biscuit industry according to Indian Biscuit Manufacturing Association.

 Market Share - Sector wise

ORGANISED SECTOR 60%
UNORGANISED SECTOR 40%
 Market share penetration- Population wise
URBAN 85%-75%
RURAL 65%-55%
 Market share - Region wise
NORTH ZONE 25%
WEST ZONE 23%
EAST ZONE 28%
SOUTH ZONE 24%
 Market share- Brands wise (volume )
PARLE 40%
BRITANNIA 38%
PRIYA GOLD 15%
ITC 11%
REST 6%
 Market Share – product wise
Marie and Glucose 50%
sweet,crackers,cream ,milk 50%
 Annual growth rate
2004-15%
2005-14%
2006-14%
2007-13%
2008 15%
2009-17%
 Total Production ( In lakh metric ton)

2003-2004 11.00
2004-2005 12.54
2005-2006 14.29
2006-2007 16.14
2007-2008 17.14

Parle is the India’s largest manufacturer of biscuits and confectionary. It is the manufacturer of
world’s largest selling buiscuits Parle-G. Parle –G brands worth more than 2000 crore and
company’s around 50 % revenue comes from Parle-G. Parle-G has 70% market share in India in
glucose biscuit category. Parle has around 40% share in biscuit market and 15% share in
confectionary market. 2 months ago it enters into the chips segment to increase its product width.

MANUFACTURING PROCEESS (OPERATION PERSPECTIVE)

We have seen the biscuits manufacturing process.It includes five stage.

 Mixing

 Forming

 Baking

 Cooling

 Packing

MIXING-

This is a process where all ingredients are  put together  in right proportion for 
dough formation. These ingredient are then fed into Mixers where mixing is done 
and dough is prepared for molding .Major ingredients are flour(Maida) , fat ,sugar .etc. Mixing
can be done in  One stage ,two stage or three stage s.

One stage or all in One   is type of mixing where all ingredients and water are 
added once .Mixing is allowed till  satisfactory dough is prepared .Normally this 
type of mixing is used for hard Dough.

Two - Stage mixing :

Creaming : All ingredients are added with water and mixed 4-5 minutes except for 
flour .
2nd stage :Flour  with chemicals are then mix with the creaming product to form a 
consistent dough .
Three stage mixing :
Stage One : fat , sugar  with  other ingredient like milk, chocolate, malt , honey etc 
are mixed and cream is preparedwith portion of water  .

Stage two: Salt , chemical and flavours with colors are mixed with water.

Stage three : Flour  with water is then added to the prepared cream and mixed till 
satisfactory dough is prepared .

Mixing process  have following characteristics which  have be monitored for better
result .
method.
Mixing time : Normally any mixing could be achieved  within 15-25 minutes .
Much depends on mixing  speed of mixer , flour characteristic's or temperatures 
required for dough.

Dough Temperatures : Very important factor  the temperature ranges between

35 deg c - 42 deg c  as per biscuit variety .

Dough consistency: This is  done manually by checking dough and stretching the 
dough it should not break neither should it be so elastic . These methods are 
mastered by bakers by trial and error method.

For cracker variety  dough are had additional ingredient yeast and dough are kept 
for 10- 24 hrs .

FORMING

In  forming sections  the dough is passed through several rolls  to form sheets , these 
sheets are then converted into One uniform sheet of desired  thickness it is normally 
6-5mm.

Moulders and cutters are used to cut sheet or convert dough  into desired shape and size

BAKING

Wet dough pieces of desired weight and shape are then passed on to oven band through 
swivel panner web .

Following are the chemical and physical changes which occurs in oven ,When dough piece 
is passed on to oven .

Physical changes
1. Formation of crust   2. Melting of fat  3.gas expansion  in dough piece due to co2 
expansion at higher temperatures . 4. Water converted into steam

COOLING

Cooling process is as  important  than any other process , When biscuit comes out with
oven the temperatures of biscuit are around 70-95deg c, These biscuit can be cooled by 
letting it travel for distance of 1.5 times of baking time . so if you have a oven of  200 ft 
then cooling conveyor length would be approx  300 - 350 . In some places forced cooling is 
also done due to space constrain or for special features .Cooling brings temperatures to 
room temperature for handling of biscuit for packing.

PACKING

Biscuits are fed into packing machines in continuos  stacks this is  either manual or with help of
auto feeders with help of feeding chutes .Biscuits are fed into packing machines in continuos
stacks this is achieved through stacker which converts free flowing biscuits into uniform
achieved through stacker which converts free flowing biscuits into uniform stacks .These are
done through guidelines  which could be adjusted as per  type of biscuits .

Major functions of packaging are

1. Protect from mechanical damage in transit and loading and unloading

2. Protect from loss of moisture and any foreign odour contaminations
3. Protect from Foreign body infestation.
4. Legal compliance for values and ingredients for consumers
5. Advertisement

PRODUCTION CAPACITY

In bahadurgarh factory in all the 3 biscuits has production

Biscuits Brand Production/day

Monaco 25 ton
Krack Jack 50 ton
Parle G 100 ton

Waste Percentage:- waste percentage of around 1.5-2%.They classified the waste into two kind
of waste

1 RB(Recyclable)

2 SB(Sewageable)
Sewageable waste is the waste which they sold to farmers or any person who ultimely feed that
to the animals.It is also the source of revenue for them.

FINANCIAL ASPECTS

Revenue of the whole Parle group around 5000 crores.

Break up of that revenue is

Biscuits segment- 4000 crore

Confectionary segment- 1000 crore

HUMAN RESOURCE

Human resource capacity was around 1000 operators and 90 executive staff at Bahadurgarh
plant. Out of 1000 operators 500 were on contract and 500 were permanent employee.

CSR (corporate social responsibility)

At bahadurgarh plant as a csr activity management has distributed free lunch boxes in the
government school,they distributed free hand pump.Parle Centre of Excellence as an institution
is dedicated to enrich the lives of people through conducting various cultural programs across all
region to facilitate the all round development of the children. Every year, Parle organises
Saraswati Vandana in the state of West Bengal during the festival of Saraswati Puja, inviting
schools from all across the state to participate. The event is one of much fanfare and celebration,
keeping alive the culture and traditions of ages. Our involvement in cultural activities has seen
the inception of Golu Galata in Tamil Nadu, held during Navratri. Its gives a platform to all the
members of a household to showcase their creativity and being judged by immanent
personalities. Thousands of families participate and celebrate the occasion on a grand scale.

STRATEGIC DECISION

As raw material cost like sugar,maida has skyrocketed in the recent past. Parle has made the
strategy to combat the rising raw material cost.Company has kept all the product selling price
constant but has reduced the quantity and given more focus on cost cutting through reduction of
wastage.thats why company is looking for automation so that it can save some labour cost also.
 Report on industrial visit

Relaxo footware Ltd. (Bahdurghar, Haryana)

Relaxo is one of the most quality conscious, progressive footwear companies manufacturing
branded footwear such as Relaxo Hawai & Flite slippers, School -mate, Canvas shoes, Sparx
sports shoes etc. Headquartered in New Delhi, Relaxo maintains a fine combination of comfort,
style, and workmanship and is embarking upon appreciable growth plans for the future. The
company began as a small enterprise in 1976, was officially incorporated in 1984 & further went
into public listing in 1995. According to the 2008 Business Survey, it has now emerged as the second
largest footwear producer in India.

Products:
Relaxo Footwear has a plethora of diverse operations in its portfolio, most of which may be classified
into three main divisions:
• Whole Sale Operations • Retail Operations • Export Operations
Products comprise a wide range of quality footwear in the following brands:
1. Hawaii Slippers: Hawaii is the most popular brand in the Relaxo portfolio. It comes in  diverse
shades and styles and its comfort value makes it a favourite among all age groups. With an
output of 300000 pairs a day, Relaxo is one of the largest manufacturer of Hawaii in India.
2. Flite: Flite is Relaxo's most exclusive brand. Its unique “fashionable and light” quality is
ensured by its manufacturing process, involving cutting-edge EVA technology. Available in an
array of colours and designs, it is among the popular products in the casual footwear industry.
3. Sparx: Sparx is a range of sports shoes and sandals that embodies the spirit of today's youth.
Available in awe-inspiring colours and designs, it reflects verve and dynamism as an iconic
youth brand and is symbolic of a wholehearted zest for life
4. Schoolmate: Schoolmate is a range of school shoes for boys and girls and is an expression of
Relaxo's faith and commitment towards the young leaders of tomorrow. Made with special care
to pamper thousands of tiny feet, each pair bears the mark of superb workmanship and
adaptable design.

Production:

The company has established 6 manufacturing plants spanning North India. These are located
in Delhi, Bahadurgarh (Haryana) and Bhiwadi (Rajasthan). With a cumulative area of over
120,000 sq. feet, these units have a huge set up enabling massive production. Each
manufacturing unit is equipped with world-class machinery and hi-tech product testing
laboratories. IN FY10, Hawaii footwear (Relaxo) could contribute 40% of sales, Light slippers
(Flite) 40% and Sports shoes and sandals 20% of sales.

S No. Factory Location Products Manufactured

1 RFL I Bahadurgarh Hawaii, Spark Hawaii
2 RFL II Bahadurgarh Hawaii
3 RFL III Bhiwadi Hawaii
4 RFL IV Bahadurgarh Flite
5 RFL V Haridwar Sparx Shoes & Sandals
Flite, Schoolmate, Casualz, Sparx
6 RFL VI & VI B Bahadurgarh
DIP
7 RFL VII Bahadurgarh Canvas
8 Nu Wave Shoes Delhi Schoolmate, Casualz
Canvas, Bahamas, Sparx Fabricated
9 Patel Oil Mills Delhi
Hawaii
10 Marvel Polymers Delhi Sparx Shoes & Sandals

Products at Bahadurgarh:
Hawaii, Spark Hawaii, Flite, Schoolmate, Casualz Sparx DIP, Canvas

Today, the company manufactures over 3 lakh pairs of footwear per day, which approximately
adds up to over 10 million pairs per year. Each pair is given thorough attention by the
dedicated and skilled employees working at the 10 state-of-the-art manufacturing units in
Northern India. Thus, it is no small wonder that the annual turnover has multiplied 2.4 times in
the last 3 years from Rs. 305 crore in 2007-08 to a whopping Rs. 550 crore in 2009-10.

MARKET SCENARIO:

RFL is one of the largest players in this sector . Other big names in the footwear industry are Bata
India, Liberty Shoes and Lakhani Footwear of which Lakhani is not a listed peer. Bata India cannot be
compared to the business of RFL as Bata follows a different business model.

RFL enjoys a very good market share especially in the northern part of the country. RFL has the
capacity to manufacture over 100 million pairs, per annum. It is second only to Bata India. Its capacity
to manufacture 200,000 pairs of Hawaii slippers per day is one of the highest in the footwear industry.
A network of 350 distributors and 30,000 retailers operating across India ensures that all its products
reach customers in almost all parts of North, West and South India.
 LEARNING:
OPERATIONS MANAGEMENT:

Moving up the value chain

RFL began by manufacturing and selling Hawaii footwear. Over the years it has added products to its
portfolio that are better placed than Hawaii footwear – i.e. light slippers and shoes & sandals. In terms
of perception of trade, it has moved up the value chain. Design, product development, quality and
affordable price – the four cornerstones of footwear business – RFL is well placed in all of these. Shoes
give RFL a higher margin compared to the other two products.

Commitment to quality
Relaxo has consistently lived by and upheld its quality assurance, rigidly adhering to the statutes of
Quality Par Excellence and Absolute Customer Satisfaction.
Quality control managers monitor every stage of manufacturing process, right from pre-production to
shop floors. Shaping and designing undergo the same stringent checks as the final products. Some of
the quality tests that our products are subjected to are:
 Random Testing
 Batch Testing
 Tactical Wear Testing

MARKETING MANAGEMENT

RFL enjoys a good Brand Value

RFL produces different products under different brands. It produces Hawaii Footwear in the brand
name of “Relaxo” whereas the light slippers segment is branded as “Flite”. The school and sports shoes
segment are branded Sparx for which with brand ambassador is Model and Actor Neil Nitin Mukesh. In
FY09, RFL spent Rs 30.3 crores on advertisements and sales promotion, which accounts to 7.5% of
sales. All three brands – Relaxo, Flite and Sparx are quite well known and well accepted by the
common man and therefore this brand value helps the company push its sales further and create more
faith in the minds of the customers. Also a reputed brand name enables the company to have a higher
pricing for its products in the market.

HUMAN RESOURCE MANAGEMENT

Types of strategies
Growth - An organisation can expand either through internally generated growth or through acquisitions,
mergers or joint venture. Growth may be concentrated on building existing strengths or on moving into
new or unrelated areas of business.
Retrenchment - The emphasis of retrenchment is on performance improvement by increasing
productivity, cost cutting, downsizing, re-engineering, and selling or shutting down business operations.
Stability - This is a neutral strategy that attempts to maintain the status quo by pursuing established
business objectives; and is often used when an organisation is performing well in a low-risk environment
or when an organisation needs to consolidate after a period of rapid growth or restructuring.

FINANCIAL MANAGEMENT 

Decent Margins
The financial year 2009 has been a year of lots of ups and downs for the markets and the economy. The
same was also felt by RFL. The raw material prices were pretty high in the initial quarters for the
company. The company could not transfer the volatility in the raw material prices on to the customers
and thereby took a hit on the margins. During Q4FY09, the company witnessed a big jump in the
operating margins as there was a fall in the raw material prices and so the company could reduce its raw
material expenses (while keeping its sale prices constant) in turn increasing the margins. In Q1FY10
also the margins remained high due to a fall in purchase of finished goods.

Recent Financial Performance (Q1FY10)

In FY09, RFL took a hit on profitability in the first 3 quarters of FY09 due to rising raw material prices
(Rubber and EVA) that could not be passed on to the customers. Prices of natural rubber rose 11% in
FY09 while that of synthetic rubber rose 16% and EVA rose 33%. In the fourth quarter however, due to
reversal in prices of raw materials, RFL performed well and posted an impressive OPM of 15% (vs 7-
10% in the previous 3 quarters). Rubber prices that had risen from Rs 75 to Rs 140 a kg have fallen
back to Rs 80 per kg currently. Similar is the case with EVA prices (largely imported). RFL has not
reduced prices of its products post the fall in price of raw materials. Hence it has cushion to launch
schemes for distributors/retailers and fight competition. Traditionally the 1st and the 4th quarters are
good for RFL.

SUGGESTIONS FOR IMPROVEMENT

Risk and concerns

 The raw material price fluctuation is a matter of concern as ~47% of expenditure incurred by
company is expenses related to raw materials

 Another matter of concern is the fluctuation in the currency. RFL imports Ethyl Vinyl Acetate
(EVA) for the production of Flite brand. Any depreciation in the rupee would impact the margins
of the company.
 RFL sells almost 65% of its products in the north Indian market thereby creating a very high
dependence on the states of north India. It is unable to reap the benefits of a wider market and
diversified geographical base as its network in other regions is not as strong.
 Being a branded footwear company, one of the important expenditure incurred by RFL is the
expenditure on advertisements. It will have to keep on spending large amount in advertisement to
sustain and improve value of its brands.
 There is always a risk of fresh competitors in this segment as there are no high entry barriers into
this industry.

Opportunities:
 The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period
spanning from 2008 to 2011.
 Presently, the Indian footwear market is dominated by Men’s footwear market that accounts for
nearly 58% of the total Indian footwear retail market.
 By products, the Indian footwear market is dominated by casual footwear market that makes up
for nearly two-third of the total footwear retail market.
 As footwear retailing in India remain focused on men’s shoes, there exists a plethora of
opportunities in the exclusive ladies’and kids’ footwear segment with no organized retailing
chain having a national presence in either of these categories.
 The Indian footwear market scores over other footwear markets as it gives benefits like low cost
of production, abundant raw material, and has huge consumption market.
 The footwear component industry also has enormous opportunity for growth to cater to increasing
production of footwear of various types, both for export and domestic market.