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2011

Internship Report on Ideal Chemical


Submitted To:
Submitted By: Asad Ali Shahzad (FA10-MBA-15C-119)

Asad Ali Shahzad


COMSAT INSITITUTE OF INFORMATION AND TECHNOLOGY
10/10/2011

Acknowledgement

All praises are for Allah Almighty that has bestowed upon human being the crown of creation and has endowed him with knowledge and wisdom. The Prophet Mohammad (PBUH) Who brought for us revelation and unlimited knowledge and civilized the barbarian human being. I am very thank full to Allah Almighty who gave me the courage to complete this complex task and to my ever caring and loving parents whose prayers helped me to reach this stage of my life.

Table of Contents
Executive Summary ................................................................................................................................... 5 1History and Background of Ideal Chemical .................................................................................... 6 1.11.21.31.41.52Historical Overview .................................................................................................................... 6 Mission ......................................................................................................................................... 7 Vision ............................................................................................................................................ 7 Objectives .................................................................................................................................... 8 Board of Director ........................................................................................................................ 8

Business Operation ............................................................................................................................ 9 2.1- Organizational Structure ................................................................................................................ 9 2.2- Departments.................................................................................................................................. 10 2.2.1- Production Department ........................................................................................................ 10 2.2.2- Accounts Department ........................................................................................................... 11 2.2.3- Marketing Department .............................................................................................................. 11 2.3- SWOT Analysis............................................................................................................................. 12 2.3.1- Strength .................................................................................................................................. 12 2.3.2- Weaknesses .......................................................................................................................... 13 2.3.3- Opportunities ......................................................................................................................... 14 2.3.4- Threats.................................................................................................................................... 14 2.4- Competitive Strategy ................................................................................................................... 15 2.4.1- Price ........................................................................................................................................ 16 2.4.2- Quality ..................................................................................................................................... 16 2.4.3- Customized Products ........................................................................................................... 17 2.5- Marketing Strategy ....................................................................................................................... 17 2.5.1- Mission .................................................................................................................................... 17 2.5.2- Marketing Objectives ............................................................................................................ 18 2.5.3- Financial Objectives.............................................................................................................. 18 2.5.4- Target Markets ...................................................................................................................... 18 2.5.5- Positioning .............................................................................................................................. 18 2.5.6- Strategies .................................................................................. Error! Bookmark not defined. 3-Business Process Analysis ............................................................................................................. 19

3.1- Ratio Analysis ............................................................................................................................... 19 3.2- Current Ratio ................................................................................................................................. 19 3.3- Cash Ratio ..................................................................................................................................... 20 3.4- Debt ratio ....................................................................................................................................... 20 3.5- Net profit margin ........................................................................................................................... 21 4LEARNING AS A STUDENT INTERN .......................................................................................... 22 4.1- Internship experience .................................................................................................................. 22 4.2- Working Experience Impact on career ...................................................................................... 22 4.3- Duties and Responsibilities ......................................................................................................... 23 4.4- Accomplishment ........................................................................................................................... 23 4.5- Problems........................................................................................................................................ 24 5Conclusion and Recommendations............................................................................................... 25 5.1- Conclusion ..................................................................................................................................... 25 5.2- Recommendations ....................................................................................................................... 26

Executive Summary

I was worked as a internee in the accounts department of ideal chemicals under the supervision of Sohaib Aslam Accounts Manager. Ideal Chemical was incorporated in Pakistan on 03-11-2008 as a Private Limited Company. The company is principally engage in the business of manufacturing all types of industrial chemicals. Ideal chemical is under leadership of Mr. Mohammad Ashfaq Khalid, Munawar Hussain and Muhammad Aslam under the supervision of CEO Munawar Hussnain. Ideal Chemical offering different types of chemicals which are used in industrial products and their raw material are aluminum wire, aluminum hydroxide and Sulphuric Acid. It main goal is to be the market leader.

1- History and Background of Ideal Chemical 1.1- Historical Overview


Ideal Chemical `Private Limited was established in 2008 under the companies ordinance 1984. Munawar Hussain. Muhammad Ashfaq Khalid and Muhammad Aslam are the board of Director. Munawar Hussain is Chief Executive of Ideal Chemical PVT Limited. Ideal Chemical factory in located at Qilla Sattar Shah, 1.5 km Pindi Dass, Towards Distt Sheikhupura and head office is situated at 142-SD Falcon Complex Gulberg-3 Lahore. In the Beginning Ideal chemical PVT limited took slow start in chemical industry market but because of the good policies they achieve success in business in no time. Their good will and profit increase every year with great pace. In four tears Ideal Chemical Private Limited has achieved their goals successfully and Company is raised towards their mission and vision.

1.2- Mission

To provide competitive chemical solutions through technological innovation to form the basis of better life.

1.3- Vision

To become a leading chemical solutions provider to industry worldwide.

1.4-

Objectives
The objectives of Ideal Chemical are as follow:

Highly Profit Variety Products Maintain Good Product Selling Expansion of Strong Structure Expansion of Networks To get maximum share of the market To price the products optimally

1.5- Board of Director


The Board of director of ideal Chemical is as follow:

Munawar Hussain Muhammad Ashfaq Khalid Muhammad Aslam

Board of Director Board of Director Board of Director

2- Business Operation
2.1- Organizational Structure

Board of Directors

Chief Executive Officer

Auditor

Financial Consultant

Legal Advisor

Area Managers

2.2- Departments
The Department names are as follow. Production Department Marketing Department Accounts Department

2.2.1- Production Department


Selling of Chemical Purchasing of Chemical

Selling of Chemical
There are seven chemicals that Ideal Chemical can sale in the market. Aluminum Sulphate (White) Aluminum Sulphate (Brilliant White) Aluminum Sulphate (Semi-White) Aluminum Sulphate (Super-White) Aluminum Sulphate (BGW-!) Sulphuric Acid Sulphonic Bioxide

Purchasing of Chemical
There are three chemicals that Ideal Chemical purchases from in the market. Aluminum Wire Sulphuric Acid Aluminimum Hydroxide
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2.2.2- Accounts Department


Account department can maintain the financial status of the ideal chemical Private limited.

Financial Result Revenue-net Gross Profit Operating Profit Profit Before tax Taxation Profit After Taxation

2010 (Rs) 81,993,814 9,323,172 3,376,349 3,347,738 516,223 2,931,515

2009 (Rs) 6,521,823 854,471 390,095 388,344 217,415 170,929

2.2.3- Marketing Department


Marketing is the process used to determine what products may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves.

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2.3- SWOT Analysis


2.3.1- Strength
Being a Private company its main aim is not only to earn profit but to satisfy its customer by providing superior value to its customers. Ideal chemical always provide best quality chemical to its customer so that ideal chemical customer show faith and loyalty by reordering the chemical. It is the main strength of ideal chemical

Provide Credit Ideal chemical also provide credit purchase facility to its loyal customer

Gaining Success A company cannot gain success without hard work of its workers. Medical Facility Its provide medical facility to its worker bonuses are given on regular basis

Pick and Drop Pick and drop facility to its workers

Ideal chemical always provide competitive rates to its customers which is its main strength.

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2.3.2- Weaknesses
Instead of strengths of Ideal Chemical there is some weakness that I have observed during in internship period.

Lack of Experience Majority of the workforce consists of young

professional, they lack in their experience. And sometimes lack of experience becomes a hurdle while serving to the customers. It is the point where they feel difficulty while competing with the other companies. Motivation Level I observed that at present the motivation level of the employees is not very much.

Internal Control System Internal Control System to be improved

Not Efficient Department Marketing department is not very much efficient Job Rotation Job rotation for employee is limited

Credit Purchase Facility Credit Purchase facility should be limited

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Lack of experience There is lack of experience in middle management

2.3.3- Opportunities
Progress It is mandatory to try to make progress with consistency as well as to adopt change s with needs of time, in order to cope up with both conditions

Lot of Opportunities Lots of opportunities are there for Ideal chemical industry to increase the scale of business in Pakistan as well as in Abroad.

Good Thinking Top management is thinking to take advantage of these opportunities.

2.3.4- Threats
Threats are the negative trends in external environment factor. As on one side environment provides opportunities to one organization on the other hands it also it also to face some threats. Ideal chemical private limited also has to face this situation.

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Other Chemical Industry Other chemical producing companies are always has threats

Changing Policy Changing in government policies should be threats for company

Price war Price war among companies is a serious threat.

2.4- Competitive Strategy


Successful chemical companies are constantly evaluating their objectives, developing pragmatic strategies to achieve them, and then taking action to transform plans into reality.

Analyze strategic and competitive industry position Develop new strategies for market entry and growth Develop new markets and products tailored to customer needs Segment existing markets to identify growth opportunities Assess technologies to define opportunity and/or threat Assess competitor strategies and likely competitive response Understand customer behavior to identify new ways to profitably serve them Analyze programs and budgets to ensure spend is appropriate to expected returns

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2.4.1- Price
If the corporate strategy is to compete on lower price, the low price approach is either a low cost strategy or a low margin strategy with the latter being unacceptable to most investors. The low cost strategy demands a clear and complete understanding of cost and on-going minimization of costs. Real-time financial analysis of such key issues as quality, regulations, customer satisfaction, performance and profitability by customer, product, or location is critical, since company-wide visibility speeds the flow of goods, eliminates waste due to costly shelf-life expirations and returns, and gains the efficiencies necessary to meet product demand while keeping costs at a minimum. In addition to support for actual costing (that exposes all material and operation costs, including indirect costs or value resulting from co-products and byproducts); there is an increasing awareness of the need for customer segmentation that allows the enterprise to match customer service levels to the value of the relationship.

2.4.2- Quality
If the corporate strategy is to compete on superior quality, consistent product quality must match each customers definition of quality not the enterprises definition of quality. While many assume quality is defined as the highest level of product quality, the reality is that quality is the ability to satisfy each customers demands for product consistency. A companys ability to provide consistent quality begins with specifications and continues from purchasing to inventory to production and shipping. Raw materials and active ingredients often vary in potency, grade and pH factors among other characteristics. The ability to dynamically adjust recipes based on material characteristics allow enterprises to produce product with consistent quality and maximize material utilization, with the accuracy required for chemicals manufacturers.

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2.4.3- Customized Products


If the corporate strategy is to compete on its ability to customize products, chemical manufacturers must possess flexibility, in terms of easy, customer driven product formulation, production processes and relatively short product runs. In specialty chemicals, in particular, the time to-market process wins more business from recognizing and exploiting customers needs than from trailblazing a new market with a purely technological innovation. The faster time-to-market and time-tovolume, the greater advantage these companies have over their peers, and the greater chance to gain market share. Major customers are increasingly setting technical and business process requirements and deadlines for their suppliers, requiring manufacturers to have effective systems for managing these customer demands.

2.5- Marketing Strategy


This is an age of competition. Numerous companies are providing chemicals to the customer. These days everyone is facing pressure of competitors. In this world of growing competition, the only way to survive and grow, for an organization, in the market place is the proper marketing and promotion of its products The market Strategy is based on three business segments: industrial products, consumer products, and textile chemicals.

2.5.1- Mission
Ideal Chemical mission is to provide the highest quality, lowest cost specialty chemicals for the chemical industry. We exist to attract and maintain customers. With the strict adherence to this maxim and scrutinized financial controls, success will be ensured. Our products will exceed the expectations of our customers.

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2.5.2- Marketing Objectives


Maintain steady, sustainable growth each quarter. Continue to increase market penetration by 1.5% per quarter.

2.5.3- Financial Objectives


Never decrease research and development relative to sales levels. Continue to generate manufacturing efficiencies, helping expand the profit margin. Attempt to decrease overhead costs as a percentage of revenue.

2.5.4- Target Markets


Our market is divided into three segments: Industrial Products Consumer Products Textile Products:

2.5.5- Positioning
Ideal Chemical will position them as a premier niche chemical manufacturer for the chemical industry. This positioning will be achieved by leveraging Aluminium Sulphate competitive edge is in the formulations and manufacturing processes that has been developed for the production of the seven specialized products. This has created a sustainable competitive advantage relative to the other industry participants.

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3-Business Process Analysis


3.1- Ratio Analysis
Ratio analysis is an important and age-old technique of financial analysis. Ratios are important and helpful in the reference that: These simplify the comprehension of financial statement and tell the whole story of changes in the financial conditions of the business. These provide data for inter-firm comparison. The ratios highlight the factors associated with successful and unsuccessful firms, also reveal strong and weak firms. These help in investment decision in case of investor and lending decision in case of Industry etc.

3.2- Current Ratio

Rs.(000) Current assets Current Liabilities

2010 31612109 13550310 0.23%

2009 11671029 6933560 0.16%

Financial position of Ideal Chemical is strong in 2010 as compare to 2009. This ratio tells us about short term solvency of the organization Current ratio is showing better trend in 2010. Cash balance is increasing in 2010 as compare to 2009.
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3.3- Cash Ratio

Rs.(000) Cash Equivalent Current Liabilities

2010 4376653 13550310 0.32%

2009 829091 6933560 0.11%

Cash ratio also describes the better condition for the industry. If the cash ratio increases it is better for the industry. It shows the financial condition of the industry.

3.4- Debt ratio

Rs.(000) Total Liabilities Total Assets

2010 27054384 33386828 0.81%

2009 7150957 13651904 0.52%

Debt Ratio describes the firms debt position as well as its liabilities. It also describes the level of financial risk. If the ratio is high then it is negative sign for industry. The ratio is decrease slightly but it is not good for industry overall.

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3.5- Net profit margin


Rs.(000) N.P.A.T X 100 Sales 2010 2831515 x 100 81993814 3.45% 2009 170929x100 6521823 2.62%

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4- LEARNING AS A STUDENT INTERN

4.1- Internship experience

I did my internship at Ideal Chemical for a total duration of six/seven weeks and the departments that I have worked during that time are as follows: Accounts Department
Marketing Department

First day, I reported to the manger of the industry who gave me brief introduction about the management and working of the industry, he also check my knowledge about industry level by taking a short interview. Then he introduced me with employees. Total ten employees are working with one manger. I worked in account Department with Sohaib Aslam. I learned how to enter the data in computer software.

4.2- Working Experience Impact on career

My internship experience has given me a realistic preview of my field of education. Now I feel that I m better prepared to enter the world of professional work. I have come to know and have been appreciated by a number of professionals who are lending their services to the industrial sector for more than a decade. I feel honored that I have worked such experienced professionals. The overall experience of my internship was very good. I learned the sense of responsibility in its literal meaning. I am now capable of dealing with different sort of customers, and how to be patience while doing so. Besides this I also gain knowledge about company which I previously lacked and many more products being offered by the
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companies. No doubt this internship gave me the experience, which would boost my confidence to work in future.

4.3- Duties and Responsibilities

My duties and responsibilities are as follows: Maintain a good relationship with the company senior staff. Create a good and effective learning environment in the company. Equally deal with all the type of people belonging to any type any gender, race, religion etc. To help the senior staff during working hours to reduce his work load. Maintain the secret information of customer.

4.4- Accomplishment

The main purpose of internship is to get a practical experience in the market and to get some practical knowledge. Usually the period of internship is short but we can learn a lot from this period. First time in my life when I was doing some reasonable practical tasks. I learnt how to implement my MBA knowledge on this job. I learnt what the practical implementation of the book knowledge is It was first time in my life to work whole day in the company with full responsibility, to go in time and to off in time. I learnt from this short period of job is punctuality. The other thing is dressing, professional dressing matters a lot. By seeing my senior and collogues I start to copy them in dressing. It was a big achievement for me, that I learn how to do the work in team and group of people. Working in team should be learnt.

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4.5- Problems

For any job skills and abilities are acquired to perform the job but in case to perform professional task then man should perfect and have a lot of skills to perform any type of task. But during the internship I faced some problems There is no proper way to give complete training to internee. Working in industry is very difficult. Chemicals are very dangerous Lack of skill with dealing with different type of customers Difficult to perform work in excel because major work is done on excel. Operate different type of computer program especially in software. Acquired the skill of communication & other professional skill. Lack of Knowledge how to face problems encountered

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5- Conclusion and Recommendations

5.1- Conclusion

At present there is no such organization in the world that is free from problem and challenges. Every concern has to strive and struggle a lot to be more profitable and to get more competitive edge. It has been four years since the establishment of Ideal Chemical Private Limited and since its establishment it has aimed to become the leading industry of Pakistan by that provides outstanding services to its customers. The company has seen phenomenal growth while also increasing the assets and profits of the company. The products that Ideal Chemical provides have a great market penetration not only because of their features but also the profit that they charge. The management of industry is taking strategic steps to enable the company to emerge as a strong and progressive institution. It is continuing to make efforts to refine its products and operations to make them more compatible. New customer schemes have been introduced and an action plan to maintain revenue growth in future. As the business and economic conditions remain uncertain, Ideal Chemical continues to develop the new products like it has been doing in past.

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5.2- Recommendations

After doing internship of six weeks in Ideal Chemical Private Limited, I would like to give some recommendations to overcome some problems. Company should prefer to promote worker on the basis of their talent and avoid going for personal like and dislikes. It can be harmful for the organization in the long run. In Ideal Chemical, there is misdistribution of work; some people are over burdened with the work. So I suggest that there should be fair distribution of work in all the departments. Ideal Chemical should provide loan to suppliers at low mark up rate and easy terms & conditions. Ideal Chemical Private Limited needs to use more marketing channels such as radio to make the public aware of its products and services. In the presence of intense competition Ideal Chemical Private Limited has to realize the importance of marketing. There are no incentive schemes for employees of Ideal Chemical like scholarship schemes for employees that want to pursue higher education. Education fees are also returned by Ideal Chemical to its employees, after they have finished their studies. Ideal Chemical should continuous to expand its business by market penetration strategies.

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