Part A

Industry Profile

CHEMICAL INDUSTRY:
Chemical industry is the business of using chemical reactions to turn raw materials such as coal,
oil and salt into a various products. During 19th and 20th century technological advances in the
chemical industry dramatically changed the economy and created pesticides and fertilizers for
farmers, pharmaceuticals for the health care industry, synthetic dyes and fibers for the textile
industry, soaps and beauty aids for the cosmetics industry, synthetic sweeteners and flavors for
the food industry, plastics for the packaging industry, chemicals and celluloid for the motion
picture industry, and artificial rubber and paints for the automobile industry.

MEANING:
The chemical industry refers to an industry involved in the production of chemicals. The
industry includes petrochemicals, agrochemicals, pharmaceuticals, polymers, paints and oleo
chemicals. Chemical processes are used, including chemical reactions to form new substances,
separations based on properties such as solubility or Ionic charge and distillations in addition to
transformations by heating and other methods. Chemical industries are involved in the
processing of raw-materials obtained by mining and agriculture among other supply sources into
materials and substances and chemical, compounds that are end products or are used in other
industries.
HISTORY:
Chemical industries can be traced back to Middle Eastem artisans, who refined alkali and
limestone for the production of glass as early as 7,000 B.C., to the Phoenicians who, produced
soap in the 6th cent. B.C., and to the Chinese who developed black powder, a primitive explosive
around the lOth cent. A.D. In the middle Ages, alchemists produced small amounts of chemicals
and by 1635 the Pilgrims in Massachusetts were producing, saltpeter for gunpowder and
chemicals for tanning. But, large-scale chemical industries first developed in 19th century. In
1823, British entrepreneur James Muspratt started mass producing soda ash (needed for soap and
glass) using a process developed by Nicolas Leblanc in 1790. Advances in organic chemistry in

1
the last half of the 19th century. Allowed companies to produce synthetic dyes from coal tar for
the textile industry as early as the 1850s. BASF was licensed to operate its organization was
issued on April 27, 1865. the founding Fathers were Friedrich Engehoren. In 1865 he makes his
dream a trail blazing reality. On 6lh April he found a Stock Corporation in Mannheim under the
name Badische Anilm-Und Soda Fabric.
In the 1890s, German companies began mass producing sulfuric acid and, at about the
same time, chemical companies began using the electrolytic method, which required large
amounts of electricity and salt, to create caustic soda and chlorinc. Man-made fibers changed the
textile industry when rayon (made from wood fibers) was introduced in 1914; the introduction of
synthetic fertilizers by the American Cyanamid Company in 1909 led to a green revolution in
agriculture that dramatically improved crop yields. Advances in the manufacture of plastics led
to the invention of celluloid in 1869 and the creation of such products as nylon by Due Pont in
1928. Research in organic chemistry in the 1910s allowed companies in the 1920s and 30s to
begin producing chemicals for oil. Today, petrochemicals made from oil are the industry's
largest sector. Synthetic rubber came into existence during World War II, when the war cut off
supplies of rubber from Asia. Since the 1950s growing concern about toxic waste produced
by chemical industries has led to increased government regulation and the establishment of the
Environmental Protection Agency (1972), The leakage of toxic chemicals at the Union Carbide
plant in Bhopal, India (1984), was the worst industrial disaster in history and heightened public
concern about lax environmental regulations for chemical companies in developing countries.
Beginning in the 1980s, U.S. corporations faced expanding competition from foreign producers,
including some Third World oil producers who have set up their own oil refining and
petrochemical industries. In 1997 the U.S. chemical industry produced about $389 billion
worth of products and employed 1,032,000 workers. It exported about $71 billion worth of
chemicals. U.S. chemical industry shipments total about $450 billion annually. The industry is a
major provider of raw materials for consumers, manufacturing, defense, and exports (about 15
percent of the total). End markets include consumer products, health care, construction, home
furnishings, paper, textiles, paints, electronics, food, and transportation. In fact, most industries
use chemicals as their key raw materials. For example, the auto has about $1,500 of chemicals
such as paints, lube oils, rubber tyres, plastic, and synthetic fibers a cell phone is feasible
because of its use of silicon-based chemicals and a durable plastic assembly; microwave ovens
are made with silicon chips, plastic housings, and fire-retardant plastic additives.

2
Chemical industry sales and profitability tend to follow the U.S. consumer economy, with peak
sales and profits a few years after strong consumer economic growth periods and low points
during recessions. While demand growth for the overall chemical industry has slowed since the
1960s, it is still better than annual gross domestic product (GDP) gains. Operating margins,were
about 6 percent in 2000 compared with a peak of almost 11 percent in 1995. Research and
development and capital spending by the industry are about $30 billion each, or just under 7
percent of sales. The fastest growth areas are life sciences, specialties such as electronic
chemicals, and select plastics. The overall employment level of the chemical and allied
industries is over 1 million people, with about 600,000 in direct manufacturing. Most of the
chemical industry's basic manufacturing plants are located in the Gulf Coast (primarily Texas
and Louisiana) due to the proximity of key energy raw materials. Finished product manufacrure,
by contrast, is located closer to population centers on the East and West Coasts and in the
Midwest. Its basic Aim is to perform the work by providing Employment Health and Safety tips
to all the employees, contractors, and all the students who visit the Factory, in order to protect the
organization from the environmental pollution.

INDIAN CHEMICAL INDUSTRY:

The Indian chemical industry is one of the fastest growing sectors in the economy. It has
achieved a growth rate of 8.6% over the last few years. With the size of $30 billion it accounts for
12.5% of the country's total industrial production. The size of Indian Chemical industry is about
Rs.l,20,000 cores. The production of Chemical industry during the financial year 2007-2008
witnessed growth of 7.6% compared to 2006-2007. This was higher than the overall
manufacturing sector growth of 5.2%. Chemical industry is one of the major contributors to
India's GDP and has 14% share in Indian manufacturing output. It contributes around 8% of
exports from India, and accounts for 11 % of import bill. This amply indicates the important
place and role of the Chemical industry in india's industrial as well as overall economic
development and growth.

Indian Chemical Industry Overview:

1. Contributes to 13% of GDP.
2. One of the fastest growing sectors of Indian economy.
3. Chemical Industry in india is fragmented and dispersed - multi product and multi faceted.

3
4. Chemicals sold directly to large customers and through distribution channels.
5. Distribution channels mostly consist of stockists and dealers spread all over India
addressing small segments and retail market.

Chemical Industry is highly heterogeneous with following major sectors:

1. Petro chemicals
2. Inorganic Chemicals
3. Organic Chemicals
4. Fine and specialties
5. Bulk Drugs
6. Agrochemicals
7. Paints and Dyes
Chemical Industry Structure
a) Highly fragmented and widely dispersed.
b) Western india accounts for 45-50% of total Indian chemical Industry.
c) Large players in bulk chemicals. Both large and small players in Fine and Speciality
chemicals.
d) Presence of many multinational companies also.
1. Petrochemicals
• The major category in the chemicals
• One of the fastest sectors at 13% p.a.
• Covers:
o Basic chemicals like Ethylene, Propylene, Benzene and Xylene etc.
o Intermediates like MEG, PAN and LAB etc.
o Synthetic fibers like Nylon, PSF and PFY etc.
o Polymers like LDPE/HDPE, PVC, Polyester and PET etc.
o Synthetic rubber like SBR, PBR etc.
• Major players are Reliance, IPCL, NOCIL, Haldia and GAIL etc.

2. Inorganic Chemicals
• US$ 2.5 Billion industry.
• Covers basic products like Caustic, Chlorine, and Sulphuric Acid etc.
• Inorganic chemicals mostly used in detergents, glass. soap, fertilizer, alkalies etc.

4
 • Competition from imports is on the rise.
3. Organic Chemicals
• 1 Billion Dollar industry
• Covers a wide range of chemicals
• Units concentrated mostly in the Western India
4. Fine and Specialty Chemicals
• Low volume, high price/margin chemicals
• Fragmented with large number of players
• Major Players
o India: ION Exchange, Balmer Lawrie, Dai Ichi Karkaria. Etc.
o MNC: Ciba, Hoechst, Foseco, Nalco Chemicals, Clariant, ICI etc.
o And many small Indian companies
• Market around US$ 80 million p.a,
• Major end user segments - Textile, Leather, paper, detergent, rubber,
paints, polyester, oil and gas etc.
• Growing very fast
5. Bulk Drugs
• Large market due to large population
• Large exports (US$ 600-800 million) which is around 6-8% of global drugs market
• Total market is US$ 3 Billion p.a
• Out of 475 drugs used, 425 are locally produced.
• Over 350 units in the organized sector and many more in the unorganized sector
• Bulk drug units concentrated around three areas:
o Bombay - Ankleshwar
o Hyderabad - Madras
o Chandigarh

• India very strong in reverse Engineering, molecular chemistry and because patents
not on products but on process

• Major players:

5
 • Ranbaxy, Shasun, Cupola, Dr. Reddy's, Cheminor, Lupin, IPCA, Sun, Cadilla,
Wockhardt, Aurobindo, Kopran etc.
• Most of the bulk drug companies are Indian companies, whereas some of the major
pharmaceutical formulation companies are MNCs.
6. Agrochemical
• India is a large agricultural economy which is the major user. Average Indian
consumption is very low (l/20th of world average)
• Market side 100,000 MT (in terms of technical grade)
o US$ 800 million
o Growth 10% pa
• Consumption varies depending on crop and region
• Cash crops like sugarcane, tobacco etc. are the major consumers of pesticides
(above 60%)

• Two types of producers - Technical - 40 nos.

• Formulators - above 500 nos.

• Major players
India: United Phosphorus, Rallis and Excel
MNC: Hoechst Agrevo. Novartis, Bayer etc
• Significant: Technical grade pesticides have been growing at the rate of 10% in
the last few years.
7. Paints and Dyes

• Total Market - US$ 1 Billion

• Growth Rate 12%p.a.

• Per capita consumption very low (400 gms) as compared to developed countries
like USA (15 kgs)
• Market highly fragmented
25 large and medium players - 50% market share
2000 unorganizcd players - 50% market share
• Dyes used in Paints, Inks, Textiles, Polymers etc.

6
 • India is a major exporter of dyes, mostly due to ban of production of some of the dyes and
intermediates in the developed countries due to pollution
• Major Players:
o Paints - Asian Paints, Goodlass Nerolac, ICI, Courtalds, Jenson &
Nicholson
o Dyes & Intcrmediates - Color Chemical (Hoechst), Clariant, IDI, Atul,
Mardia etc.
o Inks - Coates, Hindustan Inks, Sakata

2. COMPANY PROFILE:

This is a German chemical company that by its name is Famous and leading in the world
known as BASF (BADISCHE ANILINE-UND SODA FABRIK).

B- Badische, a place in Germany

A- Aniline-und, a first product by the company
S- Soda, anothcr product produced by the company
F- Fabric, it's a fabrics or it is a factory.

BACKGROUND AND INCEPTION OF BASF INDIA LTD:

BASF in India was started in way back in 1943. The company has been partnering India's
progress with its vast knowledge in the field of chemistry. It has 4 companies in India. There are
more than 1100 employees and also manufacturing sales sector. BASF offers innovative, hi-tech
and safe solutions. It is engaged in the business of manufacturing & marketing of styropor tanning
agents, leather chemicals and auxiliaries, crop protection chemicals, textile chemicals dispersions
and specialty chemicals, plastics automotive coal coatings, construction chemicals polystyrene
polyurethane systems. We have strong manufacturing and R&D group in India is represented by
more than 1300 Employees. BASF has its Branches in India at Thane, Pune, Delhi, Mangalore &
It has turnover around Rs 100 core. The integrated network principle, the "Verbund", is
instrumental in BASF's success and it imparts an unmistakable idcntity to the corporation. By
managing know-how according to the Verbund principle, BASF is enhancing its innovative
power and can respond quickly and flexibly to the requirements made by the markets and by its

7
customers. BASF considers its business partners and the social environment around it to be
partners in the Verbund. Responsibility towards the environment and towards society is key
elements of BASF's corporate philosophy. BASF's philosophy is based on the principle of
sustainable development. By subscribing to the "Responsible Care" initiative launched by the
chemical industry, BASF has committed itself to steadfastly pursing improvements in the
realms of environmental protection, health and safety.
At BASF's Verbund sites, the various plants are skillfully integrated with each other. This
translates into a more efficient and resource-saving utilization of raw materials and energy in
all chemical processes. Moreover, transportation distances are kept to a minimum, while the
logistics and infrastructure are jointly employed to great advantage. The synergistic effects in the
Verbund help save the environment and save money as well - some € 500 million per year in
Ludwigshafen alone.

BASF AT MANGALORE:
BASF India Limited had acquired 210 acres of land in 1993, 20 kilometers north of
Mangalore, initially 50 acres of land used for setling up two plants for the manufacture of Dyes
and Dispersions and ultimately to be developed as integrated site. The production commenced in
March 1996. Mangalore was chosen interalia, taking into account its industrial and social
infrastructure, skilled labour, proximity to a petroleum refinery (MRPL) and modern harbour.
The Mangalore site is large in area compared to other sites.
No of Bargain able Employees - 118
No of non Bargainable-Employees - 127
Total Employees - 245
We work all the days 365 days. They work on-the principles:
ISO 9001 Quality system
ISO 14001 - Environment Management system
Responsible care Program

NATURE OF BUSINESS CARRIED:

BASF India Limited is the flagship company of the BASF Group in India. The company is
listed on the National Stock Exchange and the Bombay Stock Exchange. BASF India Limited
manufactures and markets expandable polystyrene, tanning agents, leather chemicals and

8
auxiliaries including specialized metal complex dyes, leather dyes, texlile chemicals, dispersions
and specialty chemicals, acrylic polymers in primary forms and crop protetion chemicals. BASF
India Limited is also involved in the trading of chemicals including dyestuffs and related textile
auxiliaries, and renders technical services to various industries.

VISION, MISSION AND QUALITY POLICY:

VISION:
1. Their innovative products, intelligent solulions and services make us the most competent
worldwide supplier in the chemical industry.
2. They generate a high returns on assets
3. They strive for sustainable development
4. They welcome change as an opportunity
5. Some of the customers view BASF as their partner of choice.
MISSION:
"ADDING VALUES TO GROWTH AND INNOVATIONS"
1. Earn a premium on cost of capital
2. Help the customers to be successful
3. Form the best team in the industry
4. Ensure sustainable development
BASF-2015 sends out a clear message as to what BASF stands for viz.,
1. Mutual success
2. Intelligent solutions
3. Reliability and trust
4. Partnership

QUALITY POLICY:
BASF group is known the world over for supplying products with unmatched quality. Each
BASF product is sent through rigorous quality control tests. Each BASF site in India boasts a
well-equipped QA/QC department working according to the Quality Poticy of BASF in India to
achieve the Quality-Objectives the departments are run by highly skilled and dedicated teams of

9
chemists. In line with BASF group's philosophy of keeping the same qualily standards at all the
sites, the QA/QC departments, wherever possible, stick to analytical techniques standardizcd for
BASF group. This ensures that the quality of the products leaving the BASF in India sites is
competitive internationally. To assure the customers of the commitment to the quality BASF in
India sites have been opting for ISO 9001 series certification. Most of their sites have either got
the certification or are at advanced stages of the process of getting them. With the change in the
concept of ISO certifications, BASF in India will be embracing the latest versions of these
certifïcations in the time to come to ensure the satisfaction of our customers. The quality policies
followed by BASF India Limited are committed to achieving full customer satisfaction by
supplying quality products, which conform to identify requirements. The foundation of this
commitment is "Doing everything right the first time". All our employees share Ihe
responsibility for quality. They make use of all the necessary tools and work both individually
and as a team to improve processes, practices, procedurcs and policies to generate zero-error
output. Some of the quality objectives are given below:
1. Enhancement of Customer Satisfaction on a sustained basis.
2. Continual improvement of products, process and services.
3. Prompt and safe delivery of products.
4. Quality awareness through motivation and training.
5. Cost optimization
6. Improving maintenance efficiency and plant availability
7. Energy conversion metbods and waste reduction
8. Technology up gradation utilizing BASF's world wide research and developmcnt.

PRODUCT PROFILE:
The company produces Two products. They are in Dyes and Dispersion plants. These
products are used in textile colours and auxiliaries are used in the production of dyes.

Dyes/colorants:
The plant was originally designed to produce 2225 tons per annum of product. Dyes are mostly used
in textile colors. Auxiliaries are used in the production of dyes. They are-

10
Product name Application area

Isolans Dyes Colouring agents used in Textile, Wool, Nylon, silk.

Luganil/Lurazol Dyes Wet-end colouring agents used in Leathers, viz Shoes,
garments, upholstery, automobiles, bags,etc.
Neozapons Coloring agents for artificial Zari, permanent markers, Ball
pen inks, copier toners, Ink-jet inks, wood coating and printing inks.
Eukosolar Dyes Coloring agents for dyeing/finishing leather and wood coating.
Erganil dyes Coloring agents for dyeing/finishing leather and wood Coating.

DISPERSION:
The dispersions plant was setup in the year 1996. The plant manufactures a wide range of
products for the leather, textile, paint, construction and paper industry. The plant at present has an
annual capacity of 65000TPA (tons per annum).

Products of Dispersion plant and their application areas:

Product name Application area
Acronal 18 D Paints
Acronal 295D Paints
Acronal IN 296 D Paints
Acronal S 305 D Paper / board coating
Acronal S 504 Paper / board coating
Acronal S-400 Water proofing / construction
Basoplast 400 DS Paper sizing
Basoplast DD 8812 Paper sizing
Bilbind PS Textile sizing
Dekol SN Dispersing agent in textile dyeing
Helizarin Binder ET Binder for textile printing
Helizarin Binder FCE Binder for textile printing
Relugan RE Retaining agent for leather
Relusyn CA Textile sizing
Sokalan PA 25 CLPN Dispersing agent in detergents
Styronal D 516 Paper coating

11
Styronal D 708 Paper coating
Styronal D 718 Paper coating

AREA OF OPERATION:
BASF India Ltd. Company is a transnational company which is operating in 170 countries
and has production sited in more than 39 countries. The company operators in Germany, Japan,
Sweden, United States, Canada, China, Malaysia, Pakistan, India and so on. BASF India Ltd exports
5% of its products to other countries and rest it supplies within the country. At present, the BASF
Group in India is represented by the following company-BASF India Limited- Mangalore BASF
Coatings Private Limited- Mangalore BASF Syrenics Private Limited- Dahej BASF Polyurethanes
India Limited- Thane

OWNERSHIP PATTERN:
BASF India Ltd Company is a Public Ltd Company.
BASF AG Holding Company holds 51% of the equity share capital as on 31 March
2008 and Parent Company holds 49% of the equity share capital.

Management – BASF
Name Designation

Prasad Chandran Chairman and Managing director

R Y Vaidya Alternate Director

Deepak Thuse Alternate Director

S Ramnath Alternate Director

R R Nair Director

R A Shah Director

Rainer Diercks Director

Tilman Krauch Director

Hermann Althoff Director

12
K R Coorlawala Director

Pradip P Shah Director

COMPETITORS INFORMATION:
As BASF India Ltd is one of the largest leading companies; it faces stiff competition
from its competitors. The company has a huge competition from various chemical companies. The
various competitors'of BASF India Ltd are as follows: Dow Chemical Company:
The Dow Chemical Company is currently the second largest chemical manufacturer in the World
after BASF. Dow Chemical is a major provider of plastics, chemicals, and agricultural products.
With presence in more than 175 countries and employing 43,000 people worldwide, Dow holds
itself to be one of the top world companies in innovation and research and development, with more
than $ 1 billion annual expenditure in R&D and the single largest concentration of PhD's and
Engineers in the United States. Its stated mission under the current CEO, Mr. Andrew Liveris, is to
"To constantly improve what is essential to human progress by mastering science and technology"
with the vision "To be the largest, most profitable, and most respected chemical company in the
world".
Bayer AG is a massive German based chemicals and pharmaceuticals manufacturer. It has
operations in most countries worldwide and had global sales for 2000 of nearly $30 billion. Its
operations are divided into four sectors: Health, Agriculture, Polymers (plastics, synthetic rubber)
and Chemicals. It has recently acquired Aventis controversial crop science business, making it a key
player in the development, commercialization and sale of GM crops. As a major player in 4
controversial sectors for over 125 years Bayer has a distinguished history of corporate crimes
ranging from the manufacture and sale of controversial drugs (Heroin, Ciproxin and Baycol), the
development of chemical warfare agents and poisons (Chlorine Gas, Zyklon B and VX), the use of
forced labour during WW2, and numerous cases of poisoning, side-effects and environmental
pollution connected to its chemical and pharmaceutical products. In December 2001,
Multinational Monitor rated Bayer AG as one of their Top Ten Worst Companies of the year.

INFRASTRUCTURAL FACILITIES:
A Company in order to be successfül must have good infrastructure facilities. BASF India Ltd
Company has good infrastructure facilities. They are as follows:
1. Latest Technology: The company uses latest technology, which is German based.

13
2. PAS: A very good PAS system through out the organization.
3. Good Environment: The Company is situated in the area which is far from the city and free
from all disturbances
4. Good Training Room: The Company has good training room with well equipped
furniture.
5. LCD Presentations: There is a provision for LCD presentation.
6. Subsidized Canteen: The employees are provided food in the canteen at subsidized rates
7. Transportation: The Company has good transportation facility as it is near to the air. port and
railway station
8. Medical Facilities: There is a separate medical room for first aid purpose.

ACHIEVEMENTS/AWARDS:
1. BASF India Limited Company has won the Best Tax Payers Award from the
Department of Commercial Taxes, as one of the honest Tax Payers in the Mangalore
division on 18th March 2005.
2. Coatings Team of BASF India Limited won the Best Supplier Award in the year
2005-06 by Honda Motor Cycles and Scooters India Limited.
3. BASF India Limited has won Business Award which is given by Canara Chambers
on 16th September 2006.
4. Best Fuel Efficient Boiler given by the department of Factories and Boiler of
Karnataka.
5. Selected as one among the best 10 Environment, Health and Safety (EHS) performer
given by department of Factories and Boiler of Karnataka.
6. The 'Prashansa Patra' award from National Safety Council of India (NSCI) in 2009
for developing & implementing effective occupational safety and health management
systems & procedures.
7. the 'Super Achiever Award' from the Kanara Chamber of Commerce & Industry
(KCCI) 2009 for achieving the percentage increase in their turnover in the previous
two financial years, percentage increase in taxes paid to central & state governments

14
WORK FLOW MODEL (END TO END):
Production process of Dyes follows the following steps:

DIAZOTISATION

COUPLING
UNIT
METALIZATION

FILTRATION

DRYING

STANDARDIZATION

PACKING

Diazotization: Diazotization is a reaction of an aromatic primary Amine with Nitrous acid. In

the first step Aniline (NH2) is added with Sodium Nitrite (NaNo2) and Hydrochloric acid (HCI)
to get the diazotized product. This process takes place in reactors.
Coupling: The next step is coupling, where the diazotized produce is added with couplers for
e.g. Phenol to get the coupled product or the basic dye which needs to be given a shade.
Metallization: Under metallization, the coupled product or the dye is added with a particular
metal, for e.g. chromium (Cr), iron (Fe), and copper (Cu, cobalt (Co) After the metallization they
get a complex formation otherwise known as Metal complex in the ratio 1:2, where metal is 1
and dye is 2. This step is done to get the required shade.
Filtration: After metallization we have to filter the product to separate the solid from the liquid.
It’s like straining tea. The liquid solution is then sending for drying.
Drying: Drying is done either through Tray Dryers or Spray Dryers. Spray dryers are used for
leather or textile solution, while Tray dryers are used for Neozapons.
Standardization: The next step after drying is standardization. Here the product is then put in a
blender, where it is mixed with solvents to meet the final requirement. There are 2 kinds of
blenders, Drum Blender and Ribbon Blender. Then a sample is sent to the QC/QA to check if the
product meets its required specification like the strength, shade, purity etc. if it does not, the
product is rejected. And if it is accepted then the product is sent for packing.

15
Packing: Packing is done in drums. They are available in different capacities like 6 kgs, 10 kgs,
25 kgs, 50 kgs, and 100 kgs, 200 kgs and 950 kgs.

FUTURE GROWTH AND PROSPECTS:

BASF is the world’s leading chemical company. Its portfolio ranges from chemicals,
plastics, performance products, agricultural products and fine chemicals to crude oil and natural
gas. As a reliable partner to virtually all industries, BASF’s intelligent solutions and high-value
products help its customers to be more successful. It combines economic success with
environmental protection and social responsibility, thus contributing to a better future.
A member of “BASF – The Chemical Company” group, headquartered in Germany and
operating in 170 countries, BASF – The Chemical Company in India has envisaged the growth
potential of the Indian chemical industry and embarked on a plan to be a notable player in this
market. With the use of its high technological base it has engaged in a wide variety of business in
manufacturing & marketing of Chemicals.
Research and Development Division (India) – A Part of a Global Platform
BASF is a research-based company. For the past 140 years, their company has given
utmost importance to basic research and a number of important inventions are to BASF’s credit.
The R & D Centre at BASF India’s Thane site in Mumbai is a part of BASF’s Global
Technology Platform. Central to the Platform are: Specialty Chemicals Research, Polymer
Research, Plant Biotechnology Research and – founded by Nobel Prize Winner Carl Bosch –
Chemicals Research and Engineering (“Ammonlabor”). The scope of the Central Research
Laboratories is vastly widened by numerous co-operations with universities and scientific
institutions all over the word. Recently, the R & D Centre of BASF India and a second research
facility in the United States became part of the Global Platform. These two centers now form an
integral part of BASF’s research activities and are full members of the research network. Even in
research, BASF is really a global player.

16
 Part B

McKENSY’s 7 S Frame

 STRUCTURE
 SKILL
 STYLE
 STRATEGY
 SYSTEM
 STAFF
 SHARED VALUE/SUPER ORDINATE GOALS:

17
 The four soft S’s however, are hardly feasible. They are difficult to describe since
capabilities, values and elements of corporate culture are continuously developing and changing.
They are highly determined by the people at work in the organization. Therefore it is much more
difficult to plan or to influence the characteristics of the soft elements. Although the soft factors
are below the surface, they can have a great impact of the hard Structures, Strategies and
Systems of the organization.

STRUCTURE:
Structure is a framework of relationship of persons, operating at various levels, to
accomplish common objective. An organizational structure is a systematic combination of people
function and physical facilities. It constitutes a formal structure with definite authority and clear
responsibility.

Organization Chart:
The superior-subordinate relationships are defined by organization charts, which are
formal documents that indicate the chain of command and the titles that have been assigned to
the managers and other personnel. These charts are somewhat like “road maps” as they are guide

18
19
Different Departments at BASF:
BASF has a well-defined organization structure. There is good authority and
responsibility relationship. All acts are performed in accordance to the organization structure so
as to perform the jobs effectively and efficiently. The entire organization is divided into a
number of departments and the acts of each department in controlled by different individual who
are specialized in particular field, so as to ensure division of lab our and specialization. This
helps to ensure mass production and efficiency. The various departments in BASF are as
follows:
1. Production Department:
The main function of BASF is production. It involves itself in the production of two
products, Dyes/Colorants and Dispersions. These act as leather chemicals ; they are used in
paints wrappers etc. Production Department is managed by 53 bargain able and 14 non-bargain
able employees.
Production Department functions 7 days a week, 365 days a year and 24 hours a day. The
work is done under three shifts. Production takes place based on the availability of raw-material.
At the end of every month the availability of raw-material is determined, quantity of finished
product required to be reduced is also determined. Based on these requirements, production for
next month is planned.
i. Dyes/Colorants:
Dyes are mostly used in textile colors. This is the largest plant of the two plants in terms
of manpower. It has an installed capacity of 2220TPA (tones per annum).
ii. Dispersions:
Dispersions plant is another plant in BASF. The plant is small compared to dyes plant, in
terms of size and manpower. Its production capacity is 65000 TPA. There is only 19 workers in
this plant. Production in this plant also takes place for 24 hours a day, under three shifts.
Dispersion plant is a fully mechanized plant. DC system controls all operations of this
plant. Since most of the work in this plant is mechanized, manual work is quite less. Thus small
work force is sufficient for its process. Chemicals used in this plant are hazardous, so most of the

20
chemicals are transferred through pipeline due to which exposure of workers to the chemicals are
minimal. The plant is also designed to be explosion protective.

Organization Chart of Dyes Plant

PLANT MANAGER - 1

ASSISTANT MANAGER - 1

PRODUCTION EXECUTIVE - 1

PRODUCTION OFFICER - 1

OPERATOR - 3 WORKMEN - 5

Organization Chart of Dispersions

PLANT MANAGER - 1

ASSISTANT PLANT MANAGER

PRODUCTION EXECUTIVE - 5

OPERATORS - 2

WORKMEN - 12

2. Quality Control Department:

Products produced by the company must be checked for its quality before it is distributed
in the market. The quality control department does this function. In BASF there are three
laboratories, two in Dyes plant and one in Dispersions plant, the three laborites are:
 Raw Material quantity control lab
 Application lab
 Information lab

Organization Chart of Quality Control Department

21
 SENIOR GENERAL MANAGER

MANAGER QUALITY ASSURANCE

ASST. MANAGER - QA ASSISTANT MANAGER

CHEMIST - 7

WORKMEN - 3

When the raw materials are brought to the production plant, the quality control
department checks it for its quality. Only if the raw materials satisfy standards they are allowed
to involve in production. Then the production is started at various stages of production plant.
Once the production is completed some samples will be brought to the laboratory and checked
for its quality. If the products are said to agree to the established standards only then the
produced product is allowed to pack and get distributed. If the quality of the product does not
reach the standards then the entire produced product will be rejected and reproduction is done.
BASF is very strict in its quality of products world wide. Thus the products in India or
Mangalore are same as the quality of products in Germany. This feature has helped BASF
maintain the brand name create brand loyalty among its customers.
3. Engineering Department:
Engineering Department deals with managing and betterment of the activities of the
organization. They mainly deal with utility and maintenance section. Engineering Department
deals with maintaining utilities. Different utilities are:
Power: BASF, Mangalore do not depend on others for the supply of power. They produce it
themselves. They have 3 mega watt diesel generators and one emergency KVA diesel generator.
Entire plant including administrative block uses the same power facility. Present generating
capacity is 3.75 KVA, but the requirement is only 2.5 KVA.
Air: Compressed air is essential for production and clearing purposes. Compressed air developed
through three double action compressors.
Steam: Steam is also essential for the plant for its production purposes. Steam is produced in
BASF.

22
Organization Chart of Engineering Department

MANAGER - ENGINEERING

ASST. MANAGER ASST. MANAGER

PROCESS ELECTRICAL

EXECUTIVE INSTRUMENTAL - 2 EXECUTIVE MAINTENANCE

OFFICER CIVIL

4. Personnel Department:

In a business origination the personnel function constitute a paradoxical one. In fact if you
look at the word MANAGEMENT, It can be divided into MANAGE-MEN-Tactfully. Thus the
world itself suggests the meaning of management that is to manage men.
In BASF there exists a well-structured Personnel Department. Top authority of personnel
department is acquired by Sr. General Manager. Under him come the Manager – Personnel,
then the Asst Manager & Officer – P & A

Organization Chart of Personnel Department:

SENIOR GENERAL MANAGER

MANAGER - P & A

ASST. MANAGER
PERSONNEL AND

OFICER - P & A

23
Salient Features of Personnel Policies/Practices of Mangalore Works:
BASF Mangalore works has well-developed and standardized personnel department.

a. Here work goes on 24 hours a day, 7 days a week and 365 days a year which is done under
3 shifts i.e., first shift is from 6.00 am to 2.00 pm, second shift is from 2.00 pm to 10.00
pm, and the third shift is from 10.00 pm to 6.00 am. Usually administrative office will
function only in general shift (8.30 am. To 4.30 pm).

b. The company tries to perform with minimum adequate man power to reduce its labour
cost.

c. The employees here are not only specialized in their jobs but also possess multi skills to
perform during emergency.

d. Free movement of operators/workmen from one plant to another

e. Attendance punching machine in respective plants to keep precise record of presence of

employees in the plant.

f. Attendance incentive scheme and EL/PL (12 to 22 days) based on attendance

g. Interest subsidy on housing and vehicle loan to the employees

h. Unskilled jobs such as janitorial service, canteen, security service loading and unloading
materials at warehouse, first aid services and packing of final finished products and all
other electrical mechanical and civil maintenance works are given on contract basis.

Recruitment and selection of employees:

Recruitment forms the first stage in the process, which continues with selection and ceases
with placement of candidates. It is the next step in the procurement function, the first being
the manpower planning. Recruitment makes it possible to acquire the number and types of

24
 people necessary to ensure the continued operation of the organization. Recruitment has been
regarded as the most important function of personnel administration, because unless the right
types of people are hired, even the best plans, organization charts and control system would
not do much good. There will be vacancy in an organization due to retirement and labour
turnover. This vacancy can be filled by recruitment/selection. BASF does its recruitment by,
 Internal Sources:
o Personnel already on the pay roll of an organization.
o Present permanent employees.
 External Sources:
o Employment exchange.
o Campus selection.
o Private consultancy.
o Advertisement in newspaper, during vacancy.
Induction
Once an employee is recruited BASF conducts an induction programmed to him. induction is a
process of introduction or orientation of new employees into his new organization, new
colleagues and new surroundings. The induction program tries to overcome the feeling of
strangeness, unfamiliarities and fear in the minds of new employees. During induction the
employee is made familiar with the practices, policies and purposes of the organization. In other
words, it is welcoming process – the idea is to welcome a newcomer, make him feel at home and
generate in him a feeling that his own job, however small is meaningful.

Training
BASF is dedicated to training and professional development of its human resource. It ensures
that the training needs of each employee is mapped and appropriate training is given either by the
in-house or professional trainers.

BASF follows a training policy, whereby it tries to educate the work force about the skill that are
necessary in carrying out the required job. The company has 2 types of trainees
i) Probationaries

25
These are trained initially for a period of one year as depending upon the needs analyzed after
the training is completed the worker is confirmed on the job.

ii) workmen trainee

these are trainees who undergo training in a specific field for which they are selected. Then they
are admitted to the organization as probationaries for a period of one year and later on they
would be the part if the workforce of the organization.

Training programs in BASF are conducted keeping in view the profile of the candidate, training
needs identified through performance appraisal, needs expressed by respective departments. The
intensive training program for all the company trainees is based on both theoretical concepts as
well as practical applications.

Generally the company recruits fresher’s with qualifications such as SSLC, PUC, ITI, B.Sc,
Diploma candidates and expose them to in plant training for a period of 2 years. This training
program for operators and technical workmen comprises shop floor training, class room training
etc. there by enabling them to gain familiarity with the working of the plant. these is done with
the view to promote the efficiency of the operators and the technical workmen by training them
in their specialized field of activity. The company also recruits engineering graduates and
exposes them to intensive management training for a period of 2 years.

In order to train its employees in specialized field for the efficient functioning of the organization
BASF has adopted different training methods they are as follows

1. On the job training

a. Vestibule training or training centre
This method of training attempts to bring the job situation in the company to classroom
b. Training by experienced workmen
In this method the experienced senior fellow workmen imparts training to the candidates
c. Demonstrations and examples

26
Here the trainer actually performance the activity himself by going through a step explanation of
why and what is to be done.

2. Off the job training

a. Lecture
b. conferences
c. Seminar or group discussions

Wage and salary administration

The management of BASF fixes the wage on basis of memorandum of settlement between
management and workmen once in four years. Various aspects are looked upon such as wage
legislation, wage structure, performance standards. The company pays much above the living
wage of its employee. In addition to its basic pay scale the package also includes improvement in
other benefits to the employees. With this the company expects to motivate its employees so that
they perform better.

Performance appraisal system at BASF

When an employee is selected, trained and motivated he is then required to be appraised for his
performance. Performance appraisal is the step were the management finds how effective it has
been at hiring and placing employees. It is a process of evaluating an employees performance of
job in terms of its requirement

In BASF there are two methods of appraisal

1. Workers performance appraisal (Bargainable)
It includes work men, operator/technicians and chemists

2. Executive performance appraisal (Non-Bargainable)

Includes officer, executive, assistant manager, deputy manager, manager and general
manager.

27
The parameters for workers performance appraisal (Bargainable):
While evaluating the performance, BASF considers the following performance factors.
 Job knowledge
 Attitude, behavior and inter personal skill
 Dependability
 Communication
 Initiative/ learning
 Discipline
 Efficiency/quality in work
 Safety
 Punctuality and attendance

The workmen’s performance is rated by his superior on the basis of his performance.
Against every parameter the appraiser is expected to support his rating by putting his comments
in the space provided along with the illusion, example or incident where ever possible. The
strengths and weakness of the workmen is put down by the appraiser. Further the appraiser also
provides for areas of development. Finally the overall assessment is done based on the total score
of all the parameters.

Executive performance appraisal (non Bargainable)

The performance management system is also known as Employee dialogue process consists of
three performance dimensions
i. Main tasks
The main tasks basically determine why the position or job exists. the main task defines the core
responsibility of the employee. Main tasks are job specific and have very little to do with the
abilities of the person concerned.

ii. Targets
It is a joint agreement of results to be achieved in a defined period of time. it aligns employee
performance with the business goals. Targets are set using the SMART principles

28
S- SPECIFIC
M- MEASURABLE
A- ACTION ORIENTED, ACHIEVABLE, AGREED
R- REALISTIC, RELEVANT
T- TIME BOUND

iii. Competencies
The visible competencies are skill, knowledge, behavior, invisible competencies include attitude,
traits, values and motivation. Research over the years has indicated that the differentiating
factors in performance lie “below the surface” Knowledge and skills only indicate what a person
can do. Motives, Traits & Self Concept are characteristics that will indicate whether a person
will do the given job.

Safety and Environment Department:

Chemical industries have high potential for losses, but effective steps taken in time can
minimize the losses. Effective action will only be possible if there exist a pre-planned and
practiced system that ensure dissemination of all important information to all concerned in other
to cope with an emergency.
BASF group is intent on manufacturing products that can be made safely. The company
conducts its own stage of product development to preclude any possible harm to people and
environment. The company also supports customers in handling and processing products safely
and in keeping with environmentally sound practices, provides them with detailed information
on proper product use. Whenever possible emissions are minimized at the source. For instance
solvents used in the production of colorants are recaptured and recycled. Closed cooling systems
are used to prevent leaks of dangerous substances in production from contaminating either the air
or cooling water. Such safety measures are standard for BASF throughout the world in its
ecology and toxicology laboratories.
BASF operates its own incinerators and landfills. It reinforces its environmental
precautions with constant checks and analyses of emissions to air and water. BASF India Ltd.,
Mangalore works considers environmental protection, occupational health and safety as on going
challenge for its sustainable development. The Mangalore works of BIL has been certifies under

29
ISO 9001 14001 systems. Based on these systems and well defined EHS policy the company,
various measures are implemented and monitored to ensure safety, health an environmental
protection.

Organization Chart of Safety and Environment Department:

SENIOR GENERAL MANAGER

MANAGER SAFETY & ENVIRONMENT

EXECUTIVE SAFETY & ENVIRONMENT

CHEMISTS - 04 OPERATORS - 07

BASF has got approvals from the following authorities or its environment and safety
management:
 Ministry of Environment and Fisheries, GOI.
 Karnataka State Pollution Control Board, GOK.
 Fisheries Department, GOK.
 Land Owners.
 NGO’s/Fishermen/Environmentalists.

Safety Health Policy:

 BASF considers Safety, Health and Environment Protection fundamental
management concerns. Economic considerations do not have priority over Safety,
Health and Environment Protection.
 BASF is committed to providing a healthy and safe work place. It believes that safe
work procedures are more productive and are an incentive to better performance.

30
  BASF encourages Safety, Health and Environmental awareness among all its
employees through training, dissemination of information and effective
communication.
 BASF helps customers to process its products safely and in an environmentally safe
manner.
 BASF manufactures products that are produced, stored, transported used and disposed
off with minimal adverse impact on and environment in conformity with the
principles of Sustainable Development.
 BASF as a Responsible Care Company is committed to meeting all statutory
obligations. Necessary steps for continuous improvement are taken even where no
regulations exist.

Environmental Policy (ISO 14001):

BASF, Mangalore Works manufacturing chemicals such as dyestuffs, polymer
dispersions, automotive and coil coatings is committed to the BASF corporate guidelines dated
October 1997 and BASF group EHS Directives dated January 2000. In line with this
commitment, the company shall strive to continually improve their Environmental Management
System through:
 Improvements in products and processes resulting in reduced environmental impacts.
 Continued compliance with all applicable legal requirements and other requirements.
 Prevention of pollution leading to minimization of air emissions, liquid effluents and
solid waste and conservation of resources such as water, fuel, chemicals and power.
 Promotion environmental awareness among all employees and persons working on
behalf of the organization.
 The company shall also make it available to public on request.
Emergency Service Facilities:
BASF is equipped with various kinds of devices to prepare itself and its workers during
emergency. The most important devices are:
 Manual Call Point (MCP)
 Ionized Smoke Detectors

31
 In BASF there are 55 Manual Call Points. In case any emergency arises in he company,
then these manual call points are broken. ISD’s are Ionized Smoke Detectors. They are installed
in the production department. In case any fire accident take place or the amount of smoke
emitted is more than the required limit, the ISD’s detect them and a siren is given automatically.
It includes Emergency Siren, Emergency Control Center, Communication, Fire Fighting Facility
and Medical Services.

Personal Protective Equipments:

Personal Protective Equipments such as Helmets, Safety Glasses, Face Shield, Gloves
Chemical Resistance, Body Aprons, Safety Shoes, Toe Protection Insulation, Dust Masks, Ear
Plug, Ear Muff and So on.
5. Accounts Department:
Maintenance of up to date records of all transaction is very essential in any company.
Such records can be maintained only through proper accounting procedures. Whenever the
company enters into a transaction it must be entered in the books of accounts. BASF maintains
an up to date records of all transactions by following book keeping. Previously it was done
manually, but today software called as SAP (System Application Software) is used. SAP is
German Software. It acts as a common server. By using SAP technology data can be entered by
any person at any part of the world and it can be accessed and viewed at any part of the globe.
With this technology it is possible for any branch to get information about the other. SAP helps
the head office to know the activities conducted by the branches.
SAP has helped to speed up the activities of BASF. Accounts section includes purchase
section and costing department. Purchase department deals with purchase of raw materials. Raw-
materials in BASF are usually purchased from Mumbai (Head Quarters) and purchases of some
 Promotion environmental awareness among all employees and persons working on
behalf of the organization.
 The company shall also make it available to public on request.

32
Organization Chart of Accounts Department

ASSISTANT MANAGER - PURCHASE

PURCHASE OFFICER

ACCOUNTS OFFICER ACCOUNTS ASSISTANT

SKILL:
In the Mc Kinsey’s 7s frame work, Waterman considers “Skills” as one of the most
crucial attributes or capabilities or an organization. The term skill includes those characteristics
which most people use to describe a company. In other words skills refer to dominant skills or
distinctive competence of an organization.
The employees working at BASF have got enough skill to achieve the organization
objectives. The workers are working up to their potential. The top management feels that the
skill of the workers is satisfactory. Worker will be trained in such a way that they will work
effectively and efficiently.
Training:
Every organization needs to have well trained and experienced people to perform the
activities that have to be done. If the current or potential job occupant can meet this requirement
training is not important. But when this is not the case, it is necessary to raise the skill levels and
increase the versatility and adaptability of the employees. Inadequate job performance or decline
in productivity or changes resulting out of job redesigning or technological breakthrough require
some type of training and development efforts.
BASF follows compulsory training to its employees. The company provides with both on
the job and off the job training. Some kinds of training provided to BASF employees may be as
follows,

1. On the Job Training:

33
 Virtually every employee, from clerk to company president, gets some “On the Job
Training” when he joins the firm. Employees are coached and instructed by skilled co-workers,
by supervisors, by the special training instructors. They learn the job by personal observations
and practice as well as occasionally handling it. It is leaning by doing, and its most useful for
jobs that are either difficult to stimulate or can be learned quickly by watching and doing. In
BASF it is mostly used for technical jobs in production department.
a. Vestibule training or Training-Center:
This method attempts to duplicate On the Job situations in a Company classroom. It is a
classroom training, which is often imparted with the help of the equipment and enables the
trainee to concentrate on learning the new skill rather than on performing an actual job.
b. Training by Experience Workmen:
By this Method, Training is imparted by experienced senior fellow-workers. It is
particularly adaptable were experienced workmen needs helpers. It is useful in departments in
which workmen advance through successive jobs to perform a series of operations.
c. Demonstration and Examples:
In the Demonstration method, the trainer describes and displays something as when be
teaches an employee how to do something by actually performing the activity himself and by
going through a step by step explanation of ‘why’ and ‘what’ he is doing.

2. Off the Job Training:

“Off the Job Training” simply means that training is not a part of everyday job activity.
The actual location may be in the company classrooms or in places which are owned by the
company or in universities or associations which have no connection with the company. This
method consists of:
 Lectures ;
 Conferences ;
 Seminar or Group Discussions.
In addition to the above training which is related to the jobs BASF also provides other
kinds of training such as,
 Firefighting and emergency preparedness: This kind of training is essential to face
emergency situation in case of leakage of chemicals.

34
  Integral Yoga Training: This kind of training, trains the employees about yoga and
meditation, Electrical safety in industries, Supervisory skill development, HRD
systems and best practices, Communication skills training.

STYLE:
The style in an organization becomes evident through the pattern of actions of the top
management team over a period of time. The emphasis laid on aspect of business reporting
relationships and aspect of organization culture.
Style refers to how managers collectively spend their time and attention and how they use
symbolic behavior. How management acts is more important than what management says. From
the study of different aspects of BASF India Limited it seems the company has adopted top down
and participative style of functioning. Here ideas are taken from the employees, but the final
decision is taken by the top management. Every employee is given a chance to voice his opinion,
each one is considered and is implemented based on its validity and benefits.
The following aspects are indicative of the style:
 There is complete transparency in all the dealings of the organization.
 The concept of smart ideas, where the employee can pen down his idea and drop it in
the smart ideas box, which is checked on a regular basis.
 The organization is the combined effort of the subordinate and superiors.
 The company has a good involvement with people near by, neighboring schools and
so on.
 The company maintains transparency in all its affairs to the public.
 The managers in the company are highly influencing to the subordinates in order to
attain certain common goals.
 Managers at BASF are not dominating over their subordinates instead they are having
friendly relationship with every one and involve them in decisions making.
 The company’s participative style of management has resulted in the development of
a committed and motivated work culture.

STRATEGY:

35
 Strategy refers to the course of actions through which the organization relates itself with
its environment so as to achieve its objectives. The company adopts strategies such as pricing,
waste elimination and so on. Strategy of waste elimination is explained as follows:
Waste Elimination at BASF:
Since BASF deals with chemicals in its production process a lot of harmful wastes are
liberated in its waste water. This waste water must be treated and then be liberated to the sea.
The water that is passed through the effluent treatment plant, purified in different steps and then
liberated to the sea. However 100% purification is not possible, but yet BASF utilizes all
possible methods to purify the water. The purified water is passed through a pipeline is 300 mm.
The on shore pipe is made of ductile iron, and off shore pipe is made of HDPE.

EFFLUENT TREATMENT PLANT

The effluent treatment plant (ETP) is one of the most significant features of BASF,
Mangalore. This ETP is well developed and has obtained ISO 14000 standards certification.
Formation of Effluents
There are basically two types of effluents, i.e., industrial and domestic.
The industrial effluents are produced due to washing and cleaning of vessels and reactors,
waste water from cleaning units like scrubbers, dryers etc. The effluent contains material from
both dyes and dispersion plants. The industrial water differ from batch to batch. Domestic waste
includes sanitary and kitchen wastes from various parts of the plant. Domestic wastes are usually
neutral and do not vary much in composition.
Description of Process:
The waste from all the parts of the plant is sent through channels by gravity flow to the
treatment site. The treatment site consists of two parts, the treatment unit and the incinerator unit.
There are five holding tanks in which two are of 500m3 and three are of 300m3 to
receive the raw effluent. The domestic effluent is separately collected in a 100m3 tank and
pumped directly into a bio aerator. The different phases of the treatment are described below.
Primary treatment:
The effluent from the dyes and dispersion plants (generally in the ratio 70:30) received in
the holding tank is first neutralized to pH5-7 with either caustic soda or HCI. Then a required
amount of flocculating polyelectrolyte is added to the effluent in tanks known as cascade tanks to

36
increase the flock size for faster sedimentation of sludge. The chemically treated effluent them
flows to the clarry-flocculator where the chemical sludge settles down and the clear supernatant
liquid flows to the aeration tank for biological treatment.
Secondary treatment:
The chemically treated effluent after sludge separation is subjected to bio degradation in
the aeration tank. The effluent then goes to the clarifier where the biological sludge settles down
and the clear supernatant liquid overflows to the filer deed sump via the V-notch.
Tertiary treatment:
Biologically treated effluent is then passed through pressure sand filter and activated
carbon filter. The final treated effluent is pumped and stored in the guard pond for testing the
quality of the water before discharging into the sea. The chemical sludge from the
clariflocculator and the excess biological sludge from the clarifier are taken to the sludge sump.
The combined sludge then centrifuged. The filtrate is recycled back to the clariflocculator and
wet cake is transferred to the cake drying beds. The dried cake is incinerated.

SYSTEM:
System refers to all the rules, regulation and procedures both formally and informally that
complement the organization structure. It includes production planning, inventory control system
and capital budgeting system and performance appraisal system.

INVENTORY CONTROL SYSTEM:

The inventory control is basically controlling the incoming raw materials, and storing the
finished goods. The warehousing department takes care of the inventory. They usually adopt the
FIFO method, but due to some exceptions like leakage etc. they issue without keeping FIFO in
mind.
Receipt, Storage & Issues of Incoming Material

PURPOSE:
To establish and maintain a system for the control of receipt, storage, issue and transfer
of materials to ensure preservation of their properties.

37
SCOPE:
This is applicable to all raw materials, and packing materials that affect quality directly.
This Covers the issue/transfer of materials between the factory Stores, Production plants and
other BASF Locations.
PROCESS DESCRIPTION:
1. RECEIPT AND VERIFICATION
 Receive materials from the supplier along with the challan/bill/invoice/certificates and
check for Stamping, date and signature of Security on the documents received with the
Consignment. Get the consignment unloaded at Unloading Points or designated locations
as per check list.
 Verify the documents received with consignment as per relevant Purchase Order and
check the consignment for any apparent physical/visual damages.
 In case of REJECTION on the spot, write the reasons for rejection on the accompanying.
 Document(s) and send them back to the supplier in consultation with Purchase Dept.
 Enter the receipt of materials in SAP online for preparation of Goods Receipt.
 Provide Identification label to the consignment indicating Description of Material,
Source, and Date of Receipt, Batch details, Lot Quantity as per the procedure for
Identification, Traceability and Status.
 Prepare Sample Request in case of tankers and send it to QA department. Get the
materials analyzed from QA department and received the acceptance letter from them
clearly mentioning the test status for further action.
 In case of Solid & Liquid materials take out samples as per work instructions and label
them and send it to QA along with the respective GR/relevant documents and shift the
Materials to their designated locations.
 In case of rejections, rejected materials are segregated and are marked with REJECTED
board as per the procedure for Identification, Traceability and Status.
 Arrange to send the rejected materials to the concerned supplier along with relevant
documents as directed by the purchase department.
 Update the stocks of materials in SAP.

38
2. STORAGE
 Identify and store all Raw materials considering its compatibility.
 Materials are issued on the basis FIFO but in special cases are suggested by the Quality.
 Assurance or the respective Plant in charge.
 During the storage period ensure that the quality of materials does not deteriorate.
 Identify the materials, which have limited storage period and define their shelf life.
 In case any items are found beyond their Shelf Life, arrange to get them verified by QA
department.
 Based on the feedback from QA department, decide scrapping or extending the storage of
those items in consultation with the divisions. Maintain records of these verifications and
disposal.

3. ISSUE
Issue of material always against a “Production Orders” or a reservation from user
department and examine the same for adequacy. In case of any discrepancy, get clarifications
from the department and verify the stock availability at unrestricted block & give batch details in
case of batch managed items and its purity to Material workman for taking out the required raw
material & dispensing the same. Material Assistant verifies the materials taken out and permits to
issue it to the respective plans. The plant personnel acknowledge materials issued against
production order. Update the issue of materials in SAP.

PROCESS DESCRIPTION:
RECEIPTS & WAREHOUSING
a) Receive finished goods from the production plants and arrange to verify them for
quantity.
b) Get them stacked in designated locations and ensure identification as per the procedure
for Product Identification, Traceability and Status.
c) Check the receipt of goods in SAP.
d) Check for damages/leakages.

39
4. MATERIAL TRANSFER
a) In case of rejections being sent back to suppliers, prepare Challan and get it authorized by
warehouse in charge.
b) Send the rejected materials to the supplier along with a copy of the rejection report.
c) Receive Return Note along with products from user Department indicating
excess/reasons for return/type of fault.
d) Inform Purchase and QA about the return of material and arrange for its verification.
e) Dispose off non-conforming materials as per the Procedure for Control of Non-
conforming products.

5. MATERIAL TRANSFER-OTHER BASF LOCATIONS

 Receive request from Purchase department and get D.O. from division.
 Get them stacked in designated locations and ensure identification as per the procedure
for Product Identification, Traceability and Status.
 Check the receipt of goods in SAP.
 Check for damages/leakages.

4. MATERIAL TRANSFER
 In case of rejections being sent back to suppliers, prepare Challan and get it authorized by
warehouse in charge.
 Send the rejected materials to the supplier along with a copy of the rejection report.
 Receive Return Note along with products from user Department indicating
excess/reasons for return/type of fault.
 Inform Purchase & QA about the return of material and arrange for its verification.
 Dispose off non-conforming materials as per the Procedure for Control of Non-
conforming products.

5. MATERIAL TRANSFER – OTHER BASF LOCATIONS

 Receive request from Purchase department and get D.O. from division.
 Remove the material and keep ready for dispatch.
 Ensure that they are identified as per procedure for Identification, Traceability and Status.

40
  Arrange for Transport.
 Load and dispatch along with proper documents.

Dispatch
1. Receive Delivery Orders & confirmed pick list from Divisions/Distribution depts..
2. Based on the program/schedule arrange to remove the products, prepare them for loading
and verify them.
3. Allow transporter and security personnel to verify the same as per pick list.
4. Compare the details of Verification against the Program.
5. Arrange for the loading of the transport as per the Work Instruction. Guidelines for
Loading and cargo lashing are also observed.
6. In case of export items, receive Packing List from plants.
7. Prepare Invoice, get them pre-authenticated by HOD.
STAFF
Staff refers to how company’s develop employees and shape basic values. The BASF group
of company’s takes all the appropriate steps to see that the selected candidates are suitable for the
job.
So in order to meet the emerging ideas based values BASF has got sound recruitment
process, which is based on scientific method and it has got system of training program to develop
the employees. In BASF training is given for both workmen and office staff. For workmen it is
A1, A2, A3, A4 and Technical Operator B1, B2, B3, B4 and Chemist C1, C2. Workmen perform
production job. Chemist checks the quality of Raw Material and Finished Goods. Assistants
perform jobs like dispatch of goods, cash payment and so on. The Designation of workers is as
follows:
Workers Performance Appraisal Executive Performance Appraisal
Category Job Category Job
A1 Workman M1 Officer
A2 Workman – 1 M2 Executive
A3 Workman – 2 M3 Assistant Manger
A4 Senior Workman M4 Deputy Manager
M5 Manger

41
 M6 General Manager
B1 Operator/Technician
B2 Operator – 1 / Technician – 1
B3 Operator – 2 / Technician – 2
B4 Senior Operator / Senior Technician
C1 Chemist / Assistant
C2 Chemist – 1 / Assistant – 1
C3 Chemist – 2 / Assistant – 2
C4 Senior Chemist / Senior Assistant

Classification of Various Groups of Staff:

DESIGNATION QUALIFICATION APPROX. WAGE (P.M.)

Workmen S.S.L.C. (10th Std) Rs. 10107/- to Rs. 10137/-
Operator / Technician PUC/ ITI (10+2) Rs. 11564/- to Rs. 11699/-
Chemist B.Sc. (PCM) (10+2+3) Rs. 12505/- to Rs. 12570/-
Assistant Graduation (10+2+3) Rs. 12505/- to Rs. 12570

SHARED VALUE / SUPER ORDINATE GOALS:

In the 7s frame work there is one variable termed as super ordinate goals, which may be
considered to be equivalent of the term organizational purpose. According to proponents of the
Mc Kinsey’s frame work super ordinate goals refer to a set of values and aspirations that go
beyond the conventional formal statement of corporate objectives. Super ordinate goals are the
fundamental ideas around which a business is built. They are its main values. They are the broad
notions of future direction.
Shared Value with Reference to BASF India Limited:
BASF India Limited is committed in achieving full customer satisfaction and enhancing
it. This commitment is shared by all the employees and is an integral part of the fundamental
value system of the company. It develops products and chemical processes and provide services
of high scientific and technical levels to foster good partnership with the customers. BASF helps
customers to use its products safely and in an environmentally safe manner. It achieves this by
continual improvement of processes, products, services and systems, customers, and thereby
foster good partnerships with them.

42
 Another important value that BASF India Limited is committed to is “Economic
considerations do not take priority over safety and health issues and environmental protection” –
extract from Values Charter.
We can confidently tell that BASF has achieved this, as they successfully achieved ISO-
14001 and they are a member of Responsible Care.
RESPONSIBLE CARE:
Responsible Care a public commitment is a chemical industry initiation, which calls on
companies to voluntarily demonstrate their commitment to improve all aspects of performance,
which relate to protection of Health, Safety and Environment.
Guiding principles of RC:
a) To recognize and respond to community concerns about chemicals and our operations.
b) To develop and produce chemicals that can be manufactured, transported, used and
disposed of safely.
c) To make Health, Safety and environmental consideration a priority in our planning for all
existing and new products and processes.
d) To report promptly to officials, employees, customers and the public, information on
chemical related health or environmental hazards and to recommend protective measures.
e) To counsel customers on the safe use, transportation and disposal of chemical products.
f) To work with others to resolve problems created by past handling and disposal of
hazardous substances.
These are few of the guidelines of the Responsible Care program, which are followed by
BASF India Limited completely. BASF always make sure they make Environment, Health
and Safety (EHS) are given major priority in thesir organization, which makes it “The
Chemical Company”.

Part C

SWOT ANALYSIS OF BASF INDIA LIMITED:

STRENGTHS:

43
  A diversified manufacturing base source.
 Vibrant downstream industries in different segments.
 Competitive core industries.
 Advanced technology.
 Capability to produce world-class end products.
 Strong presence in some export market segments.
 Large domestic market.
 Dedicated knowledge group.
 Good and Strong R & D base and quality human resources.
WEAKNESS:
 Lots of time goes in R & D.
 No aggressive approach.
OPPORTUNITIES:
 Success stories in Dyes and Agro-chemicals have boosted the confidence to take on
global competition squarely.
 The markets in the developed countries are opening up and India can take advantage of
this. A large number of products are going off patent.
 With the knowledge available in the country, there is a tremendous potential to grow and
increase exports in Dyestuff and Agro-chemicals market.
 Sustainable growth of BASF in the market.
THREATS:
o The merger trend that’s taking place in India these days. For ex. (merging of Dow
Chemicals and Reliance) can be a major threat to BASF.
o Cheaper products by small industries who sell cheap quality chemicals.

44