COST ANALYSIS AND PROCESS OF PAPER MAKING ATBHAWANI PAPER MILL LIM.

OBJECTIVE The main objective of the cost analysis is to

identify the variable thing which affect the cost. The project is concerned with all those area

wherein a company makes its cost as per the product or market requirements.

The project is sufficient to differentiate the variable cost to fixed cost.

One Important objective of the study is to know the parameter of raw material acquisition for a company aspects.

This Project is a journey of process which start with procurements of raw material and end with the distribution or dispatch of finished paper as well as the project elaborate us the criteria of paper making process.

COMPANY PROFILE YEAR EVENTS1979 - The Company was incorporated in July. The

Company's object is to manufacture of writing and printing papers and wrapping paper. The company was promoted by Sudhir Tandon and Girish Tandon in Association with UPSIDC and PICUP.

1988 - The company proposed to undertake further modifications in MF paper machine.

2001 - The Company has entered into an agreement with CDSL NSDL and Skyline Financial Services Ltd for dematerialization.

To part finance its expansion programme, the company has come out with an issue of 1,23,18,000 equity shares of Rs 10 each for cash at a premium of Rs 2.50 each (issue price Rs 12.50 per share) on rights basis to the existing equity shareholders. The right issue opens on April 12, 2006 and closes on May 5, 2006

The Company has an integrated pulp and paper mill on a plot of land measuring 40 acres at Raebareli on Lucknow- Allahabad Highway. The plant is located within a radius of 125 km from Kanpur, Lucknow and Allahabad, three major cities in Uttar Pradesh. The central location of the project facilitates the procurement of raw material and also helps in marketing paper throughout Uttar Pradesh.

RESEARCH METHODOLOGY PRIMARY DATA  The primary data was collected through the following

specific method and techniques under considerations.   Informal Interviews. Discussions with officer concerned.  SECONDARY DATA The secondary data was obtained through the

following means for the purpose of the project work. Annual reports. Journals and Magazine. Budgeted manuals Audited balance sheet and profit

and loss

RAW MATERIALS REQUIREMENT SHORT FIBRE LONG FIBRE FUEL CHEMICALS Poly aluminum chloride Soap and surf (Dyna, Nirma and Amber) Floculant Fennofix Aerotech Nalco Prestige Sodium silicate Sosium bi sulphite Sosium hydro sulphite ETC…..

DIESEL UTILITIES & POWER WATER STEAM MANPOWER

COST ANALYISIS

In business, a cost analyst is a person who analyzes a company's costs, or the use of available resources, and reports such analysis to management for decision-making and control

Meaning Usefulness Elements of CostThe cost of an industrial undertaking may be

divided into three principal elements: Materials; Labour, and Expenses.

CLASSIFICATION OF COSTS

i. Direct and Indirect Costsii. Fixed and Variable Costs: iii. Standard Costs:

The advantages of the standard costs are:

1. They are helpful in production and price policies.

2. Serve as a barometer of the operating efficiency of a plant; and

3. Work as incentive to workers.iv. Average Cost and Marginal Cost

ABC ANALYSIS

SWOT ANALYSIS The main strength of the Company lies in its ability to sustain in the off

season due to its diversified product mix. Through innovation & continuous up gradation in efficiency and improvement in the health of the plant, the Company has been able to increase its production substantially over the years.

  In January 1999, a new “Suction Press Roll Shell” with Blind Drilling was

commissioned successfully. Due to this, “shadow marking” earlier appearing in the paper being manufactured on MF Machine has been completely removed. Formation and appearance of the paper has improved to a large extent, thereby increasing the marketability of the product. The Company has been able to achieve about 9800 tons of Reel Production during 2004 -2005 as compared to 5027 tons during 1998-99, thus shifting its product –mix as per market demand.

    The Company has a diversified product-mix. It produces high value

added 25 gsm MG Poster & Tissue Paper. Its MF Color Printing & Ledger Paper is well accepted in the market.

  The bad debts have been very minimal over the last ten years, due to

high focus on recovery and qualitative credit policy.

Financial: Credit worthiness of the Company has remained high

not only with Financial Institution and Banks, but also with the suppliers and there have been no defaults. Hence, SBPML is able to procure their inputs at competitive rates.

Even during lean periods, the Company has been able to maintain its liquidity and did not face any problem in procurement, especially seasonal raw materials & fuel namely, straw, bagasse, cotton, paddy husk, etc.

  Human Resources The Company has had perfectly harmonious labor

relationships and has been able to retain its workforce and even at officers and managerial levels there is little employee turnover.

Labor relations are quite cordial with no disruption in the company’s working since 1987.

WEAKNESSES DEPEND UPON NATURE LIMITED MARKET

OPPORTUNITIES The Company is an early entrant in expanding

capacities, so it is likely to gain market share, if proper efforts made.

In India, the per capita consumption of paper is about 6 Kg against the ASEAN average of 29 Kg and world average of 54 Kg. Hence, there is a potential demand for paper.

Recently the Company has received ISI Certification, which will further provide edge in Government Supplies.

There has been steep increase in the allocation of funds to the educational sector in the recent Union Budget in the form of education cess which will increase consumption of paper.

THREATS Any delay in implementation schedule of the

project could lead to time and cost overrun. Any reduction in customs duty of paper will

affect the domestic paper industry. The Company faces competition from cheap

imports from Russia, Indonesia, and South East European Countries.

Any other unfavorable Government policies.

FINDING

Working process is so good.   Financial position is strong.   Firm work on balanced approach.   Production basically same in every season.   Stock management process is satisfied.   Stock issue process is not good.   Management interruption is too much.  

SUGGESTIONS

For cost control—  Use self produced pulp. Ignore contract based work. Contact nearest dealer of chemical for reducing

transporting cost. Inventory management—  Know the stock turn for all major item of

inventory. Change item issue process. Stock should be issued only with authorized

signature.

LIMITATION Date was not available due to company privacy.   The study may require a lot of assumption at

place.   Staff was co-operative but not able to provide too

much help.   A number of works is depended upon contract, so

availability of labor become less sometime.   Office time was not suitable.   Financial data was not available easily.

THANKS