Financial performances & Evaluation of ACI Godrej Agrovet Private Ltd. Chapter I 1. Introduction 2. Objective of The study 3. Methodology of the study 4. Scope of the study 1.1 Introduction Organizational performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives). Specialists in many fields are concerned with organizational performance including strategic planners, operations, finance, legal, and organizational development. In recent years, many organizations have attempted to manage organizational performance using the balanced scorecard methodology where performance is tracked and measured in multiple dimensions such as: financial performance and evaluation (e.g. shareholder return) customer service social responsibility (e.g. corporate citizenship, community outreach) employee stewardship ACI Godrej Agrovet Private Limited is a joint venture company formed by a 50:50 stake of ACI Limited, Bangladesh and Godrej Agrovet Limited, India. The company started its business in Bangladesh at the end of the year 2004 with Poultry Feed. It started Hatchery and Breeding Farm Operations in February 2007. The Company launched and started selling Fish Feed at the same time. In July 2009, it diversified its product portfolio and introduced Shrimp Feed and Cattle Feed. ACI Godrej Agrovet Private Limited is into the business of providing integrated solution to the market by manufacturing and marketing quality Poultry, Aqua, Cattle Feed and Day Old Chicks, not only for business purpose but also for the improvement of socio economic condition of the farm owners of Bangladesh.
1. Introduction2. Objective of The study3. Methodology of the study4. Scope of the study
1.1 IntroductionOrganizational performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives).Specialists in many fields are concerned with organizational performance including strategic planners, operations, finance, legal, and organizational development.In recent years, many organizations have attempted to manage organizational performance using the balanced scorecard methodology where performance is tracked and measured in multiple dimensions such as:
financial performance and evaluation (e.g. shareholder return) customer service social responsibility (e.g. corporate citizenship, community outreach) employee stewardship
ACI Godrej Agrovet Private Limited is a joint venture company formed by a 50:50 stake of ACI Limited, Bangladesh and Godrej Agrovet Limited, India. The company started its business in Bangladesh at the end of the year 2004 with Poultry Feed. It started Hatchery and Breeding Farm Operations in February 2007. The Company launched and started selling Fish Feed at the same time. In July 2009, it diversified its product portfolio and introduced Shrimp Feed and Cattle Feed. ACI Godrej Agrovet Private Limited is into the business of providing integrated solution to the market by manufacturing and marketing quality Poultry, Aqua, Cattle Feed and Day Old Chicks, not only for business purpose but also for the improvement of socio economic condition of the farm owners of Bangladesh.
1.2 Objective of The study
The main objective of the study is to critically scrutinize the existing position of financial performance and evaluation Of ACI Godrej Agrovet Ltd. The main objective of this report is:
To collect the internal working program To get a brief overview of the entire business structure of Aci Godrej Agrovet
Ltd. To determine future prospects of ACI godrej Agrovet Ltd. To identify how can ACI godrej capture its market to check and analyze financial ratios to identify sources of data to identify product of the company
1.3. Methodology
Theoretically the study is founded on the existing financial data and research studies conducted on “Future plans of ACI Godrej Agrovet Ltd” in general.Knowledge is identified mainly from primary sources of different activities of respondents like finance employee, sales representatives and internal auditor, through imaginative structured questionnaire. For analyzing ratio I used MS excel and MS word. And used books as secondary source of information. Websites were also used as secondary sources.
Chapter- II
2.1. Historical Background Of ACI Ltd2.2. Historical Background Of Godrej Agrovet Ltd
2.3. Background of ACI godrej Agrovet Ltd
2.1. Historical Background Of ACI LtdACI was established as the subsidiary of Imperial Chemical Industries (ICI) in the then East Pakistan in 1968. After independence the company has been incorporated in Bangladesh on the 24th of January 1973 as ICI Bangladesh Manufacturers Limited and also as Public Limited Company. This Company also obtained listing with Dhaka Stock Exchange on 28 December, 1976 and its first trading of shares took place on 9 March, 1994. Later on 5 May, 1992, ICI plc divested 70% of its shareholding to local management. Subsequently the company was registered in the name of Advanced Chemical Industries Limited. Listing with Chittagong Stock Exchange was made on 22 October 1995.Advance Chemical Industries (ACI) Limited is one of the leading conglomerates in Bangladesh, with a multinational image. ACI is a Public Limited Company with a total number of 19,653 shareholders. Among these, there are three foreign and fifty local institutional shareholders. The company has diversified into three major businesses. Besides these, the company has a large list of international associates and partners with various trade and business agreements.Strategic Business Units
a. Crop Care and Public Healthb. Livestock & Fisheriesc. Fertilizerd. Cropexe. Seeds
Aci has the following subsidiaries- ACI Formulations Limited Apex Leather crafts Limited ACI Salt Limited ACI Pure Flour Limited ACI Foods Limited Consolidated Chemicals Limited Premiaflex Plastics Limited Creative Communication Limited ACI Motors Limited ACI Logistics Limited
Joint Ventures- ACI Godrej Agrovet Private Limited Tetley ACI (Bangladesh) Limited Asian Consumer Care (Pvt) Limited
Management CommitteeMr. M Anis Ud Dowla Chairman Puneet Pokhriyal Managing DirectorDr. F.H. Ansarey Executive Director, AgribusinessesMr. Syed Alamgir Executive Director,
Consumer BrandsMr. M. Mohibuz Zaman Chief Operating Officer, PharmaceuticalsMr. Muallem A. Choudhury Executive Director,
Finance and PlanningMr. Asif Iqbal Chief Operating Officer,
Corporate CommunicationMr. Towfiqur Rahman Director Business DevelopmentMr. Priyatosh Datta Director, Quality AssuranceMr. Pradip Kar Chowdhury Financial ControllerMs. Sheema Abed Rahman Director Corporate AffairsMr. Abdus Sadeque Director, Marketing & SalesMr. Imam Ahmed Istiak General Manager, OperationsFinancials (Year Ending December 2008)Authorized Capital Taka 500 MillionPaid Up Capital Taka 162 Million Sales Taka 7,370 MillionNumber of Employees 3,380
Our MissionACI’s mission is to enrich the quality of life of people through responsible application of knowledge, skills and technology. ACI is committed to the pursuit of excellence through world-class products, innovative processes and empowered employees to provide the highest level of satisfaction to its customers. Our VisionTo realize the mission ACI will:
Endeavor to attain a position of leadership in each category of its businesses. Attain a high level of productivity in all its operations through effective and efficient
use of resources, adoption of appropriate technology and alignment with our core competencies.
Develop its employees by encouraging empowerment and rewarding innovation. Promote an environment for learning and personal growth of its employees. Provide products and services of high and consistent quality, ensuring value for
money to its customers. Encourage and assist in the qualitative improvement of the services of its suppliers
and distributors. Establish harmonious relationship with the community and promote greater
environmental responsibility within its sphere of influence.
Distribution NetworkThe company maintains strategically located sales centers in nineteen different locations across the country. It has developed an advanced distribution system through its more than 300 skilled and trained manpower and a large fleet over eighty vehicles. The distribution system is capable of handling continuing volume of diverse range of products from the various businesses.Business UnitsACI carries the legacy of ICI- world renowned British Multinational in providing the people of Bangladesh with quality medicines and healthcare products. Its state-of-the art pharmaceutical plant represents Bangladesh’s quest for a truly world class manufacturing facility. ACI’s rich heritage leads to innovative and higher value added formulations.The comprehensive product range of ACI pharmaceuticals include products from all major therapeutic classes and in various dosage forms like tablet, capsule, dry powder, liquid, cream, gel, ointment, ophthalmic and inject able. ACI Parma also has state of the art plant on Novel Drug Delivery System (NDDS). It produces world class Modified Release drug and medicine to cater the requirement of pharmaceutical manufacturer of domestic and international market. It exports high quality pharmaceuticals to a good number of countries of Asia, Africa & South America.Consumer Brands & Commodity Products:The Consumer Brands Division boasts in having an unequivocal presence in consumers' heart with the market leading brands like ACI Aerosol, ACI Mosquito Coil, Savlon. These are the persistent performers in keeping the household clean and free from germs and harmful insects.The necessity of pure food in the minds of Bangladeshi consumers especially in the commodity food business has pushed ACI to fill up the market gap by producing commodity products such as Salt, Flour and Spices. Now the customers of Bangladesh are ensured with 100% pure Salt, Spices products and Wheat products under the brand name of “ACI Pure”. ACI also represents the world renowned product range of Colgate, Nivea, Tetley, Godrej & Dabur in Bangladesh through distribution and forming joint ventures.AgribusinessesACI Agribusiness is the largest integrator in Bangladesh in Agriculture, Livestock and Fisheries and deals with Crop Protection, Seed, Fertilizer, Agrimachineries, and Animal Health products. These businesses have glorified presence in Bangladesh.ACI Agribusiness is having strong partnership with national and international R & D companies, universities and research institutions. Before introducing any product, it is elaborately tested in the laboratory and farmer’s field. ACI provides solution to the farmers through a large team of scientists & skilled professionals.Creative Communication Ltd:Creative Communication is an integrated communication firm founded in 2000, staffed by dedicated and pragmatic specialists working as one team. As a forward-thinking marketing and advertising firm, Creative Communication is a solid partner at both strategic and tactical levels and has developed several partnerships with the most state-of-the-art players in numerous fields.
Manufacturing facilitiesACI has seven separate manufacturing plants in the outskirts of Dhaka. ACI Pharmaceutical plant is located in a scenic location on the bank of Shitolakkha in Narayanganj. While being as friendly as possible to the environment, this modern plant is enriched with modern production system which strictly follows cGMP PRESCRIBED by WHO.In the midst of lush greeneries of Bhowalerghor, the land of legendry Rajshonnashi, stands the state of the art plant of the ACI Formulations. This plant produces -Crop Protection Products & consumer products.ACI Salt factory is the pioneer of the evaporation salt refining technology in Bangladesh and is producing the number one salt brand- ACI salt in the country.ACI Flour plant has been built on the bank of Shitolakkha with world’s best technology keeping in mind to provide the best quality flour to the consumers.
In the midst of the vast agricultural land of Sirajgonj, ACI Foods factory stands with the modern technology with the commitment to provide pure, fresh & hygienic ready to eat foods & spices.The ACI Tetley factory is located in a beautiful site of Konabari and is producing the world’s reputed Tetley brand with consistent quality.ACI Godrej Agrovet plant is producing poultry and fish feeds standing in the midst of a scenic rural environment in Sirajganj.Strengths of ACI:
ACI Limited is the first company in Bangladesh to have attained the ISO 9001 certification for Quality Management System and ISO 14001 for Environmental Management System.
ACI has endorsed the Principles of Global Compact ACI Limited is a Founding Member of the Community of Global Growth
Companies ACI has a distribution network which is supported by nineteen depots all over the
country located and connected with WAN. ACI has the largest international association with world renowned companies. ACI has the right environment for individual growth and development and maintains adaptive HR Policies.
ACI CentreThe corporate headquarter of ACI is named as “ACI Centre” which has international working facilities. Aesthetically this is one of the best corporate office in Bangladesh with a beautiful lush green lawn. ACI centre has a covered space of 70,000 sq. feet and all work stations are provided with state-of-the-art fiber optic connectivity. Value of People in ACIOur vision is to contribute to the personal development of employees to their full potential. We encourage our employees to acquire new skills and enhance their career. We expect all employees to avail this opportunity.
ACI is an equal opportunity company. We do not distinguish between gender, race, religions or personal belief.
Equal Opportunities Policy
Advanced Chemical Industries Limited is committed to ensure that the principle of equality of opportunity is applied in all areas of its operation. The Management has adopted the following Policy:
Equal Opportunities Policy Statement
1. The equal opportunity policy of the company is that in the recruitment, selection, training, appraisal, development and promotion of staff, the only consideration must be that the individual meets, or is likely to meet, the requirements of the program or post.
2. The requirements being met, no employee will be discriminated against on the basis of their sex, race, color, ethnic origin, nationality (within current legislation), marital status, caring or parental responsibilities, age, or beliefs on matters such as religion and politics.
3. The above policy guidelines also apply to selection of and dealings with all business partners.
4. ACI Limited is committed to provide a working and social environment in which the rights and dignity of all its members are respected, and which is free from discrimination, prejudice, intimidation and all forms of harassment. Contact Information:
Company Name Advanced Chemical Industries LimitedAddress 245 Shaheed Tazuddin Ahamed Soroni, Tejgoan ,
(Industrial Area) Dhaka 1208Phone 880 2 9885694Fax 880 2 9886029Email [email protected] Web Page www.aci-bd.com2.2. Historical Background Of Godrej Agrovet LtdGODREJ Agrovet Limited was formerly a division of GODREJ Soaps Limited. It was set up as a separate company with a focus on the agri-sector. Over the years, the company has developed and nurtured a close relationship with the farmers. Providing them with innovative products, as well as educating them on world-class farming practices.Together with its subsidiary Goldmohur Foods and Feeds Limited, GODREJ Agrovet has revenues close to Rs.1210 Crore (US$ 300 million – FY 2007). The activities of the company are vast: Compound Animal Feeds, Agricultural Inputs, Integrated Poultry Business, Oil Palm Plantations, Plant Biotech, Retailing of Fresh Farm Produce, Agricultural inputs and many other products that are required in the rural areas.GODREJ Agrovet acquired Goldmohur Foods And Feeds Limited in year 2001. Goldmohur Foods and Feeds is a leader in Animal Feed Business, with focus on Poultry Feed. Goldmohur Foods and Feeds enjoy strong brand equity for its Poultry and Cattle Feed Brands. GFFL has a state of the art R&D center in Bangalore “ANIC” (Animal Nutrition Innovation Centre) devoted to development of innovative animal feed products. Recently Goldmohur Foods and Feeds Limited have been merged with Godrej Agrovet Ltd (GAVL) thereby making GAVL the undisputed Industry Leader in Animal Feed Business in India.Today Godrej Agrovet together with its subsidiary has manufacturing facilities spread over 40 strategic locations and a network of over 10,000 distributors, dealers and C&F agents. In its journey of growth, Godrej Agrovet has set new standards of corporate performance, delivering reliable, quality products and services to all its customers’ at the most competitive costs.STRATEGIC TIE-UPS
Strategic tie-ups, acquisitions, joint ventures have been a way of life in GAVL. Meaningful alliances and useful acquisitions have been providing impetus to the growth of GAVL. The acquisition of businesses have been in different segments starting from Gold Mohur Foods and Feeds (Animal Feed), India Poultry Farm (Poultry), Strategic investments (of around 26%) have been made in industries, which have a strategic fit and which complement our existing businesses like Cream line (Dairy), Polchem (Bio-technology)GLOBAL FORAYS:GODREJ Agrovet Limited has been spreading its wings and has started making its presence felt in the international arena too. Joint venture with ACI group of Bangladesh for poultry and feed operations in Bangladesh and Al-Rahaba, which is into the poultry business in Middle East are just the beginning.About the Godrej GroupThe Rs 10,795 Crore (US$ 2.22 Billion – FY-2009) Godrej Group is one of India’s largest professionally run private sector groups. It has a well-established presence in varied businesses ranging from foods to consumer durables to real estate and information technology. In 1997, Godrej completed 100 years of service to the nation. Today, the name Godrej is synonymous with Quality & Trust. It is amongst the most admired Business Groups in India, delivering quality products and services to its customers at competitive costs. All this, with the highest international standards of customer care. Key Highlights
Godrej Agrovet Limited is a Rs.1210 Crore (US$ 300 million – FY 2009) company. Manufacturing facilities spread over 40 strategic locations. Network of over 10,000 distributors, dealers and C&F agents. First company in India to retail processed and fresh chicken, under the brand name
“Godrej Real Good Chicken”. First company in India to retail fresh fruits and vegetables, under the brand name
“Godrej Nature’s Basket”.i First company in India to set up rural retail centers for complete agri solutions, under
the brand name “Godrej Aadhaar”.Agri-Inputs The Agri-Inputs division of Godrej Agrovet Limited was started in the year 1997. Its primary objective was to market plant growth promoters developed by the company’s very own in-house R & D Department. There’s been no looking back since then. Today, the division can take credit for creating many unique and innovative agricultural solutions that cover the entire range of agricultural crops.Animal Feed India’s No.1 Animal Feed Manufacturer; Godrej Agrovet is no new comer to the Animal Feeds industry. It has a rich experience of over 3 decades. In this time, it has grown into the largest producer of commercial Animal Feed in India, with a strong presence in Dairy Feed, Aqua Feed and the Poultry Feed sectors. Its production facilities spread over 40 locations across the country. Despite the vast geographical and cultural diversity of India, Godrej Agrovet has managed to develop a quality feed which is appreciated by farmers all across the country. This can only be attributed to its strong grass root level understanding of India. Godrej Agrovet’s success in the livestock sector is based on a single guiding principal: What’s good for the consumer is good for business. A great example of this philosophy in action is Manthan – a highly creative and effective demand creation model that guides and provides customized solutions to help cattle farmers increase milk output and also market the end produce.
It is successful initiatives like this that have not only benefited the farmers, but have also made Godrej Agrovet the leader in this business.Key Highlights
No.1 in Cattle Feed 1st to market poultry feed in crumb form 1st to market poultry feed in pellet form No.1 in commercial broiler feed
Integrated Poultry Business It is foresight that led the way for Godrej Agrovet in the Indian poultry industry. They correctly predicted that poultry farming would evolve from a backyard business to a consolidated, value added business. In anticipation of this, they set up their Integrated Poultry Business (IPB) in 1999 with a view to organize the chicken processing industry and give it a professional and modern approach. Today, the company now covers breeding, rearing of IPB has turned out to be one of the key forward diversifications of Godrej Agrovet. It has the support of world-class infrastructure, professionalism and the relentless pursuit of providing the Indian consumer with superior quality products.Key Highlights
First to give the poultry industry in India a professional and modern approach Covers entire spectrum of the poultry business, from farm to plate Has world-class farms and state-of-the-art processing plants Launched Godrej Real Good Chicken, the number one brand in India for retailed
processed fresh chicken.JV with Tyson Food Inc USA for Poultry Business.Tyson Foods Inc is the world leader in the processed meat business; GAVL has entered into a JV with Tyson for benefiting from their global expertise and technological edge. A new Company has been formed named Godrej Tyson Foods Ltd and the processing part including the Real Good Chicken and Yummizies brands has been transferred to this JV. This JV is expected to establish GAVL as market leader in Poultry business in India over the coming years. GAVL holds 49% in this JV.Oil Palm Business: Godrej Soaps Ltd set up Oil Palm Plantations in Andhra Pradesh and Goa in the early 90’s. In 1997, the Oil Palm Division was transferred to Godrej Agrovet.
Over the years, Godrej Agrovet has developed 6500 Hectares of oil palm in Andhra Pradesh, Goa and Karnataka. Oil mills too, have been set up in Andhra Pradesh and Goa to produce crude palm oil.Godrej Agrovet has also put together a dedicated extension team that helps oil palm growers improve productivity. The company has set up a one-stop shop providing farmers with seeds, fertilizers, pesticides, technical guidance on cultivation and 100 % buy back of fresh fruit bunches.With such a strong commitment to development and service, is it any wonder that Godrej Agrovet is today, the largest processor of oil palm in the country?The company has constructive plans for the future. In order to bridge the gap between demand and production for edible oils, Godrej Agrovet has committed itself to increase vegetable oil production in the country. To this end, the company has already commenced oil palm plantation activities in Gujarat, Orissa and Mizoram. Key Highlight
Largest producer of oil palm in India Dedicated and Trained team
Factories in Andhra Pradesh and Goa Supported by best quality seed & 100% buy back of fresh fruits.
New Associations formed in the Oil plantation Business:1) Godrej Oil Plantations Ltd : The Oil palm business and Jatropha plantation carried on by of GAVL with all the assets and liabilities in the states of Andhra Pradesh, Orrisa, Mizzoram and Gujrat has been demereged from GAVL and has been transferred to GOPL. The effective date of business transfer as per the court order is 1st April’2007.Subsequently 20% of shares in GOPL were sold to Blessed Resources pte Ltd of Singapore on 25.02.20082) Godrej Oil Palm Ltd:
The Oil palm plantation business along with all the assets and liabilities of GAVL in the states of Goa and Karnataka has been demereged from GAVL and has been transferred to GOPL. The effective date of this transfer as per the courts order is st April’2007. Further GOPL has been renamed as Godrej Gokarna Oil Palm Ltd (GGOPL) and subsequently 51% of shares in GGOPL were sold to IJM Plantations Berhad of Mauritius on 25.02.2008.
3) Cauvery Palm Oil Ltd :GAVL has acquired 51% in Cauvery Palm Oil Ltd (Chennai) ,this investment was made on 1st March’08 .The investment will help in strengthening GAVL’s interest in the Oil palm business and gives access to the oil palm plantation in the state of Tamil Nadu (as allotted to CPOL). COPL is now a Subsidiary company of GAVL.
Plant Biotech DivisionGodrej Plant Biotech Division, a part of Godrej Agrovet is one of the largest companies in India engaged in micro-propagation of plants through tissue culture. It is also actively involved in contract research on anther culture, seasonal variation, production of secondary metabolites through plant cell culture and genetic engineering. It also exports foliage, flowering, fruits and medicinal and oil bearing plants.2.3. Background of ACI GODREJ Agrovet Private limitedACI GODREJ Agrovet Private limited is a 50:50 joint venture Company formed by Godrej Agrovet Limited-India, a reputed company belonging to the Godrej Group of India and ACI Limited, a highly respected Corporate of Bangladesh. The company’s investments, Include a feed mill project in Sirajganj, a hatchery project near Joina Bazar, Gazipur and a Breeder farm in North Bengal in Panchagarh. Over the past few years the Poultry farming is slowly transformed from the backyard venture to full scaled scientific manner and is attaining the status of an allied agro industry have developed a number of commercial undertakings base on mainly increased local demand. Despite infrastructures inadequacies, a good number of progressive farmers are coming into these businesses, apart from the efforts of public and private sectors, certain Non-Governmental Organizations (NGO) are also vigorously attempting to spread the practice of organized farming of poultry.
The basic purpose of the breeding farm is to provide quality day old chicks for the commercial broiler farmers of this country thereby playing a pivotal role to satisfy the growing Protein needs of the country, the marketing of the products will be carried out by the company with its own dealer network in the whole of Bangladesh. 1. Capital Structure:The Capital structure of the company is as follows-Authorized capital : BDT 500,000,000Paid up capital : BDT 270,000,000Face value per share : BDT 100
2. Sponsor & Share holding position:
Name No. Of Share
Share Amount Position
Net worth as as of June, 2009
( Tk)
Advance Chemical Industries Ltd (ACI)
1,350,000 135,000,000 50% 125,499,058
Godrej Agrovet Limited, India
1,350,000 135,000,000 50% 125,499,058
Total 2,700,000 270,000,000 100% 25,0998,116
3. Key highlights of the JV agreement between ACI Limited & Godrej Agovet Limited, India:i) Registered office: During the term of this agreement the registered office of
the JVCO shall be the ACI Centre, 245 Tejgaon I/A, Dhaka-1208.ii) Share capital: The parties agree that each of Godrej Agrovet Limited and
ACI shall subscribe take up and hold 50% each of the subscribed share capital of the JVCO.All equity shares shall be of the same class and shall be take in all respects and the holders thereof shall be entitle to identical rights & privileges including without limitation to identical rights /privileges with respect to dividend, voting rights, distribution of assets in the event of voluntary or involuntary liquidation, dissolution or winding up of the JVCO.
iii) Contribution: Godrej Agrovet Limited, India: Godrej Agrovet Limited, India shall assist the JVCO in the selection of machinery and equipment for the JVCO and for establishing research and development facilities with respect to the products.ACI Limited: ACI agrees that it will secure long term loans for the JVCO from Bangladesh financial institutions, Bank on terms and conditions to be agreed upon by JVCO and the financial institutions /Bank.
iv) Decision making: No major decisions will be considered as passed without the affirmative vote of at least one director nominated by each of ACI and GAVL at Board meeting and/or all share holders at general meeting.
v) Profit/Loss Sharing/Dividend: 50:50 of profit/loss share. The amount and
timing for declaration and payment any dividend or making any other distribution of profits by the JVCO. The parties hereto agree that the JVCO shall declare and pay dividend in respect of each financial year of 50% of post tax profits of the JVCO unless otherwise recommended by the Board of the Directors.
vi) Management participation: The managing director of the JVCO shall function to supervision, superintendence and control of and on such terms and
conditions as would be approved by the Board of Directors of the JVCO and shall be a person nominated by Godrej Agrovet Limited, India.
4. Key Strategic advantage of AGAPL over existing playersAGAPL enjoys a lot of advantages in Bangladesh. This is because of the expertise available from the Godrej Agrovet Limited of India which has the experience in Poultry Feed production technologies, latest nutritional research, development & technologies, Breeding Farm management and Hatchery management. Due to this we have expert expatriates, at all key areas, who are trained in the skills required to deliver the optimum performance at these levels.We are proud to say that we are the least cost producers of Animal Feeds in the country. Latest available information on Hatchery costs shows that we are also one of the least cost producers of DOC in the country. As the cost of production is low, the profit margins are higher as compared to the competition. The high margin provides good surplus money during upturn in the business cycles and reduces losses during downturn.As majority of the key Raw Materials are imported from India, the company leverages its advantages in the sourcing and timing of procurement to its advantage. As the Commercial department employees keep a regular and direct contact with the Indian counterparts, they are able to get important decision making information on Raw materials which give a direct impact on the bottom line. AGAPL also enjoys a good reputation in the Industry. It is a member of many representatives’ bodies and enjoys an ear to the changes on policy levels taken by the bureaucrats for the Industry. AGAPL products are known for their “good value” to the customers. The products are positioned in the value segment where the price of the products is high but the value or benefit provided to the customers is also high. In all of the product categories, the Company enjoys good reputation.AGAPL is known and respected by its competitors who keep a strong watch on its activities.Sales strategy:
Creates new customers Sells more to present customers Builds long-term relationships Provides solutions to customer’s problems Provides service to customers Helps customers resell products to their customers Helps customers use products after purchase
Chapter- III3.1 Definition of Internship Program3.2 Terminology Of Management3.3 Defination of Finance
3.1 Definition of Internship ProgramDefinition: An internship is an opportunity to integrate career related experience into an undergraduate education by participating in planned, supervised work.Characteristics of internships:• contributes to the student’s personal and professional development through challenging work assignments• is completed before the student graduates from the university although in some cases internships can be completed the summer between the student completing the undergraduate degree and before beginning a graduate degree program• is planned and scheduled through consultation with the department or college so as to fit into the undergraduate experience
• involves a supervision component that is mentoring and educational• includes career related experiences that complement what is learned in the classroom• will have a reflection and evaluation process at the conclusion of the internship• builds upon the relationship the department/college/university has with employers• is most successful when the student, the department/college, and the employer all share responsibility in making it a valuable experience
3.2 Terminology Of ManagementManagement in all business and human organization activity is simply the act of getting people together to accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources.Management can also refer to the person or people who perform the act(s) of management.The verb manage comes from the Italian maneggiare (to handle — especially a horse), which in turn derives from the Latin manus (hand). The French word mesnagement (later ménagement) influenced the development in meaning of the English word management in the 17th and 18th centuries.[1]
Some definitions of management are:
Organization and coordination of the activities of an enterprise in accordance with certain policies and in achievement of clearly defined objectives. Management is often included as a factor of production along with machines, materials, and money. According to the management guru Peter Drucker (1909–2005), the basic task of a management is twofold: marketing and innovation.
Directors and managers who have the power and responsibility to make decisions to manage an enterprise. As a discipline, management comprises the interlocking functions of formulating corporate policy and organizing, planning, controlling, and directing the firm's resources to achieve the policy's objectives. The size of management can range from one person in a small firm to hundreds or thousands of managers in multinational companies. In large firms the board of directors formulates the policy which is implemented by the chief executive officer.
Theoretical scopeMary Parker Follett (1868–1933), who wrote on the topic in the early twentieth century, defined management as "the art of getting things done through people". She also described management as philosophy. One can also think of management functionally, as the action of measuring a quantity on a regular basis and of adjusting some initial plan; or as the actions taken to reach one's intended goal. This applies even in situations where planning does not take place. From this perspective, Frenchman Henri Fayol considers management to consist of seven functions: 1. planning 2. organizing 3. leading 4. co-ordinating 5. controlling 6. staffing 7. motivating
Some people, however, find this definition, while useful, far too narrow. The phrase "management is what managers do" occurs widely, suggesting the difficulty of defining management, the shifting nature of definitions, and the connection of managerial practices with the existence of a managerial cadre or class.
One habit of thought regards management as equivalent to "business administration" and thus excludes management in places outside commerce, as for example in charities and in the public sector. More realistically, however, every organization must manage its work, people, processes, technology, etc. in order to maximize its effectiveness. Nonetheless, many people refer to university departments which teach management as "business schools." Some institutions (such as the Harvard Business School) use that name while others (such as the Yale School of Management) employ the more inclusive term "management."
English speakers may also use the term "management" or "the management" as a collective word describing the managers of an organization, for example of a corporation. Historically this use of the term was often contrasted with the term "Labor" referring to those being managed.
3.3. Defination of FinanceFinance is the science of funds management. The general areas of finance are business finance, personal finance, and public finance. Finance includes saving money and often includes lending money. The field of finance deals with the concepts of time, money and risk and how they are interrelated. It also deals with how money is spent and budgeted.
Finance works most basically through individuals and business organizations depositing money in a bank. The bank then lends the money out to other individuals or corporations for consumption or investment, and charges interest on the loans.
Loans have become increasingly packaged for resale, meaning that an investor buys the loan (debt) from a bank or directly from a corporation. Bonds are debt sold directly to investors from corporations, while that investor can then hold the debt and collect the interest or sell the debt on a secondary market. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important as they invest in various forms of debt. Financial assets, known as investments, are financially managed with careful attention to financial risk management to control financial risk. Financial instruments allow many forms of securitized assets to be traded on securities exchanges such as stock exchanges, including debt such as bonds as well as equity in publicly-traded corporations.
Central banks act as lenders of last resort and control the money supply, which affects the interest rates charged. As money supply increases, interest rates decrease.An entity whose income exceeds their expenditure can lend or invest the excess income. On the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity claims, decreasing its expenses, or increasing its income. The lender can find a borrower, a financial intermediary such as a bank, or buy notes or bonds in the bond market. The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary pockets the difference.
A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays the interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Banks are thus compensators of money flows in space.
A specific example of corporate finance is the sale of stock by a company to institutional investors like investment banks, who in turn generally sell it to the public. The stock gives whoever owns it part ownership in that company. If you buy one share of XYZ Inc, and they have 100 shares outstanding (held by investors), you are 1/100 owner of that company. Of course, in return for the stock, the company receives cash, which it uses to expand its business; this process is known as "equity financing". Equity financing mixed with the sale of bonds (or any other debt financing) is called the company's capital structure.
Chapter –IV
4.1. Business Growth4.2. Overview of Poultry Industry4.3. Overview of Fish Feed Industry4.4. Overview of DOC Industry4.5. Overview of Cattle feed Industry
4.1. Business Growth
The Company is on a high growth path.
Commercial operations were started in the end of 2005. In the year 2006, only Poultry Feed business commenced which gave revenue of BDT 20.57 Crore. In the year 2007, Fish feed business was started and together the two product categories earned a revenue of BDT 77.01 Crore. The Fish Feed business is now the second largest in the country by market share. Also in late 2007, Broiler DOC was sold to the farmers. These DOC were provided from the market leader Hubbard Classic breed whose parent stock is directly imported from Europe and the USA. The sale of DOC is catching up very fast with the demand for these quality chicks far exceeding what can be produced.There is a good demand for the quality products produced by the company. Due to this, all of the product mix is growing at a growth levels much higher than the Industry. The year-on-year turnover growth was 274% in 2007 and 68% in 2008 and is 51% as of first 6 months of the current year.
The Revenue growth figures since the start of the operations are given below:Year
Actual ( January to June) & Best estimate ( Jan to Jun 12)
Product MixGiven below are the Product mix and their industry scenario:
a. Poultry Feed (Broiler and layer)b. Fish Feed (Sinking)c. Cattle Feedd. Broiler DOC.
4.2. Overview of Poultry IndustryTraditional poultry rearing in the home enclosures especially among the female citizens of Bangladesh is a very common phenomenon. It is an important source of cash income for poor rural families, particulars for women. However, poultry is emerging as a popular commercial venture and rapidly shaping up into an industry. The commercial poultry development in the last decade has gained significant impacts on the employment generation and poverty alleviation. As the commercial poultry farming is getting more and more popularity, a large number of energetic and hard working young men are participating and contributing to build their fortunes.
Demand and supply gap of Poultry:
With growing urbanization, poultry offers an easy to cook, fast food option, which is giving it a high preference among the urban population. These urban population who have a good disposable income, will drive the future growth of the industry.
The demand supply gap in layer feed is almost 50%. 50% of the customers are using loose feed which has a good chance of getting converted to compound feed.
In case of boiler feed, unorganized sector is around 10% only.
The Poultry Feed market size is around 70,000 Mt per month (as of Dec 09) and it varies across the year based on festival demand. As is evident from the table below, the Company has a gained a market share of 6.4% in the few years of start of the business.
4.3. Overview of Fish Feed IndustryFish is the major part of the staple diet of the country. Its consumption is gradually increasing at a steady rate. However in the last few years, due to scientific advancements, the proportion of cultured fish has increased to more than 50% of the total fish catch. Industry experts are of the view that the cultures are more profitable for the farmers as intensive farming can be done which increases their profitability.
Also with growing commercialization and urbanization, the demand of specific fish species like Tilapia, Thai Koi is increasing.
Demand and supply gap of Fish Feed: The unorganized sector is almost 50%. Hence there is huge demand supply gap. Efforts of the industry members are required to convert the unrecognized loose feed customers to organized, compound feed.The organized Fish Feed market is around 1,80,000 Mt wherein we are placed at number two with a market share of 12.5%. We have achieved this position in two years of business and see huge increases in the coming years from this product line.
The competitor scenario is given below:
4.4. Overview of Broiler DOC Industry
The Broiler DOC industry forms a part of the Poultry Industry and is covered above. However the DOC forms the essential input to the poultry feed industry and its demand-supply has a direct impact on sales
Demand and Supply Scenario for DOC: Industry expert argue that due to the inclination of farmers to use chicks mainly for broiler meat there is a large crisis of parent stock. The increased supply of parent stock and hence commercial DOC, will lead to more broiler feed sales
The Broiler DOC competitor information is given below:
4.5. Overview of Cattle Feed Industry
The Cattle Feed nutrition is largely unorganized with raw materials forming more than 95% of the total nutritional requirement of cattle population. There is a large untapped market of cattle which have marketable surplus of milk. These areas are being targeted for creating markets for cattle feeds.
As the market is small and its impact on the top line of the company is low, hence not discussed in detail. However the total market size along with competitor information is given below:
Chapter V
5.1. Need for Capital Expenditure5.2. Projected Income Statement5.3. Projected Loan Repayment Schedule5.4. Fund Flow5.5. Projected Balance Sheet
5.1. Need for Capital ExpenditureThe existing asset base has reached 85-90% capacity utilizations. In order to continue the growth momentum, additional investments are required for Tk 35.31 Crore to beef up the Feed milling capacity, start a new Extruder Plant for Floating Fish Feed and complete the existing Kazirhat Breeding Farm.
The details of the existing capacities of the Feed Mill, Breeding Farm & Hatchery are given below. Also the Planned Asset expansions are indicated.
Feed Mill-SirajgongPoultry, Fish (Sinking) & Cattle Feed
96,000 Ton 186,000 Ton
Feed Mill-Sirajgong Floating Fish Feed 30,000 Ton
Breeding farm-Panchogarh Hatch able egg 9,636,000 Pcs 14,454,000 Pcs
Hatchery Broiler DOC 6,168,000 Pcs 14,568,000 Pcs
Plan for utilization of Proposed Loan:Out of the total Capital expenditure requirement of BDT 35.31 Crore, BDT 10 Cr will come from Equity inclusion by the share holders, Tk 20 Cr from debt financing & remaining BDT 5.31 Crore from internal accruals.The loan amount will be utilized to put up (a) a Feed Mill of 15 MTPH capacity expandable to 30 MTPH and (b) a 5 MTPH Extruder Plant expandable to 10 MTPH. Both of these Plants will be housed in a one lac square feet godown which will be constructed at the existing Factory site in Sirajgonj. The land for which has already been purchased.Means of Finance:
Particulars Amount (cr)Source of FundShare capital 10.00Term Loan 20.00Fund from operation ( From July 2009 to March 2010) 5.31Total Fund 35.31Application of FundFeed Mill of 15 MTPH 19.575 MTPH Extruder Plant 10.45Expansion of Breeding farm 5.29Total Application of Fund 35.31
The details of the capital expenses are given below:
Proposed Expansion cost:a) Feed Mill of 15 MTPH Amount Civil construction with prefabrication Warehouse (93,000 sft) 69,750,000Civil construction with prefabrication for new plant 9,962,500Plant & Machineries 112,482,940Land development 3,500,000Sub: Total 195,695,440b) 5 MTPH Extruder PlantCivil construction with prefabrication for extruder 13,650,000Plant & Machineries 90,841,940 Sub: Total 104,491,940
c) Breeding farmBuilding and civil construction 52,916,055Total Estimated expansion cost 353,103,435
The creation of these Plants will continue the momentum of aggressive growths which we are experiencing and the revenues will reach BDT 455.93 Crore and PBT to BDT 24.66 Crore by year 2014. The projected income statement is given below: 5.2. Projected Income StatementFrom 2009 to 2014
Particular Year Amount in cr2009 2010 2011 2012 2013 2014
Contribution:The contribution margin will vary from 9.25% to 10.5% over the projected period till 2014. The contribution margins from operations are getting enhanced due to (a) increase in the proportion of imports of raw materials, to total imports & (b) incorporation on nutritional advancements in product quality up gradations.
PBT:The PBT will jump significantly by reaching scale economies and from BDT 6.79 Crore in 2009 will increase fourfold to BDT 24.66 Crore
Debt Service Coverage Ratio:We will be a debt free company by the end of 2015.
Revenue Growth Trend:The sales projections till 2014 are given below:
The details of the Income statement & Balance Sheet projections are provided separately
5.3. Projected Loan Repayment ScheduleFrom 2009 to 2013
The loan will be serviced in the following manner:
Amount in crBank Name
Outstanding as of May 2010
Sanction and Proposed Loan
Total Loan 2009 2010 2011 2012 2013
Term LoanSCB 1.70 1.70 1.02CBC 1.83 2.00 3.83 1.12 1.12 0.91 0.50City Bank
3.90 3.90 0.87 0.87 0.87 0.87 0.43
New Bank
20.00 20.00 3.33 4.44 4.44 4.44 3.33
Short TermSCB 11.64 11.64CBC 2.91 2 4.91City Bank
2.96 2 4.96
Total 21.04 29.9 50.94 6.34 6.43 6.22 5.81 3.76
5.4. Fund FlowFrom 2009 to 2014
Amount in cr
Particulars Year2009 2010 2011 2012 2013 2014
Source of Fund:Opening Balance 1.62 1.16 0.51 5.80 14.37 30.49PBT 6.79 11.07 15.11 19.42 21.82 24.66Depreciation 3.13 5.48 5.60 5.63 6.01 6.01Share capital 4.00 6.00Term loan (existing) 6.00Term loan ( proposed) 20.00Working capital 12.00a) Total Source of Fund 53.54 23.71 21.22 30.85 42.2 61.16Application of FundTerm loan Repayment(Prin.) 2.70 6.34 6.43 6.21 5.81 3.76Capital expenditure 5.17CWIP ( Expansion of )Hatchery 6.47Proposed expansion 30.24 5.07Royalty 1.04 0.82 1.11 1.44 1.62Changes in NWC 7.80 11.29 8.17 9.14 4.47 4.69b) Total Application of Fund 52.38 23.74 15.42 16.46 11.72 10.07(a-b) Net Cash Flow 1.16 0.51 5.80 14.37 30.49 51.07
We are planning to maintain following net working days-Days of WC 2009 2010 2011 2012 2013 2014Days of Debtors 15 20 25 30 30 30Days of Inventory 20 20 20 20 20 20Days of creditors 25 16 15 15 15 15
Financial ratios are useful indicators of a firm's performance and financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms. In some cases, ratio analysis can predict future bankruptcy.
Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used:
Liquidity ratios Asset turnover ratios
Financial leverage ratios
Profitability ratios
Dividend policy ratios
Liquidity Ratios
Liquidity ratios provide information about a firm's ability to meet its short-term financial obligations. They are of particular interest to those extending short-term credit to the firm. Two frequently-used liquidity ratios are the current ratio (or working capital ratio) and the quick ratio.
The current ratio is the ratio of current assets to current liabilities:
Current Ratio =
Current Assets
Current Liabilities
Short-term creditors prefer a high current ratio since it reduces their risk. Shareholders may prefer a lower current ratio so that more of the firm's assets are working to grow the business. Typical values for the current ratio vary by firm and industry. For example, firms in cyclical industries may maintain a higher current ratio in order to remain solvent during downturns.
One drawback of the current ratio is that inventory may include many items that are difficult to liquidate quickly and that have uncertain liquidation values. The quick ratio is an alternative measure of liquidity that does not include inventory in the current assets. The quick ratio is defined as follows:
Quick Ratio =
Current Assets - Inventory
Current Liabilities
The current assets used in the quick ratio are cash, accounts receivable, and notes receivable. These assets essentially are current assets less inventory. The quick ratio often is referred to as the acid test.
Finally, the cash ratio is the most conservative liquidity ratio. It excludes all current assets except the most liquid: cash and cash equivalents. The cash ratio is defined as follows:
Cash Ratio =
Cash + Marketable Securities
Current Liabilities
The cash ratio is an indication of the firm's ability to pay off its current liabilities if for some reason immediate payment were demanded.
Other asset turnover ratios include fixed asset turnover and total asset turnover.
Financial Leverage Ratios
Financial leverage ratios provide an indication of the long-term solvency of the firm. Unlike liquidity ratios that are concerned with short-term assets and liabilities, financial leverage ratios measure the extent to which the firm is using long term debt.
The debt ratio is defined as total debt divided by total assets:
Debt Ratio =
Total Debt
Total Assets
The debt-to-equity ratio is total debt divided by total equity:
Debt-to-Equity Ratio =
Total Debt
Total Equity
Debt ratios depend on the classification of long-term leases and on the classification of some items as long-term debt or equity.
The times interest earned ratio indicates how well the firm's earnings can cover the interest payments on its debt. This ratio also is known as the
interest coverage and is calculated as follows:
Interest Coverage =
EBIT
Interest Charges
where EBIT = Earnings Before Interest and Taxes
Profitability Ratios
Profitability ratios offer several different measures of the success of the firm at generating profits.
The gross profit margin is a measure of the gross profit earned on sales. The gross profit margin considers the firm's cost of goods sold, but does not include other costs. It is defined as follows:
Gross Profit Margin = Sales - Cost of Goods Sold
Sales
Return on assets is a measure of how effectively the firm's assets are being used to generate profits. It is defined as:
Return on Assets =
Net Income
Total Assets
Return on equity is the bottom line measure for the shareholders, measuring the profits earned for each dollar invested in the firm's stock.
Return on equity is defined as follows:
Return on Equity =
Net Income
Shareholder Equity
6.2. Financial Ratio analysis
Current RatioAn indication of a company's ability to meet short-term debt obligations; the higher the ratio, the more liquid the company is. Current ratio is equal to current assets divided by current liabilities. If the current assets of a company are more than twice the current liabilities, then that company is generally considered to have good short-term financial strength. If current liablities exceed current assets, then the company may have problems meeting its short-term obligations. For example, if XYZ Company's total current assets are $10,000,000, and its total current liabilities are $8,000,000, then its current ratio would be $10,000,000 divided by $8,000,000, which is equal to 1.25. XYZ Company would be in relatively good short-term financial standing.
years Current Ratio2009 0.1875682010 0.2605682011 0.4293942012 0.760
Acid test
A stringent test that indicates whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory. The acid-test ratio is far more strenuous than the working capital ratio, primarily because the working capital ratio allows for the inclusion of inventory assets. Calculated by:
years Acid test2009 0.1186642010 0.1190642011 0.2536982012 0.283381
2009 2010 2011 2012
Debt/Equity Ratio:
A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets.
Note: Sometimes only interest-bearing, long-term debt is used instead of total liabilities in the calculation.
Also known as the Personal Debt/Equity Ratio, this ratio can be applied to personal financial statements as well as companies'.
years Debt/Equity Ratio:
2009 0.3153812010 7.3692832011 2.5493192012 0.860
2009 2010 2011 2012
Debt to total assets ratioThe debt to total assets ratio is an indicator of financial leverage. It tells you the percentage of total assets that were financed by creditors, liabilities, debt.The debt to total assets ratio is calculated by dividing a corporation’s total liabilities by its total assets. Let’s assume that a corporation has $100 million in assets, $40 million in liabilities, and $60 million in stockholders’ equity. Its debt to total assets ratio will be 0.4 ($40 million of liabilities divided by $100 million of assets), or 0.4 to 1. In this example, the debt to total assets ratio tells you that 40% of the corporation’s assets are financed by the creditors or debt (and therefore 60% is financed by the owners). A higher percentage indicates more leverage and more risk.
the proportion of a company's value represented by debt, stock, assets, and other items.
Example: By comparing debt to total capitalization, these ratios provide a glimpse of a company's long-term stability and ability to withstand losses and business downturns.
A company's capitalization ratio can be expressed in two ways:= Long-term Debt / Long-term Debt + Owners' Equity and= Total Debt / Total Debt + Preferred + Common Equity For example, a company whose long-term debt totals $5,000 and whose owners hold equity worth $3,000 would have a capitalization ratio of5,000 / (5,000 + 3,000) = 5,000 / 8,000 = .625 capitalization ratio Both expressions of the ratio are also referred to as component percentages, since they compare a firm's debt with either its total capital (debt plus equity) or its equity capital. They readily indicate how reliant a firm is on debt financing.
Capitalization ratios need to be evaluated over time, and compared with other data and standards. Care should be taken when comparing companies in different industries or sectors. The same figures that appear to be low in one industry can be
very high in another.
Interest Coverage Ratio
A ratio used to determine how easily a company can pay interest on outstanding debt. The interest coverage ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) of one period by the company's interest expenses of the same period:
A ratio showing how many times a company's inventory is sold and replaced over a period. the
The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or "inventory turnover days".
Net Profit Margin:Net profit divided by net revenues, often expressed as a percentage. This number is an indication of how effective a company is at cost control. The higher the net profit margin is, the more effective the company is at converting revenue into actual profit. The net profit margin is a good way of comparing companies in the same industry, since such companies are generally subject to similar business conditions. However, the net profit margins are also a good way to compare companies in different industries in order to gauge which industries are relatively more profitable. Also called net margin.
Return On Investment - ROI
A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or
Return on investment is a very popular metric because of its versatility and simplicity. That is, if an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken.
Return on Assets - ROA
An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this is referred to as "return on investment".The formula for return on assets is
Note: Some investors add interest expense back into net income when performing this calculation because they'd like to use operating returns before cost of borrowing.
Asset turnover ratioIndicates how successful a firm is in utilizing its assets in generation of sales revenue. A high ratio is considered desirable, but what is considered high in one industry may be low for another. Asset turnover ratios are computed for specific assets, such as 'cash to sales, 'inventory to sales, 'fixed assets to sales, when computed as total 'assets-to-sales' ratio, it is called capital intensity.
7. Conclusion:Godrej Agrovet Ltd (GAVL) plans to pump in USD 12-13-million, along with its partner, into
its Bangladesh joint venture, ACI Godrej Agrovet, to expand capacity.
"We plan to inject funds of around USD 12-13-million along with our partner in FY 10 into the company to expand capacity," Godrej Agrovet's Managing Director, B S Yadav, said here.
ACI Godrej Agrovet is a 50:50 joint venture between Godrej Agrovet and ACI Limited of Bangladesh and manufactures poultry, fish, shrimp and cattle-feed besides having hatchery and breeding farm operations.
The company plans to expand its animal feeds capacity from the present 1.2-lakh tpa to 2.5-lakh tpa. This is expected to be done in about 6-months time.
"We also intend to raise the production of chicks from 1-million per month to 2-million per month," Yadav said, adding the time-frame for this is between 12-18-months.
Funds for fuelling the expansion will be raised through debt, equity, if needed, and internal accruals, he said.
The Godrej group company which is a leader in India in animal feeds, is betting big on this segment and intends to give a strong thrust to this business in the coming years. The company is targeting a more than Rs 200-crore jump in its animal feeds business from Rs 960-crore in FY 09 to around Rs 1,150-crore in FY 10.
