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A Project on Production Operation Management and the company chosen for this project is sitara chemicals
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Sitara Chemical Industries Limited. Production
PRODUCTION REPORT
SITARA Chemical Industries Limited
(SCIL)
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Sitara Chemical Industries Limited. Production
In the name of Allah, the sustainer of the whole universe. Peace be upon the Holy
Prophet Muhammad (SAW), the most perfect of all the human beings ever
born.we feel it an honor to submit this report for the production and operational
managemnt. we express our sincerest and heartfelt gratitude to our teacher
Mr.SARDAR ZAHID for his well directed and skilled guidance.
Last but not least we offer our humble heartfelt gratitude and deepest affections to
our great parents who inspired us for higher ideals of life, supported morally and
financially throughout our studies, and always prayed for success in the pursuits
of our life.
(INOVATORS)
BBA-B9-A
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Sitara Chemical Industries Limited. Production
TO
our Haji Bashir Ahmad
Most respected loving and adoring Sahib the
Chairman of STIL whose benevolent attitude
PARENTS
and fair administration of the organization has
Who always provide us shelter.
always the source of inspiration for the entire
In all the seasons of our life
staff of the organization.
And
our success is really the fruit
Of their prayers.
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Sitara Chemical Industries Limited. Production
3: LIST OF CONTENTS
Subject Page No.
1. TITLE PAGE 01
2. ACKNOWLEDGEMENT 03
3. LIST OF CONTENTS 04
4. INTRODUCTION 05
5. OVERVIEW OF THE ORGAIZATION 06
6. NATURE OF ORGANIZATION 07
7. MARKET SHARE 11
8. USES OF CAUSTIC SODA 12
9. PROCESS 14
10. DISTRIBUTION 16
11. ERP 17
12. PROBLEMS 18
13. REFERENCE & SOURCES 23
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Sitara Chemical Industries Limited. Production
INTRODUCTION
Sitara Chemical Industries Ltd. (SCIL)
Sitara Chemical Industries Ltd. is the primary producer of caustic soda in Pakistan
and enjoys the benefits of being part of the Sitara Groups which is, one of the most
recognized and respected conglomerates in the country.
SCIL was incorporated in 1981 as a public limited company and started its
commercial production in 1984.
SCIL has made growth by leaps and bounds and become largest Caustic Soda
producer in Pakistan. Initially produced caustic soda at a rate of 30 metric tons a day,
the plant’s was gradually increased over the years to current level of 540 metric tons a
day.
SCIL is a one of the units of “Sitara Groups of Industries”.
Sitara Group of industries comprises of following business units.
Sitara Group of Industries
Sitara Chemical Industries (Pvt) Ltd. _ Chemical Division
Sitara Chemical Industries (Pvt) Ltd. – Textile Division
Sitara Textile (Pvt) Limited
Sitara Energy (Pvt} Limited
Sitara Fabrics (Pvt) Limited
Sitara Agri Model Farm
Sitara Per Oxide (Pvt) Limited
Groups Charitable Institutions
Aziz Fatima Trust
Aziz Fatimah Trust Hospital
Ghafoor Bashir Children Hospital
Aziz Fatimah Girls High School
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Sitara Chemical Industries Limited. Production
OVERVIEW OF THE ORGANIZATION
Company History and Background:
Sitara Chemical Industries Ltd. was incorporated in 1981 as a public limited
company and started its commercial production in 1984, under the administration of
two brothers, Haji Abdul Ghafoor (late) and Haji Bashir Ahmad. Now Mr.
Muhammad Adrees is the Chief Executive of SCIL. The factory is situated at 32km
Sheikhupura Road Faisalabad. SCIL incorporated under the companies’ ordinance
1984 and listed in1987.
Initially SCIL was incorporated for Chloral Alkali Production, however it under gone
merger with Gafoor Basheer Taxtile. SCIL has made growth by leaps and bounds and
become largest Caustic Soda producer in Pakistan. At present SCIL has a market
share of 53% in Caustic Soda industry. Similarly it enjoy major market share of by-
products and specialty chemicals such as Hydrochloric Acid, Liquid Chlorine,
Sodium Hypo Chlorite, Bleaching powder, Ammonium Chloride, Magnesium
Chloride, Ferric Chloride, Calcium Chloride, Nickel Chloride, Zinc Chloride, etc.
SCIL’s primary shareholder is Mr. Mohammad Adrees, who holds 61.32% stake in
the Company. Mohammad Adrees is the Chief Executive of SCIL and the eldest son
of the Haji Bashir Ahmed, the Chairman of Sitara Group.
The following table presents the current shareholding structure of SCIL.
Shareholders Number of Percentage
Shares Holding
Mohammad Adrees 11,377,502 61.32%
National Bank of Pakistan - Trustee 1,374,853 7.41%
Department
Other Financial Institutions 1,957,353 10.55%
Individuals 3,015,896 16.26%
Joint Stock Companies, Others 827,995 4.46%
Total 18,553,599 100.00%
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Sitara Chemical Industries Limited. Production
Nature of Organization
Core business of the company is manufacturing of Caustic Soda and some by-
products at Chemical Division. The Company mainly supplies industrial chemicals to
various industries, which gives the company a very wide consumer base
diversification over many industrial segments. The location of the plant is also
strategic as some of the major consumers belonging to textile, soap, paper and
vegetable oil industries are situated in the surrounding area.
SCIL operates through five separate divisions: the Chemical Division, Textile
Division, Agri Division, Specialty Chemical Division and PVC Division. The
company is an innovator and has diversified its products base over the recent past and
continues to introduce new products and processes in the domestic market.
Chemical Division
The chemical division has been in operation since 1985 and has consistently
remained the primary source of revenue for the company. The division produces a
wide range of products (detailed in the table below), which are all by-products of the
Sodium Chloride electrolysis process.
Caustic Soda Liquid (50%) Sodium Hypochlorite
Caustic Soda Liquid (33%) Hydrochloric Acid
Caustic Soda Solid Liquid Chlorine
Caustic Soda Flakes Ammonium Chloride
Bleaching Powder Hydrated Lime
Caustic Soda Flakes 98%min
In June 2006 SCIL successfully installed a new Caustic Soda Plant with a capacity of
210 metric tones per day. This new plant replace the high energy consuming Mercury
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Sitara Chemical Industries Limited. Production
and old technology having capacity of 105 metric tones per day with most poser
efficient Membrane technology and has added capacity of Caustic Soda 105 MT.
In 2007 SCIL has installed new 22MW power generation plant. Electricity generation
started in April 2007. Uninterrupted supply generated by power plant will not only
reduce cost of production.
Specialty Chemicals Division
The Specialty Chemicals Division was established in 2001 to launch SCIL’s products
into the global market and improve the quality of product and services. All exports for
the Chemical Division are routed through the Specialty Chemicals Division, which
allows SCIL to generate foreign exchange and diversify risks. The access to foreign
markets also enables the company to achieve increased economies of scale via
expanding volumes. The division has an extensive international distribution network
with representatives in Kenya, South Africa, Sri Lanka and Syria.
The Specialty Chemicals Division also spearheads the Research and Development at
SCIL by improving process, introducing new technology and launching new products
to tap business opportunities in niche markets. The division plays an integral part in
enhancing the company’s corporate image and expending its international presence.
The division is currently engaged in the sale of following products:
Ferric Chloride Calcium Chloride
Magnesium Chloride Nickel Chloride
Magnesium Carbonate Ferric Sulphate (Solid, Powder)
Ferric Chloride 40%+/-1
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Sitara Chemical Industries Limited. Production
Agri Division
The Agri Division was launched in February 2003 with aim of introducing plant
nutrition technologies that improve yields from agricultural output. The division has
been busy in identifying factors that have be contributed to the low yields currently
seen in farming and has identified crop nutrition i.e. feeding crops with balanced
nutrients, timing thereof and application techniques as specific areas of focus. In
addition, improving soil environment, crop quality and self life of the agricultural
products are the main objective of the division. Scil is also providing free advisory
services to farmers along with demonstrations at farmers sites. The management feels
that there is a great deal potential in this segment as there is need and demand for
yield increasing products and techniques.
Currently the Agri Division offers the fowling products.
Phosphorus Plus Potash Plus
Nutri Calcium Nitro-20
NPK-c Chelated Znic
Chelated Iron
Textile Division
The Textile Division was launched in 1996 when Ghafoor Bashir textile limited was
merged with SCIL as part of Sitara Group’s overall strategy. Later Sitara spinning
mills was merged with SCIL in 1998 as part of same strategy. The division is engaged
in the production of top quality Polyester/ Cotton (PC) and Polyester / Viscose (PV).
Textile Division production remained 9,978,032 kgs of yarn in year 2007 against
10,991,174 kgs in the preceding year. During the year all 22,080 spindles remained
operational. Textile sector of Pakistan especially spinning sector remained under
slump. Production of yarn resulted in decreased during the year as compared to
preceding year.
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Sitara Chemical Industries Limited. Production
Business Volume
Sitara Chemical Industries Ltd. is the largest producer of Chlor-Alkali products in
Pakistan. The total amount of turnover in financial year 2008-09 was Rs.6.263
Billion.
Product Wise Five Year Business Volume
Product 2003-04 2004-05 2005-06 2006-07 2007-08 G.Total
(Quantity in Metric Tons)
Caustic Soda liquid 86,878 90,712 99,476 104,451 119,051 500,568
Caustic Soda Flakes 23,845 23,179 19,264 21,047 21,868 109,203
Caustic Soda Solid 4,602 5,172 5,089 4,162 4,315 23,340
Hydrochloric Acid 83,185 102,515 109,164 114,535 124,392 533,791
Sodium Hypo Chlorite 27,410 28,459 26,740 34,093 43,585 160,287
Liquid Chlorine 6,245 6,267 6,536 6,976 7,293 33,317
Bleaching Powder 4,358 4,609 4,137 4,249 4,992 22,345
Ammonium Chloride 2,246 2,426 2,608 2,536 3,150 12,966
Calcium Chloride 677 2,397 1,874 3,131 2,736 10,815
Magnesium Chloride 296 553 848 812 1,257 3,766
Ferric Chloride 752 662 751 948 917 4,030
Nickle Chloride 6 5 13 15 12 51
Total 240,500 266,956 276,500 296,955 333,568 1,414,479
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Sitara Chemical Industries Limited. Production
Graphical Presentation of Five Year Business Volume
400,000
353,925
350,000 315,622
283,875 293,267
300,000 255,080
250,000
200,000 Series1
150,000
100,000
50,000
0
2003-04 2004-05 2005-06 2006-07 2007-08
Market Share of Caustic Soda Industry in Pakistan
Caustic soda industry in Pakistan comprised of only three produces mentioned below.
Forecasting a persistent increase in demand management is trying to increase
production capacity of plant. The estimated market situation at June 2009 will be as
follows.
Producer Capacity % Age
Tons
Sitara Chemicals Ind. Ltd. 151,695 53.27 %
Ittehad Chemicals Ind. Ltd. 93,313 32.77 %
Nimar Chemicals Ind. Ltd. 29,237 10.26 %
Imports 10,540 3.70 %
Total 284,785 100.00 %
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Sitara Chemical Industries Limited. Production
Graphic Presentation of Market Share of Caustic Soda in Pakistan
SCIL ICL
53% 33%
Imports Nimar
4% 10%
SCIL ICL Nimar Imports
Product Lines
Following SCIL’s main products along with production capacity
Product Name Designed Capacity
(Tons Per Year)
Caustic Soda (All Forms) 132,000
Sodium Hypochlorite 36,000
Bleaching Powder 7,500
Ammonium Chlorite 3,000
Hydrochloric Acid 110,000
Caustic Soda utilization
It is used in Textile processing as mercerizing agent & fixing agent, Neutralizing
agent in petroleum refining, pulp and paper, detergents, vegetable-oil refining, soap
industry as a sponifying agent, ion exchange resins regeneration, chemical
manufacture of rayon and cellophane etc.
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Sitara Chemical Industries Limited. Production
World wide caustic soda apparent consumption by end use 2008 (%)
Caustic consumption in Pakistan – sector wise
4% 3%
9%
1%
2%
4% 42%
3%
32%
TEXTILE SOAP & DERTERGENT FOOD & BEVEAGES
GHEE & OIL FERTILIZER POWER GENERATION
CHEM ICAL PAPER & BOARD M ISC
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Sitara Chemical Industries Limited. Production
Sodium Hypochlorite utilization
Used in textile, carpet industry, sodium silicate manufacturing, sugar industry,
disinfection for potable water and cooling tower, rayon and other chemicals
Bleaching Powder utilization
Used in textile Industries, carpet Industries, water purification, pulp, paper and
paper board, sugar etc.
Ammonium Chlorite Utilization
Used dry battery cell, galvanizing pipe, sheet and other material,
pharmaceuticals metal cleaning, soldering, tanning etc.
Hydrochloric Acid Utilization
Textiles, water treatment, production of liquid sugar, steel pickling &
galvanizing industries, Production of gelatins from bones, activated clay etc.
Production process:
Production process of SITARA CHEMICALS is as
Raw material:
Raw material for caustic soda is
Raw salt
Water
Suppliers:
There are two main suppliers of sitara chemicals
1) province and second 1 is federal
Punjab mineral development cooperation.
Pakistan mineral development corporation.
Water:
Water is taken by the tube well which operate by electricity which is taken from
WAPDA
Own power plant
Sitara energy limited
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Sitara Chemical Industries Limited. Production
Process:
Sitara chemical industries is the largest industry to produce tha NAOH(caustic
soda) in all over the ASIA.
The production units of SCIL are divided unto different area which are stated below
1-Membrane –I
a. it consists of one cell,
b. its capacity to produce NAOH is 65 ton per day.
2-Membrane-II
a- also consists of one cell.
b- its capacity of production is also 65 ton per day
3-Membrane-III
a. it consists of four cells.
b. its production is 200ton per day,
4-BMR
a. it consists of three cells.
b. its production is 210 ton per day.
The making of brain:
In order to make the pure brain SCIL considers the following processes:
1. saturator:
in this process a solod from salt is added in water.the salts are placed in a
chamber and then pour in the water to produce a raw from of brain,there are two
chambers for making of raw brain.when one chamber os filled it puts on the stop state
for the filtration of mud in it.After some time mud is removed from the bottom of
chamber and brain is forward to the settler.
2. Sattler
In the serer process, the brain is collected in a large tank of “v” shapes at the
bottom. here the process adapted for the removal of remaining mud and some other
impurities are removed by,”GRAVITY”.these impurities are collected from the
bottom of the chamber and are sent for the chemical processs filtration,
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Sitara Chemical Industries Limited. Production
3. Filtration:
some impurities are completely soluble in the water and are difficult to
separate from the Brain.so some chemical process are used to filter the Brain.when we
add different chemicals in it reacts with impurities in the Brian and makes the
precipitates and is removed by the filters. This 70% Brain now sent to primary Brian.
4. primary brian:
in the primary Brian the water is purified by some chemical processes
in the which some insoluble particles are obtained and then removed.
5. secondary Brian:
in this stage the Brian water is in the ready state for our usage.it is
nearly 99% purified and are sent to the relevant units like MI, MII, MIII and BMR for
BMR for the further process to produce caustic soda.
General process:
NACL + H2O NAOH +H+CL
When we add sodium chloride in the water to obtain caustic soda we use electrolysis
process.
Electrolyzer:
An electrolyzer consists of one or more elements cells arranged in series or
parallel electrically and make a circuit.
The electrolyzer needs 550 v DC current for the process of electrolysis.in order to
obtain that voltages SCIL purchase 132 KV from WAPDA and step it down to 11 KV
and further step down to 440V AC by the transformers and then passes this voltages
from rectifier where AC voltages and changed into DC voltages..
These DC voltages are supplied to the Electrolyzer to separate the NAOH,
hydrogen and chloride ions .The electrolyzer consists of many single elements cells.
A single element cell consists of anodica and cathodic half shells.
The above all the process takes place in the cell room. The following are the
cell room equipments.
Electrolyze
Ion exchange membranes
Electrolyzer breaks the Brian water into the ions and ion exchange membrane
seprates the ions.
During the manufacturing of caustic soda two very dangerous gasses are obtained
Hydrogen
Chlorine
One gas is obtained on catholyte and chlorine is obtained on anolyte. These are safely
removed from the pipes and produces HCL. As HCL is also a very dangerous
chemical CaO is used to neutralization of HCL.
In the end NAOH is obtained in three shapes.
A. 32% pure
B. 50% pure
C. 100 % solid flex
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Sitara Chemical Industries Limited. Production
This is the final stage of caustic soda. After this it is ready to go to the market and
other mills where it is used in the different industries like textile and Ghee mills.
DISTRIBUTION MIX OF SCIL
There are two ways of distribution adopted in SCIL,
1 Direct channel
2 Indirect channel
Direct channel
Mostly SCIL deal and distribute their goods direct to customers. They have two zones
for different sectors, zone 1 deals with Faisalabad , Islamabad , Multan . Similarly
zone 2 deals with Karachi.
Zone 1: Faiasalabad , Gujranwala , Islamabad , Multan
Zone 2: Karachi.
Many well-known companies purchase chemicals directly from Scil, like Rafhane
Maize Products, Pakistan Steel Mills, Proctor and Gamble, Nishat Group and many
government institutions like WASA, Pakistan Atomic Energy commission, and
Pakistan Petroleum Ltd.
Indirect channel (AGENTS / MIDDLE MAN)
SCIL also deal and distribute their goods through agents/buying Houses to avoid
heavy losses in foreign countries because of unknown market situations in the
beginnings of its business and investing huge amounts in that particular country.
Many dealers registered in Scil and continue their business for many years
successfully.
Scil also have a warehouse in Karachi for accommodating small customer that cannot
lift in bulk quantity from plant.
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Sitara Chemical Industries Limited. Production
ENTERPRISE RESOURCE PLANNING:
An enterprise resource planning (ERP) system is an integrated computer-based
application used to manage internal and external resources, including tangible assets,
financial resources, materials, and human resources. Its purpose is to facilitate the flow of
information between all business functions inside the boundaries of the organization and
manage the connections to outside stakeholders. Built on a centralized database and
normally utilizing a common computing platform, ERP systems consolidate all business
operations into a uniform and enterprise-wide system environment.
An ERP system can either reside on a centralized server or be distributed across modular
hardware and software units that provide "services" and communicate on a local area
network. The distributed design allows a business to assemble modules from different
vendors without the need for the placement of multiple copies of complex and expensive
computer systems in areas which will not use their full capacity.
SITARA CHEMICAL LTD is using 6.0 I sap and every department have
independat software
Problems:
Power supply is the main problem which has to face SITARA CHEMICAL LTD, as in
Pakistan there is power crises so SITARA has also to face this probles
Solution
This problem is solve out by using different power resources which are
Wapda
Own power plant
Sitara enery Ltd.
MAJOR COMPETITORS OF THE ORGANIZATION
The following are the major competitors of the sitara chemical industries which are
giving a touh time to organization
1.Ithad chemical Limited
2.Nimer chemical Limited
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Sitara Chemical Industries Limited. Production
Technical Person as Internal Auditor
Internal Audit Department consist of person having financial background, therefore
Internal Audit Department emphasize mostly internal control and procedure. On the other
hand technical side is absolved from all accountabilities. There is a need to appoint in
Internal Department a technical person to look in the matters of purely technical nature.
Brain Drain Required To Be Stopped
It takes nearly 1 year by employee to make an acquaintance with organization culture,
machines and complicated procedures. If employee resigns after two or three years then
its means company is serving as trainee institute and not availing productivity from
trained employees. Salary and wages constitutes only 3% of C.G.S and Company is
facing high turn over, which means employees are under paid. It is recommended to
retain experienced brain from being drained.
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Sitara Chemical Industries Limited. Production
AN OVERVIEW OF SITARA CHEMICAL LTD
Company Name: SITARA CHEMICAL INDUSTRIES LTD
Business Type: Manufacturer
Product/Service Liquid Chlorine,Bleaching Powder,Hydrochloric Acid,Calcium
Chloride,Ferric Chloride,Magnesium Chloride,Hydrated Lime,Other
Chlor Allied Products,Ammonnium Chloride,Caustic Soda
Flakes,Ammonium Bicarbonate,Cuperous Chloride
Registered Address: 32 KM, Sheikhupura Road----, FAISALABAD, --, Pakistan Zip: --
Brands: Sitara
Number of Employees: Above 1000 People
Company Website URL: http://www.sitara.com.pk
Trade & Market
Main Markets: North America
South America
Eastern Europe
Southeast Asia
Africa
Oceania
Mid East
Eastern Asia
Western Europe
Main Customers: Water Treatment Companies, Oil Drilling Companies, Textile Units,
Soap Units, Constructions Companies etc
Total Annual Sales Volume: US$10 Million - US$50 Million
Export Percentage: 41% - 50%
Total Annual Purchase US$10 Million - US$50 Million
Volume:
Factory Information
Factory Size: 50,000-100,000 square meters
QA/QC: In House
No. of Production Lines: Above 10
No. of R&D Staff: 21 - 30 People
No. of QC Staff: 51 - 60 People
Management Certification: ISO 9001:2008 ISO 14001:2004
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Sitara Chemical Industries Limited. Production
14: REFRENCES & SOURCES USED
Annual reports of:
Sitara Chemical Industries Ltd.
Itehad Chemicals Ltd.
Journals:
Economic Survey of Pakistan.
MR.NASEER AHMAD(production manager SCIL FAISALABAD)
www.sitarachemical.com
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