N.S.

AGRICULTURAL
.S.AGRICULTURAL COLLEGE MARKAPUR
Affiliated to ANGRAU, Guntur

AN INTERNSHIP REPORT ON
NAGARJUNA FERTILIZERS AND CHEMICALS
LIMITED – KAKINADA

FOURTH YEAR – SECOND SEMESTER 2019-20

20

Submitted By
Kota Sunil Varma NAA/16
NAA/16-58
Tati Dileep Chand NAA/16
NAA/16-11
Yandru Madhu Veera Chakra NAA/16
NAA/16-26
Mandapati Veera Sai Raju NAA/16-61
 Detailed Description of the Enterprise

Nagarjuna Fertilizers and Chemicals Limited is a leading manufacturer

and supplier of plant nutrients in India. Commencing operations in 1985, today
the asset base is around Rs. 21 billion. Nagarjuna Fertilizers and Chemicals
Limited is involved in the production and marketing of a wide range of
fertilizers.
lizers. Urea, the widely used nitrogenous fertilizer is both manufactured (at
Kakinada Plant) and marketed through imports (at Vizag and Kakinada Ports).
In the vast Urea market, the brand “Nagarjuna” is a highly regarded and
preferred brand by the farming community.

Figure 1 Nagarjuna Fertilizers and Chemicals Ltd. Kakinada

NFCL currently markets about 1.2

million tons of Manufactured Urea and about 0.6 million tons of Imported Urea
per annum. With the aim of providing Total Solutions to the farmers, NFCL has
commenced marketing of fertilizer mixtures through domestic sourcing and has
further plans to enter into Phosphatic and Potassic segments also.The company
also markets a wide range of micronutrients and micronutrient mixes like Zinc
Sulphate, Mahazinc etc. with emphasis on quality.In
quality terms of the Composite
omposite
Scheme, the name of the Company has been changed to Nagajuna Fertilizers
and Chemicals Limited w.e.f. August 19 2011.
Broad portfolio of products and services include:
1.Nutrition solutions:
Macro and Micro fertilizers and Farm Management services
2.Micro Irrigation solutions.

Operations and offerings of NFCL have been aligned into three strategic
business units:
1. Straight Nutrition Business
2.Nutrition Solutions Business
3.Nagarjuna Management Services

Preparing for the future, proactively, The most important aspects of the
organisation:
1.Strategy – Having a long term vision for the company
2.Structure – To facilitate achieve our strategy
3.People – Aligning related policies with Strategy and Structure. In turn to build
the right capability, attitude and behaviour in employees.
4.Process – To enable employees to work more efficiently and effectively, to
have the best in class internal business processes.

The Endeavour of the Organization is to unlock the full potential of our people
by transforming into a performance driven organization that attracts the best
talent, nurtures a more productive and results-focused workforce and
implements initiatives, which align people strategies with organizational
objectives.

The key action areas in this road map are:

 Facilitating redefinition of organisation structure to support NFCL’s

business direction, goals and priorities.
 Evolving a people management philosophy and institutionalising systems
and policies that reflect uniformity, fairness and transparency.
 Establishing Best in Class HR systems and processes, in line with
organizational requirements.
 Facilitating creation of a performance based culture with clear linkages
to rewards and careers.
 Defining the organization capability framework and assessing
organizational people capability to support NFCL’s vision.
 Products Services
I. Products
A. Manufactured Products
1. Urea (46% N) (White free flowing) – Prilled
2. Anhydrous Ammonia
B. Marketed Products
1. Diammonium Phosphate (18-46-0) – DAP
2. Muriate of Potash – MOP (Potassium Chloride)
3. Zinc Sulphate Heptahydrate (ZnSO4 7H2O)
4. Zinc Sulphate Mono-hydrate (ZnSO4 H2O)
5. Chelated Zinc as Zn-EDTA
6. Formulation No. 4 (in Andhra Pradesh only)
7. Di-Sodium Octa Borate Tetra Hydrate (Na2 B8O13.4H2O)
8.Speciality Fertilizers
{MULTI -K ,Poly feed,MAP (12-61-00),MKP (00-52-34)}

About the Founder

Nagarjuna Group is a dream willed into reality by its visionary Founder Shri
KVK Raju. Shri KVK Raju a first generation technopreneur was born in a
humble agricultural family in Andhra Pradesh on November 28, 1928. On
graduating from Banaras Hindu University and the Madras Institute of
Technology he went on to complete his Master's in Mechanical and Industrial
Engineering from Michigan State University and the University of Minnesota,
USA. After a short stint in the American Industry he returned to India and
worked for short periods at Caltex Oil Refinery, Orient General Industries and
Associated Electrical Industries. Finally, he joined Union Carbide of India and
worked with them for 15 years. While working with Union Carbide, KVK's
deep-rooted urge to serve society through industry impelled him to start out on
his own. Thus was born Nagarjuna Group in 1973 with an investment of Rs. 50
million. The Group has since then come a long way to become a diversified
conglomerate with an asset base of Rs. 43 billion.
A recipient of various awards for his
outstanding contribution to the industry and society, KVK, was a firm believer
in the adage "practice what you preach". A self-made man KVK practised
simple living and high thinking. He dreamt big and worked with an unstinted
focus of mind and body to make his dreams come true. KVK was a visionary
with firm belief in his mission to serve society through industry. It is this
belief, which continues today to be the guiding light of Nagarjuna Group.
 Milestones of the Company
 1974: Birth of a business group that pioneered several core sector
enterprises in the coming decades. Starting with manufacturing steel,
Nagarjuna Steels Limited was launched.
 1985: With focus on agriculture input business started plant nutrition
business with Nagarjuna Fertilizers and Chemicals Limited.
 1992: Forayed into the Crop Protection Business with investments in
Pesticide Formulations manufacturing followed by Technical Grade
Manufacturing in the year 1994.
 1994: Micro irrigation business started to address the irrigation problems
of farmers living in water and energy scarce regions.
 1995: Ventured into Energy sector. Entered into power generation by
setting up Nagarjuna Power Corporation Limited.
 1997: Entered into petroleum by setting up Nagarjuna Oil Corporation
Limited.
 1999: Was one of the first entrants into the Technology Enabled Agri-
Informatics Space through ikisan.
 2003: Crop Nutrition and Crop Protection Businesses consolidated under
Nagarjuna Fertilizers & Chemicals Ltd and Nagarjuna Agrichem Ltd
respectively.
 2005: Investments in the Crop Protection Business along with long term
tie-ups with reputed MNCs.
 2007: Ventured into setting up overseas Fertilizer Manufacturing
Locations along with investments into dedicated R & D setup.
 2010: R & D efforts intensified in many new Agri-Domains space in
India and Overseas.
 2013: Investments into making the Fertilizer Bulks, Micro-Irrigation and
Customized Fertilizer segments diverse and comprehensive in the
Nagarjuna Crop Nutrition Business.
 2015: Initial investments into making a foray into the African Markets for
the Nagarjuna Crop Nutrition Business.
 2018: Nagarjuna Fertilizers and Chemicals Ltd enters the Billion Dollar
League in the Crop Nutrition Business.
 Technical
cal Process Involved in the Operation of the
Enterprise

Urea manufacturing facility – Kakinada:

One of the largest Urea complexes in India, the plant is spread over 1130 acres.
It is strategically located at Kakinada
Kakinada,, a seaport on the east coast of India in the
state of Andhra Pradesh. The company enjoys close proximity to raw materials
and a ready market at itss doorstep.The Natural gas based plants operate with one
of the lowest energy consumption rates in the world.
Charting out an ambitious future, the plant has
expanded its operating capacity from the current 1.4 Million Tonnes to about
1.5 Million Tonnes
onnes per annum after completing the de de-bottlenecking
bottlenecking and the
revamp of the project. The expansion has been planned keeping in mind the
availability of additional Natural gas from huge Natural gas reserves in the
nearby Krishna- Godavari basin.

NFCL strive to adopt the global best practices in all areas of operations. The
world class operations have resulted in long uninterrupted runs of plants for
over 365 days with maximum availability of plant on-stream
on stream days. Minimum
possible human interference and best maintenance practices keep equipment and
facilities fit for intended use under safe working conditions. Process simulation
software like ASPEN PLUS and drafting software like AUTOCADD are being
used for plant simulations / modifications and in turn to minimise energy
consumption, maximise production and maximise asset utilisation.The plant
also has an exhaustive documentation section and technical library with over
1300 Technical books and journals. The library also houses more than 1250
national and international standards.

UREA:

 Raw materials
 Work in process
 Finished goods
 Stores and spares, packing materials

Raw materials:
For production of urea the basic raw material used in NFCL are naphtha,
natural gas, other chemicals and materials. Raw materials are purchased and
stored in tanks for smooth production. It is a continuous process.
Naphtha is an important raw material in
production of urea. Naphtha and natural gas are used to produce ammonia and
ammonia is converted in to urea. NFCL is drawing the raw material through
pipeline from various agencies fro the production of urea.

Work in process:
During normal operation ammonia produced in the ammonia plant goes
directly per urea manufacture. In case of raw materials plant stoppage or
running at low load, in order to avoid stopped or reduction of ammonia plant
load, two ammonia storage tanks each of 5000MT capacity are provided where
liquid ammonia can be store.

Finished goods:
Finished goods in terms of NFCL mean urea. They are supplied to
farmers, dealers in villages, towns and cities. As per as the internal storage is
concerned zero inventory will be maintained. Mostly the products are seasonal
so the production will be more in karriff and rabbi season. In order to avoid the
fluctuation in demand, NFCL is maintaining bagged urea in 600 go downs.
4000 MT will be manufactured per day.
The godowns can be classified into:
1.Buffer go downs
2.Filed go downs

Go downs are belonged to government agencies and private agencies. The go

downs are taken on hire at cost as probable comparable with others. Demand is
more in season, so to meet seasonal demand it is produced urea at its full
capacity through out the year, approximately 4000 tones/day.
Here the holding cost of finished goods is very
minimal(interest and storage cost) on the year ending march 31st. it is
unseasoned so that ever unsold stock is there it should maintain for another four
months up to kharif season.
Buffer go downs is huge area can be stored that is more than 1000 metric
tones, it is permanent go downs. Government can be under taken this type of
go downs. Filed go downs are a temporary in which less than 1000 urea can be
stored. Urea can be obtained from buffer go downs.
The rent paid during the year is 144.92 lakh it will be
12 lakh per month. When goods are delivered to dealers, NFCL is following
FREE ON LORRY SERVICE (FOL).

Stores and spares:

The project work dealing with inventory of stores and spares in NFCL
encompasses the following aspects:

 As production is concerned no inventory is maintained except naphtha.

So these materials do not directly enter production but necessary for
production process.
 Even though certain huge amount of expenditure is incurred, the required
important spares are to be kept ready at stock for any emergency
replacement.

The cost incurred on stock of spares will be very less when compared to the
revenue loss due sudden shut down of production urea.There are certain spares
to be replaced frequently due to wear and tear. Those are electrical spares,
mechanical spares, and instrumental spares.
PROCESS DESCRIPTION OF UREA PLANT:

UREA PLANT:
The production of urea requires ammonia and Co2 as the inputs, both of
which are available from ammonia plant. The pilling tower of 22 m diameter
and 75 M free fall high operates under natural draft. The urea perils from the
bottom of pilling tower are transported through mechanized belt conveyor
system in to urea storage silo or directly to urea bagging plant.

BAGGING:

The periled urea from the urea plant is transferred to the bagging plant in belt
conveyers. The pilled urea enters the bunkers designed for 50 Mt of urea
capacity. Bunkers are provided with load cells, which have 2 independent
electronic bagging machines

MATERIALS MANAGEMENT:

Materials management is an important function of an organization covering

various aspects of input process which are necessary for the production process
and spare parts fro the maintenance of plant. Thus in a production process
materials management can be preliminary to transformation process.

PURCHASE DEPARTMENT:

Purchasing is the one phase of materials management. This department is

processing different goods and services from some internal agencies. The main
objective of this department is to arrange the supply of materials, spare parts
and services or semi-finished goods of desired quality, quantity at lowest price
and at the desired time. What ever required by the NFCL to produce the urea
will procured from some source out side the NFCL.

SUPPLY CHAIN MANAGEMENT

SCM in NFCL or in the fertilizer industry should work as a circulatory system

of the human beings. It collects deoxygenated blood from various organs and
parts of the human body and circulates it to the lungs for purification and
receives oxygenated blood and sends it to all parts of the human body. It’s a
continuous process that’s why human beings stay alive. Hence there should be a
similar process here in SCM of NFCL and in the fertilizer industry itself. The
inbound logistics of NFCL is a continuous process as it supplies natural gas and
other inputs for manufacturing of Urea, the process is nonstop process
throughout the clock, and round the week.(except maintenance days about
25days in the year).The output is continuous process i.e. 4300 tons per day.
Department of Fertilizers says ‘Since one decade there has been no new urea
capacity addition in India. The demand supply-gap has widened over the past
decade. Currently indigenous urea production is of about 22 million tons and
the consumption is of some 29 million tones, the 7 million tons shortfall is
bridged through imports’. The demand for urea by the farmers in India is also
continuous demand. So the firm should meet the demand in continuous process.

MARKETING:

NFCL is operating in Andhra Pradesh, Orissa, West Bengal, Maharastra,

Karnataka, Pondicherry (Yanam territory). A professional team, with a wide
range of products, that include Urea, traded fertilizers (DAP, MOP, Complex
fertilizers), Micro-nutrients, Pesticides, Organic fertilizers and Bio-Pesticides,
has taken NFCL very close to the farmers and made NAGARJUNA a
household name among the farming community

Keeping pace with the changes in agricultural practices NFCL has developed
organic-fertilizers and bio-pesticides with support from NARDI. A new
concept in fertilizers i.e., Customized Fertilizer Granules (CFGs) has been
developed and the product is in trials.

NFCL’s Development activities focus on imparting training to farmers and

dealers on the latest package of practices in various crop stand technology
transfer. Training programs are carried out both on campus at KVK, Kakinada
and off-campus at villages and towns. A Well-equipped and trained
development team organizes the programs using audio -visual vans, jeeps, slide
projectors and literature on products and crops, etc. State Governments,
Agriculture Universities and the farming community as a whole have
acknowledged the effectiveness of development programs being carried out by
NFCL.

LINKAGE MECHANISM:

First of all collect the product needed to meet the demand from both the
sources of indigenous and imports in right time continuously. Secondly
Stock it in BSKUs in the factory premises for indigenous and near the
ports for imports.
 And thirdly the product can be distributed to the destinations by
following ways of distribution continuously
continuously:
FINANCE:
The total cost of the existing complex is Rs. 2156 crores (Rs. 1186
crores for Unit-II and Rs. 970 crores for Unit – II). This consists of
loan of Rs. 1,162 crores (Rs. 515 crores for Unit-I and Rs. 647 crores
for Unit – II) sanctioned by IDBI, IFCI, ICICI, UTI, LIC, GIC and
also Banks. The foreign exchange component of Rs. 781.07 cores
was met by the Indian Financial Institutions like IDBI, IFCI & ICICI
and also by Italian Buyers credit.
CUSTOMERS OF NFCL::

Farmers are the primary and only customers of the products of the products
manufactured in NFCL, Kakinada. To help the products reac
reach
h the customers
NFCL has a robust distribution network with ample stock keeping units (SKU)
to help the products reach the customers. The 250 people strong marketing force
is committed to provide total customer satisfaction through reliability,
timeliness, courtesy, honesty and value for money.This commitment has helped
us in achieving the status of the leading player in plant nutrition in the states of
Andhra Pradesh, Bihar, Chattisgarh, Gujarat , Haryana, Karnataka,Madhya
Pradesh, Maharashtra , New Delhi , Orissa, Punjab , Rajasthan, Tamil Nadu,
Uttar Pradesh, West Bengal Servicing 15 states, The company has 3 zonal
offices and 30 regional offices including Specialty Fertilizers and Micro
Irrigation regional offices.
 STRATEGIES ADOPTED BY THE ENTERPRISE
PLANNING:

 Pioneer transformation in the approach to plant nutrition

 Deliver holistic plant nutrition solutions to the farmers
 Be the most preferred organization to be associated with

Pioneer transformation in the approach to plant nutrition we shall develop crop,

site and stage specific wholesome plant nutrition solutions. NFCL shall focus
on all necessary initiatives towards this – be it manufacturing technology,
regulatory, logistics and using a mix of several sciences and skills. The most
preferred organization to be associated with in the process of providing these
solutions , NFCL shall delight all the stakeholders – employees, investors,
suppliers, customers and society at large. The stakeholders would prefer to be
associated with us not only for the higher value we offer, but also shall
cherish their relationship with us due to the way we deal with them – with full
commitment, responsibility and accountability.

PROCUREMENT OF RAW MATERIAL:

 Selection of venders
 Selection enquires to vendors
 Receiving quotation from supplies
 Preparing quotation comparison
 Statement calling negotiation/minutes of meeting
 Note for approval
 Purchase order

PRODUCTION:

Employee Focus:
NFCL’s aim to have the most satisfied employee base by the turn of the
century through its commitment to Personal and professional development of
the individual.

 Rewarding teamwork, innovation and quality behavior

 Through job satisfaction
 Creating and sustaining a close-knit family culture wherein every
individual experience a sense of belonging
Customer focus:

In recognition that business is based on quality and integrity, NFCL’s aim to

have the most satisfied customer base by enhancing farmer productivity through
forward integration on the one hand, and through catering to industrial needs on
the other. Unto this end, NFCL shall:

 Produce high quality products that give value for money

 Offer, both products and services
 Innovate to satisfy the real needs of customers
 Engage in fair, open and ethical practices.

Shareholder focus:

NFCL aim to keep its shareholders satisfied by:

 Delivering the best long-term return on investment amongst

all companies in the Indian agri-business industry.
 Continuous growth and excellence in business performance.

MARKETING:

 Imparting training to farmers and dealers on the latest package of

practices in various crop stand technology transfer.
 Training programs are carried out both on campus at KVK, Kakinada and
off-campus at villages and towns.
 A Well-equipped and trained development team organizes the programs
using audio -visual vans, jeeps, slide projectors and literature on products
and crops, etc

LINKAGE MECHANISM:

 Robust distribution network with ample stock keeping units (SKU) to

help the products reach the customers.
 The 250 people strong marketing force is committed to provide total
customer satisfaction through reliability, timeliness, courtesy, honesty
and value for money.
MANAGEMENT:

 Pre-commissioning, Commissioning and Operation of Plant

 Maintenance : Preventive, Breakdown and Turnaround
 Inspection and Condition Monitoring
 Environmental Services and Systems
 Safety Services and Systems
 Laboratory and Quality Assurance
 Plant Technical Services – technical and energy audit
 Plant problem diagnostics and troubleshooting
 Training
 SWOT ANALYSIS
SWOT analysis (or SWOT matrix) is a strategic planning technique used to help
a person or organization identify strengths, weaknesses, opportunities, and
threats related to business competition or project planning. It is intended to
specify the objectives of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieving
those objectives. Users of a SWOT analysis often ask and answer questions to
generate meaningful information for each category to make the tool useful and
identify their competitive advantage. SWOT has been described as the tried-
and-true tool of strategic analysis.Strengths and weakness are frequently
internally-related, while opportunities and threats commonly focus on the
external environment.

STRENGTHS OF NFCL:

 Renewed focus on the core business

 Effective Supply chain network
 Presence in broad spectrum of products & services and thus better
Strategic flexibility
 State-of-the-art Manufacturing Technologies
 Cost effective Operations
 Brand identity
 Robust Distribution network

WEAKNESSES OF NFCL:

 Systems & Processes for the restructured entity needs to be installed

 Susceptible to changes in government policy

OPPORTUNITIES FOR NFCL:

 To Capitalize on positive outlook for the industry

 Expand value added services to the farmers, channel partners, and
governmental agencies.
 Attract Strategic & Financial investors
 Conducive policy changes
 Expansion into Global Markets
THREATS TO NFCL:

 Intense Competition
 Entry barriers are too low in Micro Irrigation & Agri Informatics sectors