1

MGT 401

Term Paper

ON

RFL Chair (RFL Plastic LTD)

Submitted To: Shawkat KamalSenior lecturer

Submitted By: Faysal Ahmed05304073Md. Samiul Islam05104119Yaseen Ahmed Salahuddin05304068

BRAC BUSINESS SCHOOLDate of submission July 29th 2010

2

RFL Chair (RFL Plastic LTD)

Transmittal Message

Shawkat kamal

3

Senior Lecturer

BRAC Business School

66 Mohakhali, Dhaka-1212.

Subject: Letter of Transmittal

Dear Sir,

With great pleasure we are submitting our final report on “rfl plastic chair“rfl plastic chair”. We have found this

study of the report to be quite interesting, beneficial and insightful. We have tried our level best

to prepare an effective & creditable report.

The report contains the strategy taken by rfl company while they produce and marketing their

product and a look at how it is done in the practical way. Here we have gathered information

through different sources such as websites and actual interviews from admin and production

department of “RFL plastic company ltd.”

We honestly hope that our analysis will help to give idea about the strategy practice of a reputed

plastic company. We hope you will find this report worth all the labor we have put in it.

We welcome your entire query & take pride to answer them.

Yours sincerely,

Faysal Ahmed – 05304073

Yaseen Ahmed Salahuddin - 05304068

Acknowledgement

4

Our acknowledgement begins by thanking our course teacher, Shawkat Kamal who has

provided us with suggestions for making this Final Report and also provided us with the format

for preparing this report. Then we would like to show our warm-hearted gratitude to Anup

Padder (Management Trainee of RFL LTD) who has provided us with great deal of

information, adequate data and helped throughout for the accomplishment of this report

successfully. Finally, last but not the least, we all would like to thank each and every member of

our group for all the hard works regarding the report and we ourselves like to congratulate us

for the accomplishment of the report successfully.

Methodology

5

The report is based on primary data by conducting personal interviews with Anup Padder

Management Trainee of RFL LTD, and secondary data obtained from the website of RFL LTD

and the internet. We have work in a group of three and complied all the information together it

was pretty hard for us to get all the information’s because we had problems getting an interview

with a superior officer of RFL LTD more over we could not find much information’s in the

internet.

Table of contents

6

Transmittal message.…………………………………………..... 03

Acknowledgement ……………………………………………… 04

Methodology…………………………………………………….. 05

Scope ……………………………………………………………... 07

The Organization-

Introduction & History, …………… ……………………......….... 08-09. SWOT Analysis................................................................................. 10

Production………………………………………………................ 11

Distribution…………………………........……………………...... 12

Annual Report…………………………………………………… 13

Conclusion ............................................................................... ........ ……14

Recommendation ………………. ………………………........ ................14

Reference ……………….................................................................14

We have chosen this company because it is a Bangladeshi company and they are one of the

largest manufacturers of indoor and outdoor plastic products for domestic and export markets in

Bangladesh. As we are studying Business Strategy we thought by doing a report on this company

we would learn how these types of Bangladeshi companies implement the business strategies in

7

the real world. RFL LTD is a renowned company in Bangladesh not only for plastic products but

also for products like Cast Iron, uPVC and Building Material Products.

1.1 Objectives

Our main objective is to represent a Term Paper on “RFL Chair” However; the main objectives

of the report are given follows:

Having knowledge about the company and their business strategies.

To identify their distribution strategy.

To identify their production process.

To explore new segments of market and to cater to it

To identify what the consumer needs and providing it to them

Where the raw material comes from?

To enhance the strength and skill of the organization that will contribute to company's

increasing growth both in domestic and global markets

To expand distribution network to make the products available at customers'

doorsteps

Finding out their long term goals and missions for sustaining in this competitive

market.

Scope:

The use of fashionable plastic good like chairs is increasing at a rapid pace in the rural areas of

Bangladesh. Despite being a developing nation, we see bright prospects in the plastic industries.

However the use of plastic chairs in the urban areas is still to emerge. The prospects of the use of

plastic chares have tremendous potentials as we see the ever increasing uses of plastic products

in Bangladesh. Thus we have chosen the topic “RFL Plastic Chares” for our project.

8

2.0 Company Overview

RFL is a nationally recognized brand in Bangladesh for plastic, PVC (Polyvinyl Chloride) and

cast iron products. RFL Plastics, a subsidiary of RFL Industries is one of the largest

manufacturers of indoor and outdoor plastic products for domestic and export markets. RFL

Plastics Limited commenced its operation in 2003. The vision of the company is to make molded

household products and furniture made of plastics of decorative design at an affordable price.

The company's product ranges include household items like table ware, kitchen ware, cleaning

accessories, storage containers, multipurpose ware, baby ware, hangers and furniture items like

Arm Chair, Armless Chair, Table, Stool etc. Due to its perceived superior quality, innovative

design and varying ranges, RFL has already been established as most preferred brand in plastic

category in Bangladesh. With the expansion of its product line and capacity, the RFL products

are now being exported in various countries around the globe.

RFL has become a benchmark for competitors on the lines of quality by manufacturing premium

quality products to give clients excellent services and true value for money. The unmatched

products have given a big name to the domestic market so much so that the name is accepted

with trust and quality assurance the nation over. This is possible because the company is

professionally managed and promoted by people who ensure that creativity is given full freedom

to blossom and talent is nurtured in the company.

2.1 History

RFL (Rangpur foundry Ltd) started its journey with Cast Iron (CI) products in 1980. The initial

main objective was to ensure pure drinking water and affordable irrigation instruments for

improved rural life. Today the company has its wide ranges of CI products like pumps, tube

wells, bearings, gas stoves etc and has achieved the prestige as one of the largest cast iron

foundry and light engineering workshop in Bangladesh. With a vision to serve the common

9

people of Bangladesh with quality necessity products, RFL diversified its operation into PVC

category in 1996 & in Plastic Sector in 2003.

2.2 Facts- current status of the company with findings

Plastic Product Lines of Chairs

RFL has a wide range of plastic products, as our report is on RFL chair we listed only chair

related products below –

Types of Product Name of Product

Arm Chair Arm Chair

Arm less Chair Arm less Chair, Slim Chair, Dining Chair

Stool Short Stool, Medium Net Stool, High Net Stool,

VIP Stool, Square Stool, Deluxe Stool.

Table Tea Table, Center Table, Baby Reading Table,

Restaurant Table, Reading Table, Dining

Table.

Comparison between RFL Chairs and their competitors

RFL Chairs Prices

Average

Bengal Chairs Prices

Average????????? Prices

Average

Arm Chairs 000000 000000 00000

Arm less Chair 00000 00000 0000000

Stool 000000 00000 00000

10

By analyzing the above table we can see that RFL has a higher price in average than its

competitors this is only because they want to portray themselves as a superior brand than their

competitors and they also provide high quality products to their consumers.

3.0 SWOT matrix

Strengths

►RFL has achieved a strong brand image. It has selected a good relevant brand name for its

products whereas other firms suffering from it.

►RFL talks quality and gives quality to its customers.

►RFL has updated manufacturing plant with the capacity to meet the demand.

►RFL has a wide variety of products which others do not have.

►RFL has achieved a good competitive advantage through its distribution coverage system.

►RFL has the state of the art machineries and equipments for manufacturing their plastic chairs

and other products.

►They have their own R&D department for innovating new models and getting to know the

taste and preferences of the consumers.

Weaknesses

►The prices of their plastic chairs are competitively higher than the other competitors.

11

►Though they have good distribution coverage system, products are always available in posh

urban areas but in some urban places they fail to provide the product in time, as a result they are

losing a potential market share.

Opportunities

►The Company has the option to expand its product folio by introducing plastic furniture’s like

office and school furniture’s.

►The Company has the potential to expand to smaller towns and other geographies. Existing

markets are not fully tapped and the company can increase presence by penetrating further. By

doing this RFL will have the inherent advantage of this trend.

Threats

►Their main threats are their competitors (Bengal Plastic ltd., Taj Plastic ltd. etc) which are also

reliable brand names in Bangladesh

►People of our country still think that this type of plastic product will not give them that

satisfaction what they could have from the wood furniture

Description of one of the opportunities of RFL

The biggest opportunity for RFL Plastic chairs is that they are one of the market leaders in

producing plastic products and they have a renowned brand in the market. By taking all these in

hand they can make their own outlets for selling their products in the rural areas of Bangladesh

which they are not doing. By doing this they can take away most of the market share because in

the rural areas people prefers plastic furniture’s more than wooden or any other kinds of

furniture’s.

4.1. Production

12

The factory is located 30 miles (50 km) East of Dhaka at Ghorashal, Narshingdhi and is

equipped with 70 plus injection molding machine, the factory is about 600,000 square feet. It is

fully equipped with state of the art injection molding, vacuum forming and blow molding

machines with a conversion capacity of over 3,300 tons (3,000 MT) of resin per month. RFL

currently utilizes 500 production molds and an in-house mold repair shop.

Through vigorous selection and evaluation process, best quality food grade plastics are used as

raw materials for manufacturing.

Around 3000 workers under the supervision of more than 100 technical experts put their effort to

give the shape of the consumer demands.

Each process line of manufacturing goes through stringent quality control process and checked

against slightest of non conformance.

RFL has more than sixty machineries which produce all of their plastic products these machines

are only stopped while changing the molds inside the machines. For producing the plastic good

RFL uses the best quality raw material which is called resin it is mainly imported from Malaysia

and Indonesia. The resin a raw material use for plastic products is given in the machineries and

the mold of the plastic chairs or any other plastic products which they want to produce it inserted

inside the machineries. After that the machines are turned on and most of the times the

machineries are switched on twenty four hours non stop, it only takes few minutes to make one

product, after the product is completed they send it to the inspection area when the inspection is

completed the final product is sent to the nearest depot where it is stored and shipped to the

distributers or the distributers come and take away the final product.

4.2. Distribution

RFL does not have any fixed distributers or any outlets for chairs of their own but all of their

chairs are distributed by different types of retailers who clams to be the distributers if RFL, all of

these distributers first has to go to their head office in Dhaka city and ask for how many items

13

they want and in what quantity, then they go to the nearest deport and give the receipts and take

away their products and sell them in their retail stores and from their the final product reaches

the final consumers.

5.0 Marketing strategy

They have their own sales outlets and distributors all over Bangladesh and also export their

products in different countries outside Bangladesh. They promote their plastic chairs by

advertising in media’s like TV channels, radio, print media etc in Bangladesh. They also

participate in different trade show or fair to promote their product.

The company has its own R&D laboratory which explores about product and design innovations

that can meet both expressed and unexpressed consumer demand.

Annual Report

Financial Performance of RFL Group

RFL has performed outstanding in the market during last few years. The maximum amount of

share capital that RFL is authorized, The amount of money that has been received by

shareholders of RFL, profit before tax and after tax, earning per share , return on paid up capital,

price earnings ratio and some other information of Last 5 years are given below-

Particulars 2005 2006 2007 2008 2009Authorized Capital 200,000 200,000 200,000 200,000 200,000

Paid up capital 100,000 100,000 100,000 100,000 100,000Turnover (Net) 383,007 433,894 440,923 502,499 556,564

14

Gross Margin 79,694 88,437 89,513 102,049 113,266Profit before tax 191,68 200,02 225,89 255,15 290,64Net profit after tax 11,402 12,149 13,547 17,493 21,871Tangible Fixed Asset 107,991 95,128 86,178 76,960 71,390Cumulative reserve and surplus

39,111 42,982 47,519 68,049 51,599

Shareholders’ Equity 155,111 158,982 162,519 168,229 172,099Dividend Proposed (%) 16 16 16 18 20.50Return on Paid up Capital

(%)

18.94 19.87 20.54 20.71 21.87

EPS 1.89 1.99 2.05 2.07 2.19Price Earnings Ratio 11.22 10.19 14.56 34.52 52.81

Value in ‘000 Tk.

.

Conclusion:

RFL is creating a new movement in plastic industry. People are moving from wood furniture to

plastic furniture. For these reason RFL have a good opportunity to grave the potential market.

They always trying to giving the modern plastic furniture and they are doing it by producing

different product model.

Recommendation:

15

RFL LTD is a very big company and the only few recommendations that we came up with is that

as they do not have their own outlets for selling their plastic chair products and they also do not

have fixed distributers they can implement some outlets of their own and make few distributers

how will only sell their products. The need for plastic products are now growing in the rural

areas and they can get a first mover advantage in this matter and give more value to their brands.

Take the Scrap into Account

Scrap is a major challenge for plastic products manufacturers. During production, there is always some excess material, such as flash, feed, or tail. This expected scrap must be taken into account when planning the material required for each job

Built-in Quality Management

Because variability in quality is present from raw materials through the manufacturing process, it is critical to have good processes and excellent quality systems. Good processes involve documentation and workflows, which RFL provides through integrated web-based help and interactive business models. RFL’ quality systems include integrated control plans, statistical process control, and failure mode effects and analysis (FMEA) at the design and process levels of the application. Combined with the ability to manage manufacturing issues by splitting orders and generating material review boards, RFL offers an industry-leading solution for built-in quality.

A Solution for Both High and Low Volumes—At the Same Time

Most plastic products manufacturers face the challenges of a mixed-mode environment—that is, running high-volume production on some products and low-volume or discrete production on others. This often becomes a scheduling nightmare because of limited machinery capabilities and downtime during changeovers between products. IFS Applications provides a solution to this problem by making it possible to run some products as production line items (high volume) and others as discrete (job shop). IFS provides graphs and tables to pinpoint where the issues are or are going to be, allowing the scheduler to react faster and be more proactive. For the discrete order applications, a setup matrix that helps minimizes downtime during changeovers. IFS Applications also includes constraint-based scheduling (CBS) for production environments in which there are a need to schedule around a constraining workstation.

Reference:

16

http://www.rflplastics.com/aboutus.htmhttp://www.google.com/RFL Annual Report