Essay: Kiri Industries Ltd

1. DESCRIPTION OF BUSINESS-
KIRI INDUTRIES LIMITED
Kiri Industries Limited (KIL) is one of the largest manufacturer and exporter of wide range of Dyes, Intermediates and Chemicals from India. KIL, a fully integrated Dyes and Chemicals company is a winner of several CHEMEXCIL and GDMA performance awards. KIL is a preferred resource centre for many of the most extensive product lines in textile dyes. Sophisticated quality control practices and procedures, modern manufacturing facilities and ERP driven enterprise management has enabled KIL to offer internationally recognized quality products and services. KIL is an accredited and certified Key Business Partner with world’s top Dyestuff majors across Asia-Pacific, the EU and Americas.
The company came into being in 1998 with the setting up of Dyes manufacturing unit at Vatva, Ahmedabad. KIL is an ISO 9001:2008-certified company listed on Bombay Stock Exchange and National Stock Exchange of India. In 2007, KIL embarked upon two stage backward integration by setting up India’s largest Dyestuff intermediate manufacturing facility and largest basic chemicals facility at Padra (Baroda, Gujarat). To strengthen its competitive edge in the Dyes vertical, KIL formed Joint Venture with Long Sheng (China) and set up manufacturing facility for Dyes at Padra ( Baroda, Gujarat ).
On 4th February, 2010, Kiri Industries Limited (KIL) acquired DyStar Group, through SPV Kiri Holding Singapore Pvt Ltd. Dystar acquisition is considered to be a historical development in the global Dyes industry. DyStar Group is the global market leader in Dyes, Dye solutions, Performance Chemicals, new technologies and custom-manufacture of special Dyes & Pigments. It provides products and services across the whole value chain in numerous industrial sectors (apparel, hosiery, automotive, carpets, leather, home upholstery, industrial fabrics, etc.) The acquisition of Dystar, a multinational German Company having worldwide market share of around 21% has changed the dynamics, making KIL now a Global Conglomerate and a total textile solution provider.
In the 15 years of its corporate journey, KIL is focusing on providing products of high quality, collaborations and strategic acquisitions, application & environment aligned R&D, innovative solution-centric and all-encompassing customer care. KIL is accredited with many revolutionary innovations in the process and chemistry of producing dyes and dyes intermediates.These have enabled it to contribute towards cost rationalizations for customers, improved compliance with sustainability norms.
All initiatives taken by KIL have enabled it to set its footprint in over 50 countries across 7 continents.
Kiri Industries Ltd. has set up a very modern R & D laboratory for testing, development of dyes & Intermediates. It is fully equipped to carry out all types of unit processes and unit operations with back up of in-process testing facilities.
The major equipments/Instruments are,
Glass lined reaction vessels upto 5 KL with heating & cooling facility.
1. Vaccum distillation unit
2. Vaccum drying unit
3. Vaccum filtration
4. Laboratory reverse osmosis unit
5. HPLC
6. UV ‘ Vis spectorphotometer
7. GC
8. metrohm auto titrator
All experiments are controlled in fuming chambers. There is special facility for storage of hazardous chemicals in fuming storage cabinets.
Apart from modern manufacturing plant, quality control labs and R & D center, it keeps abreast of ever-changing demand of textile industry, national & international requirements for environment & other product related legislations etc. The dyes marketed by KIL are GOTS registered and pre-registered with REACH. KIL has always focused on up gradation in quality of its products and is recognized as an ISO-9000 certified company.
Research & Development
KIL’s has adherence to optimal product quality, exceptional customer services and ethical business practices has won a few accolades over the years.
A Select list includes:
Textile Association (Mumbai Unit, India) Industrial Excellence Award to Mr. Manish Kiri (2010) Ahmedabad Management Association (AMA) Outstanding Entrepreneur Award (2009-2010) to Mr. Manish KiriChemexcil’sTrishul Award (2008-2009) to the Company.
Gold Award (2006-2007) from CHEMEXCIL in the year 2009 GDMA(Gujarat Dyestuffs Manufactures Association) Award for Direct Export of Self Manufactured Dyes (2008-2009)
‘A’ class vendor status awarded by Clariant (India) Limited for outstanding performance as a Business Partner ‘ Sourcing, and for contribution in the growth of Clariant (India) Limited (2006) ECGC (Export Credit Guarantee Corporation) (Government of India) Silver Jubilee Award (2005)
Trishul Award from CHEMEXCIL for outstanding export performance (2004-05) Two Star Export House recognition (2004)
Environmental Clearance from the Ministry of Environment & Forestry, Government of India (2004).
CHEMEXCIL Platinum Award for outstanding performance (2002 ‘ 2003).
CHEMEXCIL Award for outstanding export performance (1999-2000)
GDMA (Gujarat Dyestuffs Manufactures Association) Trophy for export performance (1990-2000)
‘ criterion: Rs 60 million-plus direct export of self manufactured Dyes & Dye Intermediates.
CHEMEXCIL Award for outstanding export performance (1998-1999).
Today, KIL is widely acknowledged as a frontline player in the Dyes & Intermediates industry. In keeping with this corporate stature, the company makes it a point to participate in high-profile industry events such as IndiaChem 2009 (Ahmedabad), where a worldwide clientele can access it, exchange ideas and forge future associations / initiate transactions.
KIL: Corporate Milestones:
All experiments are controlled in fuming chambers. There is special facility for storage of hazardous chemicals in fuming storage cabinets.
Apart from modern manufacturing plant, quality control labs and R & D center, it keeps abreast of ever-changing demand of textile industry, national & international requirements for environment & other product related legislations etc. The dyes marketed by KIL are GOTS registered and pre-registered with REACH. KIL has always focussed on upgradation in quality of its products and is recognized as an ISO-9000 certified company.
1998:
Incorporated as Kiri Dyes and Chemicals Private Limited. Initial capacity: 1,200 MTPA
2002
Obtained 100% Export Oriented Unit eligibility, from Kandla Special Economic Zone.
2003
Became a Government Recognized Trading House.
2004
Manufacturing unit converted into a 100% Export Oriented Unit.
2005
Began strategic backward integration to manufacture Intermediates at manufacturing unit at Padra, Vadodara.
2006
Began Commercial production of Vinyl Sulphate (backward integration project) at manufacturing unit at Padra, Vadodara.
2007
Accorded ISO 9001:2000 Certification for both dyes unit at Vatva and dyes intermediate unit at Padra, Vadodara.
Accorded ISO 14001:2004 Certification for Environmental Management System by ISOQAR for dyes intermediate unit at Padra, Vadodara.
2008
Entered Joint Venture agreement with Longsheng Group, China’s No 1, for setting up a 50,000-MTA Dyestuff manufacturing plant in India.
Successfully completed Initial Public Offering of 3,750,053 equity shares and got listed on BSE and NSE for expansion and diversification in to basic Chemicals.
2009
Successfully completed Joint Venture with Zhejiang Longsheng Group Co Ltd, China, to eastablishLonsenKiri Chemical Industries Ltd (today India’s largest Dyestuffs manufacturers), and began commercial production.
2010
Acquired DyStar Group, worldwide market leader in Dyes, through wholly owned subsidiary Kiri Holding Singapore Private . Limited
First Award for the year 2008-09 from GDMA for Direct Export of Self Manufactured Dyes.
SWOT ANALYSIS OF KIRI INDUTRIES LIMITED:
2. PRODUCTS AND SERVICES:
Reactive Dyes
Reactive Dyes are the most versatile and popular class of Organic Dyes for importing color on cellulosic fibers. As the name suggests, these dyes chemically react with cellulose to form a covalent bond between dye molecule and cellulose. The salient features of Reactive Dyes are
– their brilliant shades
– ease of application
– overall good fastness properties
– economy
The popularity of Reactive dyes with textile processors is due to its versatility in application by various dyeing methods such as exhaust dyeing, semi-continuous and continuous dyeing as well as various printing methods by direct printing, resist printing, discharge printing and very recently by inkjet printing.KIL offers a wide range of Reactive dyes as listed below to practically meet most of the requirements of cotton textile processors.
Kiraol VS dyes
Kirazol KR/KX dyes
Kirazol S &W dyes
Kiractive ME dyes
Kiractive ED dyes
Kiractive HE dyes
Kiractive CN dyes
Kiractive P dyes
Dye Intermediates
In order to ensure uninterrupted supply line of key raw materials and stability of pricing for its customers, KIL embarked upon the process of backward integration. In the first stage, facilities for Dye Intermediates were set up at the village Padra( Vadodara, India ).Close to 60 percent of intermediates required for Dyes manufacturing are manufactured at this facility. The commissioning of this facility has empowered KIL tomanage cost of raw materialsmonitor the quality of key raw materials thus ensuring desired quality control of finished productmanage fluctuations in prices of raw materialsmanage efficient production schedulesmeeting customers’ expectations
Dystar
Formed in 1995 as a specialist in textile coloration, DyStar has transformed itself into a full solutions provider. We now offer customers a complete range of auxiliaries and colorants. Trained staff and modern service labs in all major markets ensure that customers all over the world receive fast and expert technical service.
LonsenKiri Chemical Ind Ltd.
A joint venture company between China-based Zhejiang Lonsen and India-based Kiri Dyes and Chemicals inaugurated a new dyestuff plant on 19 July 2009 in Vadodara, the Gujarat state of India. The joint venture, called LonsenKiri Chemical Industries Ltd (LKCIL), is located in the Dudhwada village and manufactures reactive dyes.
BASIC CHEMICALS
SULPHURIC ACID 98%
SPENT SULPHURIC ACID
OLEUM 65%
OLEUM 23%
CHLORO SULPHONIC ACID
Eco-kinship
It is in the corporate culture of Kiri Industries Limited (KIL) to keep in sync with the trends that emerge in the world’s technology capitals. Alongside this exploratory scientific attitude, the company has adopted “Green Productivity” concept to enhance productivity, profitability, quality of life and reduces environmental impacts.
KIL’s management is committed to provide cleaner, healthier and safer living conditions and an improved quality of life within the workplace as well as surrounding areas.
KIL believes that industrial development and environmental integrity are not mutually exclusive. Indeed, they should be two sides of a coin, each side being equally important components of the coin’s value. The company has developed policy of Duo-Eco-Growth i.e. economic growth encompassing ecological growth.
Resource optimization
Environmental compliance
Safety and Health
Eco-friendly technology
KIRI BUSINESS:
Marketing
KIL is one of the largest players in the Dyes Industry in India. Since its inception, the company has been pursuing an aggressive strategy to become one of the major players at global platform. Now with its strong customer base across all 7 continents, it has acquired the status of largest Indian Multinational in the Dyes sector. KIL has brought about some revolutionary
Manufacturing
KIL has manufacturing plants for Reactive Dyes with installed capacity of 18000 TPA. KIL has infrastructure to simultaneously take batches in more than 30 vessels with batch sizes going up to 250 KL liquid.
CUSTOMER SERVICE:
Colour Solution:
There are various enduses of fabrics and colour shades demand for each enduse is fast changing with fashion, environmental conditions etc.
We at KIRI , can provide you colour solution to match your exact ” colour shade ” requirement. It will help us if you could share any of the following data to enable our technical team to run through our repertoire and provide the matching shade.
Pentone Shade number
Spectral data of shade
QTX file
Upon receiving above , we will match your shade and provide you colour solution/ colour recipe.
Engage
Our stakeholders have variety of inputs to share with us. We believe that these inputs will enable us to improve upon our services and come up to their expectations. We are very keen to have your sales enquiries/feedback/suggestions on our products and services. We request you to update the form given below.
3. Market Analysis & Market plan
Market Analysis
In the past 25 years, the production of dyes in the United States, Western Europe and Japan has decreased significantly, while production in Asian countries, particularly in China, India, Thailand and Indonesia, has increased.
Many of the changes in the dyestuffs industry began in about 1990 as a result of fierce price competition and globalization of world trade. China has become the major textile producer and as a result, dye production has moved closer to the point of consumption. China now accounts for 40’45% of world consumption.
India has also increased its presence, now accounting for about 10% of world consumption. These two countries are also major exporters of dyes to other countries. They also export large quantities of important raw material and dye intermediate chemicals, which are subsequently modified for use in Western countries. Even developing countries that process large volumes of textiles have become more dependent on Asia for dyes.
In the early 2000s, the worldwide dyestuff industry was characterized by significant oversupply, resulting in severe pressure on prices. As a result, most dyestuffs producers suffered significant financial losses, and major restructuring took place, especially in the more developed nations. Since 2010, prices have tended to increase as a result of raw material shortages and growing pressure from increased environmental controls imposed in the production processes in Asia, especially in China and India. In China, several dye and textile factories have been closed by the government for being either too polluting or too energy intensive. Both Chinese and Indian textile dyes and chemicals suppliers are faced with the challenge of reducing pollution and optimizing use of resources. It is likely that many smaller manufacturers will go out of business as they find it prohibitive to comply with environmental legislation. In recent years, enforcement of such legislation has become stricter with the change in political climate.
Consumption of textiles, the largest end-use market for dyestuffs, in turn depends directly on population growth and private (consumer) spending levels. The most important short-term factor is fashion, which dictates the types of colors used. The quantity of dyestuffs consumed per volume of textile is considerably higher when bright or dark colors are desired in textiles than when only light colors are in demand. Hence, the colors used for textiles have an impact on the total consumption of dyestuffs. A lesser but still potentially important factor is the substitutability of organic pigments for dyes, particularly in the textile printing segment but also in other segments such as plastics and inks. On the other hand, specialty dyestuffs may also substitute for pigments in selected markets; an example is the dyeing of modified polypropylene fibers, which are normally pigmented.
The total dyes market is forecast to increase at an average annual rate of about 3%. Asia will continue to be the largest and fastest-growing market for textile dyes, as textiles remain a high-volume traded commodity produced in this region.
Dyes
The Indian dye industry is valued at around US$ 3 billion, with exports of about US$ 1 billion. The per capita consumption is very low (50 gms) as compared to average global consumption (400gms). The industry is highly fragmented with 50 players in organized sector and 900 in unorganized sector. (400 gms). The industry has undergone tremendous over the years, starting as an intermediate manufacturing industry to a full fledged industry with huge export potential. At present, India’s share of the dye output globally stands at 5%, with a manufacturing capacity of 1,50,000 tons per annum.
Future Forecasts
A decade of economic reforms has resulted in major changes in the way the Indian chemical manufacturers work and operate. Individual enterprises have realized their strengths and weaknesses and are gearing up to face the new challenges. Success stories in dyes and agrochemicals have boosted the confidence of Indian manufacturers to take on global competition squarely. Some of the advantages of Indian chemical industry include –
‘ Due to its low cost infrastructure, the country has huge export potential. According to a recent report, India’s chemical exports have the potential to rise US$ 300 billion by 2015. This defines an investment of US$ 50 billion in chemical industry alone.
‘ The country has the capacity for high value addition being close to Middle East. This is a cheap and ample source for petrochemical feedstock.
‘ In some categories of chemicals, India does have the advantage for exports (dyes, pharmaceuticals and agrochemicals) by establishing strategic alliances with countries like Russia. With the expertise and know-how available in the country, there is a tremendous export potential in dyestuff and agrochemical market.
‘ Availability and abundance of raw materials for titanium dioxide and agro-based products, such as castor oil provide an opportunity to yield significant value addition. This, however, would require substituting their exports in raw form by producing high value derivatives.
‘ The major challenges are pursuit for feedstock and knowledge management. The naphtha-based crackers that have been providing feedstock to the industry traditionally have now been replaced by new gas-based crackers. Along with China, India pose a stiff competition to the Middle East due to the vibrant exports and huge unexplored reserves of oil and gas. The Govt. of India is acting as a facilitator by establishing LNG terminals and acquiring equity interests in overseas proven oil reserves. This will fuel the fast growth in chemical industry. The govt. is also engaged in the development and formulation of a National Policy on Pharmaceuticals and mega-industrial chemical estates.
Marketing plan
Industry import chemical dyes:
Chemcolour- Leaders in importing, manufacturing and marketing of specialty chemicals and food ingredients.
4p analysis
1. Product- Consumer
The product part of the Four Ps model is replaced by consumer or consumer models, shifting the focus to satisfying the consumer.
Reactive Dyes are the most versatile and popular class of Organic Dyes for importing color on cellulosic fibers. As the name suggests, these dyes chemically react with cellulose to form a covalent bond between dye molecule and cellulose. The salient features of Reactive Dyes are
– Their brilliant shades
– ease of application
– Overall good fastness properties
– Economy
The popularity of Reactive dyes with textile processors is due to its versatility in application by various dyeing methods such as exhaust dyeing, semi-continuous and continuous dyeing as well as various printing methods by direct printing, resist printing, discharge printing and very recently by inkjet printing.
KIL offers a wide range of Reactive dyes as listed below to practically meet most of the requirements of cotton textile processors.
1. Kiraol VS dyes
2. Kirazol KR/KX dyes
3. Kirazol S &W dyes
4. Kiractive ME dyes
5. Kiractive ED dyes
6. Kiractive HE dyes
7. Kiractive CN dyes
8. Kiractive P dyes
2. Price
Reactive dyes
FOB Price: INR 250 / Kilogram
Min. Order Quantity: 100 0Kilogram/Kilograms
Supply Ability: 19000 Ton/Tons per Month
Port: TIANJIN
Payment Terms: L/C,D/P,T/T
3. Place
Segment Market Value (billion US$)
Basic Chemicals 20
Specialty Chemicals 9
High End / Knowledge Segment 6
Total 35
Ahmedabad vatva GIDC
4. Promotion
Digital Marketing
Creating website
4. Comparative Position of Indian Chemical Industry
PORTER’s FIVE FORCES MODEL
Once the above discussion regarding manufacturers is clear, we now apply Porter’s five forces model. This is a framework for industrial analysis, determines the competitive intensity and therefore attractiveness of market.
Porter’s Five Forces is a framework for industry analysis and business strategy development formed by Michael E.Porter of Harvard Business School in 1979. It draws upon Industrial Organization (IO) economics to derive fiveforces that determine the competitive intensity.
5. Import-Export Norms
1. IEC CODE
Importer Exporter Code Number
‘ Definition of IEC Code: – IEC Code is unique 10 digit code issued by DGFT ‘ Director General of Foreign Trade, Ministry of Commerce, and Government of India to Indian Companies.
‘ Full form of IEC Code: – Full From of IEC Code is : ‘Importer Exporter Code ‘. To import or export in India, IEC Code is mandatory. No person or entity shall make any Import or Export without IEC Code Number.
‘ IEC Code No Notification: – Directorate General of Foreign Trade (DGFT) issued a Policy Circular No.15 (RE-2006)/2004-2009 Date: 27th July, 2006) for New System for issuance of Importer-Exporter Code Number.
‘ Application for Grant of IEC Number: – An application for grant of IEC number shall be made by the Registered/Head Office of the applicant and apply to the nearest Regional Authority of Directorate General Foreign Trade, the Registered office in case of company and Head office in case of others, falls in the ‘AayaatNiryaat Form – ANF2A’ and shall be accompanied by documents prescribed therein. In case of STPI/ EHTP/ BTP units, the Regional Offices of the DGFT having jurisdiction over the district in which the Registered/ Head Office of the STPI unit is located shall issue or amend the IECs.
‘ Only one IEC would be issued against a single PAN number. Any proprietor can have only one IEC number and in case there are more than one IECs allotted to a proprietor, the same may be surrendered to the Regional Office for cancellation.
‘ IEC Code Online Application Form: – The application can be downloading Form in PDF or Word. This is called “AayaatNiryaat Form – ANF2A”. Along with IEC Code Number Application Form it is necessary to submit Appendix-18B Attested by Applicant’s Banker in his letter head with two passport size photo).
‘ Validity of IEC Code No: – An IEC number allotted to an applicant shall be valid for all its branches/divisions/units/factories as indicated in the format of IEC given in Appendix- 18B.
‘ Duplicate Copy of IEC Number: – Where an IEC Number is lost or misplaced, the issuing authority may consider requests for grant of a duplicate copy of IEC number, if accompanied by an affidavit.
‘ Application Fee for IEC Code Number: – Application Fee: Rs 250.00
‘ Mode of Payment: – In Demand Draft of any Bank or Payment through EFT (Electronic Fund Transfer by Nominated Bank by DGFT Like HDFC Bank, ICICI Bank, State Bank of India, UTI Bank, Punjab National Bank, Central Bank etc) or Application fee can deposited by TR6 Challan with Duplicate Copy in any branch of Central Bank of India and TR6 Challan need to be submit along with IEC Code Application.
‘ Specified fee shall be paid for making an application under any provision of the Policy and Handbook of Procedure Volume-I.. The scale of fee, mode of payment, procedure for refund of fee and the categories of persons exempted from the payment of fee are contained in Appendix-21B.
‘ Territorial Jurisdiction of Regional Authorities: – Every application, unless otherwise specified, shall be submitted to the Regional Authority of Directorate General Foreign Trade, as per the territorial jurisdiction of the Regional authorities indicated in Policy and Handbook of Procedure Volume-I.
‘ Filing of Application: – Application can be filed online in DGFT website; details of online links are given below.
‘ Every application for an Import/Export licence/ certificate/ Authorization/ permission or any other purpose should be complete in all respects as required under the relevant provisions of the Policy/Procedures and shall be signed by the applicant as defined in Paragraph 9.9 of the Policy. An incomplete application is liable to be rejected giving specific reason for rejection. However in case of manual applications, the applicant would furnish a soft copy of the application in MS word format.
‘ Self Addressed Stamped Envelope: – The applicant shall furnish a self addressed envelope of 40 x 15 cm with postal stamp affixed on the envelope as follows for all documents required to be sent by Speed Post:
A Within local area Rs. 20.00
B Up to 200 Kms. Rs. 25.00
C Between 200 to 1000 Kms Rs. 30.00
D Beyond 1000 Kms. Rs. 50.00
Mandatory Requirements to apply for IEC Code Number
1. PAN Number
2. Current Bank Account
3. Bankers Certificate
4. IEC-Code-Number
Application-Fee
Rs-250.00
(Expert TIP : Pay via EFT (Electronic Fund Transfer ), and submit IEC Online Application form, If you wish to receive IEC Number instantly)
5. The physical application containing required documents should reach DGFT RLA concerned within 15 days of its online submission.
6. E-mail is not mandatory. If it is provided it will facilitate faster communication.
Check List of Documents to apply for IEC Code
1. Covering Letter on your company’s letter head for issue of new IEC Code Number.
2. Two copies of the application in prescribed format (AayaatNiryaat Form ANF 2A
) must be submitted to your regional Jt.DGFT Office.
3. Each individual page of the application has to be signed by the applicant.
4. Part 1 & Part 4 has to be filled in by all applicants. In case of applications submitted electronically.
5. No hard copies of Part 1 may be submitted. However in cases where applications are submitted otherwise, hard copy of Part 1has to be submitted.
6. Only relevant portions of Part 2 need to be filled in.
7. Rs 250.00 Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application fee in terms of Appendix 21B.
8. Certificate from the Banker of the applicant firm in the format given in Appendix 18A.
9. Self certified copy of PAN issuing letter or PAN (Permanent Account Number) Card issued by Income Tax Authority.
10. Two copies of passport size photographs of the applicant duly attested by the Banker of the applicant.
11. Self addresses envelope with Rs.25/- postal stamp for delivery of IEC certificate by registered post or challan/DD of Rs.100/- for speed post
How to submit IEC Code application
Application can be submitted in person/by Authorised Employee of the Company at the R & I counters in the office Or It can be sent by post/courier.
Processing of IEC Code Application
The application can be submitted at the counter in person at the office or it can be sent through Post/Courier. An acknowledgement in form of a receipt having File Number is generated on receipt of application. The file number is used for any correspondence/query regarding the IEC application submitted to the office. The application is then sent to IEC section where it is processed. If the application is found complete in all aspects (as per requirements prescribed) an IEC is generated, or else a deficiency letter stating the nature of deficiency is prepared and sent to the applicant. Replies are awaited in cases where deficiency letter is issued and after due compliance by the applicant the IEC is allotted.
Issue and Despatch of IEC Code
IEC allotment letter is sent through post at the registered office mentioned by the applicant in the application. Similarly deficiency letters are sent to applicant by post.
About IEC Application Status
File No for IEC application
A new option to know the file number has been introduced for all exporter who are sending their application through Post/Courier. The applicant has to input PAN number to get the file number.
Status of IEC Application
The applicant can know the status of the IEC application using option ‘Status of IEC Application’ on the website of CLA.
IEC issued day wise
IEC’s issued daily can be viewed on the website using option ‘IEC issued day wise’
File No for IEC application
Applicant’s who have sent their application through post/courier can know their file number using option ‘File No for IEC application’
GENERAL NOTE FOR CHEMICALS & ALLIED PRODUCTS
(PRODUCT CODE: A)
1. In case of formulation products, where norms are fixed based on a specific strength, assay/ percentage composition/ pack size/ concentration/ active material etc., of the resultant product, the requirements of inputs for different strength/ pack size/ assay/ formulation such as EC/ WDP/ WP etc. can be worked out on pro-rata basis.
2. Unless otherwise specifically mentioned, the quantity of inputs allowed are based on 100% strength/ concentration. In case the strength/ concentration/ purity of the item imported/ proposed to be imported is different from what is mentioned alongwith the description of import item/ 100% strength etc., quantity of the item may be reduced or enhanced based on actual concentration of the imported inputs in the inverse ratio, i.e., more the concentration, the lesser the requirement and vice-versa.
3. In case where the input(s) required for the manufacture of the resultant export product have norms from further basic stages(s) for manufacture of one or more of such inputs, the licence can be issued by using these norms (excluding packing material, if any) in place of such inputs, for manufacture of the resultant export product.
4. In respect of Drug items, export products have been described with/ without suffix such as IP, BP, USP. While issuing licences, suffix as such IP, BP, USP, depending upon the suffix used in the export order, may be added along with the description of the export product.
5. In respect of injection/ syrup, in addition to items permitted in the norms, the relevant glass vials with 5% wastage and stopper with 1% wastage, wherever required, can be allowed. Against export of capsules, relevant hard gelatin capsule may be allowed with 5% wastage on the net number of capsules in the export product.
6. In case of Drug Formulations like Injection/ Syrups, the export product description should be clearly defined to show the actual contents of bulk drugs in the export product as per drug manufacturing licence.
7. Wherever import of MDPE is allowed, the same would mean Plastic Granules with density ranging between 0.917 and 0.943.
8. Unless otherwise specifically mentioned, the input-output norms of Dye-stuffs are on the basis of 100% Assay/ 100% Dye content. In case the Assay/ Dye content is different or the resultant product to be exported is different from the Assay/ Dye content based on which the norms are fixed, the requirement of different raw materials may be calculated on pro-rata basis excluding the dispersing agent. The quantity of dispersing agent ‘ Lignine Sulphonate or any other dispersing agent – to be used as per the declaration of the applicant would be 100 minus Assay percentage/ Dye content percentage of dye in the export product. In case of all finished dye, the percentage of dye content (Assay) in the export product description must be indicated.
9. Wherever import of “Caustic Soda” or “Caustic Soda Solid” or “Caustic Soda Flake” is allowed, it is on the basis of 100% strength. Wherever specific strength of Caustic Soda in Caustic Soda Lye is not mentioned, the same may also be taken as 100% strength, even though Caustic Soda is also commonly available in 50% and 33% Strength in Lye form. Interchangeability between the import of Caustic Soda Solid/ Flakes or Caustic Soda Lye is permitted based on the percentage content of Caustic Soda in the import material. Further, wherever import of Caustic Soda or Caustic Soda Flakes is allowed, against specific norms, the same would also cover Caustic Soda Prills/ Pearls.
10. In case of paper, a variation of ??10% in GSM of paper in import and export will be allowed, except in case of SION at Sl.Nos.A-1569 and A-1579 where flexibility for import of relevant paper within the range of GSM 50 to GSM 150 will be allowed.
11. Where “Synthetic Rubber” has been permitted as an input in generic terms, the applicant will have to indicate the specific type of synthetic rubber to be used in the export product and same will also be indicated alongwith the export product.
12. In case of Plywood, wherever import of chemicals have been allowed, the value of the same shall not exceed 20% of FOB value of export. In case of Veneer, the value of such chemicals shall be limited to 5% of FOB value of exports.
13. Import of the following varieties of Wood or Veneer shall not be allowed against export of Commercial Plywood:
1)Teak 2)Rosewood 3)Ash 4)Cherry 5)White Oak 6)Red Oak 7)Walnut 8)Birds Eye Maple 9)Maple 10)Burls of different varieties 11)Reconstituted Veneers of different varieties 12)Beeck 13)Lace Wopod 14)Sapelli 15)Mahogany 16)Afromosia and 17)Other varieties of Peeled/ Sliced Decorative Veneers.
The thickness of permissible Veneers other than those mentioned above should be maximum 6 mm.
14. In case of export of refrigerant gases in returnable ISO container, item of import required for manufacture of such gases shall only be allowed. Import and export of ISO container on lease basis shall be governed by rules and regulations laid down by Customs in this behalf.
Wherever, import of Penicillin and its salts (ITC HS Code No. 29411010) or import of 6-APA (ITC HS Code No. 29411050) is allowed as an input item under Duty Exemption Scheme, the export obligation period for such licences shall be restricted to six months from the date of clearance of first import consignment. The licensing authority shall make an endorsement in the Advance Licence to this effect. No further extension in export obligation period shall be allowed in these licences.
Five Modes of Entry into Foreign Markets
In an effort to sell their products and services to new customers, businesses will often attempt to enter new, foreign markets. Entry into a foreign country can be tricky, however, as the business must adapt to a new clientele, new legal regulations and new competition. To make for an easier transition, there are a number of common modes that businesses can use when starting up in a foreign market.
Joint Venture
One of the most popular modes of entry is the establishment of a joint venture, in which two businesses combine resources to sell products or services. Many countries with tightly controlled economies, such as China, often require foreign companies to partner with a local company if they wish to sell products to their residents. Although joint ventures provide foreign companies with a partner experienced in the foreign market, these partnerships can be difficult to manage and require a splitting of profits.
Licensing
In the licensing mode of entry, companies sign contracts with foreign businesses, called “licensees,” that allow the foreign companies to legally manufacture and sell the company’s products. The foreign companies will either purchase the license outright, pay a regular licensing fee or pay a percentage of their revenue over time in the form of royalties. Often used by manufacturing firms, licensing allows a company to enter a market quickly and inexpensively, but provides little control over the product’s foreign marketing and sales.
Exporting
Rather than attempt to partner with or provide a license to foreign companies, some companies will simply sell their products to distributors overseas, who will sell the products to consumers. This exporting prevents the company from having to invest the money in developing manufacturing facilities in the foreign market, but transportation costs and restrictive tariffs may make this mode uneconomical for certain products.
Internet
Many companies will attempt to enter foreign markets indirectly, by targeting foreign consumers on the Internet. Similar to exporting, companies retain their physical operations in their native countries, but ship products overseas. However, whereas in exporting, companies contract with local businesses, with the Internet they take orders directly from consumers. One advantage to this mode is that it is relatively cheap, entailing only the cost of a website and marketing. The downside is that it is often less effective than establishing a physical presence in the foreign market.
Purchasing Foreign Assets
Many companies, rather than launching an entirely new venture in a foreign market, will simply purchase or invest in a foreign company. While often more expensive, direct investment allows the investing company to reap the profits of a business that is already well integrated into the local market.
Licensure Requirements
2.1 Any individual licensed under the provisions of the Act and the rules and regulations herein may use the title “licensed chemical dependency professional” and the abbreviation “LCDP” or the title “licensed chemical dependency clinical supervisor” and the abbreviation”LCDCS” provided that the title and abbreviation correspond to the license held pursuant to the Act.
2.2 No individual shall represent herself/himself as a “licensed chemical dependency professional”, “LCDP”, “licensed chemical dependency clinical supervisor”, “LCDCS”, unless she/he is licensed as a “licensed chemical dependency professional” pursuant to the Act and provided that the title and abbreviation correspond to the licensed help pursuant to the Act.
Qualifications for Licensure
3.1 The Department shall issue the appropriate license to applicants who meet the qualifications for the license as specified: 3.1.1 Licensed chemical dependency professional: Any individual desiring to obtain a license as a licensed chemical dependency professional shall be currently certified as an advanced chemical dependency professional or an advanced chemical dependency professional II in accord with the ICRC/AODA member board standards, as a prerequisite for submitting the application to the licensing Board.
3.1.2 Licensed chemical dependency clinical supervisor: Any individual desiring to obtain a license as a licensed chemical dependency clinical supervisor shall be currently certified as an advanced chemical dependency professional or advanced chemical dependency professional II, have completed the ICRC/AODA member board standards for the chemical dependency clinical supervisor, and submit an application to the licensing Board.
Application for Licensure and Fees
Application for license to practice as a licensed chemical dependency professional or licensed chemical dependency clinical supervisor shall be made on forms provided by the Department, which shall be completed, notarized and submitted to the Board thirty (30) days prior to the scheduled date of the Board meeting at which they are to be reviewed.
Such application shall be accompanied by the following:
1. For U.S. born applicants: a certified copy of birth certificate;
2. For Non-U.S. born applicants: documented evidence of lawful entry into the country;
3. Verification of current certification at the appropriate level from the ICRC/AODA member board;
4. Passport-type photograph of the applicant;
5. A non-refundable, non-returnable application fee as set forth in the Rules and Regulations Pertaining to the Fee Structure for Licensing, Laboratory and Administrative Services Provided by the Department of Health.
6. A statement from the licensing/certification board in the jurisdiction upon which endorsement is to be based setting forth the requirements for licensure/certification in that jurisdiction. Said requirements shall be substantially similar to those in place in Rhode Island at the time of application. This determination shall be made by the licensing board.
Supporting institution
1. DGFT
DGFT is responsible for implementing the Foreign Trade Policy or Exim Policy with the main objective of promoting Indian exports.
DGFT or Directorate General of Foreign Trade is a government organization in India responsible for the formulation of exim guidelines and principles for Indian importers and Indian exporters of the country. Before 1991, DGFT was known as the Chief Controller of Imports & Exports (CCI&E).
Functions of DGFT
Some of the major functions of DGFT and its regional offices throughout the country are as follows:
‘ To implement the Exim Policy or Foreign Trade Policy of India by introducing various schemes and guidelines through its network of dgft regional offices thought-out the country. DGFT perform its functions in coordination with state governments and all the other departments of Ministry of Commerce and Industry, Government of India.
‘ To Grant Exporter Importer Code Number to Indian Exporter and Importers. IEC Number is a unique 10 digit code required by the traders or manufacturers for the purpose of import and export in India. DGFT IEC Codes are mandatory for carrying out import export trade operations and enable companies to acquire benefits on their imports/exports, Indian customs, export promotion council’s council etc in India.
‘ DGFT permits or regulate Transit of Goods from India or to countries adjacent to India in accordance with the bilateral treaties between India and other countries.
‘ To promote trade with neighboring countries.
‘ To grant the permission of free export in Export Policy Schedule 2.
‘ DGFT also play an important role in controlling DEPB Rates.
‘ Setting standard input-output norms is also controlled by the DGFT.
‘ Any changes or formulation or addition of new codes in ITC-HS Codes are also carried out by DGFT (Directorate General of Foreign Trade).
Apart from the above, DGFT also acts as a trade facilitator. It also deals with the quality complaints of the foreign buyers. Officials DGFT works in close coordination with other related economic offices like Customs Commission rates, Central Excise authorities, DRI authorities and Enforcement Directorate.
Shipping Bill / Bill of Export
Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, included ship’s owner, seller, buyer and some other parties. For each one represents a kind of certificate document.
Documents Required for Post Parcel Customs Clearance
In case of Post Parcel, no Shipping Bill is required. The relevant documents are mentioned below:
‘ Customs Declaration Form – It is prescribed by the Universal Postal Union (UPU) and international apex body coordinating activities of national postal administration. It is known by the code number CP2/ CP3 and to be prepared in quadruplicate, signed by the sender.
‘ Dispatch Note- It is filled by the exporter to specify the action to be taken by the postal department at the destination in case the address is non-traceable or the parcel is refused to be accepted.
‘ Commercial Invoice – Issued by the exporter for the full realizable amount of goods as per trade term.
‘ Consular Invoice – Mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Burma, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the prescribed format and is signed/ certified by the counsel of the importing country located in the country of export.
‘ Customs Invoice – Mainly needed for the countries like USA, Canada, etc. It is prepared on a special form being presented by the Customs authorities of the importing country. It facilitates entry of goods in the importing country at preferential tariff rate.
‘ Legalized Invoice – This shows the seller’s genuineness before the appropriate consulate or chamber of commerce/ embassy.
‘ Certified Invoice – It is required when the exporter needs to certify on the invoice that the goods are of a particular origin or manufactured/ packed at a particular place and in accordance with specific contract. Sight Draft and Usance Draft are available for this. Sight Draft is required when the exporter expects immediate payment and Usance Draft is required for credit delivery.
‘ Packing List – It shows the details of goods contained in each parcel / shipment.
‘ Certificate of Inspection ‘ It is a type of document describing the condition of goods and confirming that they have been inspected.
‘ Black List Certificate – It is required for countries which have strained political relation. It certifies that the ship or the aircraft carrying the goods has not touched those country(s).
‘ Manufacturer’s Certificate – It is required in addition to the Certificate of Origin for few countries to show that the goods shipped have actually been manufactured and is available.
‘ Certificate of Chemical Analysis – It is required to ensure the quality and grade of certain items such as metallic ores, pigments, etc.
‘ Certificate of Shipment – It signifies that a certain lot of goods have been shipped.
‘ Health/ Veterinary/ Sanitary Certification – Required for export of foodstuffs, marine products, hides, livestock etc.
‘ Certificate of Conditioning – It is issued by the competent office to certify compliance of humidity factor, dry weight, etc.
‘ Antiquity Measurement ‘ It is issued by Archaeological Survey of India in case of antiques.
‘ Shipping Order – Issued by the Shipping (Conference) Line which intimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date.
‘ Cart/ Lorry Ticket – It is prepared for admittance of the cargo through the port gate and includes the shipper’s name, cart/ lorry No., marks on packages, quantity, etc.
‘ Shut Out Advice – It is a statement of packages which are shut out by a ship and is prepared by the concerned shed and is sent to the exporter.
‘ Short Shipment Form – It is an application to the customs authorities at port which advises short shipment of goods and required for claiming the return.
6. Section Two: Financial Data
A. Projected Financial Statements for next 3 years
Statement of Profit & Loss
Particulars 2015-16 2016-17 2017-18
Income
Sales Turnover 250.07 299.01 359.20
Excise Duty 22.82 18.05 13.33
Net Sales 227.25 280.96 345.87
Other Income -0.02 -25.68 2.06
Stock Adjustments 9.91 38.11 49.40
Total Income 237.14 293.39 397.33
Expenditure
Raw Materials 20 26 35
Power & Fuel Cost 10 15 18
Employee Cost 15.60 15.60 15.60
Other Manufacturing Expenses 1.93 2.88 3.13
Selling and Admin Expenses 20.2 20.2 20.2
Miscellaneous Expenses 0.45 1.00 1.13
Preoperative Exp Capitalised 0.00 0.00 0.00
Total Expenses 68.18 80.68 91.93
Operating Profit 168.96 212.71 305.4
PBDIT 168.96 212.71 305.4
Interest 9.23 16.97 20.59
PBDT 157.32 195.74 284.81
Depreciation 2.41 3.34 11.72
Other Written Off 0.00 0.00 0.01
Profit Before Tax 154.91 192.4 273.09
Extra-ordinary items -0.19 -0.10 -0.12
PBT (Post Extra-ord Items) 154.72 192.3 272.97
Tax @ 30% 46.41 57.69 81.89
Reported Net Profit 108.304 134.61 191.07
Interpretation
Here we are assuming that kiri industries limited will sell 1000 ton reactive dyes at the cost of 250.07 Rs. Then after for the year 2016-2017 we assume sales to be 5% of 250.07 cr i.e.299.01 and for the year 2017-2018 sales will be 10% of 299.01% i.e. 359.20.variable cost like labor and raw material have increased in three year because of increase in operation and sales. Fuel and power cost have also increased
The operating profit is increase from 168.96 to 212.71 i.e. (43.75) in 2015-2016 to 2016-17and it again increased by. 212.71 to 305.4 i.e.( 92.69) in the year 2016-17 to 2017-18. To increase sales, company need to borrow more and so interest rates are increasing in three consecutive year’s .higher the profits, higher the tax company needs to pay. Tax rate charged is 30%..Net Profit have increased from 108.304 in 2015-2016 to 134.61 in 2016-2017 and then after 191.07 in 2017-2018
Balance Sheet
Particulars 2014-15 2015-16 2016-2017
Sources Of Funds
Total Share Capital 15.00 15.00 11.25
Equity Share Capital 15.00 15.00 11.25
Share Application Money 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00
Reserves 130.23 107.96 52.72
Networth 145.23 122.96 63.97
Secured Loans 155.75 144.32 76.58
Unsecured Loans 173.85 15.58 10.00
Total Debt 329.60 159.90 86.58
Total Liabilities 474.83 282.86 150.55
Application Of Funds
Gross Block 198.98 94.81 58.28
Less: Revaluation Reserves 0.00 0.00 0.00
Less: Accum. Depreciation 21.27 9.54 6.23
Net Block 177.71 85.27 52.05
Capital Work in Progress 0.00 54.08 2.79
Investments 118.27 16.60 4.10
Inventories 145.46 80.31 49.30
Sundry Debtors 65.87 53.29 49.19
Cash and Bank Balance 6.61 7.67 9.81
Total Current Assets 217.94 141.27 108.30
Loans and Advances 96.67 55.56 28.47
Fixed Deposits 5.33 0.00 0.00
Total CA, Loans & Advances 319.94 196.83 136.77
Deferred Credit 0.00 0.00 0.00
Current Liabilities 129.64 63.86 39.93
Provisions 11.48 6.09 5.24
Total CL & Provisions 141.12 69.95 45.17
Net Current Assets 178.82 126.88 91.60
Interpretation
Here there is not much change in equity .it means company is using its reserves to fulfill its cash requirements. Reserves have decreased from 130.23 in 2015- 2016 to 107.96 in 2016- 2017 and then again it decreased to 52.72 in the year 2017-2018
Total Debt i.e. The secured and unsecured loans of the company are decreasing in all the three consecutive years, which shows that the company company’s stability is increasing as liabilities of the companies is decreasing.
Current assets of the company are increasing in three years and currents liabilities are decreasing which indicates good performance of the company.
B. Break Even Analysis
UNITS FIXED COST TOTAL COST TOTAL REVENUE
1200 35.8 41.44 30
1400 35.8 42.38 35
1600 35.8 43.32 40
1800 35.8 44.26 45
2000 35.8 45.2 50
2200 35.8 46.14 55
2400 35.8 47.08 60
7. Findings
There are more opportunities for reactive dyes in New Zealand and Gujarat can grab this opportunities.
At present, India’s share of the dye output globally stands at 5%, with a manufacturing capacity of 1,50,000 tons per annum.
The operating profit decreases from 20.22 to 8.47 i.e. (-11.75) from 14-15 to 15-16 whereas the operating profit increased to16.43 i.e. 24.9 to 8.47. in the year 15-16 to 16-17. Hence increase in operating profit shows the increase in operations incurred by company.
The profit is increased in the year 16-17 because of the decrease in extraordinary expense and excise duty. Hence reportedly exports can be increase.
The secured and unsecured loans of the company is decreasing from the year 14-15, 15-16 to 16-17,in all the three consecutive years, which shows that the company’s stability is increasing as liabilities of the companies is decreasing.
Current ratio of company in year 14-15, 15-16, 16-17 is 3.66, 1.98 and 2.29 which shows good performance of the company.
8. Conclusion
By the end of 2014, India was New Zealand’s tenth largest export market and two-way trade was valued at NZ$1.6 billion. In the two years to 2014, trade increased by 20 percent ($400 million
The Indian chemicals industry currently has a turnover of Rs3,88,500crore ($84 billion), which includes chemicals, petrochemicals, specialty chemicals and pharmaceuticals. It is likely to grow at the rate of 9% per annum, the rate at which the Indian economy is growing. By 2020, the Indian chemical industry is expected to grow to Rs9,25,000crore ($200 billion).
Chemical industry is an important constituent of the Indian economy. Its size is estimated at around US$ 35 billion approx., which is equivalent to about 3% of India’s GDP.
Gujarat contributes 51% national chemical sector output. India is the 3rd largest producer in Asia and 12th largest in world. While NZ is already importing chemicals so there is opportunities for Indian or Gujarat’s producer to export their chemical product suitable to NZ prescriptions.
Gujarat is the chemical hub of the country, contributing around 55% of the Indian chemical industry’s annual turnover.
Chemical offers great potential, but to succeed companies will need to navigate issues such as established local practice, vested interests and relationships, buying centres and distribution channels. There may be opportunities to consult, form joint ventures and take advantage of New Zealand’s strengths in intellectual property and experience around increasing productivity in this sector.
Hence, the main export product for India is colorful dyes and there is need for product in New zealand
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