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    WCM Final

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    Rujuta Sawant
    Nagarjuna Fertilizers and Chemicals Ltd saw increases in production capacity for ammonia, urea, and extruded irrigation systems from 2008-09 to 2009-10. While ammonia and urea production exceeded installed capacity, indicating outsourcing, sales of extruded irrigation systems increased substantially. The company implemented improvement programs ahead of schedule, increasing urea production to its highest level. Inventory decreased by 21% in value due to improved order processing time from SAP implementation. However, overall sales and profits declined 16% and 34% respectively from the previous year likely due to poor agricultural conditions affecting demand. The company plans to expand into biomanure production and provide industrial services domestically and abroad.

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    WCM Final

    Uploaded by

    Rujuta Sawant
    18 views2 pages
    Nagarjuna Fertilizers and Chemicals Ltd saw increases in production capacity for ammonia, urea, and extruded irrigation systems from 2008-09 to 2009-10. While ammonia and urea production exceeded installed capacity, indicating outsourcing, sales of extruded irrigation systems increased substantially. The company implemented improvement programs ahead of schedule, increasing urea production to its highest level. Inventory decreased by 21% in value due to improved order processing time from SAP implementation. However, overall sales and profits declined 16% and 34% respectively from the previous year likely due to poor agricultural conditions affecting demand. The company plans to expand into biomanure production and provide industrial services domestically and abroad.

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    Nagarjuna Fertilizers and Chemicals Ltd saw increases in production capacity for ammonia, urea, and extruded irrigation systems from 2008-09 to 2009-10. While ammonia and urea production exceeded installed capacity, indicating outsourcing, sales of extruded irrigation systems increased substantially. The company implemented improvement programs ahead of schedule, increasing urea production to its highest level. Inventory decreased by 21% in value due to improved order processing time from SAP implementation. However, overall sales and profits declined 16% and 34% respectively from the previous year likely due to poor agricultural conditions affecting demand. The company plans to expand into biomanure production and provide industrial services domestically and abroad.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    18 views2 pages

    WCM Final

    Uploaded by

    Rujuta Sawant
    Nagarjuna Fertilizers and Chemicals Ltd saw increases in production capacity for ammonia, urea, and extruded irrigation systems from 2008-09 to 2009-10. While ammonia and urea production exceeded installed capacity, indicating outsourcing, sales of extruded irrigation systems increased substantially. The company implemented improvement programs ahead of schedule, increasing urea production to its highest level. Inventory decreased by 21% in value due to improved order processing time from SAP implementation. However, overall sales and profits declined 16% and 34% respectively from the previous year likely due to poor agricultural conditions affecting demand. The company plans to expand into biomanure production and provide industrial services domestically and abroad.

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    of 2

    Study of Annual Report of Nagarjuna Fertilizers

    Company Name: Nagarjuna Fertilizers and Chemicals Ltd.


    H.O. Location: Hyderabad, Andhra Pradesh
    Factory Location: Kakinada, Andhra Pradesh
    Managing Director: Shri.K.S.Raju
    Products Manufactured: Ammonia, Urea, Extruded Irrigation Systems & parts thereof
    Capacity Analysis - 2008-09

    Product Units Installed Production Sales


    Name Capacity ( per
    annum)
    Ammonia MT/Day 1800 2144.825 27.31
    Urea MT/Day 3000 3775.786 1397101.35
    Extruded Irrigation Lakh 827 511.25 519.77
    Systems Mts/Annum

    2009-10

    Product Units Installed Production Sales YoY


    Name Capacity (per Increase %
    annum)
    Ammonia MT/Day 2100 2319.268 ---
    Urea MT/Day 3620 4060.556 1505484.65 7.76
    Extruded Irrigation Lakh 874 787.87 796.40 53.22
    Systems Mts/Annum

    Financial Analysis
    (All fig. in Rs Cr. except employees)
    09-10 % of 08-09 % of YoY %
    Sales sales Change
    Net Sales 1987.91 ----- 2371.91 ------ (16.19)
    (Excluding other income) Rs.
    Material Cost 406.72 20.46 731.32 30.83 (44.38)
    Employee Cost 77.34 3.89 66.26 2.79 16.72
    No. of Employees (Assumed) 1000 ---- 1100 ----- (9.09)
    Inventory held on yr. end 59.38 2.99 74.94 3.16 (20.76)
    Power & Fuel Cost 311.91 15.69 470.42 19.83 (33.7)
    Interest paid 149.04 7.49 169.32 7.13 (11.98)
    Depreciation 128.18 6.45 120.96 5.10 5.98
    Exports --- --- --- --- ---
    Imports --- --- --- --- ---
    Net Profit (NOPAT) 258.00 12.98 395.40 16.67 (34.75)

    Average Earning of Employee Rs. 4.2 L/Yr Rs. 5.0 L/Yr


    Revenue generated /Employee Rs. 198 L Rs. 215.6 L
    (Sales / No. of Emps.)
    Inventory-Turn-Over Ratio 33.47 Times 31.65 Times
    (i.e. Sales /Inv. …… times)
    E.P.S. (Rs.) 1.55 0.76
    Specify:Face Value of Eq. Sh =Rs.10
    Student’s Name 1. Anirudh Kunte Roll No. MMS-044
    2. Praful Lohakare Roll No. MMS-045
    3. Sneha Parthasarathy Roll No. MMS-047

    Capacity Utilization:
    All three products of manufacture have seen an increase in the production capacity over the
    previous year. In case of Ammonia and Urea, the tonnes produced overshoots the installed capacity,
    which indicates outsourcing of production. Extruded irrigation systems however saw a substantial
    increase in sales. However, Ammonia is consumed in-house and doesn’t see any sales in 09-10 as
    opposed to 08-09.

    Productivity, Quality:
    The company conducted two major programmes; The Annual Turnaround and Revamp
    Schemes, both implemented ahead of schedule. These two schemes resulted in the highest ever
    production of Urea by the company amounting to 14.82 Lakh MT. The Revamp scheme in particular
    resulted in an increase in the overall production by 2 Lakh MT / Annum. The company phased out
    the use of naphtha for to production switching over to Natural Gas feed stock, making the process
    more energy efficient.

    Inventory Management:
     The inventory held sees a decrease of almost 21% in value terms over the last year. There
    aren’t by far any set norms for inventory management. However, periodic physical
    examination of the inventory is carried out. During the year, certain discrepancies were
    observed, however, they were identified to be not material related and were dealt with for in
    the books of accounts.
     With the implementation of SAP, lead time in order processing has reduced from two to three
    days to less than 10 minutes.

    Profitability:
    The overall sales saw a drop in the current year over the previous year by about 16%. The net
    profit also saw a decrease of 34%. This could be attributed to the near abysmal condition of the
    agricultural production in the country during the year, due to fluctuating monsoon conditions in over
    the country.

    Future Plans:
     The company plans to venture into Biomanure production from the Municipal Solid Waste
    (MSW).
     Also, it plans to provide Industrial services to fertilizer projects/plants and other projects in
    India and Abroad. Currently, the company caters to only the Indian market.
     Plans for manufacture of chemicals for solar and semi-conductor application businesses are
    underway. Also, the company is looking for installation of various new mechanisms for
    efficiency improvement.

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