F – 04

Gian Jyoti Institute of Management & Technology, Mohali

Assignment II
Academic Session January – April 2018

Name of the Faculty:- Rajneesh Mehra

Subject and Code: - Strategic Management – MBA 401
Date for Allotment: - March 26, 2018
Date for Submission: - March 31, 2018
Department:- Management
Session:- January – April 2018
A peep into functional and operational implementation at KRIBHCO
Krishak Bharati Cooperative Limited (KRIBHCO) is a cooperative society set up for fertilizer
manufacturing, registered under the Multi-State Cooperative Societies Act, 1985. It was promoted by
the Government of India, Indian Farmers Fertilizers Cooperative Ltd. and National Cooperative
Development Corporation and other agricultural cooperative societies spread all over the country. It has
more than 6000 members who have contributed nearly Rs. 400 crore as capital. KRIBHCO basically
operates in the three business areas of bio-fertilizers, urea and seeds. Its fertilizer complex is located at
Hazira near Surat in Gujarat, seed plants at various locations in eight states of India and service centres
called Krishak Bharti Seva Kendra at various places in the country. KRIBHCO has equity participation in
fertilizer companies within India and in one company in Oman. The cooperative is managed by a board
of directs, senior management headed by a managing director and functional heads in the areas of
operations, finance, marketing and vigilance.

The vision of FRIBHCO is stated as: ‘We want to be a world class organisation that represents the farmer
community and maximizes returns to them through specialization in agricultural inputs and products
and other diversified businesses that maximize stakeholder value.’ The mission is ‘to act as a catalyst to
agricultural and rural development by selecting, financing and managing projects that are both socially
desirable and commercially profitable’. The objectives are: to increase the urea installed capacity while
maintaining its market share, to ensure optimum utilization of existing plant and machinery and to
diversify into other core sectors like power, LNG terminal/port, chemicals etc.( PREMISE)

The equity capital has been subscribed by the Government of India (67.6%) and other cooperative
societies (32.4%). (Corporate level) As on 31.03.2010 the authorized share capital of the Society is Rs.
500 crore and the paid up share capital is Rs. 390.67 crore which includes188.90 crore held by
Government of India and remaining Rs. 201.77 crore held by Cooperative Societies. The total
membership as on 31.03.2010 was 6546. Its net worth is Rs. 2860.16 crore, constituting equity of Rs.
390.28 crore and reserves of Rs. 2469.88 crore. It earned a post-tax profit of Rs. 124.63 crore in 2010-11

Checked by Head of the Department________________________________

Date of checking of the Assignment ____________________________
Approved by Dean (Academics) ____________________________________
Director (Remarks) ______________________________________________
 F – 04

Gian Jyoti Institute of Management & Technology, Mohali

Assignment II
Academic Session January – April 2018

Name of the Faculty:- Rajneesh Mehra

Subject and Code: - Strategic Management – MBA 401
Date for Allotment: - March 26, 2018
Date for Submission: - March 31, 2018
Department:- Management
Session:- January – April 2018
(up to December 2010) and has consistently declaring dividends. The Cooperative has the distinction of
paying the highest dividends and maximum taxes in the cooperative sector in India.

KRIBHCO markets its fertilizers through an extensive marketing network spread over 16 states of India,
through cooperative and institutional agencies and through its own outlets. The cooperative agencies in
its marketing network are located at different levels such as apex, district and taluka levels and village-
level societies. The institutional agencies typically involved are agro-industries and land reclamation
agencies. Business level

KRIBHCO is an ISO-9001:2000 and ISO-14001 certified company. It produced and dispatched more than
34 lakh tonnes of urea in 2006-07. Various functions of bagging, handling and loading in the product
handling plant are performed through manual product handling processes as well as through
mechanized bagging machines. Mechanical improvements have also been affected for smooth transfer
and conveying of bags in the bagging plant. These efforts have resulted in minimizing product loss,
avoiding shortfall or excess in loading quantities, minimizing the loading time and reducing the specific
bag consumption.( Implementation) ( expansion) (area of growth)

KRIBHCO has formal policies in the areas of energy, environment, quality and safety. It has declared its
energy policy and has volunteered its commitment towards energy conservation. The energy policy is
aimed at an optimum utilization of the various forms of energy in a cost-effective manner to conserve
energy resources. The Cooperative has set up a quality policy and an environment policy, which have
been framed after integrating the energy saving objectives and goals as well. The safety policy of the
Cooperative emphasizes on the importance of safety and to an adherence to safe practices. A safety
department performs the functions of ensuring compliance with safety standards. (Strategic Surveillance
Controls)

KRIBHCO has a modest human resource development set-up where it arranges in-house training and
sponsors employees to external training programmes.

Checked by Head of the Department________________________________

Date of checking of the Assignment ____________________________
Approved by Dean (Academics) ____________________________________
Director (Remarks) ______________________________________________
 F – 04

Gian Jyoti Institute of Management & Technology, Mohali

Assignment II
Academic Session January – April 2018

Name of the Faculty:- Rajneesh Mehra

Subject and Code: - Strategic Management – MBA 401
Date for Allotment: - March 26, 2018
Date for Submission: - March 31, 2018
Department:- Management
Session:- January – April 2018
The management information system at KRIBHCO covers its internal operations and the marketing
network using the relational database management system, using client/server technology. An
integrated system at plant-level comprises financial accounting, payroll, fixed assets, purchases, stores,
production, maintenance, transportation, personnel & administration and MIS. Administrative and
marketing offices have financial accounting, inventory management, payroll and provident fund
management systems. E-mail, intranet and Internet facilities are provided at all offices. Computer
training is provided to staff on a regular basis. Information security is done through installation and
upgrading of anti-virus programmes. With the IT infrastructure being accessed from various locations,
network and data security are important concerns. The society has an official website at
http://www.kribhco.net. (Functional)

Vigilance is considered important at KRIBHCO, at par with other functional areas. It is aimed at
preventive as well as punitive vigilance and at ensuring transparency and accountability. The vigilance
department works for systems improvement and simplification and codification of rules and procedures
for smooth functioning of the Society. There is a chief vigilance officer at the head office and vigilance
officers at plant and zone levels. There is a three-pronged vigilance policy in place, aimed at creating
awareness, preventing unethical activities and punishing misdemeanors. The board of directors
oversees vigilance through six-monthly reviews. An internal enquiry was recently instituted to
investigate allegations against the serving marketing director, indicating the efficacy of the vigilance
function. (Special Alert Control) (again add from above marked in red)

KRIBHCO is exploring the possibility of setting up a joint venture fertilizer project in Algeria. KRIBHCO is
in the process of signing a memorandum of understanding with the Chhattisgarh State Electricity Board
(CSEB) to set up a 2000 MW power project. It is planning to enter the DAP market in India. KRIBHCO had
put in Rs. 50 crore for all-India rail operations license for railway container operations. International
consultant KPMG is reported to have submitted a business plan to KRIBHCO for running container trains
in the area of Gujarat, Northern Maharashtra and Western Madhya Pradesh. KRIBHCO had signed a deal
with the Railways in 2007 for the operation of container trains for 20 years. It would tie up with other

Checked by Head of the Department________________________________

Date of checking of the Assignment ____________________________
Approved by Dean (Academics) ____________________________________
Director (Remarks) ______________________________________________
 F – 04

Gian Jyoti Institute of Management & Technology, Mohali

Assignment II
Academic Session January – April 2018

Name of the Faculty:- Rajneesh Mehra

Subject and Code: - Strategic Management – MBA 401
Date for Allotment: - March 26, 2018
Date for Submission: - March 31, 2018
Department:- Management
Session:- January – April 2018
operators to run the depot. KRIBHCO is keen on a roll out for the procurement of wagons. (expansion)
(area of growth)

There have been problems in the past between KRIBHCO and IFFCO as rivals in the fertilizer industry.
Equity investment of Rs. 97 crore was retired by KRIBHCO to IFFCO which had equity participation. There
have also been issues related to the alleged interference of the Department of Fertilizer, Government of
India, in the internal affairs of KRIBHCO. (retrenchment)

Q. 1 Identify the hierarchy of strategy activation at KRIBHCO from the case.

Q. 2 What are the types of strategic controls that can be implemented at KRIBHCO?

Q. 3 What are the areas of growth identified by KRIBHCO?

Q. 4 What can be the various performance indicators for expansion, stability and retrenchment
strategies?

Checked by Head of the Department________________________________

Date of checking of the Assignment ____________________________
Approved by Dean (Academics) ____________________________________
Director (Remarks) ______________________________________________