internship imran (2)

INTERNSHIP REPORT

NAME OF THE ORGANIZATION: SITARA CHEMICAL INDUSTRIES

LIMITED 32KM SHEIKHUPURA ROAD

FAISALABAD.

SPECIALIZATION: MARKETING.

SUBMITTED BY: MUHAMMAD IMRAN KHAN

ROLL #T-520165, REGISTRATION # 06-PLR-0257

CHAK NO 223 R.B MUHAMMAD NAGAR C/O

ASHRAF K/STORE NEAR PULL ABDULLAH

SAMMUNDRI ROAD FAISALABAD.

CONTACT # 041-2009079

MOBIL # 0300-7252464

SUBMITTED TO: THE CHAIRMAN DEPARTMENT OF BUSINESS

ADMINISTRATION ALLAMA IQBAL OPEN

UNIVERISTY ISLAMABAD.

Allama Iqbal Open University, Islamabad. - 1 -

ACKNOWLEDGEMENT

All praises belong to almighty ALLAH who is the supreme Authority

Knowing the ultimate relations underlying all sorts of phenomenon going on in this

universe and whose blessings and exaltation flourished my thoughts and thrived my

ambitions to

Have the cherished fruit of my humblest thanks to the Holy Prophet Hazrat

Muhammad (Peace be upon him) who is forever a torch of guidance and knowledge

and knowledge for humanity as a whole.

I deem it my utmost pleasure to avail this opportunity to express gratitude and

deep sense of obligation to my reverend teachers, for their valuable and dexterous

guidance, scholarly criticism, untiring help, compassionate attitude, kind behavior,

moral support and enlightened supervision during the whole study and completion of

the project.

I am also gratitude to staff of Sitara Chemical Industries Ltd. Especially

Mr.Ijaz Hussain (D.G.M Sectt/Acting G.M Marketing) Mr. Khalid Pervaiz Khan

Niazi (Sr. Manager Admin), Tariq Mehmood (Manager HR) who provides me useful

information during the internship program. I am thankful to all those people, who

provide me valuable information.

Finally, I should like to extend heartfelt thanks to my adoring PARENTS, for

their day and night prayers, sacrifices, encouragement, moral and financial support

throughout the course of my study.

MUHAMMAD IMRAN KHANM.B.A (Marketing)


3: LIST OF CONTENTS

LIST OF CONTENTS

Subject Page No.

1. TITLE PAGE 01

2. ACKNOWLEDGEMENT 02

3. LIST OF CONTENTS 03

4. LIST OF TABLES & ILLUSTRATION,IF ANY 05

5. INTRODUCTION 06

6. OBJECTIVES OF STUDYING THE ORGANIZATION 07

7. OVERVIEW OF THE ORGANIZATION 08

7.1 HISTORY 08

7.2 NATURE OF THE ORGANIZATION 09

7.3 BUSINESS VOLUME 09

7.4 PROFILE OF EMPLOYEES 11

7.5 PRODUCT LINES 14

8. ORGANIZATION AL STRUCTURE 16

8.1 MAIN OFFICES 16

8.2 MARKETING OPERATIONS 20

9. STRUCTURE OF MARKETING DEPTT. 21

9.1 NUMBER OF EMPLOYESS WORKING 21

IN THE MARKETING DEPARTMENT.

9.2 MARKETING OPERATIONS 22


10. FUNCTIONS OF MARKETING DEPTT. 24

10.1 MARKETING STRATEGY 26

10.2 PRODUCT PLANNING, DEVELOPMENT 26

& MANAGEMENT

10.3 PRICING STRATEGY 28

10.4 DISTRIBUTION STRATEGY 29

10.5 PROMOTIONAL STRATEGY 30

11 CRITICAL ANALYSES 32

11.1 SUCCESS & FAILURE OF PRODUCTS 38

11.2 MAJOR COMPETITORS 38

11.3 FUTURE PROSPECTS OF THE ORG. 40

12 SHORT-FALLS/WEAKNESSES OF THE

MARKETING DEPARTMENT 42

12.1 SWOT ANALYSIS 42

13 CONCLUSION & RECOMMENDATIONS 43

14 REFERENCES & SOURCES 46

15 ANNEXURE 47


List of tables & illustration

List of tables & illustration, if any

1. TABLE OF PER TON CAPACITY OF CAUSTIC SODA

2. TABLE OF SHARE HOLDING & THEIRE PERCENTAGE

3. MARKET SHARE OF CAUSTIC SODA

4. ILLUSTRATION OF WORLD WIDE CAUSTIC SODA CONSUMPTION

5. ILLUSTRATION OF CAUSTIC SODA CONSUMPTION IN PAKISTAN

6. ILLUSTRATION OF SHARE HOLDER EQUITY


Introduction

Sitara Chemical Industries Ltd. (SCIL)

SCIL is an industrial unit belongs to one of the largest Group of Industries in Pakistan

“Sitara Group Of Industries Ltd.”

Sitara Group of industries comprises of following business units.

Sitara Group Of Industries

Sitara Chemical Industries Ltd. _ Chemical Division

Sitara Chemical Industries Ltd. – Textile Division

Sitara Textile Limited

Sitara Energy Limited

Sitara Fabrics

Sitara Agri Model Farm

Sitara Per Oxide

Sitara PVC Ltd.

Sitara Shopping Mall

Groups Charitable Institutions

Aziz Fatimah Trust Hospital

Ghafoor Bashir Children Hospital

Aziz Fatimah Girls High School

Sitara Children Health care Foundation


Objectives of Studying the Organization

To learn about the modern Information Technology S.A.P (ERP) is

implemented in Sitar Chemical by the Abacus Consulting. Its main objective

of an ERP to provide instantaneous information on Sales, Marketing,

Manufacturing, Operations, Inventories and Financial etc.

To learn about sales volume increased every year 10% from other competitors.

To learn about Sitar Chemical daily average sales above 20 Million. That is

the efficiency of Marketing Department.

To learn about PVC Project has been working that able to complete the

demand on poor electricity supply conditions prevailing in the country.

To Learn about Sitara Chemical Industries Limited which is working Riba

Free.

To Learn about Sitara Chemical Industries Limited who has the Largest Chlor

Alkali Manufacturing Plant in the Pakistan.

To Learn about Sitara Chemical, which has, the fully automatic caustic soda

plant based on latest membrane cell Technology absolutely mercury free

initially production of Caustic soda is 30 MT/day gradually increased due to

demand to current Level of 550 MT/day.

To learn about the quality products of Sitara Chemical Industries Limited who

has ISO 9001-2000 Certified & Producing the Quality Product. The following

is the Quality Policy of the Sitara Chemical Industries


SCIL QUALITY POLICY (CQM-001)

“SCIL is Committed to remain alert & advance to continuously grow as a

quality symbol for its products & in meeting industrial & consumer

requirements through training, teamwork & procedures on time, every time”

To learn about the Sitara Chemical Industries Limited who is also ISO 14001

Certified & is the environment friendly & Pollution free organization. The

following is the Environmental Policy of the of the Sitara Chemical Industries

SCIL ENVIORMENTAL POLICY (EQP-001)

“SCIL is committed to continual improvement of its environmental

management system (EMS) by adoption of appropriate pollution prevention

measures & complying with all relevant environmental legislations/regulations

through training, teamwork & procedures as implemented from time to time”

To Learn about the organization who has the deep Regard of the vendors

Customers, Business Partners & Employee

7: OVERVIEW OF THE ORGANIZATION

7.1 Brief History

Sitara Chemical Industries Ltd. Was incorporated in 1981 as a public limited

company and started its commercial production in 1984, under the zealous

administration of two brothers, Haji Abdul Ghafoor (late) and Haji Bashir Ahmad.

Now Mr. Muhammad Adrees is the Chief Executive of SCIL. The factory is situated

at 32km Sheikhupura Road Faisalabad. SCIL incorporated under the companies’

ordinance 1984 and listed in1987

Initially SCIL was incorporated for Chloral Alkali Production, however it under gone

merger with Gafoor Basheer Taxtile. SCIL has made growth by leaps and bounds and


become largest Caustic Soda producer in Pakistan. At present SCIL has a market

share of 70% in Caustic Soda industry.

7.2Nature of the Organization

Core business of the company is manufacturing of Caustic Soda and some by-

products at Chemical Division. Textile Division consist of one spinning units of

45,408 spindles where cotton yarn if produced. The Company mainly supplies

industrial chemicals to various industries, which gives the company a very wide

consumer base diversification over many industrial segments. The location of the

plant is also strategic as some of the major consumers belonging to textile, soap, paper

and vegetable oil industries are situated in the surrounding area.

7.3 Business Volume

Sitara Chemical Industries Ltd. is the largest producer of Chlor-Alkali products in

Pakistan. The total amount of turnover in 2008 was Rs.6.00 Billion

Caustic soda industry in Pakistan comprised of only three produces mentioned below.

Forecasting a persistent increase in demand management is trying to increase

production capacity of plant. The estimated market situations of last five years are as

follows.

June 2008


Producer CapacityTons

% Age

Sitara Chemical Ind. Ltd 213,575

58.23

Ithad Chemical Ltd. 145,750

35.81

Nimar Chemical 31,000 5.96

Total 390,325

100.00

Sitar chemicalIndustries Ltd

Itehad ChemicalLtd

Nimir Chemical

Market Share of Caustic Soda Industry in Pakistan

June 2007


Itehad ChemicalLtd

Nimir Chemical


June 2006



% Age


54.23

Ithad Chemical Ltd. 125,400

37.81


Total 331,650 100.00


Itehad ChemicalLtd

Nimir Chemical


June 2005


Itehad ChemicalLtd

Nimir Chemical




% Age


54.76

Ithad Chemical Ltd. 118.269 36.64


Total 329,999 100.00


% Age


51.15

Ithad Chemical Ltd. 130,588 38.52


Total 350690 100.00

June 2004


Itehad ChemicalLtd

Nimir Chemical


7.4 Profile Of Employees

For the year ended June 30, 2008, total number of permanent employees were 1,184

where as number of contract employees were 715. Company has maintained

recognized provident fund, based on audited accounts as at June 30, 2008, value of

investment thereof was Rs, 30,408,7052. Whereas employees of Textile Division are

entitled to gratuity.

Company has its charter of ethics and business practices which is signed by all the

employees.



% Age


52.34

Ithad Chemical Ltd. 130,700 41.36


Total 314,759 100.00

Career Planning

The company provides attractive salary packages as well as good career progressions

to its employees. Special attention is given to Succession plans to fill up gaps required

at the time of need. The employees are made aware of their career progression’s

profile right at the time of induction.

Training Need Assessments

The company understands the importance of training and is totally committed to the

training aspects to enhance the skills and capabilities of its employees. A fully

equipped HRD center has been established at SCIL to conduct regular in-house

courses and training sessions. Sometime SCIL qualified staff conducts these sessions

and at times experts from outside Institutions are invited to impart training to

employees of various trades.

Mostly there training is arranged in PIMS, SEMEDA and employers Federations of

Pakistan, etc for external courses in their related field.

Hiring Of Trainee Engineers And Management Trainees

Sitara Industries plays an important roll in the professional growth of the fresh

Engineers and MBAs/ Master Degree Holders. SCIL induct them as Management

Trainees for a period of one year and during the training period offer them reasonable

stipend. On successful completion of training period, company offers them Jobs with

handsome Salary package.

Profile of Eminent Executives


MR. SHER ALI MALIK has joined Sitara Chemical Industries Limited on July 25,

2008 as Manager Marketing. He is holding a degree of MPA from University of

Punjab Lahore. He brings with him 15 years of experience in Sales Operational

Management and Brand Management of Fast Moving Consumer Goods (FMCG). He

has prior worked with well known processing as well as manufacturing companies

like Habib Oil Mills (pvt) Ltd. United Industries Limited and Iffco Pakistan (pvt) Ltd.,

Formerly Evian Fats and Oils.

MR.LIAQAT ALI SHAHID has joined Sitar Chemical Industries Ltd. As General

Manager Commercial on August 01, 2008. Did his B.Sc. Mechanical Engineering

from University of Engineering & Technology Lahore in the year 1978. He has about

30 years of experience in well-known companies like Crescent Sugar, Pakistan

Tobacco, Rafhan Maize & Syed Bhais. His past experience is related to Plant

Maintenance, Preventive Maintenance, Operations, Material Planning, Inventory

Control, Purchasing (Local & Imports) and Vendors development. He has also

attended various short courses like improving steam boiler efficiency & steam

distribution system, waste heat recovery, Operations Management and basic courses

for ISO-9001.

MR. TARIQ MEHMOOD is a valuable addition to highly professional, committed

and motivated team of Sitara Chemical Industries Ltd. He has professional

qualification of AICM (Chartered Manager). He brings with him diversified

experience of Human Resources Management spread over 13years in different

capacities/organizations. He has attended number of conferences and courses.


MR. SHAKEEL REHMAT MALIK has joined as Manager Administration in

Sitara-Family with effect from 11th April 2008. Mr. Malik has done his Masters in

Organic Chemistry and bachelor degree in law from University of the Punjab. He has

also done Post Graduate Diplomas Labor, Taxation laws and International Affairs.

Mr. Malik is also equipped with 15years of rich managerial and professional

experience in the fields of Legal, corporate, Industrial Relations and Administration

during which he has not only served in private but also in public sector. He has

privileged to serve in large industrial groups like Packages, Crescent, Chakwal and

Habib Group.

7.5 Product Lines

Following SCIL’s main products along with production capacity

Chemical Division

Product Name Designed Capacity

(Tons Per Year)

Caustic Soda 132,000

Sodium Hypochlorite 36,000

Bleaching Powder 7,500

Ammonium Chlorite 3,000

Hydrochloric Acid 110,000

Textile Division

Kgs In 20-Single

Cotton Yarn 20,791,776

Caustic Soda utilization

It is used in textile processing as mercerizing agent & fixing agent, Neutralizing agent

in petroleum refining, pulp and paper, detergents, vegetable-oil refining, soap industry

as a sponifying agent, ion exchange resins regeneration, chemical manufacture of

rayon and cellophane etc.


Worldwide caustic soda apparent consumption by end use 2008 (%)

Caustic consumption in Pakistan – sector wise

Sodium Hypochlorite utilization

Used in textile, carpet industry, sodium silicate manufacturing, sugar industry,

disinfection for potable water and cooling tower, rayon and other chemicals

Bleaching Powder utilization


42%

32%

3%

4%

2%1%

9%

4% 3%

TEXTILE SOAP & DERTERGENT FOOD & BEVEAGES

GHEE & OIL FERTILIZER POWER GENERATION

CHEMICAL PAPER & BOARD MISC

Used in textile Industries, carpet Industries, water purification, pulp, paper and paper

board, sugar etc.

Ammonium Chlorite Utilization

Used dry battery cell, galvanizing pipe, sheet and other material, pharmaceuticals

metal cleaning, soldering, tanning etc.

Hydrochloric Acid Utilization

Textiles, water treatment, production of liquid sugar, steel pickling & galvanizing

industries, Production of gelatins from bones, activated clay etc.

Cotton Yarn utilization

Used in weaving of gray cloth.

8: ORGANIZATIONAL STRUCTURE

8.1 Main Offices

Department Function

Accounts Department To prepare monthly, quarterly and annually Accounts,

Costing, Budgeting & Forecasting. To handle payable

and insurance, L.Cs, Inventory & Stores etc

Finance Department Arranging Finance and negotiate over coat of finance, To

handle sale, receivable, debtor aging, cash and bank etc

Internal Audit

Department

To monitor the implementation of internal procedures,

policies internal control systems and repot any violation.

Detection and control of financial risk and frauds.

Commercial Department To handle local & Import procurements.

Information Technology

Department

Development & launch the new system (SAP),

Networking, Hardware Maintenance.

Administration

Department

Dealing stake holders in general issues, transport, care

taking, weighbridge, security, recovery, horticulture,

Human Resource

Department

Hiring new manpower, satisfaction, Motivation,

Appraisals etc


Health Safety

Environment (HSE)

ISO Audit and ISO implementation, Internal safety &

environmental awareness and health improvement.

CEO Secretariat To assist Chief Executive Officer in performing his daily

functions.

Production Department To undertake production activity and maintain desired

production volume

Electrical & Instrument Maintain and economies electricity consumption,

Installation and maintenance of Electrical & Electronics

Instruments

Mechanical Department Installation and maintenance of plant and machinery.

Civil Department Undertake civil works activity either in maintenance or

new projects

Research & Development

(R&D)

Product development, product improvement and

economies production cost by discovering raw material

substitute or change in production process.

Quality Control Maintain quality and deal with complaints

Project Department To design and build structural design of new plant to be

installed.

Agri Division Basic purpose was to go for diversification by innovative

Agri products development. This division engaged in

R&D, Marketing, and production of Agri fertilizers.

Marketing & Sale

Department

To increase existing demand, to work as organization’s

intelligence in large outer environment, customer

satisfaction, advertisement, smooth dispatch, rationing of

products in case of excess demand


Organizational Hierarchy


Departmental Hierarchy


EXECUTIVE DIRECTOR

HR & ADMIN. DEPTT.

GENERAL MANAGER FINANCE

DIRECTOR TECHNICAL&PROJECT

G.M. Works

MARKETING & EXPORT DEPTT

IMPORT DEPTT.

ISO DEPTT.

PROJECT DEPTT

L & QC DEPTT

R & D DEPTT.

IT DEPTT

AGRI DIVISION

FINANCE & ACC DEPTT

CHIEF EXECUTIVE

STORE DEPTT

DGM ENGNEERING

COMMERCIAL DEPTT

PROCESS DEPTT

Share Holding

Nature Of Share Holder No. Of Share Held

% Age

Directors, CEO & their Spouse and 11,947,656 64.40

Financial Institutions 3,140,03

7 16.9

2

Individuals 3,135,94

3 16.9

0

Joint Stock Companies, Others, etc. 329,96

3 1.7

8 18,553,599

100.00


CHIEF EXECUTIVE OFFICERCHIEF EXECUTIVE OFFICER

BOARD OF DIRECTORSBOARD OF DIRECTORS

ADMININSTRATIONADMININSTRATION MARKETINGMARKETING PROCESSPROCESS

CEO SECRETARIATCEO SECRETARIAT

ADMINADMIN

HUMAN RESOURCESHUMAN RESOURCES

ACCOUNTS / STOREACCOUNTS / STORE

AUDITAUDIT

FINANCEFINANCE

INFORMATION TECHNOLOLGY

INFORMATION TECHNOLOLGY

COMMERCIAL/IMPORTCOMMERCIAL/IMPORT

AGRI MARKETINGAGRI MARKETING

SPECIALTY MARKETINGSPECIALTY MARKETING

SALESSALES

PRODUCTIONPRODUCTION

MECHANICALMECHANICAL

ELECTRICAL/INSTRUMENTELECTRICAL/INSTRUMENT

MATERIAL MANAGEMENTMATERIAL MANAGEMENT

RESEARCH & DEVELOPMENTRESEARCH & DEVELOPMENT

HEALTH SAFETY & ENVIROMENT

HEALTH SAFETY & ENVIROMENT

Although SCIL is a public limited company listed in stock exchange, however

sponsors of the company are holding 64 % of equity. Vertical organization structure

further strengthens influence of directors / sponsors in management. 17% individual

shareholders, 17% Financial Institutions and 2% Joint Stock Companies are at the

mercy of sponsors who of 64 % holdings

8.2 Marketing Operations

The internship period provided me an opportunity to get first hand knowledge about

the operations of the marketing department of SCIL. The Marketing department

performs all necessary functions that generate the marketing process. There is an up-

to-date system to record inquires and orders that are received through telex, fax,

Emails, letters and personal visit. These are viewed and discussed. On the basis of the

feasibility report, the Marketing Manager gives the approval.

The operations of the marketing department are as to:-

Study and analyze the trend of the market.

Watch and analyze competitor’s strategy of marketing.

Analyze the customer demand.

Analyze the product development process.

Analyze the quality assurance procedure.

Increased the market share as compared to competitors.

Introduce new product in the market after research and development process.

Focus on the local market as well as international market.

9: STRUCTURE OF MARKETING DEPARTMENT


Dy. General Manager Sectt/Marketing & HR

Manager MarketingManager Dispatch

Sr Deputy Manager Marketing Sr Deputy Manager Dispatch

Deputy Manager Marketing

Sr Assistant Manager

Assistant Manager Marketing

Seniors Marketing Officers

Marketing Officers

Deputy Manager Dispatch

Sr Assistant Manager Dispatch

Assistant Manager Dispatch

Sr Dispatch Officer

Dispatch officer

Assistant Marketing Officers

4 x Trainee officer

Assistant Dispatch officer

9.1 No of Employees working in the Marketing Department

Marketing Department consists of 20 employees and headed by DGM Sectt/Acting

G.M Marketing. Organization structure of this department is as

There are total 20 employees in Marketing Department. This strength is stagnant since

many years. The activity / transaction volume is increasing day by day with

enhancement in production capacity; however sanction strength has not been revised

accordingly. That is why Accounts and Finance department is facing a lot of stress

and tension rustling in job dissatisfaction and high turn over. There is an immediate

need to revise sanction strength

9.2 Marketing Operations

The marketing department performs six main operations.


Market Research

At SCIL the marketing department makes a thorough research of the market situation

and the trends of the buyers before launching a new product. This step enables the

marketing to make the right decision. The marketing personnel of SCIL regularly

monitor the market requirements, conduct research about the trends in the market;

then they arrive at a final decision regarding the introduction of a new product. The

marketing manager plays a vital role to this effect.

Environmental Analysis

To acquire a leading role as the producer of quality caustic products, SCIL’s

marketing departments constantly observe the political, social and economic

environment at home and abroad. Technical advancements are also studied and

analyzed.

Product Development

The better quality of SCIL’s products is the result of improved research methods, use

of standard material and equipment for the product development. The products of

SCIL are, therefore, accepted in both national and international markets right from

Lahore and Karachi to Brazil and Australia.

Market Analysis

The market of SCIL is based on SWOT criteria. In this process the organization

identifies and evaluates its strengths, weakness, opportunities and threats. The

organization capitalizes on its marketing strengths and gets an advantage of the most

promising opportunities .It is vigilant about its weakness. Prompt and necessary

actions are taken to eliminate threats.


Marketing Mix

The Sitara Chemical Industries are pursing a successful marketing mix Strategy. They

focus on the marketing of variegated products i.e. Caustic soda, Hydrochloric acid,

Chlorine. This strategy has always helped the organization to achieve its business

goals.

Feedback

SCIL rely on feedback to determine their actual position in the market. The feedback

provides base for the future plans. The feedback, therefore is given reasons

consideration by the CEO and departmental managers. The marketing personnel of

SCIL survey the market, conduct research and make suggestions regarding product

development, packing & printing etc

10: FUNCTIONS OF THE MARKETING DEPARTMENT

Marketing is a process of creating customer value in the form of goods & services


, ideas that can improve the life of customer.

It is the delivery of customer satisfaction at a profit.

Marketing can also be defined as process of planning & executing the conception

, pricing, promotion, & distribution of ideas, goods & services to create exchanges

that satisfy individual & organizational objectives,”

Today successful companies whether large or small, for profit or non- profit, domestic

or global, have one common factor of sharing a strong customer focus & heavy

Commitment to marketing.

Many people think and take marketing as only selling & advertising, but the concept

combine many activities i.e. marketing research, product development, distribution,

pricing, advertising, personal selling & others ----- designed to sense, serve and

satisfy customer ‘s needs, while meeting the organization’s goals.

Thus marketing seeks to attract new customers by promising superior value & to keep

current customer by delivering satisfaction. Marketing operate within a dynamic

global environment, as rapid changes can quickly make yesterday’s winning strategies

Marketing department of SCIL is lead by Mr.Muhammad Ijaz (DGM Sectt/G.M

Marketing) and headed by Mr.Ghulam Abbas (Manager Marketing Gases), Mr Ubaid

Athar Khan (DGM Marketing (South) dispatch section is controlled & monitor by Mr

Hamid Naeem (Sr.Dy.Manager Dispatch & co-ordination) while specialty chemical

division is head Mr. Asad Rathore (Manager Specialty Chemical)& export section is

lead by Mr.Amir (Dy. Manager Export)


SCIL Marketing Policy aims at bringing about both qualitative & quantitative

improvement in all the prevailing function, related directly to the customer benefit &

satisfaction. Marketing Department is basically consist of two sections.

1: Marketing section responsible for customer dealing & order taking.

2:Dispatch section responsible for the execution & dispatch of orders SCIL has

following six zonal offices in the north & south zones,

North Zone

Faisalabad zone headed by Mr Asad Rathore (M M Specialty Chem & MM FSD)

Lahore zone headed by Mr Mehmood Azam Butt (DGM Marketing)

Gujranwala zone headed by Mr Sher Ali Malik (Manager Marketing)

Islamabad zone headed by Mr Laeeq Yousaf ( Sr Assistant Manager Marketing)

Multan zone headed by Mr Nadeem abbas(Dy. Manager Marketing)

South Zone

Karachi zone headed by Mr Ubaid A Khan (G.M Marketing) through out Pakistan

SCIL is the leader in caustic soda, chlorine gas and bi product sales through the zonal

offices. Zonal offices contribute a lot in generating the revenue, according to the

annual accounts 2008, sources of revenue for SCIL are as follows

Rs.(Million) 2007 Rs.(Million)2008

Caustic Soda 2616 2619

Sodium Hypochlorite 228 279

Bleaching powder 72 72

Hydrochloric acid 142 119

Others 178 233

Total 3236 3322


10.1 Marketing Strategy

Many International markets are now extremely competitive due to the globalization of

the world trade and investment environment. In industry after industry, capable

competitors confront each other around the globe. To be profitable in such an

environment, a firm must make a clear and viable strategic choice with regard to its

position on the efficiency frontier, and action at the operational and strategic level that

support this position. That is why marketing strategy of the SCIL is to satisfy

customer through its goods & services in line with the feed back from customer &

timely shipment. The export department is handling the international market in a very

proper and appropriate manner. The export department consists of competent and

skilled team of professionals. Taking into consideration that the 30 % of total

production of Sitara chemical is exported through out the world, the export

department tries its best to generate valuable customers through out the world.

10.2 Product planning, development & Management

At SCIL strategies are adopted for managing the existing chemical products adding

new ones and discarding out dated soda and patterns. In the executive meeting

strategies are made regarding, packing and other marketing incentives, compensation

of loss and replacement of damaged goods.

At the initial stage of planning the marketing, processing and production manager

meet together in a meeting presided over by the CEO the design, the quality and

texture of the product are discussed in detail. The processing and production manager

have to confirm that the product can be easily prepared in the SCIL. The CEO gives

the final approval.


Product development Process

The standard quality products of SCIL are popular both at home and abroad the

products are prepared according to the customer requirements. Like other established

organizations SCIL based the development of their products on the following steps:

a. Generating Product ideas

By studying the market demands information is gathered public trends feed back

is collected from the current customer and the prospective customers. Also the

products of other organizations are analyzed including their position in the

market.

b. Screening the Ideas

Product ideas are evaluated to determine which ones warrant future prospects.

c. Business Analysis

A dynamic idea is expended in two-way concrete business proposal. Here starts

the function of efficient.

The business analysis enables the management to achieve the following

objectives: -

1. Identify the product features as per requirements.

2. Assess market demands, competition and profitability.

3. To make the final plans to development of the product.

d. Trail Model

Considering that the business analysis is favorable, the management approves the

products for the development. Suggestions from the finance department regarding

the cost of production are given due importance. It is assessed whether cost wise


the product is feasible or not. The production prepares a trail model of the product.

This strategy is considered positive for the product development.

e. Commercialization

The organization determines on full scale if it is successful I the market example

of SCIL product planning and development is caustic soda, Sodiumhypochlorite,

Bleaching Powder, Hydrochloric Acid. Theses two products attract the customer

on large scale. The buyers’ response and periodical market reports tell the

administration what changes to bring about in quality.

10.3 Pricing Strategy

When the DGM confirms that the required material can be easily prepared in SCIL,

and then he replies to the buyer “we are in a position to make your order”. The DGM

takes from the procurement department. The DGM calculates the prices then the GM

checks and signs the costing.

Most of the customers send their own designs in the form of Artwork and fabric

samples in case of printing of the design of the customers. On instructions of DEM,

the EM asks the sampling department and also coordinates for the sampling

requirement and its dispatch, if the customer for quality purpose requires it. If the

price quotation is workable for the customer then he places order with terms and

conditions mutually agreed.

Sometimes if prices are not workable for the customer, he offers his target price. Then

the DEM and EM recalculate this price and if it is workable for SCIL then DEM

proceeds to ask the customer for order placing otherwise does not proceed.


There are three pricing strategies being used in SCIL,

10.2.1 Competitive base price

Price prevailing in competitive international market

10.2.2 Customer base price

Mutually negotiated price between customer & SCIL

10.2.3 Product base price

Product price as per customer specification

10.4 Distribution Strategy

There are two ways of distribution adopted in SCIL,

1 Direct channel

2 Indirect channel

10.4.1 Direct channel

SCIL

Mostly SCIL deal and distribute their goods direct to customers. They have two zones

for different sectors, zone 1 deals with Faisalabad, Gujranwala , Islamabad , Multan.

Similarly zone 2 deals with Karachi.

CUSTOMERS

Zone 1: Faisalabad , Gujranwala , Islamabad , Multan

Zone 2: Karachi.

10.4.2 Indirect channel

AGENTS / MIDDLE MEN

SCIL also deal and distribute their goods through agents/buying Houses to avoid

heavy losses in foreign countries because of unknown market situations in the

beginnings of its business and investing huge amounts in that particular country.


Zone 1: Faisalabad, Gujranwala , Islamabad , Multan

Zone 2: Karachi.

Channel of Distribution

Sitara Chemical Industries Ltd Faisalabad

There is no wholesaler & Retailer to sale the products.

SCIL deal and distribute their goods direct to customers.

SCIL direct to sales product to end user e.g Textile

Industries, sugar, soap, water treatment, pharmaceuticals,

Ghee, paper etc.

End User

10.5 Promotional Strategy

SCIL use all available means to promote products and communicate information

they make effective use of strategies like Advertising, Sales promotion, Trade

promotion, PR etc. to thrive in the international and local markets

The Role of Advertising

As a tool of marketing, advertising is the structured and composed non – personal

communication of information .It is persuasive about products services or ideas.

SCIL’s advertising makes the buyer aware of the products and communicates the

information about the products floated in the market. On a broader scale their

advertising engorges the development of new products and speeds their acceptance. It

fosters employment, gives consumer and businesses and wide variety of product

choices.


Producer

Wholesaler

Retailer

Buyer

The Role of Public Relations

In this world of growing economies and tough competition, corporations realized that

the direct personal contact and relationship with consumer is the prime opportunity

to build and maintain relationships that result in future sales. Also it is way to create

mutual goodwill. The Primary Role of Public relation is to manage the organization‘s

reputation and help build public consent for its enterprises. In today’s complete

environment public consent can no longer be assumed .At SCIL this aspect is given

due attention .The CEO is always willing to meet visitors, pay visit and know the

public consent. There is team of efficient managers who explore every avenue. They

plan execute the public relations programmes. They constantly monitor and analyze

changes of attitudes in variety of publics. They visit shopping centers conduct

interview analyze incoming mails and field reports .The organization uses PR to

manage relationships with vendors, the employee’s customers, stock holders

competitors and the public in general.

The Role of Sales Promotion

Sales promotion is a direct inducement that offers extra incentives with the objective

to enhance or accelerate the product’s moment from the producer to the consumer.

Sitara Chemical Industries Ltd believes in direct inducement. So their prizes, extra

products, gifts or specialized information are offered to the consumers. The

consumers are invited to visit a store, ask for literature, personally examine displayed

product or takes some other action. These incentives add tangible immediate and extra

value to the brand .To become a market leader a brand needs both advertising and

sales promotion. SCIL’s sales promotion is creative and hard to imitate.


The Role of Trade Promotion

To move their products from the distribution outlets to the point of consumption,

marketers employ two types of strategies: push strategy and pull strategy. Push

strategies are offensive tactics that are designed to attract customers and increase the

demand for the products. The push strategies are defensive tactics designed to secure

the cooperation of the retailers, gain some space and protect against the competitors.

Sitara chemical Industries Ltd uses this channel to push the product ahead and gain

self-space. The CEO never any opportunity to introduce Sitara’s chemical products in

the great global exhibitions from China to Germany. Sitara chemical Industries Ltd is

on the top of the list of the Ministry of Trade and Commerce to introduce themselves

in the international markets through the trade promotion exhibitions and programmes

.

11: CRITICAL ANALYSIS

SWOT ANALYSIS

The overall evaluation of a company’s strength, weaknesses, opportunities and threat

is called SWOT analysis

Strength

Strength of a company judge according to their management of marketing, finance,

manufacturing and organization. Following are main strength are SCIL.

1- Company Reputation

The company enjoys food reputation in chemical and textile sector. SCIL is rated as

AA- by Japan Credit Rating Company. According to this reputation they have to exert

less effort and financial cost for acquiring loan and in case of public issues of Capital.

SCIL got top 25 companies corporate Excellence Award by Karachi Stock Exchange


Ltd in 1995, 2000 and also in 2001. European Quality Award was achieved in1993.

Best Presented Accounts Award got for the year 2000(ICAP & ICMAP. Map

corporate Excellence Award 2000.

And also having ISO – 9001 :1996 & ISO – 14001:1996.

2- 25 Years Experience Of Chloral Alkali Manufacturing

There are a lot of things, which Management have to learn through experience or hit

and trial method. SCIL’s. Management has more than 25 years of experience to run

successful business of chloral alkalis

3- Competitive Advantages

There are certain strengths which SCIL have over competitors By-products; R&D has

develop a range of by-products prepared out of material like Chlorine or HCL which

Co. has to be disposed of at huge cost. It has three-folded benefit

(a) Generation of Revenue

(b) Saving of deposition cost

(c) Environment safety

Economy of Scale: SCIL is one of largest Caustic Soda Plant in Pakistan.

Islamic Mode of Financing

Diversity

4- Market Share And Strong Market Image

The main product of SCIL is caustic soda, which they have, nearly 58% share in the

market and Caustic Soda demands are increasing at the rate of 7% annually. It is the

major strength of the company. It also have strong market image.


5- Persistent Increase In Demand

There is annual increase of 7% to 10% in annual demand of Caustic Soda. SCIL has

successful prior experience of production capacity expansion.

6- Product Quality:

SCIL has comparative quality advantage over its competitors The SCIL believes on

very strong research and developed. Separate Q. C and R&D department and busy to

maintain and improve quality of products. Every year a handsome budget is allocated

for professional development and capabilities of these departments

7- Capacity

At present SCIL has 545 Metric Ton (M.T) production capacity of Caustic Soda per

day. Initially SCIL stared with production capacity of 50 M.T per day, back in 1985.

SCIL switched over from Mercury Technology to Membrane Technology step wise

step now 92% of total production comes from latest membrane technology which is

not only cost efficient but also environment friendly

8- Shareholder

Quick decisions are required for preventive action or to avail any opportunity to avail

chance in ever changing environment. In case of SCIL 60% of share holder’s equity

lies with promoters, which indicate unity of command.

9- Other Strengths

Strong Market Image.

High Financial Resources.

State of art plant.

Awareness of Product.

ISO 9000 Certified Company.


One of the largest and oldest group

Include in the top 10 unit of the world of chemical industry.

Weaknesses

As the SCIL is market leader so, its weaknesses very few which they can easily

control. SCIL is facing following weaknesses.

1- Cost Increase

In advance countries chlorine, which is by product of Caustic Soda industry, itself,

has huge demand uses in water treatment and paper industry. In Pakistan Chlorine do

not have enough demand therefore producers have to discard it at additional cost,

causing extra cost pressure on main product and price competitiveness with respect to

international market.

2- High Turn Over

Human Resource Department is facing tough time to control high turn over. SCIL’s

trained professionals are in great demand in process industry. This high turnover

results in drain of valuable skill and experience.

3- Others Weakness

Less motivated staff.

Promotional activities are insufficient.

Environmental protection

Opportunity:

SCIL has lot of opportunities to fulfill the requirement and demand of the customers

in the offering of different products to win market shares especially in the product of

Agri. division that is also working under the SCIL.


1- 20% Antidumping Duty

Govt has levied 20% anti dumping duty on imports causing import unfeasible. This

provides great opportunity for local producers.

2. Plant Expansion

SCIL have opportunity to expand their plant Membrane-III 132 – 175 MTD,

Membrane-I replacement of Cell Room, bleaching Powder Plant of 4500 MTY

Capacity to cope with expanding export market production March 2008

3. Product Opportunities

When the caustic soda is produced excess amount of chlorine is produced that can be

further used in by product like aqua seal, Enamel Paints, Zink Chloride, Dicalcium

Phosphate, Sodium Sulphite that is used in Caustic Process, Magnesium Hydro Oxide,

Ferric Sulphite, Calcium Chloride alternate to imported Barium Carbonate, Sodium

Sulphite, Arbo Cell recovery and Anti-Caking Agent Chlorine.

4-Others

Potential in the market.

Capturing the new market.

Product innovation which results in high quality and export.

Acquisition of modern technology.

More agents throughout the country


Threat

Every company has to face some threat it may be due to external environment.

1- Environment

Chemical plant are always notorious for there health hazard and toxic waste and threat

for environment. They are always exposed to sanctions from Federal, Provincial and

Local Governments.

2 - Advancement in Technology

Some times technology does not remain competitive. In the start Sitara Chemical

Industry mercury base technology was used but this technology is not environmental

friendly so to get ISO 9001:2000 and ISO 14001:1996 certification. It has to turn of

this plant and switch to the membrane type technology. In the future there may be

such type of threat.

3- WTO

SCIL meet up coming challenges that are threaten for any organization due to the

world trade organization policies.

4- Political Instability In The Country

Political condition of the country is uncertainty, govt. policies can disturb positions of

the company and certain rule and regulations are imposed by the govt.

5- Others

Growing intense competition.

Economic instability.


11.1 SUCCESS & FAILURE OF PRODUCTS

Sitara Chemical is producing quality products throughout the world especially in local

market. This is because of its quality of caustic. Top Management is basically of

religious-minded people so the public respects its products. SCIL started this unit for

its production since 1984 because of being Faisalabad’s oldest unit; the demand of its

product is very high.

The prices of its products are very high due to high quality spinning, weaving and

finishing cost. That’s why most of its products are out of the range of the poor people.

There is no fare price shop in the unit as well as in the open Market. The products are

acceptable in the market because of their durability and high quality. The major

reason for the failure of some products is that poor people do not understand the

quality; they only understand price level.

11.2: MAJOR COMPETITORS OF THE ORGANIZATION

The following are the major competitors of the Sitara Chemical Industries

1. Ithad Chemical Limited

2. Nimer Chemical Limited

Here is the comparison between the SCIL & ICL


Analysis With Reference To Other Chloral Alkali Producer

Following is comparison of statistics between SCIL and Ithad Chemicals Ltd.

(ICL)

Products Production In Tons

SCIL ICL

Caustic Soda 124,374

81,392

Sodium Hypochlorite 24,410

45,178

Bleaching Powder 4,643

2,315

Liquid Chlorine 8,183

10,921

Hydrochloric Acid 109,120

98,209

Sales Million 3,943

1,903

Gross profit Million 900

333

Operating Profit Million 708

153

Profit Before Tax Million 487

90

Profit After Tax Million 346

50

Profitability Ratios Gross Profit % 22.84 17.50

Operating Profit % 17.95 8.00

Profit before tax % 12.37 4.73

Earnings per share - Basic (Rs,) 15.96 1.68

Return to capital employed % 20.00 5.73

Debt equity 1:1.7 1:0.56

Current ratio 1.16 1.02

Statistics shows that SCIL has surpassed its nearest competitor with faraway distance


11.3 FUTURE PROSPECTS OF THE ORGANIZATION

As evident from application of revenue nearly 40% of total revenue is spend on fuel

and power expenses. Caustic Soda produced through electrolysis of water solution of

common salt (Brine) therefore 68% of total cost of its production for chemical

division comprises of fuel and power and 10 % in case of textile division. At present

one unit of electricity costs Rs. 6. It will be cost beneficial to have SCIL’s own power

generation plant. Recent dramatic increase in furnace oil prices compelled the

management to withdraw from furnace oil based power generation plant proposal.

Other options are Gas and coal based power generation plants. The company after

studying various power generation technologies finally decided to go for gas engines.

Management is hopeful that close to mid of next year SCIL’s power project shall be

in operation.

After a successful experiment of internally developed production process and

marketing of Calcium Chloride, during last three years on limited scale, SCIL is going

for a larger export based plant for Calcium Chloride which is at final stage of

technology selection

PVC Project

Management is also working on PVC project for which design work is at final stage.

The PVC project will consume Chlorine internally available.

Polyvinyl chloride (PVC) is prepared from the organic compound vinyl chloride

(CH29CHCl). PVC is the most widely used of the amorphous plastics. PVC is

lightweight, durable, and waterproof. Chlorine atoms bonded to the carbon backbone

of its molecules give PVC its hard and flame-resistant properties.


In its rigid form, PVC is weather-resistant and is extruded into pipe, house siding, and

gutters. Rigid PVC is also blow molded into clear bottles and is used to form other

consumer products, including compact discs and computer casings.

PVC can be softened with certain chemicals. This softened form of PVC is used to

make shrink-wrap, food packaging, rainwear, shoe soles, shampoo containers, floor

tile, gloves, upholstery, and other products. Most softened PVC plastic products are

manufactured by extrusion, injection molding, or casting.

Sitara Per Oxide.

SCIL have opportunity to start new plant such as Sitara Per Oxide. It will produce 550

Metric ton per day. With chemical compound of hydrogen and oxygen with the

formula H2O2, Hydrogen peroxide acts as both an oxidizing and a reducing agent. Its

oxidizing properties are used in the bleaching of substances, such as hair, ivory,

feathers, and delicate fabrics, In Pakistan Textile sector is its main demand centre

used as bleaching agent. It is also used medicinally, in the form of a 3% aqueous

solution, as an antiseptic and throat wash. Hydrogen peroxide is used in restoring the

original colors to paintings that have darkened through the conversion of the white

lead used in the paintings to lead sulfide. The hydrogen peroxide oxidizes the black

lead sulfide to white lead sulfate. It is also used as a source of oxygen in the fuel

mixture for many rockets and torpedoes. As a reducing agent it reacts only with such

easily reduced chemicals as silver oxide and potassium permanganate


12: SHORT-FALLS/WEAKNESSES OF MARKETING

DEPARTMENT

12.1 SWOT ANALYSIS

STRENGTHS

Adequate financial resources

Specialized in printing

Have a diversified units of industries

Good market image

Competent management and workers

Have ability to compete with competitors

In home facility of production

Loyal customers

Loss sustaining capacity

WEAKNESSES

Uncertain chances of promotion

Salary package less attractive

Centralized decision making

Lack of a proper human resource system, hence employees are not motivated

to develop their creative and innovative abilities.

Due to high turn over the organization is not enjoying the economy of scale.


OPPORTUNITIES

Large scale productions because of new market coverage and increasing

demands.

Introduction of new variety in garments

Extension of fashion-designing & stitching departments

THREATS

GST and WTO pose biggest threats

Instability of prices due to currency devaluation

Entrance of new and quality conscious competitors

Low price offered by the competitors

Strong promotional activities by the competitors to convince buyers

New quality, environmental and social accountability standards overhead are

increasing rapidly.

13: CONCLUSION & RECOMMENDATION FOR

IMPROVEMENT

The remedy for weakness, discussed in previous chapter, is described serially as:

1 – Concentration Of Power Versus Delegation Of Powers

There is a need to delegate the powers down the hierarchy so that CEO could

concentrate only on issues of strategic importance

2 – Unnecessary Documentation May Be Converted Into Paperless Environment


Micro Film scanning of all the documents is recommended for all the documents

which could be attached to vouchers as annexure in system and can be accessible for

the person who want to see evidence by just clicking attachment.

3 – Communication Can be Improved Through Information Technology

There is a need to promote e-mail system of sending and receiving mails to reduce

cost of stationery and storage.

4 – Bureaucratic Structural must be transformed Into Flat organization

structure

Flat organization structure is recommended to reduce cost and to improve decision

making process. This will not only leads to cost efficiency but also promotes job

satisfaction.

5 - Well Defined Job Description and Job Rotation Will Improve Performance

And Teamwork

A well defined job manual, describing all inns and outs of job, along with job training

is necessary to win not only loyalty of employees but also to enhance quality of job

performance. Job rotation will improve confidence and mutual dependence among

employees as job will not suffer in case of absence of any employee.

6 - Technical Person as Internal Auditor

Internal Audit Department consist of person having financial background, therefore

Internal Audit Department emphasize mostly internal control and procedure. On the

other hand technical side is absolved from all accountabilities. There is a need to


appoint in Internal Department a technical person to look in the matters of purely

technical nature.

7 - More Diversification Is Required

Company’s is consistently reinvesting in Chloral-alkali industry, as evident from

continuous increase in Caustic soda production capacity. Now a days Chloral-alkali

industry is in full swing and company is enjoying abnormal proffer, however in case

of adverse situation (discussed in SWOT analysis P-38) Company would be in hot

waters. Where as in diversified portfolio, such risk can be minimize.

8 - Brain Drain Required To Be Stopped

It takes nearly 1 year by employee to make an acquaintance with organization culture,

machines and complicated procedures. If employee resigns after two or three years

then its means company is serving as trainee institute and not availing productivity

from trained employees. Salary and wages constitutes only 3% of C.G.S and

Company is facing high turn over, which means employees are under paid. It is

recommended to retain experienced brain from being drained.

9 - More Investment in IT is required

SCIL has signed SAP (a Germany-based Enterprise Resource Planning (ERP)

Solution) with the Abacus Consulting Group on the 7th December, 2007. This is a

great step towards the technological enhancement of the organization and is indeed an


evidence of the Technology Aware Management that is possessed by the SCIL. This

will lead to the better utilization of the information resources of the organization.

14: REFRENCES & SOURCES USED

REFERENCES AND SOURCES USED

Annual reports of :

Sitara Chemical Industries Ltd

Sitara Flash

Ithad Chemicals Ltd.

Journals:

Economic Survey Of Pakistan

Principle Of Marketing Phelip Kotler & Gary Armstrong

Cost Accounting Usry, Hammer & Matz

Statistics For Management Richard I Levin & David S Rubin

Advance Accounting M G Shukla & T S Grawal

Principle Of Corporate Finance Richard A Brealey & Stewart C

Myers

Fundamentals Of Financial Management Ven Hourn

Business Reserch Methods Donald R Cooper & C William

Emory

Accounting Meigd Williams Hake Better

Management And Cost Accounting Colin Drury


http://www.sitarachemical.com/

Ijaz Hussain (DGM Sectt/G.M Marketing)

Ghulam Abbas(Manager Marketing/Gases)

SOURCES www.sitarachemical.com

15: ANNEXES

Abbreviations Used

SCIL Sitara Chemical industries Ltd

L/C Letter of Credit

SCI Sitara Chemical Industries

B/L Bill Of Lading

PO Purchase Order

WHT With Holding Tax

GST General Sales Tax

CEO Chief Executive Officer

FM Finance Manager

GM General Manager

ME Manager Export

DME Deputy Manager Export

FOB Freight on Board

CD Account Current Deposit Account

WTO World Trade Organization


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