SUMMER TRAINING REPORT

SUBMITTED BY:MAHAK GOREJA

TABLE OF CONTENT
1. INTRODUCTION SOPA ABOUT SOYA INDUSTRIES ABOUT RUCHI SOYA 2. MANUFACTURING PROCESS RUCHI SOYA products Procurement of raw material I. II.
SEED CRUDE OIL

Extraction Process 3. LOGISTICS C.H.A. Supply Chain Export I.

Export Contract

II. III.

BULK Containerization

4. DOCUMENTATION PRE-Shipment POST-Shipment Letter of Credit 5. FOREX HEDGING I. II. III.

SPOT FUTURES FORWARD

6. CONCLUSION AND RECOMMENDATION

INTRODUCTION

ABOUT SOYA INDUSTRIES

The soybean or Soya bean is a species of legume native to East Asia. The plant is classed as an oilseed rather than a pulse. It is an annual plant that has been used in China for 5,000 years to primarily add nitrogen into the soil as part of crop rotation. The main producers of Soya are the United States (32%), Brazil (28%), Argentina (21%), China (7%) and India (4%).

ABOUT RUCHI SOYA

The 24-year old Ruchi Soya Industries Limited is the flagship company of Ruchi Group of Industries. Its recent merger with sister concerns ( Aneja Solvex Ltd, General Foods Ltd, Ruchi Credit Corporation, Ruchi Health Foods Ltd, Param Ind. Ltd, Ruchi Private Ltd and soya businesses of MP Glychem) has catapulted it among the top five FMCG players in the country, with a turnover of 11915 crores. This merger illustrates the

strength that is to be found in increased transparency, firm market position and better control of systems.

EXPORTS
Over the years, Ruchi has become one of the largest crushers of Soyabean in India and presently has installed crushing capacity of about 13,000 Tons per day i.e. about 4 million tons annually in 14 plants, spread over 11 locations. Ruchi's share in the crushing of soyabean in India is presently about 19%. Being the largest crusher, Ruchi with its annual export of about one million tons has also become one of the largest exporters of Indian Soyabean Meal accounting for nearly 20 - 22% of the total soyabean meal from India. Soyabean meal (de-oiled extractions / cake) is obtained after crushing of seed and extraction of oil by solvent extraction process. Soyabean meal is considered as one of the most valuable raw material for preparing poultry / aqua / animal feed in the world market as it contains a very high percentage of protein. All the products produced by Ruchi enjoy ready accessibility in the export market namely, Japan, Vietnam, Indonesia, Thailand, Philippines, South Korea, Taiwan, Middle East countries apart from Indian Sub continent countries namely Bangladesh, Pakistan, Nepal, Srilanka etc.

The Soybean Processors Association of India, popularly known as SOPA, is the only national level body representing the soybean processors, farmers, exporters and brokers in India working towards the aim to strengthen soybeans as a viable crop. The main objective of SOPA is to encourage the development and promotion of soy-based products in the interest of the farmers as well as the processors. SOPA was established in 1979 with its headquarters at Indore in the state of Madhya Pradesh, the main soybean-growing region of India. SOPA is represented on all the important committees, Govt. Bodies, Export Promotion Departments and on various Ministerial advisory committees like Commerce, Foreign Trade, Agriculture, and Foods etc. SOPA's headquarters has been set up on a spacious 4-acre area. The association has a well-equipped office, conference hall, boardroom, and analytical and research laboratory. There are 160 Processing units in India processing Soybean with modern processing technology. The

technological excellence of the Soya processing units has earned a very good name for the Indian Soybean Meal in the international market.

SOPA MODEL CONTRACT OF SOYABEAN SEED

Contract No. : .................................. Date : ................................... According to your order by Phone/Fax/Telex, we confirm having purchased for you Soybean Seed Yellow/Black as per the following terms and conditions :

Seller : Address : Phone/Fax No. : Contact Person : Buyer : Address : Phone/Fax No. : Contact Person : Commodity : Soybean Seed Yellow/Black a) Moisture : Not more than 10%. If more than 10% then 1:1 rebate upto 12%. Above 12% rejectable at Buyer's option. b) Sand Silica : Not more than 2%.

If more than 2% then 1:1 rebate upto 4%. Above 4% rejectable at Buyer's option. c) Refraction : d) Green Seed : Not more than 7%. If more than 7% then 1:0.5% rebate upto 15%. Above 15% rejectable. e) Damage : Not more than 2%. Seeds If more than 2% then 1:0.5% rebate upto 5% Above 5%, 1:0.75% of upto 7% Above 7%, 1:1% of upto 10% Above 10% rejectable at Buyer's option. Quantity ................................... MTs. & No. of 4 (i) Bags ............................... (ii) Each bag to contain standard 90 kgs. including bag weight. (iii) Soybean to be packed in second sound condition New bags only. Soybean trucks to be weighed on the large scale. (However, 10 (iv) intact Bags at random to be weight on the smaller scale for cross verification.) 7 days from date of bargain (including date of 5 Delivery Period : bargain) 6 Price : Rs. .................. per Quintal F.O.R. Buyer's factory. 7 Payment 15 days as per the condition : Cash Discount : 1.5%, Payment on 2nd Day. In case of delay of payment beyond 15 days, then the buyer shall pay an interest at the rate of 18% for the delayed period. Maximum time one month. After one month Associations would take up the matter with the concerned parties. 8. Other terms and conditions : (i) Seller shall arrange delivery during the specified period. In case the seller defaults then the buyer has the right to ; a. Cancel the contract at par; b. Settle the contract and debit the account of the seller for the difference between the prevailing market price as on the last day of delivery and the contracted price; c. In case of any dispute regarding the material supplied, then the buyer shall hold 5 bags for retest for a maximum period of 5 days. Retest of moisture not permissible.

(ii) In case material is rejected at buyers factory, then the seller shall replace the material within the delivery period otherwise the buyer reserves the right to purchase from the market at seller's risk and cost as in (1). (iii) In case of nay dispute regarding the material supplied, then the buyer shall hold 5 bags for retest for a maximum period of 7 days.

SOPA MODEL CONTRACT FOR SOYABEAN MEAL

Specifications & Scale of Allowances : Protein - Min. 46% Oil - Max. 1.50% Fibre - Max. 6% Moisture - Max. 12% Sand/Silica - Max. 2% Urease 0.30 Unit Max (Mg/N.G/Min) at 30 degree Activity Centigrade by EEC method Free from lumps & foreign material other than Soya Allowances: For any deficiency in Protein below 46% rejectable at Buyers option. For any excess in Fibre above 6% rejectable at Buyer's option. For any excess in Moisture above 12% rejectable at Buyers option. For any excess in Sand/Silica above 2% allowances to be: from 2% to 2.5% and upto 2.5% allowance to be: 1 :1 or any fraction thereof Above 2.5% rejectable at Buyer's option For any excess in Urease Activity above 0.30 units allowances to be: From 0.30 Units to 0.35 Units 0.1% for each 0.01 Unit

Over 0.35 Units rejectable at Buyer's option

EXPORT IMPORT PROCESS

Most of the export form ruchi soya is of doc a by product in exectraction off oil from soyabeen . rate of doc are determined by it protien content .looking into export of doc it I is generally done throw intermidetes that are agents and brokers . The export process in ruchi is that they get orders from intermediteies and then order processing start firstly a contract is singed between the party .onces the contract is done depending upon the conditions of the export contract theletter of credit is opened by the importing partyand there after L/C is the main and chief document ,there after goods are shipped or transhipeed to the port of destination . TYPES OF EXPORTS

Third party or intermediate Direct export

PORTS OT EXPORT

Mumbai (JNPT) Kandla Bedi

PAYMENT MODES USED

L/C Advance remittance Open account

DOCUMENTATION
Export documentation is a tedious but necessary process that all exporters must pay close attention to, as documentation requirements vary considerably by country, commodity, and situation. Shipping documents are the key to international trade, and have been used for thousands of years. Documents outline the sale, shipment, and responsibilities of each party so that the full transaction is understood and complete without delay or additional costs. Documents also ensure compliance with applicable regulations. These documents can be prepared by the exporter and then processed or forwarded by a Freight Forwarder. Invoices Commercial, Pro-forma, Consular Packing Lists Dock, or Warehouse, Receipt Bills of Lading (B/L) Ocean B/L, or Motor/Truck or Air Bill, or Way Bill Certificates of Origin (C/O) Declaration of Dangerous Goods (DGD) Hazmat, placards Certificates Insurance, Free Sale, Inspection, Phytosanitary, Miscellaneous: Letters of Credit, , Duty Drawback

Invoices
Pro-forma Invoice: A pro-forma invoice is an invoice sent to the buyer before the shipment, giving the buyer a chance to review the sale terms (quantity of goods, value, specifications) and get an import license, if required in their country.

Commercial Invoice: A commercial invoice is prepared by the seller/exporter and addressed to the buyer/importer, and is one of the first documents prepared when a transaction has been agreed upon. The invoice identifies the buyer and seller, describes the goods sold and all terms of sale, including IncoTerms, payment terms, relevant bank information, shipping details, etc. An invoice may be itemized to show cost of goods, freight, and insurance, or other special handling.

Consular invoice: A consular invoice is the commercial invoice stamped or notarized by the consulate or embassy of your customers country, if required. Material Handling Packing List: A packing list is prepared by the shipper and is a detailed break down of the items within a shipment. Dock (or Warehouse) Receipt: The dock or warehouse receipt is issued by a warehouse supervisor or port officer and certifies that the goods have been received by the shipping company. Bills of Lading (B/L) A Bill of Lading is issued by the carrier to the shipper for receipt of the goods, and is a contract between the owner of the goods and the carrier to deliver the goods.

Certificates
Certificate of Origin (C/O) A document prepared by the original manufacturer and certified by a quasi-official authority - such as a Chamber of Commerce - stating the items country of origin Certificate of Insurance This document indicates the type and amount of insurance in force on a particular shipment for loss or damage while in transit. It is sometimes referred to as Marine insurance, but may cover the entire voyage. Certificate of Inspection Some customers will require a pre-shipment inspection to satisfy their own requirements or local regulations, according to an industry, government, or carrier specification Phytosanitary Certificate

Primarily a document required to import goods into the U.S., confirming compliance with phytosanitary safety regarding agricultural and animal health standards.

Special Documents
Documentary Letters of Credit (L/C): A letter of credit is a document issued by a bank committing to pay the seller/exporter a stated amount of money on behalf of the buyer/importer as long as the specific terms and conditions are met.

COUSTOM HOUSE AGENT

A Custom House Agent is somebody entitled to act upon a companys behalf on actions involving the import and export of goods. The phrase is most commonly used in India. There such agents must be licensed under section 146 of the Customs Act. The purpose of a custom house agent is to tackle the problem that management of many businesses simply do not have the resources to personally deal with import and export issues. This is a particular concern given that India is traditionally a trading nation. There is also a high degree of bureaucracy in Indian business. Ruchi has tied with up with custom house agent on yearly bases as because of the quantity of export and frequency of exports.. CHA performs function like

WAREHOUSING CUSTOM CLEARANCE STEVEDOARING

LOGISTICS
Logistics is the management of the flow of goods, information and other resources between the point of origin and the point of consumption in order to meet the requirements of consumers (frequently, and originally, military organizations). Logistics involves the integration of information, transportation, inventory, warehousing, material-handling, and packaging, and occasionally security.

DEMURRAGE
The term Demurrage originated in vessel chartering (notably voyage chartering) and refers to the period when the charterer remains in possession of the vessel after the period normally allowed to load and unload cargo (lay time). By extension Demurrage refers to the charges that the chatterer pays to the ship owner for its extra use of the vessel

DISPATCH
Compensation paid by ship owner tocharterer as a 'reward' when the latter is able to complete the cargo operations in less time than the lay time allowed

Others terms in Logistics

WIPON: WHETHER IN PORT OR NOT WIFPON: WHETHER IN FREE PRATIQUE OR NOT WIPCON: WHETHER PORT CONGESTED OR NOT WILTON: WHETHER IN LOAD TURN OR NOT WCSAON: WHETHER CARTING SPACE AVAILABLE OR NOT WBAON: WHETHER BARGEES AVAILABLE OR NOT PWWD: PER WEATHER WORKING DAY THC: TERMINAL HANDLING CHARGES SASHEXEIU: SATURDAY AFTERNOON SUNDAY HOLIDAY EXCLUDED EVEN IF USED CWC: CENTRAL WAREHOUSING CORPORATION

Forex

The foreign exchange market (Forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.[1] The primary purpose of the foreign exchange market is to assist international trade and investment, by allowing businesses to convert one currency to another currency.

Foreign Exchange Risk

When companies conduct business across borders, they must deal in foreign currencies . Companies must exchange foreign currencies for home currencies when dealing with receivables, and vice versa for payables. This is done at the current exchange rate between the two countries. Foreign exchange risk is the risk that the exchange rate will change unfavorably before the currency is exchanged.

Hedging
In finance, a hedge is a position established in one market in an attempt to offset exposure to price fluctuations in some opposite position in another market with the goal of minimizing one's exposure to unwanted risk.

Financial instruments
SPOT A spot transaction is a two-day delivery transaction (except in the case of trades between the US Dollar, Canadian Dollar, Turkish Lira and Russian Ruble, which settle the next business day), as opposed to the futures contracts which are usually three months. This trade represents a direct exchange between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction. FORWARD

One way to deal with the foreign exchange risk is to engage in a forward transaction. In this transaction, money does not actually change hands until some agreed upon future date. A buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on that date, regardless of what the market rates are then. The duration of the trade can be a one day, a few days, months or years. Usually the date is decided by both parties. and foreword contract is a negotiated and agreement between two parties FUTURE Foreign currency futures are exchange traded forward transactions with standard contract sizes and maturity dates for example, $1000 for next November at an agreed rate .Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.
SWAP

The most common type of forward transaction is the currency swaps. In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not standardized contracts and are not traded through an exchange.

OPTION A foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. The FX options market is the deepest, largest and most liquid market for options of any kind in the world..

CONCLUSION AND RECOMMENDATION

I can conclude that the whole training process was a knowledgeable and interesting odyssey where I learnt various aspects of Export-Import

management ( like Documentation, containerization, logistics) and FOREX management. Our mentors in organization explained the complete working scenario in elaboration and in depth. This complete training process is going to be an fruitful learning throughout my career. I have few recommendations for the training process for the future trainees. They are as follows: 1. The training process should be more streamlined. 2.More practical approach should be foreseen. Like factory visit, port visit and board visit should be given. 3. Trainees should be given more responsibilities to handle in the organization under the guidance of mentors

Thanks & Regards

Mahak Goreja