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INBOUND LOGISTICS OF NFCL
This primary activity of the supply chain management is taken to
understand and analyze the various inputs (inbound logistics) of NFCL and the
fertilizer industry at large. The primary inputs required by the NFCL are Natural
Gas, Naphtha, Electricity and fuel Natural Gas. Purchases of traded products,
Pool Urea (imports), Specialty Fertilizers are also considered as they are
inflows to the company. Catalysts Charge, Chemicals and Consumables,
Packing Material, stores and spares, and others (indigenous) are considered to
study how effective and efficient they are in the SCM of NFCL and to the
fertilizer industry itself.
Table - 6.1: Quantity and value of Natural Gas and Naphtha (Ind) Purchased for 10 Years (2001 – 2011)
Source: NFCL Annual Reports 2002 to 2011
Financial Yea
r
Natural Gas Naphtha (Ind)
Quantity (1000 SM3)
% Change
Value (Rs.
Lochs)
% Change
Average cost per
1000 SM3 (Rs.)
% Change
Quantity (MT)
% Change
Value (Rs.
Lakhs)
% Change
Average cost per
(MT)
% Change
2001 - 02 386342.000 - 14348.5
1 -
3713.940 - 78903.000
- 8625.18
-0.10931
-
2002 - 03 406008.000 5.09
14973.96 4.35
3688.095-0.70
87390.000
10.76
9836.54
14.04
0.11256 2.973
2003 - 04 409849.000 0.95
17118.92
14.32
4176.88513.25
42572.000
-51.3
5761.21
-41.4
0.13533 20.23
2004 - 05 397512.000 -
3.01 17038.9
2 -
0.474286.391
2.62102167.0
00 140 20053.
95 248.
10.19629 45.0
52005 - 06 366246.366 -
7.87 16875.7
0 -
0.964607.745
7.49116750.1
5914.2
7 30368.
86 51.4
40.26012 32.5
22006 - 07 347201.976 -
5.20 17154.9
3 1.654940.908
7.23113012.0
62 -3.2 35517.
51 16.9
50.31428 20.8
22007 - 08 356998.150 2.82
16423.53
-4.26
4600.452-6.89
115303.280
2.027
41852.98
17.84
0.3629815.5
2008 - 09 325852.910 -
8.72 15561.5
9 -
5.254775.649
3.80147035.0
5027.5
2 55315.
86 32.1
70.37621 3.64
52009 - 10 565485.660 73.5
35287.96
126.8
6240.29330.67 6572.000 -
95.5 1903.9
9 -
96.60.28971
-232010 - 11 639932.220 13.2
50985.64
44.48
7967.35027.68 nil -100 nil -100 nil -100
Total 4201428
215769.7 48997.71 809704.6
209236.1
Chart - 6.1: Quantity and value of Natural Gas and Naphtha (Ind)
Purchased for 10 Years (2001 – 2011)
INTERPRETATION:
Chart- 6.1 shows the Quantity and value of Natural Gas and Naphtha (Ind)
Purchased for 10 Years (2001 – 2011). It shows in the years 2002 - 03, 2003 - 04,
2004 - 05, 2005 - 06, 2006 - 07, 2007 - 08, 2008 - 09, 2009 - 10 and 2010 – 11 the
% change in the quantity of Natural gas is 5.09, 0.95, -3.01, -7.87, -5.20, 2.82, -
8.72, 73.5 and 13.2 respectively. Whereas the % changes in the value of Natural
gas is 4.35, 14.32, -0.47, -0.96, 1.65, -4.26, -5.25, 126.8 and 44.48 respectively.
The reason for this unequal and irregular % changes are fluctuations in the output
and flexible supply of inputs by the vendors. The % change in the quantity of
Naphtha in the years 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2007 -
08, 2008 - 09, 2009 - 10 and 2010 – 11 is 10.76, -51.3, 140, 14.27, -3.2, 2.027,
27.52, -95.5 and -100 respectively. And the % change in the value of Naphtha is
14.04, -41.4, 248.1, 51.44, 16.95, 17.84, 32.17, -96.6 and -100 respectively. The %
change in the quantity and value of Naphtha from the year 2009 – 10 is 100% less
because With the commencement of supply of natural gas to both the plants, the
‐150
‐100
‐50
0
50
100
150
200
250
300
2001 ‐ 02
2002 ‐ 03
2003 ‐ 04
2004 ‐ 05
2005 ‐ 06
2006 ‐ 07
2007 ‐ 08
2008 ‐ 09
2009 ‐ 10
2010 ‐ 11
%
Financial Year
Chart - 6.1: % change in Quantity and value of Natural Gas and Naphtha (Ind) Purchased for 10 Years (2001 – 2011)
% change in Quantity (1000 SM3) Natural Gas
% change in Average cost per 1000 SM3 (Rs.) Natural Gas
% change in Average cost per 1000 SM3 (Rs.) Natural Gas
% change in Quantity (MT) Naphtha (Ind)
% change in Average cost per 1000 SM3 (Rs.) Naphtha (Ind)
Company has phased out usage of Naphtha in a phased manner and has
completely changed over to Natural Gas feed Stock from August ’09 onwards.
From this study it is clear that there is no equal and regular or gradual
increase in % change of both quantity and the values. So it is suggested that the
company should see that the % change in the value is always less than the %
change of quantity.
Table: 6.2 - Quantity and value of Pool Urea Purchased for 10 Years
Financial Year
Quantity (MT)
% Change
Value (Rs.
Lakhs)
% Change
average
cost per MT
% Change
2001 – 02 20100 793.548 0.039482002 – 03 21354 6.24 843.0559 6.24 0.03948 02003 – 04 22354 4.68 905.9629 7.46 0.040528 2.652004 – 05 20144 -9.89 805.24 -11.1 0.039963 -1.392005 – 06 38418.45 90.7 1516.76 88.4 0.03948 -1.212006 – 07 711591.64 1752 28839.69 1801 0.040528 2.652007 – 08 1460879.09 105 58307.23 102 0.039912 -1.522008 – 09 706572.15 -51.6 27914.55 -52.1 0.039507 -1.012009 – 10 606947.05 -14.1 28223.03 1.11 0.0465 17.72010 – 11 558435.78 -7.99 28647.86 1.51 0.0513 10.3
Total 4166796 184041.9 0.416678Source: NFCL Annual Reports 2002 to 2011
IN
Y
0
q
an
P
T
im
2
1
2
P
it
tr
g
d
Chart
NTERPRE
Chart
Years (2001
6, 2006 - 0
quantity of P
nd -7.99 r
Purchased is
The reason f
mport order
005 – 06 is
05 is due t
008 – 09 it
Pool Urea Pu
t indicates t
From
remendousl
ap to mee
demand and
200102
Qu
6.2 - Quan
ETATION:
t 6.2 Presen
– 2011). It
07, 2007 - 0
Pool Urea P
respectively
s 6.24, 7.46
for this une
rs. The % c
s 90.7, in th
to govt. est
t is only -51
urchased is
the stable va
m this study
ly and the q
t the dema
supply ver
1 ‐2
2002 ‐03
20004
6.24
uantity an
Quan
ntity and va
:
nts the Qua
t shows in t
08, 2008 - 0
Purchased i
y. Wherea
6, -11.1, 88.
equal and i
change in t
he year 200
timations ab
1.6 is due t
s always mo
alue of imp
y it is clear
quantity pur
and. So it
ry keenly so
03 ‐4
2004 ‐05
2
4 4.68 ‐9.6.24 7.46
0 2.6
nd value of
tity % change
alue of Poo
antity and v
the years 20
09, 2009 - 1
s 6.24, 4.68
as the % c
.4, 1801, 10
rregular %
the quantity
06 – 07 it is
bout the de
to lack of im
ore or less e
orts.
r that the d
rchased has
is suggeste
o that it can
2005 ‐06
2006 07
.89 90.7‐11.1 88.4
65 ‐1.39 ‐1
f Pool Urechang
Value % c
ol Urea Pur
value of Po
002 - 03, 20
10 and 2010
8, -9.89, 90
changes in
02, -52.1, 1
changes ar
y of Pool U
s1752, and
emand for u
mports. The
equals to th
demand fo
s shown do
ed that the
fill the gap
‐ 2007 ‐08
1752
105
1801
101.21 2.65
ea Purchasgechange Av
rchased for
ool Urea Pu
003 - 04, 20
0 – 11 the %
.7, 1752, 10
the values
.11, and 1.
re fluctuatio
Urea Purcha
in the year
urea and ag
e % change
he % change
r pool urea
own fall it i
e govt. sho
p between th
2008 ‐09
20
‐51.6
02‐52.1
‐1.52 ‐1.01
sed for 10Y
vg cost % chan
r 10 Years
urchased fo
004 - 05, 20
% change in
05, -51.6, -
s of Pool
51 respectiv
ons in the g
ased in the
r 2007 – 08
gain in the
e in the valu
e in the qua
a has incre
indicates su
ould pursue
hem.
009 ‐10
‐14.11.1117.7
Years %
nge
or 10
005 -
n the
14.1,
Urea
vely.
govt.
year
8 it is
year
ue of
antity
eased
upply
e the
Table – 6.3: Quantity and value of Electricity Purchased an own generation for 10Years (2001 – 11)
Financial Year
Electricity Purchased Electricity own generation
Quantity (1000
KWH)
Value (Rs.
Lakhs)
Average Cost per
unit (Rs./KWH)
Quantity (1000 KWH)
Cost of gas per Unit of
Power generated
(Rs./KWH)
Total value (Rs.)
2001 - 02 3146.266 236.46 7.52 177032.150 0.69 123391.4
2002 - 03 2959.508 659.06 22.27 176949.356 0.77 136781.9
2003 - 04 3030.224 541.98 17.89 178917.173 0.89 159594.1
2004 - 05 2836.406 217.61 7.67 210771.800 0.81 172200.6
2005 - 06 2897.981 214.03 7.39 205476.000 0.84 172599.8
2006 - 07 3109.605 250.08 8.04 204165.000 0.87 179052.7
2007 - 08 3359.292 250.47 7.46 212111.200 0.82 173931.2
2008 - 09 3146.266 231.63 8.03 220976.000 0.82 181200.3
2009 - 10 2398.440 253.20 8.07 227647.200 1.17 266347.2
2010 - 11 2805.200 243.78 8.09 247670.000 1.51 373981.7
Total 29689.19 3098.3 2061716 1939081Source: NFCL Annual Reports 2002 to 2011
Fig 6.3: Quantity and value comparison of Electricity Purchased and own
generation for 10Years (2001 – 11)
99%
1%
Quantity of Electricity Purchased and own generation for 10Years
Quantity of own generation (1000 KWH)
Quantity of purchased(1000 KWH)
0%
100%
Value of Electricity Purchased and own generation for 10Years
value of own generation (Rs. Lakhs)
value of purchased(Rs. Lakhs)
INTERPRETATION:
Fig 6.3 Shows the quantity and the value comparison of electricity
purchased and own generation over ten years. It shows in the quantity of total
electricity 99% is in the form of own generation and only 1% is in the quantity of
purchased electricity. Where as in the total value nearly 100% is the value of
purchased electricity and only very negligible portion is the value of own
generation.
From this study it can be said that the company is paying maximum value
to the less quantity of electricity purchased. So it is suggested that the investments
in purchasing electricity is harvested and the same is invested to produce more by
own generation.
Table 6.4: Quantity and value of fuel Natural Gas consumed for 10
Years
Financial Year Quantity
% Change
Total Cost per 1000 SM3
% Change
Rate per Unit of Natural
Gas(Rs./1000 SM3)
% Change
2001 - 02 353254.7274 13124.80 3715.39
2002 - 03 330399.4008 -6.47 12188.13 -7.14 3688.91 -0.71
2003 - 04 287394.6851 -13 12028.86 -1.31 4185.49 13.5
2004 - 05 298604.7500 3.9 12799.92 6.41 4286.58 2.42
2005 - 06 285591.6300 -4.36 13157.45 2.79 4607.09 7.48
2006 - 07 274368.0100 -3.93 13580.04 3.21 4949.57 7.43
2007 - 08 315549.5290 15 14600.45 7.51 4699.87 -5.04
2008 - 09 264506.5780 -16.2 12631.90 -13.5 4775.65 1.61
2009 - 10 428724.5160 62.1 26810.49 112 6253.55 30.9
2010 - 11 477853.3470 11.5 38343.33 43 8024.08 28.3
Total 3316247 169265.40
Source: NFCL Annual Reports 2002 to 2011
INTERPRETATION:
Table 6.4 Shows the Quantity and value of fuel Natural Gas consumed for
10 Years. It shows the % change in Rate per Unit of Natural Gas (Rs. /1000 SM3)
in the year 2002 – 03 is -0.71, but in the year 2003 – 04 it is 13. 5 is due to lack of
availability of fuel natural gas. From 2004 to 2007 there is a gradual increase in
the % of Rate per Unit of Natural Gas(Rs./1000 SM3) but in the year 2007 – 08
there is a -5% change is due to govt. pricing policy. Again from the years 2009 to
2011 there is increase in the Rate per Unit of Natural Gas (Rs. /1000 SM3) is due
to feed stock shift from naphtha to natural gas.
From this study it is clear that the average Rate per Unit of Natural Gas (Rs/1000
SM3) is 50% more in the year 2001 to 2011. So it is suggested that the govt.
should make more allocation of natural gas to the fertilizers industry.
Chart 6.4: Quantity and value of fuel Natural Gas consumed for 10 Years
Table 6.5: Value of others (Ind) Purchased for 10 Years
Source: NFCL Annual Reports 2002 to 2011
0
50000100000150000200000250000300000350000400000450000500000
2001- 02
2002- 03
2003- 04
2004- 05
2005- 06
2006- 07
2007- 08
2008- 09
2009- 10
2010- 11
Quantity
Total Cost per 1000 SM3
Rate per Unit of NaturalGas(Rs./1000 SM3)
Financial Year Value (Rs. Lakhs) % Change 2001 - 02 226.35 2002 - 03 256.52 13.3 2003 - 04 254.64 -0.73 2004 - 05 262.49 3.08 2005 - 06 255.51 -2.66 2006 - 07 223.94 -12.4 2007 - 08 221.35 -1.16 2008 - 09 222.83 0.67 2009 - 10 293.15 31.6 2010 - 11 228.26 -22.1
Total 2445.04
INTERPRETATION:
Table 6.5 shows the Value of others (Ind) purchased for 10 Years. It shows
in the years 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2007 - 08, 2008
- 09, 2009 - 10 and 2010 – 11 the % change in the Value of others (Ind) Purchased
is 13.3, -0.73, 3.08, -2.66, -12.4, -1.16, 0.67, 31.6 and -22.1 respectively. The
reason for this irregular % changes are due to fluctuations in the supply and the
govt. policies in imports. In the year 2009 – 10 the % change from the previous
year is 31.6 is also the result of excess quantity received to meet the demand.
Again in the year 2010 – 11 it was reduced to -22.1% at which the value is very
low.
From this study it is clear that the inputs to the company are not regular so
it forms a bottleneck in the output. So it is suggested that the company and the
govt. should see that these inputs should flow consistently to meet the demand
from the end user the farmer.
Chart 6.5: Value of others (Ind) Purchased for 10 Years
13.3
‐0.73 3.08‐2.66
‐12.4‐1.16 0.67
31.6
‐22.12001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 2008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of others (Ind) Purchased for 10 Years % Change
Value of others (Ind) Purchased Over 10 Years % Change
Table 6.6: Value of Specialty Fertilizers Purchased for 10 Years
Financial Year Value (Rs. Lakhs) % Change 2001 - 02 1126.61 2002 - 03 961.67 -14.6 2003 - 04 997.25 3.7 2004 - 05 1057.77 6.07 2005 - 06 1783.58 68.6 2006 - 07 2291.02 28.5 2007 - 08 2590.66 13.1 008 - 09 3120.08 20.4 2009 - 10 3084.7 0 -1.13 2010 - 11 3064.79 -0.65
Total 11860.23 Source: NFCL Annual Reports 2002 to 2011
INTERPRETATION:
Table 6.6: Presents Value of Specialty Fertilizers Purchased for 10 Years. It
shows in the years 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2007 -
08, 2008 - 09, 2009 - 10 and 2010 – 11 the % change in the Value of specialty
fertilizers Purchased is -14.6, 3.7, 6.07, 68.6, 28.5, 13.1, 20.4 and -1.13
respectively. In the year 2005 – 06 the % change is 68.6 from the previous year is
gradually reduced to -0.65% in the year 2010 – 2011. The reason for this irregular
% changes are due to fluctuations in the supply and the govt. policies in the
allocations.
From this study it is clear that the other firms which are manufacturing
specialty fertilizers are also facing the output problems which are inputs to many
companies like NFCL. So it is suggested that the Fertilizer industry should
implement the SCM strategies like the proposed one in an effective and efficient
manner to meet the demand from the industrial users and the ultimate end user the
farmer.
Chart 6.6: Value of Specialty Fertilizers Purchased for 10 Years
Table 6.7: Value of Purchases of traded products for 10 Years
Financial Year Value (Rs. Lakhs) % Change 2001 - 02 8,142.06 2002 - 03 4,370.70 -46.3 2003 - 04 3,056.70 -30.1 2004 - 05 10,153.50 232 2005 - 06 7,856.49 -22.6 2006 - 07 35,246.56 349 2007 - 08 64,103.62 81.9 2008 - 09 34,651.88 -45.9 2009 - 10 53,366.17 54 2010 - 11 119,902.33 125
Total 305,603.45 Source: NFCL Annual Reports 2002 to 2011
‐14.63.7 6.07
68.6
28.513.1 20.4
‐1.13 ‐0.65
2001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of Specialty Fertilizers Purchased for 10Years % Change
Value of Specialty Fertilizers Purchased over 10 Years % Change
INTERPRETATION:
Table 6.7: presents Value of Purchases of traded products for 10 Years. It
shows in the years 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2007 -
08, 2008 - 09, 2009 - 10 and 2010 – 11 the % change in the Value of Purchases of
traded products is -46.3, -30.1, 232, -22.6, 349, 81.9, -5.9, 54, and 125
respectively. It reveals that in the year 2004 – 05 the % change is 232% from its
previous year. And in 2005 – 06 it is reduced to -22.6% and again in the year 2006
– 07 it is 349% is again reduce to -45% in the year 2008 – 09 is the result of
companies policies in maintaining its product assortment.
From this study it is clear that the company is trying to offer the consistent
product mix by sourcing traded product from other firms. So it is suggested that if
the company wants to offer the complete product mix to its end users at affordable
price the company should go for manufacturing rather than sourcing from others.
Chart 6.7: Value of Purchases of traded products for 10 Years
‐46.3 ‐30.1
232
‐22.6
349
81.9
‐45.9
54
125
2001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 2008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of Purchases of Traded products for 10 Years %Change
value of Purchases of traded products over 10 Years %Change
Table 6.8: Value of Power and Fuel for 10 Years
Financial Year Value (Rs. Lakhs) %Change 2001 - 02 13,366.97 2002 - 03 12,850.85 -3.86 2003 - 04 18,712.80 45.6 2004 - 05 28,203.36 50.7 2005 - 06 33,243.63 17.9 2006 - 07 36,952.33 11.2 2007 - 08 31,158.94 -15.7 2008 - 09 47,042.50 51 2009 - 10 31,191.26 -33.7 2010 - 11 38,814.27 24.4
Total 291,536.91 Source: NFCL Annual Reports 2002 to 2011
INTERPRETATION:
Table 6.8: presents Value of Power and Fuel for 10 Years. It shows in the
years 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2007 - 08, 2008 - 09,
2009 - 10 and 2010 – 11 the % change in the Value of Power and Fuel is -3.86,
45.6, 50.7, 17.9, 11.2, -15.7, 51, -33.7 and 24.4 respectively. It tells us that from
the year 2002 – 03 to 2004 – 05 there is an increase in the % change is due to
increase in the production capacity and the output. From the year 2004 – 05 to
2007 – 08 the % change is decreased to -15.7 from 50.7 is the result of
Arrangements for setting up a 3x 60 MW coal based power plant. The Crude
supply and product off-take (export) contract with British Petroleum is in place, as
also the agreement with domestic marketing with Indian Oil Corporation. We can
find fluctuation in the values of power and fuel from the year 2008 – 09 to 2011 is
the result of commencement of supply of gas to both the plants, the Company has
phased out usage of Naphtha in a phased manner and has completely changed over
to Natural Gas feed Stock from August ’09 onwards.
From this study it is clear that the company is doing its best to reduce the
value of power and fuel. So it is suggested that if the company can use alternative
resources like solar energy and the wind energy as the company is located in the
coastal region which can help the company to meet its objective of reducing the
value of power and fuel.
Chart 6.8: Value of Power and Fuel for 10 Years
Table 6.9: Value of Catalysts Charge for 10Years
Financial Year Value (Rs. % Change 2001 - 02 226.482002 - 03 161.6 -28.6 2003 - 04 67.31 -58.3 2004 - 05 1,030.59 1431 2005 - 06 540.21 -47.6 2006 - 07 533.63 -1.22 2007 - 08 765.07 43.4 2008 - 09 543.97 -28.9 2009 - 10 571.87 5.13 2010 - 11 7.8 -98.6
Total Source: NFCL Annual Reports 2002 to 2011
‐3.86
45.6 50.717.9 11.2
‐15.7
51
‐33.7
24.4
2001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 2008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of Power and Fuel for 10 Years %Change
Value of Power and Fuel over 10 Years %Change
INTERPRETATION:
Table 6.9: Illustrates the Value of Catalysts Charge for 10Years. It shows in
the years 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2007 - 08, 2008 -
09, 2009 - 10 and 2010 – 11 the % change in the Value of Catalysts Charge is -
28.6, -58.3, 1431, -47.6, -1.22, 43.4, -28.9, 5.13 and -98.6 respectively. It tells us
that in the year 2004 – 05 the % change is 1431 huge increase than in the year
2003 – 04 is because of large scale purchase in the year 2004 – 05 to gain the
economies of large scale purchases and the value has gradually decreased to -98.6
% changes in the year 2011.
From this study it is clear that the company is doing the best to reduce the
value of catalyst charges as they play a vital role in chemical reactions for
manufacturing fertilizers. So it is suggested that if the company can re-use these
catalysts as they remain unchanged after chemical reactions can reduce the value
even lower.
Chart 6.9: Value of Catalysts Charge for 10Years
‐28.6 ‐58.3
1431
‐47.6 ‐1.22 43.4‐28.9 5.13
‐98.62001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 2008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of Catalysts Charge for 10Years % Change
Value of Catalysts Charge over 10Years % Change
Table 6.10: Value of Chemicals and Consumables for 10 Years
Source: NFCL Annual Reports 2002 to 2011
INTERPRETATION:
Table 6.10: presents the Value of Chemicals and Consumables for 10
Years. It shows in the years 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07,
2007 - 08, 2008 - 09, 2009 - 10 and 2010 – 11 the % change in the Value of
Chemicals and Consumables is -12.5, 4.83, 19.2, 37.8, 2.57, 7.35, -17.3, 36.8, and
23 respectively. It tells us that from the year 2002 – 03 to 2005 – 06 there is an
increase in the % change is due to increase in the production capacity and the
output as they play a key role in the manufacturing process. From the year 2006 –
07 to 2008 – 09 the % change has decreased to -17.3 from 37.8 is the result of
multi sourcing from domestic suppliers. We can find fluctuation in the values of
Chemicals and Consumables from the year 2008 – 09 to 2011 is the result of
phased out usage of Naphtha in a phased manner and has completely changed over
to Natural Gas feed Stock from August ’09 onwards.
Financial Year Value (Rs. Lakhs) % Change 2001 - 02 390 2002 - 03 341.37 -12.5 2003 - 04 357.85 4.83 2004 - 05 426.63 19.2 2005 - 06 588.09 37.8 2006 - 07 603.20 2.57 2007 - 08 647.54 7.35 2008 - 09 535.50 -17.3 2009 - 10 732.56 36.8 2010 - 11 900.74 23
Total 5523.48
From this study it is clear that the company is performing well in reducing
Chemicals and Consumables as they play a vital role in chemical reactions for
manufacturing fertilizers. So it is suggested that if the company can source it from
multi supplier can gain cost affective supplies which results in lower value.
Chart 6.10: Value of Chemicals and Consumables for 10 Years
Table 6.11: Value of Packing Material for 10 Years
Financial Year Value (Rs. Lakhs) % Change 2001 - 02 2,770.28 2002 - 03 2,606.87 -5.9 2003 - 04 2,689.36 3.16 2004 - 05 4,233.23 57.4 2005 - 06 3,813.02 -9.93 2006 - 07 5,916.74 55.2 2007 - 08 8,200.26 38.6 2008 - 09 6,546.89 -20.2 2009 - 10 4,540.10 -30.7 2010 - 11 6,208.81 36.8
Total 47,525.56 Source: NFCL Annual Reports 2002 to 2011
‐12.5
4.83
19.2
37.8
2.577.35
‐17.3
36.8
23
2001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 2008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of Chemicals and Consumables for 10 Years % Change
value of Chemicals and Consumables over 10 Years % Change
INTERPRETATION:
Table 6.11: gives the Value of Packing Material for 10 Years. It presents
that in the years 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06, 2006 - 07, 2007 - 08,
2008 - 09, 2009 - 10 and 2010 – 11 the % change in the Value of Packing Material
is -5.9, 3.16, 57.4, -9.93, 55.2, 38.6, -20.2, -30.7, and 36.8 respectively. It illustrate
us that from the year 2003 – 04 to 2010 – 11 there is fluctuations in the value of
Packaging Material is due to bulk purchase and durability of the materials.
From this study it is clear that the company is performing well in reducing
the value of Packaging Materials. So it is suggested that if the company can
manufacture the PVC bags for packaging it will gain cost competitive advantage
in the industry.
Chart 6.11: Value of Packing Material for 10 Years
0‐5.9
3.16
57.4
‐9.93
55.2
38.6
‐20.2
‐30.7
36.8
2001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 2008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of Packing Material for 10Years % Change
value of Packing Material Over Years % Change
Table 6.12: Value of stores and spares (indg& import) consumed for 10 Years
Source: NFCL Annual Reports 2002 to 2011
INTERPRETATION:
Table 6.12 Presents the Value of stores and spares consumed for 10 Years.
It shows that in the years 2001 – 02, 2002 - 03, 2003 - 04, 2004 - 05, 2005 - 06,
2006 - 07, 2007 - 08, 2008 - 09, 2009 - 10 and 2010 – 11 the Value of stores and
spares (Indigenous) consumed are 329.08, 261.48, 205.78, 476.58, 723.07, 782.06,
701.41, 619.11, 589.28 and 1075.91 respectively. And the Value of stores and
spares (Imported) consumed are 147.23, 122.29, 99, 104.15, 1938.5, 136.88,
325.4, 638.3, 264.14 and 321.84 respectively. It tells us that except in the years
2005 – 06 and 2008 – 09 the %value of imported stores and spares consumed are
less than 50% of value of indigenous stores and spares is because of the
availability of stores and spares.
Hence it is suggested that the company should depend only on indigenous
stores and spares as they can be available in due time with less cost and it should
depend on imported when these are not available in local market.
Financial Year Indigenous % Imported % total2001 - 02 329.08 70 147.23 30 476.312002 - 03 261.48 68 122.29 32 383.772003 - 04 205.78 68 99 32 304.782004 - 05 476.58 82 104.15 18 580.732005 - 06 723.07 27 1938.5 73 2661.62006 - 07 782.06 85 136.88 15 918.942007 - 08 701.41 68 325.4 32 1026.812008 - 09 619.11 49 638.3 51 1257.412009 - 10 589.28 70 264.14 30 853.422010 - 11 1075.91 77 321.84 23 1397.75
Chart 6.12.1: Value of stores and spares consumed for 10 Years
Chart 6.12.2: Value of stores and spares consumed for 10 Years
70 68 68 8227
85 68 49 70 77
30 32 32 1873
15 32 51 30 23
2001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 2008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of stores and spares (indg & import) consumed for 10 Years
Indigenous % Imported %
329.08 261.48 205.78 476.58 723.07 782.06 701.41 619.11 589.281075.91147.23 122.29 99
104.15
1938.53
136.88 325.4 638.3 264.14321.84
2001 ‐ 02 2002 ‐ 03 2003 ‐ 04 2004 ‐ 05 2005 ‐ 06 2006 ‐ 07 2007 ‐ 08 2008 ‐ 09 2009 ‐ 10 2010 ‐ 11
Value of stores and spares consumed for 10 Years
Indigenous Imported
TABLE 6.13: CONSOLIDATED INBOUND LOGISTICS FOR 10 YEARS (MATERIALS CONSUMED)
S.NO
Name of the material consumed
2001- 2002 2002-2003 2003- 2004 2004 - 2005 2005 - 2006 2006 - 2007 2007 - 2008 2008 - 2009 2009 - 2010 2010 - 2011 Sources Distan
Quantity
Value (Rs.
Lakhs) Quantity
Value (Rs.
Lakhs) Quantity
Value (Rs.
Lakhs) Quantity
Value (Rs.
Lakhs) Quantity
Value (Rs.
Lakhs) Quantity
Value (Rs.
Lakhs) Quantity
Value (Rs.
Lakhs) Quantity
Value (Rs.
Lakhs) Quantity
Value (Rs.
Lakhs) Quantity Value (Rs.
Lakhs)
1
Natural Gas (Ind) (1000 SM3)
386342 14348.51 406008 14973.96 409849 17118.92 397512 17038.92 366246.4 16875.7 347201.976 17154.93 356998.15 16423.53 325852.91 15561.59 565485.66 35287.96 639932.22 50985.64 RIL & GAIL 25 km
2 Naphtha (Ind) (MT)
78903 8625.18 87390 9836.54
42572 5761.21 102167 20053.95 116750.2 30368.86 113012.062 35517.51 115303.28 41852.98 147035.05 55315.86 6572 1903.99 nil nil HPCL, Visakhapatnam 170 k
3 Pool Urea
20100 793.548 21354 843.0559 22354 905.9629 20144 805.24 38418.45 1516.76 711591.64 28839.69 1460879.1 58307.23
706572.15 27914.55 606947.05 28223.03 558435.78 28647.86 UAE 1,827
mile
6 Electricity a) Purchased
3146.2668 236.46 2959.5086 659.06 3030.224 541.98 2836.4068 217.61 2897.981 214.03 3109.605 250.08 3359.292 250.472 3146.266 231.634 2398.44 253.2 2805.2 243.78 APTRANSCO
7
b) Own Generation
177032.15 Rs / KWH
0.69
176949.356 Rs / KWH 0.773
178917.173 Rs / KWH 0.892
210771.8 Rs / KWH 0.817
205476 Rs / KWH
0.84
204165 Rs / KWH 0.877
212111.2 Rs / KWH
0.82
220976 Rs / KWH
0.82
227647.2 Rs / KWH
1.17
247670 1.51
8
fuel Natural Gas
353254.727 13124.8 330399.4008 12188.13 287394.6851 12028.86 298604.75 12799.92 285591.6 13157.45 274368.01 13580.04 315549.53 14600.45 264506.57 12631.9 428724.51 26810.49 477853.347 38343.33 RIL & GAIL, Thatipaka, kakinada
25 km
Value of other materials consumed (Rs. Lakhs)
2001- 2002 2002-2003 2003- 2004 2004 - 2005 2005 - 2006 2006 - 2007 2007 - 2008 2008 - 2009 2009 - 2010 2010 - 2011 Sources Distan
9 Others(ind)
226.35
256.52
254.64
262.49
255.51
223.94
221.35
222.83
293.15
228.26 Multisources(indg)
10 Specialty Fertilizers
1,126.61
961.67
997.25
1057.77
1783.58
2291.02
2590.66
3120.08
3084.7
3064.79
11
Purchases of traded products
8,142.06
4,370.70 3,056.70 10,153.50 7,856.49 35,246,56
64,103.62
34,651.88 53,366.17 119,902.33 UAE 1,827
mile
12
Power and Fuel
13,366.97 12,850.85 18,712.80 28,203.36 33,243.63 36,952.33 31,158.94 47,042.50 31,191.26 38,814.27 RIL &GAILThatipaka,
kakinada 25 km
13 Catalysts Charge
226.48 161.6 67.31 1,030.59 540.21 533.63 765.07 543.97 571.87 7.8
14
Chemicals and Consumables
390 341.37 357.85 426.63 588.09 603.2 647.54 535.5 732.56 900.74 Multisources(indg)
15 Packing Material
2,770.28 2,606.87 2,689.36 4,233.23 3,813.02 5,916.74 8,200.26 6,546.89 4,540.10 6,208.81 Gujarat - Jharkhand 1447 k
16 stores and spares
476.35 383.77 304.78 580.73 2661.6 918.94 1,026.81 1,257.41 853.42 1,397.75
17 Indigenous 329.08 261.48 205.78 476.58 723.07 782.06 701.41 619.11 589.28 1075.91 MP 1117 k
18
Imported
147.23 122.29 99 104.15 1938.53 136.88 325.4 638.3 264.14 321.84 Japan M/s Mitsubishi Heavy
3023.9nautic
mile
Source: NFCL Annual Reports 2002 to 2011
INTERPRETATION:
The consolidated table 6.13 shows the inbound logistics of NFCL for 10
years. It presents the quantity and value of inputs to NFCL for manufacturing
the fertilizer urea and the source, distance and mode of transportation of these
inbound logistics. The table tells that Natural Gas (Ind) (1000 SM3) the major
input and fuel natural gas is sourced from RIL & GAIL which are at Thatipaka,
Kakinada at a distance of 25km from the company and the mode of
transportation is 18’ pipe line. The Naphtha (Ind) (MT) is sourced from HPCL,
Visakhapatnam which is 170 km away from the company and the main mode of
transportation is Rail, Road, and through the Ship. The imported Pool Urea and
other traded products are sourced from UAE which covers 1,827 n miles and is
imported through the Ship. The Electricity is purchased from APTRANS CO
and the Specialty Fertilizers, Chemicals and Consumables and others are
sourced from indigenous multi sources. Packing Materials are sourced from
Gujarat and Jharkhand which are 1447 km from the company and the
mode of transportation is through Rail and Road. The indigenous spares are
sourced from Madhya Pradesh (MP) and the imported spares are brought from
Japan’s M/s Mitsubishi Heavy which is located 3023.96 N miles away from
Kakinada and is imported through the Ship.
