A

PROJECT REPORT ON
“Consumer perception and Marketing System of IFFCO Aonla”

SUBMITTED TOWARDS PARTIAL FULFILLMENT

OF
MASTER OF BUSINESS ADMINISTRATION
G.L. BAJAJ INSTITUTE OF TECHNOLOGY AND MANAGMENT

Under the Guidance of Submitted By

Mr. Ravi Jaiswal SAURABH KUMAR
Deputy. Manager (TPT) ROLL NO-0919270046
IFFCO, Aonla

UTTAR PRADESH TECHNICAL UNIVERSITRY

 CERTIFICATE

This is to certify that the project entitled “Consumer perception and Marketing
System of IFFCO Aonla” submitted to Uttar Pradesh technical University by
SAURABH KUMAR in partial fulfillment of the requirement for the award of
Master of Business Administration Degree, is a record of bonafide work research
carried out by him under my supervision and guidance. The original work was carried
during 01st April, 2010 to 30th June, 2010 in IFFCO ANOLA UNIT, U.P.

This work has not been submitted anywhere else for any other degree/diploma. The
assistance help received during the course of investigation and source of literature
have been duly acknowledge. During his tenure at the project, he was found to be
sincere and meticulous in there work. I appreciate his enthusiasm & dedication
towards the work assigned to him.

I am hopeful that he will prove to be a good professional and wish him grand success
for the future.

Ravi Jaiswal
MBA(HR)/MKU
Deputy Manager (TPT)
IFFCO, Aonla

2
 CANDIDATE’S DECLARATION

I hereby declare that the work that is being presented in the project entitled
"Consumer perception and Marketing System of IFFCO Aonla" under the
guidance of Mr. Ravi Jaiswal (Dy. Manager(Tpt) and Mr. K.K. Pandey (Dy.
Manager(Trg.), is genuine work originally done by me and has not been published
or submitted elsewhere for the requirement of a degree programme. Any literature,
data or works done by others and cited within this report has been given due
acknowledgement and listed in the reference section.

SAURABH KUMAR
roll No.0919270046

3
 ACKNOWLEDGEMENT

It is arduous to pen down the extent of our feelings, yet through this
acknowledgement, I wish to convey my deepest regards and gratitude towards those
who helped me to carry out and present this work.

I take here a great opportunity to express my sincere and deep sense of gratitude to
Mr. Ravi Jaiswal, Dy. Manager(Tpt) under whose guidance I had the opportunity
to carry out the present work. Also under his guidance, I was able to enhance my
marketing as well as inter-personal skills.

I am also very thankful to Mr. D. Kalia, Chief Manager (Training) & Mr. K.K.
Pandey, Dy. Manger (Training) who supported me & helped me throughout the
project.

Last, but definitely not the least, I express my gratitude to the Transportation staff &
to all the employees of IFFCO Aonla unit who cooperated with me during my training
period.

PREFACE

4
A comprehensive practical study of management is a supplement to the theoretical
classroom knowledge. It helps to understand the subject more precisely. Training is a
period in which a student can apply his theoretical knowledge in practical field. So
this training has high importance as to know how both the aspects are applied
together. The purpose of training is to make management student familiar with day to
day functioning of business.

The study of management acquires most crucial position in the business

administration. In order to be successful, it is necessary to give priority to the
management in an organization. But it cannot be denied that the study of management
would be more educational, materialistic and even more interesting, if it is to be
paired with the work in organization as an employee. The training session helps to get
details about the working process in the organization. It has helped me to know about
the organizational management and discipline, which has its own importance. The
training is going to be a lifelong experience.

This report tries to outline idea of professional world & helps in understanding the
pragmatic aspect of management function. Own observations are significant towards
the contribution in learning the subject. The report is therefore designed as a reference
of organization functioning, So that we are more familiar with the day to day
functions in an organization through which we can develop the decision-making
ability and sharpens our skills.

This Project Report has been completed in Partial fulfillment of the requirement of
MBA (DLP) programmed in the organization "INDIAN FARMER FERTILIZER
CO-OPERATIVE LTD." which is a largest FERTILIZER COMPANY IN ASIA.
The objective of my project is to know about the perception of consumers regarding
the fertilizer supplied by IFFCO as analyze the marketing system of IFFCO. It is
hoped that this project will serve as a supportive document to research worker as
effort has been tried to make this report an informative, stimulating & self-
explanatory.

5
 TABLE OF CONTENTS

CONTENTS PAGE NO.

CERTIFICATE………………………………………………………………………. 1
CANDIDATE’S DECLARATION………………………………………………….. 2
ACKNOWLEDGMENT………………………………………………………………….. 3
PREFACE……………………………………………………………………………. 4
TABLE OF CONTENTS…………………………………………………………….. 5
EXECUTIVE SUMMARY…………………………………………………………... 7

CHAPTER 1: INTRODUCTION…………………………………….................... 8

1.1 FERTILISER INDUSTRY IN INDIA………………………………………….. 9

1.2 IFFCO-COMPANY PROFILE………………………………………………... 12

1.3 PLANTS OWNED BY IFFCO........................................................................... 18

1.4 AONLA UNIT.................................................................................................... 19

1.5 PRODUCT PROFILE…………………………………………………………. 27

CHAPTER 2: MARKETING SYSTEM OF IFFCO……………………………. 35

2.1 MARKETING STRUCTURE OF IFFCO……………………………………… 36
2.2 DISTRIBUTION CHANNELS…………………………………………………. 39
2.3 ROLE OF COOPERATIVE…………………………………………………….. 44
2.4 MARKETING MIX OF IFFCO………………………………………………… 48
2.5 SWOT ANALYSIS……………………………………………………………... 54
2.6 TRANSPORTATION…………………………………………………………... 55

CHAPTER 3: RESEARCH METHADOLOGY……………………………….... 60

3.1 OBJECTIVE OF STUDY………………………………………………………. 61
3.2 TITLE OF STUDY……………………………………………………………... 61
3.3 SOURCE OF DATA COLLECTION…………………………………………... 62
3.4 SCOPE OF STUDY…………………………………………………………….. 63

CHAPTER 4: DATA ANALYSIS………………………………………………... 64

6
CHAPTER 5: FINDINGS & LIMITATIONS…………………………………... 86
5.1 FINDINGS……………………………………………………………………… 87
5.2 LIMITATIONS………………………………………………………………..... 87
CHAPTER 6: RECOMMENDATIONS AND CONCLUSION………………... 88
6.1 RECOMMENDATIONS……………………………………………………….. 89

6.2 CONCLUSION………………………………………………………………..... 90

BIBLIOGRAPHY………………………………………………………………… 91
ANNEXURE………………………………………………………………………. 93
QUESTIONNAIRE………………………………………………………………… 94

7
 EXECUTIVE SUMMARY

Agricultural Cooperatives in India are very actively and intimately involved in several
agriculture related activities. The most important activities are the disbursement of
production credit and distribution of fertilizers and other inputs viz seeds, pesticides
and agricultural implements. Agricultural Cooperatives are also involved in
procurement of farm produce, processing and marketing of oilseeds, Cotton, sugar,
milk and milk products, distribution of essential commodities, clothes, kerosene oil
and merchandise etc.

Coop. movement in India started way back in 1905. Till 1939, Agricultural
Cooperatives in India were distributing only the credit to the farmers. Its activities got
diversified to consumer articles and also some agricultural inputs in the rural areas
over a period of time. Subsequently, based on the suggestions made by different
committees and commissions, the cooperatives were given a significant role in
distribution of fertilizers. Currently, cooperatives are playing a significant role both in
production and marketing of fertilizers.

The vital role of fertilizers in increasing agricultural production is well recognized.

Since, the land man ratio is declining due to increasing population; the additional food
grain production has to come by increasing the productivity of land under cultivation.
Adoption of modern agricultural practices is the only way for increasing agricultural
productivity.

8
 CHAPTER 1

INTRODUCTION

9
FERTILISER INDUSTRY IN INDIA

The fertilizer industry presents one of the most energy intensive sectors within the
Indian economy and is therefore of particular interest in the context of both local and
global environmental discussions. Increases in productivity through the adoption of
more efficient and cleaner technologies in the manufacturing sector will be most
effective in merging economic, environmental, and social development objectives. A
historical examination of productivity growth in India’s industries embedded into a
broader analysis of structural composition and policy changes will help identify
potential future development strategies that lead towards a more sustainable
development path.

Issues of productivity growth and patterns of substitution in the fertilizer sector as well
as in other energy intensive industries in India have been discussed from various
perspectives. Historical estimates vary from indicating an improvement to a decline in
the sector’s productivity. The variation depends mainly on the time period considered,
the source of data, the type of indices and econometric specifications used for reporting
productivity growth. Regarding patterns of substitution most analyses focus on interfuel
substitution possibilities in the context of rising energy demand. Not much research has
been conducted on patterns of substitution among the primary and secondary input
factors: Capital, labour, energy and materials. However, analyzing the use and
substitution possibilities of these factors as well as identifying the main drivers of
productivity growth among these and other factors is of special importance for
understanding technological and overall development of an industry.

About Fertilizer
Fertiliser is generally defined as "any material, organic or inorganic, natural or
synthetic, which supplies one or more of the chemical elements required for the plant
growth". Sixteen elements listed in Table are identified as essential elements for plant

10
growth, of which nine are required in macro quantities and seven in micro quantities.

Of the elements listed in Table, carbon, oxygen and hydrogen are supplies by air and
water and are, therefore, not treated as nutrients by the fertiliser industry. The main
aim of the industry is to provide the primary and secondary nutrients which are
required in macro quantities.
Table 1- Essential elements for plant growth

No. Name of element Nomenclature

1. Carbon

2. Oxygen

3. Hydrogen

4. Nitrogen

5. Phosphorus Primary nutrients

6. Potassium

7. Calcium

8. Magnesium Secondary nutrients

9. Sulphur

10. Boron

11. Chlorine

12. Copper

13. Iron Macro nutrients

14. Manganese

15. Molybdenum

16. Zinc

Growth of Fertilizer Industry

11
The Indian fertilizer industry has succeeded in meeting almost fully the demand of all
chemical fertilizers except for MOP. The industry had a very humble beginning in
1906, when the first manufacturing unit of Single Super Phosphate (SSP) was set up
in Ranipet near Chennai with an annual capacity of 6000 MT. The Fertilizer &
Chemicals Travancore of India Ltd. (FACT) at Cochin in Kerala and the Fertilizers
Corporation of India (FCI) in Sindri in Bihar were the first large sized -fertilizer
plants set up in the forties and fifties with a view to establish an industrial base to
achieve self-sufficiency in food grains. Subsequently, green revolution in the late
sixties gave an impetus to the growth of fertilizer industry in India. The seventies and
eighties then witnessed a significant addition to the fertilizer production capacity.

The installed capacity as on 30.01.2003 has reached a level of 121.10 lakh MT of

nitrogen (inclusive of an installed capacity of 208.42 lakh MT of urea after
reassessment of capacity) and 53.60 lakh MT of phosphatic nutrient, making India the
3rd largest fertilizer producer in the world. The rapid build-up of fertilizer production
capacity in the country has been achieved as a result of a favourable policy
environment facilitating large investments in the public, co-operative and private
sectors. Presently, there are 57 large sized fertilizer plants in the country
manufacturing a wide range of nitrogenous, phosphatic and complex fertilizers. Out
of these, 29 unit produce urea, 20 units produce DAP and complex fertilizers 13
plants manufacture Ammonium Sulphate (AS), Calcium Ammonium Nitrate (CAN)
and other low analysis nitrogenous fertilizers. Besides, there are about 64 medium and
small-scale units in operation producing SSP.

12
COMPANY PROFILE

Indian Farmers Fertilizer Cooperative Limited

Type Cooperative

Founded New Delhi, India

(November 03 1967)

Headquarters New Delhi, INDIA

U.S. Awasthi,
Key people
Managing Director

Industry Fertilizer

Turnover Rs. 32,933.30 Crore (2009)

Profit After tax Rs. 360.01 Crore (2009)

Website http://www.iffco.nic.in

The Indian Farmers Fertilizer Cooperative Limited (IFFCO) is a national level multi-

13
unit cooperative society engaged in manufacturing and marketing of chemical
fertilizers. The Society was registered in 1967 and presently having a membership of
39,564 cooperatives as shareholders. IFFCO is presently operating five factories
located at Aonla and Phulpur in Uttar Pradesh, Kalol and Kandla in Gujarat and
Paradeep in Orissa. IFFCO produced over 6.8 million tones of fertilizers in 2007-08
and contributed about 20.0% to the total Nitrogen and 25.0% to the total P2O5
produced in India. IFFCO markets its fertilizers through Cooperative Agencies and
Member Cooperative Societies.

IFFCO supports Global Compact Principles of United Nation and believes in

philosophy of trusty ship and strives for sustainable development. It always
emphasizes on the need to protect the environment, human rights, health and safety of
its employees, strengthening the cooperative structure in India, improving the living
standard of farmers who are the backbones of Indian economy etc.

THE ORIGIN OF IFFCO

The cooperative sector in India during mid - sixties was distributing 70 per cent of the
chemical fertilizers consumed in the country. This Sector had adequate infrastructure
to distribute fertilizers but had no production facilities. With the introduction of multi-
agency approach by the Government of India in the distribution of fertilizers during
1967, the private trade also entered the field of fertilizer distribution. The private
sector production units provided more opportunities to the distribution network of
private trade and gave secondary preference to the cooperatives in the matter of
supplies. Due to this development, the cooperatives started getting fewer supplies of
the fertilizers.

To overcome this limitation and also to bridge the growing demand for the fertilizers
in the country, a new cooperative was conceived. In the year 1964, the Cooperative
League of USA proposed to the Government of India that the American Cooperatives
were interested to collaborate with Indian Cooperatives in setting up fertilizer
production capacity. The idea appealed to the Government of India and eminent
cooperators of the country. As a result Indian Farmers Fertilizer Cooperative Limited

14
(IFFCO) was conceived and registered on November 3, 1967 as a multi-unit
cooperative society with the primary objective of production and distribution of
fertilizers. The U.S. Cooperatives through Cooperative Fertilizer International (CFI)
provided a million dollar aid besides technical know-how to IFFCO.

VISION & MISSION OF THE SOCIETY

Vision
To augment the incremental incomes of farmers by helping them to increase their
crop productivity through balanced use of energy efficient fertilizers; and to make
cooperative societies economically & democratically strong for professionalized
services to the farming community to ensure an empowered rural India. Accordingly,
the following business activities have identified under the “VISION 2010”:

• Installation of Ammonia Urea plants including acquisition of fertilizer units.

• Backward integration to meet feedstock requirements such as Phosphoric

Acid, Natural Gas etc.

• Generation of Power.

• Production and marketing of micronutrients, seeds, bio-fertilizers, pesticides

etc.

• Value addition to Agri-products and marketing.

• Information Technology and IT enabled services.

• Establishment of Retain Chain in Urban and Semi-Urban location.

MISSION

• To provide to farmers high quality fertilizers in right time and in adequate

qualities with an objective to increase crop productivity.

• To make plants energy efficient and continually review various schemes to

conserve energy.

15
 • Commitment to health, safety, environment and forestry development to
enrich the quality of community life.

• Commitment to social responsibility for a strong social fabric.

• To institutionalize core values and create a culture of team building,

empowerment and innovation which would help in incremental growth of
employees and enable achievement of strategic objectives.

• Foster a culture of trust, openness and mutual concern to make working a

stimulating and challenging experience for stakeholders.

• Building a value driven organization with an improved and responsive

customer focus. A true commitment to transparency, accountability and
integrity in principle and practice.

• To acquire, assimilate and adopt reliable, efficient and cost effective

technologies.

• Sourcing raw material for production of phosphates fertilizers at economical

cost by entering into joint ventures outside India.

• To ensure growth in core and non-core sectors.

• To true Cooperative Society committed for fostering cooperative movement in

the country.

OBJECTIVES OF IFFCO

The main objectives of the Society are as follows: -

• IFFCO is a cooperative institution of the farmers by the farmers.

• Strengthening cooperation distribution system.

• Educating and guiding the farmers.

• Promoting nations growth through modern farming techniques.

• Improving agriculture productivity, through balance fertilizer applications.

• To promote the activity for enriching the life of rural.

16
 • To achieve self reliant and self generated economy.

• To acquire, establish, construct, provide and maintain and administer factories,

townships, estates, railway sidings, build yards, wells, water reservoirs,
channels, pumping installations, purification plants, pipe lines, carriages,
storage sheds and accommodation of all descriptions.

BUSINESS PRINCIPLES OF THE COMPANY

The principles of the company are as follows:

• Appreciation of national need of generation up to optimum return of

investment.

• To fair price of the product manufactured by the company is subsidy to the

farmers.

• Total consumer satisfaction as a quality of product, price of the product and

better service after selling the product.

• Effective management information system.

• To increase the efficiency of the workers.

• To maintain better human relation and discipline among all the employees.

• To develop good relation with customers.

MANAGEMENT

The representative general body (RGB), which is the general body, forms the supreme
body that guides the various activities of IFFCO. The RGB consists of:

 Members of board of Directors.

 One delegate from each of the member societies holding shares of the value
of the Rs.100 thousand and above, such delegate shall be as per the
provisions of the Multi-State Cooperative Societies Act/ Rules as amend
from time to time.

 Delegates to be elected from amongst the representatives of members-

17
 societies (other than members holding shares of the value of Rs.100
thousand and above) in each state/union territory at the rate of one delegate
foe every 200.

HIERARCHY OF IFFCO
CHAIRMAN

BOARD OF DIRECTORS

MANAGING DIRECTOR

EXECUTIVE EXECUTIVE
FINANCE MARKETING DIRECTOR DIRECTOR
DIRECTOR DIRECTOR (PROJECT) (GENERAL
MANAGER)
M)

TRANSPORT
ADVISOR

GENERAL GENERAL GENERAL GENERAL

MANAGER MANAGER MANAGER MANAGER
(KALOL) (KANDLA) (AONLA) (PHULPUR)

Kalol Kalol Kalol

18
PLANTS OWNED BY IFFCO

Com m
P la n ts L o c a t io n
in

K a lo l G u ja r a t 19

During the years 2004 and 2005, IFFCO has emerged as a cooperative in true spirit.
IFFCO is now entirely owned by its cooperatives and has become a cooperative of the

K a n d la G u ja r a t
farmers, by the farmers and for the farmers. Initially, IFFCO commissioned ammonia
- urea complex at Kalol and the NPK/DAP plant at Kandla both in the state of
Gujarat in 1975. Ammonia - urea complex was set up at Phulpur in the state of Uttar
19
Pradesh in 1981. The ammonia - urea unit at Aonla was commissioned in 1988.
Recently, IFFCO has acquired an NPK/DAP and Phosphoric acid fertilizer unit at

19
Paradeep in Orissa in September 2005. The marketing of IFFCO’s products is
channeled through cooperative societies and institutional agencies in over 28 states
and union territories of India.

AONLA- UNIT

20
Year of Commissioning 1988
Investment Rs 651.6 Cr

Year of Expansion 1996

Investment Rs 945.7 Cr

21
 The flagship of IFFCO, Aonla Unit is located in the Gangetic Plains of Uttar
Pradesh in Bareilly district about 28 Km. South-West on Bareilly-Aonla Road.

1. Ammonia 1520 mt/d *2 Haldore Topsoe (Denmark)

2. Urea 1310 mt/d *2 Snamprogetti (Itlay)
3. Product handling Silo1-45, 000 mt
plant (silo, packing, Silo 2-30,000mt
transport)
4. Steam & Power 18 mw *2 TEC (Japan)
generation
Plant Capacity Consultant
Aonla unit, an Ammonia-Urea complex, is comprised of two phases; Aonla- I and
Aonla-II. The total capacity of Aonla unit including both phases is 8,91,000
MTPA for Ammonia and 14,52,000 MTPA for Urea having two streams of
Ammonia and Four streams of Urea. The natural gas from HBJ pipeline being
supplied from Bombay High is the feedstock for the plants. Both Aonla-I & II
units are achieving average annual capacity utilization of 116%.

IFFCO Aonla unit is one of the most efficient and quality-wise as well as
environment oriented unit so that M/s KPMG Peat Marwich, a quality registrar
MARKETING
has certified it as ISO: 9002 unit andCENTRAL
M/s BVQL London has accredited as ISO:
OFFICE
14001 unit. At present 1150 employees are enrolled in the payroll of the unit.

39824
37381
35072

30200
26960 28134
25528
NORTH CENTRAL
NORTH ZONE SOUTH ZONE WEST ZONE EAST ZONE
ZONE
(LUCKNOW)
(CHANDIGARH) Co-rrelations (BHOPAL)
(BANGALORE) (KOLKATA)

LAND ACCESSIBILIT
QUALITY
Y
ECOFRIENDLY
Frequency Percent Valid Percent Cumulative
Frequenc
YIELDPercent
SOILFERTILITY Valid Percent
Cumulative
**
LAND Pearson Correlation 1 .706
57
Valid Very good 45y
Frequenc
Frequenc
Plant growth45.0
Percent
Percent Percent Percent
Valid45.5 Cumulative
Valid Cumulative45.5
Valid VeryGood satisfactory Sig. 30y y40 Percent
(2-tailed)
Frequenc 40.0
30.0 Percent
Percent
Valid40.0 Percent
Percent
30.3 Cumulative
.000 40.075.8
1967-68 1974-75 1980-81 1986-87 1992-93 1998-99 2004-05 2008-09
Valid
Valid
Satisfactory
VeryVery
satisfactory
satisfactory
Moderate 15Ny2654
6551 15.026.0
54.0
65.0
51.0 100 Percent 26.0
54.0
65.0
51.0
15.2 100 Percent
66.0
54.0
51.0
65.090.9
UP, BIHAR
Valid
JHARKHANDNeither
Satisfactory
Satisfactory
Very
Fair satisfactory
ACCESSIBILITsatisfactory
PUN, 7724
28
2125 8.0
HAR, Pearson 8Correlation
AP, TN, 77.0
24.0
28.0
21.0
25.0 .706
GUJ,77.0
MP,24.0
**
28.0
21.0
25.0
8.1 177.090.0
82.0
76.0
86.099.0
ASSAM,
MAH,
, nor
Neither
Neither
Poor RAJ, J&K,
dissatisfactory
Y
Satisfactory
satisfactory
satisfactory 115KAR,
13
1017 1.0 15.0
13.0
10.0
17.0CHHATTISG15.0 13.0
10.0
17.0
1.0 ORISSA,
92.095.0
93.0
96.0
100.0
UTTARANCH HP Sig. (2-tailed)
KERALA .000
ARH
W.B.
AL Dissatisfactory
nornor
dissatisfactory
dissatisfactory
Neither
Total Design
satisfactory 99 8 7 99.0 7.0
8.0 8.0 7.0
100.0 100.0 22
97.0
Fire
Product
& Safety Library
N
General & 100 100
JGM/CM
Ammonia
Missing Very JGM/CM
Mechanic
Dissatisfactory
Dissatisfactory
nor
dissatisfactory
dissatisfactory
System 1& 3
JGM/CM 4 7 1.0
5
Document JGM/CM
3.0
4.0
5.0
7.0 JGM/CM 100.0 JGM/CM
3.0
4.0
5.0
7.0
Handling
& Env. Instrumental
**. Correlation is Engg.
Drawing
significant at the 0.01 Store Manager F &
level Communication
(2-tailed). JGM/CM
Production
Plant
Urea
Traffic
Plant
Total Total General al
Maint
Manager
Civil
Electrical
Total Total Laboratory
Technical
Training
Process
Sr.
100100
100&General
Devp.
100 100.0 Utility
Manager
100.0Power
100.0Offsite 100.0
100.0
100.0General
Purchase &AA
System
System