Description
overview of packaging industry, gives overview of cosmo films. It also provides SWOT analysis of Cosmo films.
COSMO FILMS LIMITED
AGENDA
Overview of the packaging industry ? Company Overview ? Problem Statement and Objective ? SWOT Analysis of Cosmo Films ? Alternatives ? Plan of Action ? Pros of the Chosen Alternative
?
OVERVIEW- INTEGRATED FLEXI-PACKAGING INDUSTRY
? ? ? ? ? ?
Size of industry in 1997- Rs.6150 crores Primary materials of 2 types- Flexible and Rigid Flexible packaging sales- Rs.1300 crores Annual growth rate- 30% Projected growth rate of flexible packaging- 25%-30% BOPP replacing cellophane at a faster rate Packaging Industry
4%
36%
41% Plastics Metals Paper
19%
Glass
USERS
?
Primary material manufacturers, Converters and End users End Users Classified by type of industry and type of companies Type of industries- Food processing industry, Personal care products, Pharma, Liquor, Soft drinks, Dairy products, etc
? ?
Processed food segment
? ? ?
Largest segment- 45% market share Growth rate-14% Main drivers: Ready-to-eat foods segment, New uses for packaging rice, wheat and sugar Market leaders- Flex Industries, Sharp, Essel and Paper Products
?
USERS…CONT?D
Personal care segment
? ?
Market share-20% Drivers- FMCG companies shifting from plain paper wrappers for soap to flexible laminates Lamitubes used for Toothpaste, Pharmaceutical products and personal products such as shaving cream
?
Type of companies- 3 categories- A,B and C
• Premium consumer products • Companies- HLL, Nestle, P&G, Dabur • Segment size-Rs.350 crores • Growth rate- 25%-30% per annum • Medium end of market • Products- Betel-Nut products (Pan Masala), Snacks (Namkeen Bhujia), Spices • Market size- Rs.500 crores • Growth rate- 10%-15% • Most important factor- Price (Rs.5 to Rs.10 less than cat A products) • Secondary factor- Quality • Willing to accept product at discount if below quality standards • Consists of Tobacco products, Betel nut, lower value items • Key feature- Low price, Low quality • Market size- Rs.600 crores • Growth rate- 10%-15% p.a • Clients in „C? category considered risky • Did not show purchases in accounting books • Hence, subject to excise raids which led to raid on suppliers
Type A
Type B
Type C
COMPANY OVERVIEW
Incorporated on October 7, 1976 ? First in India to manufacture BOPP film for packaging and electronic applications. ? 3 production lines with installed capacity of 12700 tonnes. 4th to be set up at Nasik with a capacity of 17000 tonnes. ? Imported 70% of raw material requirement. ? Financed its operations through internal accruals and borrowings. ? Exporter to Europe, Middle East, South East Asia and America
?
PROBLEM STATEMENT
?
Saturated domestic market and the incompetence to explore the international markets
OBJECTIVE
To move from the current cash deficit position to cash surplus situation ? To address the issue of corporate governance and restructure the organization ? To make the organization globally competitive by focusing on the core competence - BOPP
?
SWOT ANALYSIS
STRENGTHS:
• •
• • • •
First in India to commence production of BOPP – a substitute for polyester. 4 production units in Chikalthana, Waluj, Silvasa and Nasik(17000 tonnes) with an installed capacity of 12700 tonnes per annum. First Indian BOPP manufacturing unit to initiate exporting. Low debt-equity ratio as compared to peers R&D expenditure constituting 0.92% of the turnover in 1996-97. Nation wide dealer network
SWOT ANALYSIS
WEAKNESSES - PRODUCTION
•
•
• • •
Barriers in communication across production lines leading to: – High manpower per line – Wastage of spares High first hand rejection rate of 11.88% from Line II and 13.05% from Line III High inventory levels and low conversion ratios Improper maintenance systems Unscheduled purchases of raw materials resulting in no bargaining power
SWOT ANALYSIS
WEAKNESSES – MANAGEMENT
•
•
•
•
Ineffective communication network between the senior management and executives No coordination among the various departments High level of stress in the organization No proper system of setting the targets based on customer requirements
SWOT ANALYSIS
THREATS: ? Falling BOPP prices owing to: ? Intensified competition ? Oversupply in domestic market ? Switching of customers due to the inability to supply what the customer wanted and in time
SWOT ANALYSIS
OPPORTUNITIES: Key clients include leading FMCG companies growing at a rate of 14% ? The packaging industry is expected to grow at a healthy pace of 20%. ? Focus on exports – competing with the best in the most demanding markets
?
ALTERNATIVE 1
?
To expedite the process of the ERP implementation
To tie up with NIIT, APTECH to increase the computer literacy in employees ? This would help them get acquainted with ERP and make most of it ? This would solve the productionplanning, forecasting, material management and internal communication issues
?
ALTERNATIVE 2
?
To set up a separate export department
?
? ?
To explore the international markets like BRIC and EU Domestic market is saturated. Hence it would be difficult to consolidate organically. Focus on international markets would help in channeling efforts and exploring new opportunities
This will boost the sales but will not address the issues of production planning and communication which are of utmost priority
ALTERNATIVE 3
?
To acquire majority stake in Gujarat Pro pack
The domestic market is saturated with excess supply ? The companies are facing price war due to lower demand and high power in consumer?s hand ? The only way to grow in a saturated market would be through inorganic growth (Eg. Acquisition of Gujarat Pro pack) ? Also enables company to cover larger domestic market
? ?
Cannot be taken with immediate effect as:
Cash deficit company ? Borrowed loans at high interest rates
?
ALTERNATIVE 4
?
Improvement in the operating efficiencies of the lines ? Synchronize the speed of different equipment in a particular production line ? Implementation of the quality management tools like TQM, Six Sigma etc. to reduce rejections and optimize the process ? To set up a recycling plant for the waste obtained during manufacturing process ? Shift from “produce and sell” to “production against only confirmed orders”. The issue of coordination among the various departments still persists
PLAN OF ACTION
To expedite the process of ERP implementation ? Form a team internally to manage the implementation ? Fix up a deadline for the complete implementation of ERP package ? Train the executives in computer applications for business process management. ? Continuous interaction with the consulting team ? Benchmark the performance with its peers
PROS OF THE CHOSEN ALTERNATIVE
Prevent duplication of data and errors in reentry ? Lead to coordination among the departments ? Cost Cutting
?
Lower the inventory level ? Lower the workforce per line ? Greater bargaining power from international suppliers
?
Expedite the decision making process ? Reduce the order processing time and thereby, the R&D team would be more responsive to customer needs ? Increase the sales collection
?
THANK YOU!!
doc_212950684.pptx
overview of packaging industry, gives overview of cosmo films. It also provides SWOT analysis of Cosmo films.
COSMO FILMS LIMITED
AGENDA
Overview of the packaging industry ? Company Overview ? Problem Statement and Objective ? SWOT Analysis of Cosmo Films ? Alternatives ? Plan of Action ? Pros of the Chosen Alternative
?
OVERVIEW- INTEGRATED FLEXI-PACKAGING INDUSTRY
? ? ? ? ? ?
Size of industry in 1997- Rs.6150 crores Primary materials of 2 types- Flexible and Rigid Flexible packaging sales- Rs.1300 crores Annual growth rate- 30% Projected growth rate of flexible packaging- 25%-30% BOPP replacing cellophane at a faster rate Packaging Industry
4%
36%
41% Plastics Metals Paper
19%
Glass
USERS
?
Primary material manufacturers, Converters and End users End Users Classified by type of industry and type of companies Type of industries- Food processing industry, Personal care products, Pharma, Liquor, Soft drinks, Dairy products, etc
? ?
Processed food segment
? ? ?
Largest segment- 45% market share Growth rate-14% Main drivers: Ready-to-eat foods segment, New uses for packaging rice, wheat and sugar Market leaders- Flex Industries, Sharp, Essel and Paper Products
?
USERS…CONT?D
Personal care segment
? ?
Market share-20% Drivers- FMCG companies shifting from plain paper wrappers for soap to flexible laminates Lamitubes used for Toothpaste, Pharmaceutical products and personal products such as shaving cream
?
Type of companies- 3 categories- A,B and C
• Premium consumer products • Companies- HLL, Nestle, P&G, Dabur • Segment size-Rs.350 crores • Growth rate- 25%-30% per annum • Medium end of market • Products- Betel-Nut products (Pan Masala), Snacks (Namkeen Bhujia), Spices • Market size- Rs.500 crores • Growth rate- 10%-15% • Most important factor- Price (Rs.5 to Rs.10 less than cat A products) • Secondary factor- Quality • Willing to accept product at discount if below quality standards • Consists of Tobacco products, Betel nut, lower value items • Key feature- Low price, Low quality • Market size- Rs.600 crores • Growth rate- 10%-15% p.a • Clients in „C? category considered risky • Did not show purchases in accounting books • Hence, subject to excise raids which led to raid on suppliers
Type A
Type B
Type C
COMPANY OVERVIEW
Incorporated on October 7, 1976 ? First in India to manufacture BOPP film for packaging and electronic applications. ? 3 production lines with installed capacity of 12700 tonnes. 4th to be set up at Nasik with a capacity of 17000 tonnes. ? Imported 70% of raw material requirement. ? Financed its operations through internal accruals and borrowings. ? Exporter to Europe, Middle East, South East Asia and America
?
PROBLEM STATEMENT
?
Saturated domestic market and the incompetence to explore the international markets
OBJECTIVE
To move from the current cash deficit position to cash surplus situation ? To address the issue of corporate governance and restructure the organization ? To make the organization globally competitive by focusing on the core competence - BOPP
?
SWOT ANALYSIS
STRENGTHS:
• •
• • • •
First in India to commence production of BOPP – a substitute for polyester. 4 production units in Chikalthana, Waluj, Silvasa and Nasik(17000 tonnes) with an installed capacity of 12700 tonnes per annum. First Indian BOPP manufacturing unit to initiate exporting. Low debt-equity ratio as compared to peers R&D expenditure constituting 0.92% of the turnover in 1996-97. Nation wide dealer network
SWOT ANALYSIS
WEAKNESSES - PRODUCTION
•
•
• • •
Barriers in communication across production lines leading to: – High manpower per line – Wastage of spares High first hand rejection rate of 11.88% from Line II and 13.05% from Line III High inventory levels and low conversion ratios Improper maintenance systems Unscheduled purchases of raw materials resulting in no bargaining power
SWOT ANALYSIS
WEAKNESSES – MANAGEMENT
•
•
•
•
Ineffective communication network between the senior management and executives No coordination among the various departments High level of stress in the organization No proper system of setting the targets based on customer requirements
SWOT ANALYSIS
THREATS: ? Falling BOPP prices owing to: ? Intensified competition ? Oversupply in domestic market ? Switching of customers due to the inability to supply what the customer wanted and in time
SWOT ANALYSIS
OPPORTUNITIES: Key clients include leading FMCG companies growing at a rate of 14% ? The packaging industry is expected to grow at a healthy pace of 20%. ? Focus on exports – competing with the best in the most demanding markets
?
ALTERNATIVE 1
?
To expedite the process of the ERP implementation
To tie up with NIIT, APTECH to increase the computer literacy in employees ? This would help them get acquainted with ERP and make most of it ? This would solve the productionplanning, forecasting, material management and internal communication issues
?
ALTERNATIVE 2
?
To set up a separate export department
?
? ?
To explore the international markets like BRIC and EU Domestic market is saturated. Hence it would be difficult to consolidate organically. Focus on international markets would help in channeling efforts and exploring new opportunities
This will boost the sales but will not address the issues of production planning and communication which are of utmost priority
ALTERNATIVE 3
?
To acquire majority stake in Gujarat Pro pack
The domestic market is saturated with excess supply ? The companies are facing price war due to lower demand and high power in consumer?s hand ? The only way to grow in a saturated market would be through inorganic growth (Eg. Acquisition of Gujarat Pro pack) ? Also enables company to cover larger domestic market
? ?
Cannot be taken with immediate effect as:
Cash deficit company ? Borrowed loans at high interest rates
?
ALTERNATIVE 4
?
Improvement in the operating efficiencies of the lines ? Synchronize the speed of different equipment in a particular production line ? Implementation of the quality management tools like TQM, Six Sigma etc. to reduce rejections and optimize the process ? To set up a recycling plant for the waste obtained during manufacturing process ? Shift from “produce and sell” to “production against only confirmed orders”. The issue of coordination among the various departments still persists
PLAN OF ACTION
To expedite the process of ERP implementation ? Form a team internally to manage the implementation ? Fix up a deadline for the complete implementation of ERP package ? Train the executives in computer applications for business process management. ? Continuous interaction with the consulting team ? Benchmark the performance with its peers
PROS OF THE CHOSEN ALTERNATIVE
Prevent duplication of data and errors in reentry ? Lead to coordination among the departments ? Cost Cutting
?
Lower the inventory level ? Lower the workforce per line ? Greater bargaining power from international suppliers
?
Expedite the decision making process ? Reduce the order processing time and thereby, the R&D team would be more responsive to customer needs ? Increase the sales collection
?
THANK YOU!!
doc_212950684.pptx