A 3C REPORT ON

CAMPCO
SUBMITTED TO:
Mr. Prakash Faculty of MBA dept. SDM College of Business Management Mangalore.

SUBMITTED BY:
Mr. BOPANNA 1st year MBA, A sec SDM College of Business Management Mangalore.

INTRODUCTION:
Chocolate was discovered in the 18 century and every childs dream came true all over the world. The various brands of chocolate often spoken about in India are Amul, Cadbury and Campco. India is a land of villages. Nearly 65-70% of our country is agriculturists. About 75% of the land used for agriculture is cultivated for basic food grain hence it has become a basic industry in our country. Agriculture is one of the oldest occupations of human beings. Agriculture means ploughing of the land, sowing seeds, protecting plants and obtaining crops for the use of people and domestic animals. Commercial crops not only help to earn foreign exchange but also provide raw materials for industries. Cocoa is also one of the important commercial crops in India. Cocoa is grown on the slopes of Niligiri Hills. The discovery of cocoa was only a first step in the direction of chocolate. The Mayas were the first to cultivate the cocoa bean for the fruits is yielded. They used the beans as an ingredient in their favorite chocolate drink xocoatl. The Mexican Indian world chocolate comes from a combination of the terms chocolate consumed in beverage force. Before the Spanish explorer discovered the chocolate and other exotic foods were totally unknown in Europe. In the 1600 European began to open fashionable chocolate houses to serve xocoatl as Hot Chocolate scattered with sugar. In the 1700s the English began with adding milk to improve the flavor. The first factory for processing and manufacturing chocolates in India was started during the world war-II at Bilimoria but due to tough competition from foreign products the company is ceased and stopped its process and it made second attempt in 1936. But it faced failure as the size of operation was economical. Finally it made third attempt to find its success to restart its production. Messrs Sathe Biscuit and chocolate co. ltd., Poona commenced production of cocoa powder on a small scale and chocolate manufacture was taken up in 1941. Then the production gradually increased. Later, Madhu Canning Factory Agra, East India Distilleries and Sugar Factories Limited Madras started the production of chocolates. The Central Areca nut and Cocoa Marketing and Processing Co-operative Limited or CAMPCO was found on 11 July 1973 at Mangalore. The organization working on principles of co-operative was found to mitigate the sufferings of areca nut and cocoa growers in Indian states of Karnataka and Kerala. The CAMPCO has now extended its services to other states of India like Assam and Goa also. The CAMPCO has now become multi state co-operative under relevant Indian laws.

The organization is mainly into procurement, marketing, selling and processing of arecanut and cocoa. The company also provides guidance for farmers for growing arecanut and cocoa. The company plans to enter into natural rubber business also. The company has set up a chocolate manufacturing plant in 1986 at Puttur of Dakshina Kannada district of Karnataka. The plant produces chocolates and other products of cocoa both under its own brand and also for Nestle. The company plans to increase production of choco chips by setting up of new plant.

HISTORY:
ARECANUT is an important commercial crop in India and finds a place in all religious, social and cultural functions in India. Cultivation of Arecanut is mostly confined to States of Karnataka, Kerala and Assam,but the consumption is spread all over the country. India is considered as the largest Arecanut producing country in the world. The total acreage under cultivation is 264000 hectares and the annual production estimated at 313000 metric tones,with Karnataka and Kerala accounting for nearly 72 percent of total production. Over six million people are engaged in arecanut cultivation, processing and trade.More than 85 percent of the area under cultivation is made up of small and marginal holdings. A sudden marketing crisis in the year 1970-71, when prices registered a marked fall which caused considerable concern to the growers, was the genesis for the setting up of this Co-operative Venture (what popularly is called The CAMPCO). Growers had been thrown into panic with the prices coming down by half of what was prevailing till 1970-71 season. Various measures were thought of for organized marketing management and leaders among growers sat together to find a way out. State Government of Karnataka, on the advice of an Expert Committee, recommended organizing a Central Agency in the Public or Co-operative sector. With the blessings and active support extended by the State Governments of Karnataka and Kerala, the CAMPCO was registered on 11th July 1973 under sec.7 of the Karnataka Cooperative Societies Act read with sec.4(2)of the Multi State Co-operative Societies Act 1984. Through perseverant efforts of far sighted , dedicated and resourceful leaders,with the cooperation and assistance of equally dedicated growers under the guidance of the State Governments of Karnataka and Kerala, this institution took

giant strides forward and has turned into a tower of strength to the areca growing community in the country. The CAMPCO has been functioning effectively with the main objectives of Procuring Arecanut and Cocoa grown by member cultivators and if necessary, from other growers on an agency basis or on outright purchase basis Sale of Arecanut and Cocoa and their products to the best advantage of members and also to advance loans to members on the pledge of goods and to do all other things necessary to carry out the objective. To promote and develop Areca and Cocoa cultivation , marketing and processing. The area of operation of this cooperative for procurement and processing of Arecanut and Cocoa extends to the States of Karnataka and Kerala, but for the marketing activity, the area has been extended to the whole country. Arecanut purchase operations were extended to Assam, Andaman and Goa but in recent years purchase operations in Assam had to be closed due to disturbances. Starting with its Head office at Mangalore in coastal Karnataka, the CAMPCO began with a handful of procurement centers in Karnataka and Kerala. The Campco adopted a safe policy for purchasing and marketing the commodity and maintaining standards in quality assiduously with the dedicated cooperation of a network of diligent officers and workers. The society achieved success by leaps and bounds, stood the brunt of changing trends, market recessions and upheavals, glut in the market and even national calamities in the marketing field for more than two and half decades. Confidence has gained among the growers for areca cultivation as an economically viable and comfortable proposition. The co-operative encouraged growers to take-up Cocoa cultivation as an inter crop in the latter half of the 70's as a supplemental crop. This grew up to become a large scale operation with good results. A sudden withdrawal by the buyers of Cocoa from the procurement operations due to crash in the international market came as a shock to cultivators. Karnataka and Kerala governments enthused at this stage the CAMPCO to enter on the scene to rescue the farmers from distress.CAMPCO willingly took up the responsibility to enter the cocoa market and performed a savior's role.As a strategy for survival in the International scene the CAMPCO played a major role in establishing a name for Indian Cocoa, which hitherto had not been achieved. It procured Cocoa Pods from growers and adopting scientific processing methods to market standards,released dry cocoa beans matching in quality in the world market to that of Ghana,Brazil and other leading

Cocoa cultivating nations. With a view to creating a permanent demand and a steady market for the beans,Campco established a Chocolate Manufacturing factory at Kemminje village in Puttur Taluk in Dakshina Kannada District adopting foreign technical collaboration in chocolate making.The factory was set up in 1986 at an initial investment of RS.116.7million and a licensing capacity to produce 8800 metric tones.The factory also entered into technical cooperation venture with NESTLE (India) Ltd,for diversifying product brands.It has been producing a variety of products - semi finished items like Cocoa Mass, Cocoa Butter and Cocoa Powder and finished products in moulded line, count line, Chocolate drink etc. .CAMPCO chocolate has gained extensive market popularity in India.

MISSION & VISION STATEMENTS:

CAMPCOs mission statement is: Co-operation between people Harmony between faiths May the fragrance of peace prevail forever From areca to chocolates, this policy has taken us a long way. And we are happy to share this secret with you. At CAMPCO we, symbolize the triumph of the co-operative spirit. And how co-operative can be a source of prosperity. This mission statement maintains that the company has a good relation between people and harmony between faiths and high set of values and purposes behind its existence. Vision of the Company CAMPCO is formed to help the farmers, procuring more and more areca nut and cocoa, then utilizing these materials in a better way which will help the farmers to get market for their products.

SWOT ANALYSIS: Strengths:

 Penetration of foreign market Maintaining a stable growth by maximizing the use of its production capacity and thus increase economies of scale and scope. Strong leadership position in confectionary markets.

Weakness:
Tough competition. Less popularity in rural areas as compared to urban areas in India.

Opportunities:
New product launches. Robust organizational changes driving performance. Purchase of Green and Blacks.

Threats:
Growing health concerns. Retailer Pressure.

MARKET SHARE:
The market share of CAMPCO is 5-8%, the Cadburys market share is 70% and the Nestls market share is 15-20%. The penetration of chocolate in the country was estimated at 5.5% in 1998. The penetration in urban India stood at while that in rural India as a mere 2.3%. Thus the consumption of chocolate is largely restricted to urban areas where too, the penetration is relatively low.

GROWTH IN THE MARKET:

CAMPCO put up a chocolate factory at Puttur, 50km away from Mangalore.

CAMPCO has signed agreement between companies. They are: AGREEMENT WITH M/S NESTLE INDIA LIMITED. CAMPCO chocolate factory entered into an agreement with M/S Food Specialties Ltd known as M/S Nestle India Ltd, on 7 February 1990, for manufacture and supply of bulk quantity of chocolates and cocoa products ranging from 2500MT to 3750MT p.a for an agreed manufacturing fee of Rs. 12,000/- per MT of raw materials. At first Nestle didnt have any plant and because of experienced people availability of all type of chocolate production with sophisticated machineries nestle made a Milkair 5.5gm white centre chocolates agreement with CAMPCO. This agreement is also made good result on CAMPCO to gain demand in competitive market. AGREEMENT WITH AMUL LIMITED CAMPCO factory had entered into an agreement with Amul India Ltd, on January 2001 for the manufacture and supply of bulk quality of chocolates. The agreement was made only for 5 years. The Amul Ltd supplies the raw materials to the CAMPCO Ltd; the CAMPCO makes chocolate and supply to Amul Ltd. The chocolate products, which were produced to the Amul Ltd, are as follows: Chocolate 5.5gm brown centre chocolates. At present CAMPCO is having its own marketing team and the present set up as follows:CAMPCO is one of Indias most modern chocolate manufacturing cooperatives. Today CAMPCO has diverse products. It is now affording product quality with a variety to cater wider section of the market. CAMPCO manufactures and markets a different range of products under its own brand name. The production and demand for chocolate have been rapidly increasing in India at the rate of 20% during the last 5 years. The average growth is at 20% internal chocolate market, which is now about 5500 tonnes. CAMPCO chocolate unit sales performance in terms of value is increasing year by year. The sale includes sales of semi finished products also.

PRODUCTS: Their main products known for are the Chocolates. Many types of campco chocolates are available in the market. There are many flavours available which are not only liked by the kids but by everyone.

COMPETITORS:
CAMPCO has competitors such as Cadbury, Nestle, Parrys, Nutrine and Amul.

OWNERSHIP PATTERN:
The type of ownership of CAMPCO is semi Government. So the workers get retired at the age of 58years. After the retirement the CAMPCO gives gratuity to their employees but no pension.

GLOBAL:
CAMPCO produces wide range of cocoa based products of consistent quality, colour and flavor to satisfy the wide spectrum of customers all around the globe. The company has built a strong system base for the confectionery of chocolate industries in U.S, Australia and Malaysia. Export on the other hand generated a total of about U.S $14 million over a 5 year period. Among the leading buyers were Malaysia, Korea and USA.

NATIONAL:
The company has various nationalized branch offices through out India under them are the distributors followed b the dealers who sell the goods to the ultimate consumers. National Office throughout India North: New Delhi East: Kolkata West: Navy Mumbai South: Bangalore

REGIONAL:
The company has regional offices throughout Karnataka. It has both dealers and distributors and the distributors are followed by dealers and ultimately to the customers. Regional offices are as follows Mangalore, Hyderabad and Delhi.

MARKET STRATEGY:
Every departments take decisions together which help the company to take the steps in their daily transaction or operations. STRATEGY Strategy is the set of decision and action plans aimed at gaining a sustainable competitive advantage. Today most of the enterprises are engaged in strategic planning. The degree of the sophistication and the formative vary considerably from organization to organization. In the case of CAMPCO chocolate factory, the strategy is to produce and sell standard and good quality chocolates with well guided procedure and good quality of raw materials from different supplying company with a quality check to deliver the products to the customer. Strategy includes objectives, goals, purpose and policies, action plans and tactics. The objectives are: To undertake processing of areca nut andcocoa and to establish industries for the manufacturing of finished and semi finished products from areca nut and cocoa. To open branches and depots, godowns and factories. To arrange for procurement, manufacture and distribution of pesticides, fertilizers etc. To undertake pooling, packing and standardization of Areca nut and cocoa.

Pricing Policy:
CAMPCO adopted the policy of full cost pricing. But sometimes they marketed the products at price lower than that of cost price and its prices are normally lower than competitors. CAMPCO has adopted on pricing policy where by the company specifies the prices to be charged to each dealer in the price list published by the members and if necessary from other growers. There is no geographical change in prices. Discount Policy: It has varying discount share, which includes trade discounts, cash discounts, special discounts etc. In some cases discount rate varies from dealer to dealer depending on sales turnover and in some cases the discount varies depending upon size of purchase.

Collection Procedure : The dealer provides security such as bank guarantee. The payment must be made within 15-40 days depending upon sales turnovers.

FACILITY AND LOCATION PLANNING:

A bad location is a severe handicap for any enterprise and finally it bankrupts it. Once the mistake is made in locating a plant it becomes extremely difficult and costly to correct it, specially where large plants are concerned, eg, recent incident with TATA in West Bengal, many garments factories in Peenya industrial area, A selection of a Location is pure economic considerations will ensure as easy and regular supply of raw materials, labour force, efficient plant layout, proper utilization of production capacity and reduces cost of production.

Factors affecting location planning of CAMPCO:

Proximity of the market: The customers/markets are located near the plant; products can be easily supplied to them. This reduces cost of product as a transportation cost. The product, thus, competes well with the competitors product. Proximity to market allows companies to meet any sudden spurt in demand, thus providing an advantage over competitors located at far-off places. Proximity to raw materials: It helps the company to get quality raw materials (cocoa beans and other essentials) in time so as to reduce the transportation cost. Good transportation facility: Region near to Puttur has the advantage of good transportation facilities, as they have good rail, air, water, and road transportation network (Mangalore). Availability of power supply: Uninterrupted power supply is a basic requirement of most industries. CAMPCO enjoys continuous power suppy.

 Basic amenities: Like water supply manned by local municipalities, roads up to factory premises, sanitation facilities like sewage, drainage system are well maintained. Government policies: Local taxation policy, political stability, Industry development zones are also helping CAMPCO. Proximity of subcontractors Easy availability of cheap land Less construction cost Availability of cheap, skillful, and efficient labour Environmental and community considerations

Hence taking all the factors into consideration Puttur which is which is very near to Mangalore suits the most for CAMPCO.

LAYOUT PLANNING IN CAMPCO:

The entire layout is planned and utilized in a way which reduces time and increases efficiency of the plant. This plan has also helped in cost reduction and utilization of resources to a maximum extent. The production process below will give a clear picture of the layout planning where the layout is divided into 2 major groups. COCOA PROCESSING CHOCOLATE PROCESSING

Here the raw cocoa and other materials first go through the cocoa processing unit and the pass on to the chocolate processing unit. At the end of the process the finished chocolate which is ready to consume is available.

PRODUCTION PROCESS:
The production process of CAMPCO Chocolate factory is a continuous process maximize output without sacrificing quality, maximum quantity control, reducing the cost, improving the efficiency etc. which is divided into 1. Cocoa Processing 2. Chocolate Processing COCOA PROCESSING The CAMPCO chocolate factory collects only the dry cocoa beans. The wet beans are fermented and dried in the sales depots. There after processing begins: 1.Cleaning 2.Roasting 3.Winnowing 4.Alkalization 5.Nib ginning(milling) 6.Liquor Processing/Hydraulic Processing CHOCOLATE PRODUCTION PROCESSING 1. Preparation of ingredients 2. Mixing 3. Refining the mixture 4. Conching 5.Tempering Requirements followed by CAMPCO for good facility and location planning: An understanding of capacity & space requirements. Selection of appropriate material handling equipment. Decisions regarding environment and aesthetics. Identification and understanding of the requirements for information flow. Identification of the cost of moving between the various work areas.

Systemic deficiencies faced:

High level taxation Poor quality of basic infrastructure like road, port etc Lack of expenditure in research and development. Delay in absorption in technology by existing units

CONCLUSION:
CAMPCO has a better scope for expansion of its activities in relation to different units like areca nut, cocoa in order to safeguard and strengthening of CAMPCO function more effectively. It can capture international market by latest Technologies. Thus, CAMPCO is a best example for a successful industry or company.