Lijin

Akay Flavours And Aromatics Pvt Ltd
CHAPTER 1
INTRODUCTION
Marthoma College Of Management And Technology1

1. INTRODUCTION
Organization is a social arrangement which pursue collective goals, controls its own
performance, and has boundary separating it from its environment.According to
ChesterBernard (1938) an organization is “a system of consciously coordinated activities or
forces of two or more persons”. The most requirement of the term Organization is an entity
and is referred to as an enterprise as a whole like company, corporation, partnership firm etc.
Organization is defined as collectively for achieving common objectives. Every organization

hasdifferent functional departments like finance, human resource, production etc.
Organization is a foundation upon which the whole structure of management is built. Every
organization has certain basic parts that are made up of people who perform, supervise, and
plan besides those who render support services and technical advice. As such studying the
structure or design of an organization means analysing how these parts are put together, who
reports to whom, the degree of centralization or decision making power concerned at top, the
extent of rules, policies, regulations, and procedures in the organization. The structure of an
organization is characterized by the task and authority relationships. Jobs are the foundations
of this authority structure.
An organization study is a direct investigation about the functions and activities carried out in
an organization. An organization study helps to know in general about an organization and in
particular about it different functional areas. The organization study helps the student to be
familiarized with functions of various department of an organization.
The study report entitled as an organizational study report at Akay Flavours and Aromatics
Pvt Ltd was done to analyse the practical aspects of business management in the modern
business scenario and also to study the various functional departments in the organization.
The epic of AKAY begins in the year 1995 established as a private Ltd company on 15th
April. Today, AKAY has carved a position of its own as one of the leading manufacturers
and suppliers of paprika and spice oleoresins, natural essential oils and natural colours for the
global food industry. The company was originally promoted by two NRI’s engineer
entrepreneurs, Mr. Alex Koshy and Mr.Rajendra Prasad hails from Dubai together known as
A & P Group. Both belonging to Kerala having more than 23 years of experience in
Engineering & Manufacturing sectors. Today Indian spices hold the same spell within the

past one decade the international trade in spices has grown by leaps and bounds. An
estimated 5,00,000 tonnes of spices and herbs valued 1500 million dollars are being imparted
globally every year. An impressive 46% of this supply comes from India. India’s exports of
spices extract have shown spectacular growth attaining over 50% of the global market within
a short spam.
The result of the study is the complete understanding of the inter-related functions of
different departments, for the smooth functioning of the organization as a whole. The data is
collected from the respective point contacts from each department in the form of face
interaction and interviews.
1.1 NEED OF THE STUDY

The spices industry in India is growing in a faster pace. Kerala “The Gods own country “is
major provider of spices in all over the world. The organization selected for the study is
a100% export oriented company, which is having a capacity of 120 tones and turnover of 160
crores.
Organizational study is the study of how the structure of the organization designed to
integrate people with the organization and effective interface with the environment for the
accomplishment of organizational goals. The proper management of the higher, middle and
lower level of administration is important for any business to run smoothly.
The organizational study helps to get a good knowledge about the industry. It helps to
understand the culture in the organization and its effectiveness in employees. This study is
aimed to get the direct experience of the overall functioning of the organization. It gives an
opportunity to interact with the different departments of the organization. There is a need to
see the application of textual knowledge be put into real life practice.The Post Graduate
Management course so far has provided with only theoretical knowledge regarding the
various management fields and aspects. The industrial familiarization program is a mandatory
requirement of a person who is goingto involve in management activities. It is the
management which makes the organization effective and efficient through planning,
organizing, integrating and inter relating organized resources and activities.

An organization study helps to familiarize with business organizations and to relate there by
which practice. This enables the students to understand about key business process and to
gain knowledge about various departments.
1.2 OBJECTIVES OF THE STUDY
 To understand the functioning and operations of different departments in Akay

flavours and Aromatics
 To get an industrial exposure so that knowledge about the working culture of an
organization can be understood.
 To understand the theory with practical
 To interact with highly qualified managers and study their duties and responsibilities
 To give suggestions based on findings of my study
 To know the industries expectations toward the management students
1.3 RESEARCH METHODOLOGY

The method used to conduct this organization study is qualitative form of analysis:
 Primary data
 Secondary data
 Primary data
Primary data are those data which are collected or published at the first time. They can be
obtained either through observation or through direct communication with the respondents or
through personal interviews. There are several methods for collecting primary data. They are:
 Personal visit to plant
 Data collected from formal and informal interviews
 Secondary data
Secondary data means data that are already available. i.e., they refer to the data which have
already been collected by someone else. Secondary data are those data which are collected
from the published sources such as:
 Journals
 Magazines
 Brochures
 Printed materials

 Web site of the organization, etc.
1.4 LIMITATIONS OF THE STUDY

The main limitations of the study are:
 Time is a limitation to this study. The company professionals didn’t allow me to
spend the whole time in the organization due to their busy time schedules.
 Secondary data available from the company manual were out dated.
 Some information’s are based on personal opinions.
 The organization people were not readies to give the financial details regarding the
organization.
 In depth study of each and every department in the organization is not possible.

CHAPTER 2
INDUSTRY PROFILE
COMPANY PROFILE
PRODUCT PROFILE

2.1 INDUSTRY PROFILE

Spices are the currency of developing countries. India, Egypt, China, Indonesia, Malaysia,
Mexico, Turkey and Brazil are the primary producers of spices. Since spices are always in
demand in the industrialized world, the export of these basic agricultural commodities by
developing countries can be relied upon to earn valuable foreign exchange. The major
importers are the US, Europe, Japan, East Asian and Middle East countries.
India, blessed with vivid agro-climatic zones, exports spices to 120 countries. Her biggest
trading partners are the US, Europe and Japan. India has the status of mere a commodity
exporter in these markets, except for spice oils and oleoresins. The processors/packers in
these countries and a few multinational companies buy Indian products and sell them under
their brands at a price 4 to 5 times more than they cost. Indian brands have yet to find markets
beyond middle-class and ethnic populations. Reduction in exportable surplus on account of
increasing domestic demand, dependence on nature, pest and disease problems, low
technology infrastructure and arbitrary imposition of standards and stringent food laws by
importing countries are the major challenge with the spice industry in India. Quality
improvement, value addition and compliance with stipulations under WTO agreements are
required for better market access. It is essential to channelize exports, to use effective
processing and packaging techniques, to develop recognized international brand and to focus
on niche markets.
Spice is a dried seed, fruit, root, bark, or vegetable substance. Primarily used for flavouring,
colouring, or preserving food. Sometimes a spice is used to hide other flavour. Many spices
have anti-microbial properties. A spice may have other uses, including medicinal religious
ritual, cosmetic or perfume production or as a vegetable.
The spice trade developed throughout south Asia and Middle East in around 2000 BC with
herbs pepper. The Egyptians used herbs helped stimulate world trade. The word spices comes
from the Latin root Spec. By 1000 BC, medicinal systems based upon herbs could be found
in China, Korea, and India.Spices are strongly flavoured and aromatic substances of
vegetable origin obtained from tropical plants commonly used as a condiment.Spices are well
known appetizers and are considered essential in the culinary are all over the world. Spices
possess anti-oxidant properties and are used as preservatives in some foods.

India the land of spices plays a significant role in the global spices market. No other country
in the world produces as many kinds of spices as India with quality spices come from Kerala.
The fame of Indian spices is older than the recorded history. It is believed that the Parthia was
being fought by Rome, largely to keep open trade route to India. Indian spices and her famed
products are the main lure for crusades expeditions to the east. Developing countries
especially in the Asian continent are the major producers of variety of spices. A large
percentage of international and domestic trade take place in the dried form of row spice.
India, Indonesia, and China are three major competitors in spice trade.
The culinary herb market is also expanding through the production areas are widely
distributed. India is one of the prime producers and suppliers of raw herbs to USA and the EU
(European Union). This is a labour driven industry, therefore producers must have a sound
knowledge of the methods and practices followed in the production of herbs and spices. The
booming global spice market also poses good opportunities for the Indian spice industry to
provide quality spices at competitive prices. Indian exporters face stiff competition from
China, Malaysia and Pakistan in terms of pricing of the products. Manufacturers should
therefore ensure consistency in supply, product quality, pricing and marketing strategy to
increase their share in exports.
2.1.1 HISTORY OF SPICES

The fame of Indian spices is older than the recorded history. The story of Indian Spices is
more than 7000 years old. Centuries before Greece and Rome had been discovered, sailing
ships were carrying Indian spices, perfumes and textiles to Mesopotamia, Arabia and Egypt.
It was the lure of these that brought many seafarers to the shores of India.
Long before Christian era, the Greek merchants thronged the markets of South India, buying
many expensive items amongst which spices were one. Epicurean Rome was spending a
fortune on Indian spices, silks, brocades, Dhaka Muslin and cloth of gold, etc. It is believed
that the Parthia wars were being fought by Rome largely to keep open the trade route to India.
It is also said that Indian spices and her famed products were the main lure for crusades and
expeditions to the East.

Today when spices cost so little, it seems unbelievable that they were once a royal luxury and
that man were willing to risk their lives in quest of them. Though it was the Dark Ages, but
there were rich people who had gold to exchange for pepper and cinnamon. It was in the year
1492 A.D., that Christopher Columbus discovered the New World. Five years later, four tiny
ships sailed southward from the port of Lisbon, Portugal, under the guidance of Captain
Vasco Da Gama. Like Columbus, Vasco Da Gama too was searching for a new route to the
spice lands of Asia. While Columbus failed to achieve the goal, Da Gama succeeded. In a
two year, 24,000 miles round trip, he took his ships around the continent of Africa to India
and back to Lisbon. Only two of the four ships survived to reach their homeport. These two
ships brought back a cargo of spices and other products worth 60 times the cost of the said
voyage.
The spices of the East were valuable in those times, during these Middle Ages, a pound of
ginger was worth a sheep, a pound of mace worth three sheep’s or half a cow. Pepper, the
most valuable spice of all, was counted out in individual peppercorns, and a sack of pepper
was said to be worth a man`s life. Gama`s successful voyage intensified an international
power struggle for control over the spice trade. For three centuries afterwards the nations of
Western Europe - Portugal, Spain, France, Holland, and Great Britain - fought bloody sea-
wars over the spice-producing colonies.
By the year 1000 Arabians had conquered the Indus valley, what is now India. They brought
the cumin and coriander that mixed with Indian pepper, ginger and turmeric make up the base
of so many South Asian dishes. It was this combination of spices that century’s later British
sailors spread throughout the world as curry powder. In India, Arabian traders got the rare
and exotic spices of the Far East from local spice merchants. India had spent the previous two
millennia spreading its culture to the Spice Islands of the east. Arabian traders were able to
make good money supplying these spices, even with the high prices paid to the Indian middle
men, not only to their countrymen back home, but to Europe as well. These traders of spices
paid for the Art and Education for which Arabia became famous in the present day. In many
ways the culture of Arabia loved studying and learning different things. Many great Greek
and Roman plays were translated in Arabic, so too were the geographic writings of Pliny and
Ptolemy telling of the general location of the tabled Spice Islands.

As Arabian astronomers charted the stars in order to study them and understand man’s
relation with them, they realized these same charts could be used for navigation. And then
Arabian traders invented the technology and knew the odds. Soon they were sailing to what is
now Indonesia and Malaysia to purchase spices directly, bypassing the Indian middlemen. By
the middle of the 13th century Arabian merchants were regularly visiting Sumatra for cassia
from the slopes of Mount Korintje.While travelling they would stop at little villages and
towns that had fresh water resource to refill their water supplies. At these stops the merchants
would barter their cumin, coriander and saffron and speak and preach of their religion as
well. The tropical climate did not suit the saffron but coriander now plays an integral part in
so many dishes across Indonesia. The religion, which they preached while bartering spices
did even better than the coriander, with Indonesia today being the world`s most populous
Islamic country. Compared to the Hindu belief in a caste system spread earlier by traders
from India, it seems the Islamic belief that all were equal in serving God really hit a chord
with the people of Indonesia.
Broadly, there are two main subdivisions of spices:
 Major spices
 Minor spices.
For example the spices like pepper, cardamom, ginger, turmeric, chilies etc., comes under
major category. The important minor spices grown in India are ajowan, aniseed, caraway,
celery, coriander, cumin, dill seed, fennel, fenugreek, garlic, onion, saffron, vanilla etc.
2.1.2 INDIAN SPICES

The history and culture of Indian spices is probably as old as human civilization itself. The
Vedas, the Bible and the Quran are all replete with references - direct or indirect - to Indian
spices. The earliest literary record in India on spices is the Rig Veda (around 6000 BC), and
the other three Vedas - Yajur, Sama and Atharva. Spices constitute an important group of
agricultural commodities, which are virtually indispensable in the culinary art. They can be
primarily defined as farm products used in various forms viz; fresh, ripe, dried, broken,
powdered etc. which contributes aroma, taste, flavour, colour and pungency to food, rather
than a lone food seasoning factor.

Eco-farming is widely practiced and popularized in Indian with the availability of bio-
pesticides, bio-agents and organic manures. India is capable of supplying a wide range of
organically grown spices from white pepper to vanilla and spice products from tamarind
paste to vanilla powder and organic herbs commercially cultivated in India are basil,
rosemary, Thyme Bayleaf, Oregano & sage and are used for culinary purposes and medical
or cosmetic application. The rich and varied agro Lima tic condition / zones in India offers
vast scope for commercial production of variety of herbs from mint to parsley to oregano.
Spices may be bark, buds, flowers, fruits, leaves, roots, roots, seeds, stigmas and styles or the
entire plant tops. They are well known as appetizers or preservatives and many of them have
rich medicinal properties and are used in pharmaceutical, perfumery, cosmetic products,
religious rituals etc.
2.1.3 WORLD SCENARIO

Spices constitute an important group of agriculture commodities which are virtually
indispensable in the culinary art. They can be primarily defined as farm products used in
various viz fresh, ripe, dried bracken powered etc. which contributes aroma, taste flavours
colour and pungency to food rather than alone food seasoning factor.
Spices may be bark, bud, flowers, fruits, leaves, roots, seeds and style or the entire plan tops
they are well known as preservatives and many of the hare rich medicinal properties and are
used in pharmaceutical, perfumery cosmetic products religious ritual, etc.
2.1.4 INDIAN SCENARIO

The history and culture of Indian spices is probably as sold as human civilization its self the
Vedas, the bible and the Quran are all replete with preference direct or indirect to Indian
spices the earliest literacy recoding of Indian on spices in rig Veda and the other three Vedas
 Quality:
The spices board had set up the quality evaluation &up gradation laboratoryin 1990. The
laboratory has been awarded with the certificate of registration by the British Standards
Institution (BSI) for the quality management system adopted by laboratory as per the
requirement of ISO 9002 – 1994.

2.1.5 STATE SCENARIO

Kerala province the pride of its spice farming community. Cardamom, coriander, pepper,
ginger, turmeric, paprika, capsicum, nut and many more this harvest of spices appreciated for
thousands of years has entered into the modern technology. AKAY FLAVOURS AND
AROMATICS PVT LTD as a 100% export oriented units. The company has 2 branches in
Kerala; there are ‘Nallanikunnu’ in Pathanamthitta district. The main product is oleoresin and
oil spices. The next unit in Kerala ‘Ambunadu’ in Ernakulum. The main product is oleoresin
and natural oils.
2.1.6THE SPICES BOARD, INDIA

Spice board of India is the apex body for the export promotion of Indian spices. Established
in 1987, the Board is the catalyst of these dramatic transitions. The Board has been with the
Indian Spice industry every step of the way. It plays a far-reaching and influential role as a
developmental, regulatory and promotional agency for Indian Spices. Within the past one
decade the international trade in spices has grown by leaps and bounds. An estimated 500,000
tonnes of spices and herbs valued at 1500 million US dollars are now imported globally every
year. An impressive 46% of this supply comes from India. India's exports of spice extracts
have shown spectacular growth attaining over 50 percent of the global market within a short
span of few years. Spices exports from India have registered substantial growth during the
last one-decade. It has increased from 109636 tonnes valued US$ 135 million in 1990-91 to
235611 tonnes valued US$ 472 million in 1999-2000. During the year 2002-03, the spices
export quantity has touched an all-time high of 264107 tonnes. However, during 200304 the
export has declined to 246566 MT valued US $ 415 million. The decline was mainly due to
decline in export of Mint Products and also because of low volume of pepper exports coupled
with low unit value realization. Still India commands a formidable position in the World
Spice Trade with 46% share in Volume and 27% in Value. The main functions of the spice
board are:
 Research, development and regulation of foreign market of small and large
cardamom.
 Research and production development of cardamom.
 Post-harvest improvement of all spices.
 Promotion of organic production, processing and certification of spices.
 Development of spices in the north- west.
 Provision of quality evaluation services as well as brand promotion service

The Board consists of: -

a) A chairman,
b) Three members of the Parliament of whom two shall be elected by the House of the
People and one by the Council of states,
c) Three members to represent the Ministries of the central Government dealing with
i) Commerce
ii) Agriculture
iii) Finance
d) Seven members to represent the growers of spices
e) Ten members to represent the exporters of spices
f) Three members to represent major spice producing states
g) Four member’s one each to represent:
i) The planning Commission.
ii) The Indian Institute of Packaging Bombay.
iii) The central Food Technological Research Institute, Mysore.
iv) Indian Institute of spices research, Calicut.
Besides, the Indian Institute of Spices Research (IISR) has also been set up as a constituent
body of Indian Council of Agricultural Research (ICAR) which is devoted to research on
spices. It serves as an Institute of excellence for conducting and coordinating research on all
aspects of spices improvement, production, protection and post-harvest technology
IMPORT
Through Indian manufacture of spice oil and oleoresins are situated in the land of spices are
to be imported because of their high yield, for example the yield of the Indian pepper is less
than Sri Lankan variety. The same in the case of nut mug and mace, cloves on the other hand
are not grown in quantities enough to meet the manufacturer’s requirements in India. They
are hence imported to into India due to the demand for clove oil in foreign markets.
MARKET OUTLOOK
The recent development in spice oil production is the microencapsulated spice oil and
oleoresins, sterilization oil were a problem. Bacterial contamination has emerged as a serious
problem since radiation was not allowed. Micro encapsulating of the spice oil oleoresin at an
economic price can solve this problem. The strength of the oil reveals the same throughout a

long period. By encapsulation of oils we can avoid oxidation of spices, which has also been a
major problem. Through our oil are almost up to the mark of British oils in quality we have to
go to a long way in improving packaging and overall presentation of the product.
Since the quality of essential oil being subjective, there should be a direct contact between
buyer and seller for fixing quality standards. In small markets, producers deal directly with
flavour/perfumery house, agent, actual users etc….the recent development in spice oil in
production is the micro encapsulated spice oil and oleoresins, sterilization oil were a problem.
Bacterial contamination has emerged has a serious problem since radiation was not allowed.
Microencapsulating of the spice oil oleoresin at an economic price can solve this problem.
The strength of the oil remains the same throughout long period. By encapsulation of oils we
can avoid oxidation of spices, which has also been a major problem. Through our oil
arealmost up to the mark of British oils in quality we have to go to a long way in improving
packaging and overall presentation of the product.
In the UK Indian foods are becoming more and more popular. This means that the demand
for spice and spice product may go up in the coming years. Of late there has been new
development in the cola industry cardamom colours, which is made by incorporating
cardamom oils. The particulars have a linking towards cardamom flavour, which is used
abundantly in coffee flavoured with cardamom commonly known as Arab coffee.
The global demand of spice has increased due to:
 A sharp in the processed food consumption increased in the demand for fragrances for
various health therapies.
 Increase in demand and consumption of ethnic food.
 Introduction of flavoured coffee, tea related drinks in the beverage industry.
PRODUCTION
There are about 24 companies engage in producing spice oil and oleoresins. Most of that are
located in Kerala. The total production of these ranges from 2500 to 3000 tons per year. The
total annual installed capacity of these firms is about 4000 tons. The several manufacturers
are now expanding this product line to includemore spice or production at full capacity and
this current capacity utilization varies from an insignificant level of 60-70% of the total
installed capacity.

GOVERNMENT POLICIES
The ministry of commerce has given timely support for the study progress of the industry,
which culminated in the leadership in supply of oils and oleoresins in theworld markets. Self-
certification of essential oils and oleoresins facilitate free flow of export. Forimport,
government lays duty from other countries for extraction purpose. The government ISO
stipulates time limit for re-export.
2.1.7MAJOR SPICE EXPORTED
Chillies 33%
Seed spices 22%
Turmeric 14%
Spices oil and oleoresin 7%
Pepper 7%
Cardamom 1.1%
Fennel 1.1%
Ginger 2.7%
Fenugreek 1.2%
Tamarind 0.9%
Nut mug & Mace 1%
Table 2.1

2.1.8PROBLEMS THAT ARE FACED BY SPICES INDUSTRY:
 Low Productivity:
Low productivity in the Spice sector is one of the serious problems facing the Indian Spice
Industry. Result is low competitiveness in the international markets
 Poor Product Quality :

Poor product quality at farm level is another problem hindering reasonable price realization
by the producer. Insufficient infra-structure facilities for cleaning, scientific methods of
processing, storage and packing.
 Insufficiency of Legal Provisions:

Our present legal provisions relating to many elements that constitute SPS measures are
insufficient. India does not have a National Standard covering all the requirements of the
agreement under SPS measures.
 Some Indigenous Varieties are disappearing:

The rapid disappearance of some indigenous varieties of spices due to mixing of planting
material results in loss of genetic purity. Examples are varieties contributing to the production
of Cochin ginger (viz. Kuruppampady, Ellackal), Alleppey finger turmeric (viz. Elanji), and
Byadagi chilli, etc.
 Poor Post-harvest Handling:

Post-harvest operations involve drying, curing and primary packing. This reduces problems
of contamination. Scientific post-harvest handling has yet to come to the agricultural
operations in Uttaranchal. Our natural comparative advantages in production are being
whittled away due to the poor quality of the produce.
 Insufficient Mechanization of Spice Production and Processing:

Lack of desired level of value-addition at the primary processing level results in lesser returns
to the farmers and farm labourers.

COMPETITION
India is facing stiff competition from other producing countries that supply spices in whole
form. Most of these countries have no domestic market for the spices they are producing,
forcing them to sell their produce even at cost price (examples cardamom from Guatemala,
pepper from Vietnam, cloves from Indonesia).
2.1.9 REJECTION OF EXPORT MATERIALS

Farmers of spices like cardamom, chilly and ginger are heavily dependent on chemicals for
pest and disease control and fertilizers. Indiscriminate use of chemicals results in pesticide
residues beyond tolerable limits, leading to rejection of many consignments of spices from
India. Trade restrictions on contaminated food or feeds have the greatest effect on countries
like India, which currently have limited, or no available means of monitoring aflatoxin levels.
The toxins are particularly carcinogenic in humans and eating contaminated food often results
in liver cancer, amongst other diseases. Aflatoxins also act an immuno-suppressant so that
affected individuals become susceptible to a wide range of diseases. Besides endangering
human health, aflatoxin contamination seriously affects the export potential of high-value
commodity crops, such as edible nuts and spices like turmeric and chillies, which could
provide an important source of income for farmers.
2.1.10 AGRICULTURAL EXTENSION IS NOT MARKET-ORIENTED

Extension is not focused on the needs of the market, especially the export market. The
available market information service is limited to a few areas and to a few sections and often
fails to recognize indigenous methods and factors to get a competitive edge in export of
spices.
Problems of the Growers of Uttaranchal:
 Inadequate price for the exporters

This is a recurring complaint of the Indian spice farmer. The price situation is directly linked
to the supply position of each year. There are crops like chilly, where huge stocks are
maintained in cold storages. The price which ruled the previous year often influences farmers
to go in for large scale cultivation, irrespective of stocks available and neglecting the
possibility of alternate crops. This results in severe price crash.

This situation repeats itself and the vicious cycle continues. Added to this is the pressure of
imports. India, on an average (1998-99 to 2000-2001) imports 59,000 tonnes of spices,
valued at Rs. 280 crores per annum. Though imported stocks are mainly for value addition
and export, a part is meant for stock and sale in the domestic market. Imports do, to a certain
extent, suppress the domestic price, affecting the prospects of Indian spice farmers. The
alternative is to improve production of the items that are imported and make them available at
international prices. This is possible with production support programme.
 Pest and Disease Problems and Dependence on Nature:

These are factors reducing the acquired comparative advantage. This is one of the major
reasons for the erratic production of individual spices, earning the country the label of
‘inconsistent supplier of spices’.
 Poor availability of Inputs:

This is restrictive factor especially planting material. Also there exist a non-availability of
suitable fertilizers and plant protection chemicals, suitable irrigation, facilities for on-farm
processing and storage, and adequate credit.
 Crop Insurance is absent:

Unprecedented natural calamities often push these small and marginal growers into a crisis
situation. Small landholdings and less technical know-how add to the problem.
2.1.11 INDIA’S SHARE IN THE GLOBAL SPICE MARKET

Spice derivatives can be categorized into spice oil, oleoresins and essential oils. The demand
for spice derivatives is also increasing due to the hygiene, standardization, and consistency
factor. India contributes nearly 70% of the world spice derivative market. It exports largely to
the US, EU etc. Indian Southern states including Kerala, Karnataka, and Tamil Nadu provide
concentrated oils oleoresins for use in perfumery, pharmaceuticals, foods processing and
industrial chemical laboratory.

2.1.12 ORGANISATIONS RELATED WITH THE PROMOTION OF EXPORTS
 Agricultural and Processed Food

Products Export Development Authority, #12/1/1, Palace Cross Road,
Bangalore – 560020
Phone: 23343425. / fax: 23364560.
 Visweswaraya Industrial Trade Centre, Kasturba Road,

Bangalore – 560 001.
Phone: 22864281 / 22860853
 Spices Board,
Govt. Of India, Ministry Of Commerce, #22/1, Rest House Road,
Bangalore – 560001.
Phone: 25320354.
 Tobacco Board,
Govt. of India, Ministry Of Commerce, 4th Floor, Unity Building Annexe, Mission road,
Bangalore – 560 027. Phone: 22233087.
 Joint Director General of Foreign Trade,

KendriyaSadan, “E” wing, 7th floor, Koramangala, Bangalore.
Phone: 25537214 / 25537215.
2.1.13 PROBLEMS OF THE EXPORTERS
 Inadequate surplus of the exporters

Of the 31.50 lakhs tonnes of spices produced annually, (excluding mustard), India could
hardly export 7.5–8 per cent. There have been severe shortages of exportable varieties of
spices in certain years. The major reason is burgeoning domestic demand. Demand for spices
from the upwardly mobile middle-class is on the increase. Changing eating habits and the
population explosion are also factors. This huge domestic demand leaves behind little surplus
for export and so exports are happening by accident rather than design.

 Insufficient Quantities of Quality Spices:

The major causes of inferior quality in spices are:
 Lack of awareness among farmers of the latest technologies in production and
postharvest operations.
 Facilities at the grading and packing centres are also rudimentary and the
merchants in this sector do not possess modern equipment for cleaning and
grading or for storage of spices.
 Proper drying of spices within 8-12 per cent of moisture is not done after
harvesting, resulting in microbial contamination.
 Drying of spices on non-hygienic surfaces creating further contamination from
microbes such as fungi, germs and bacteria including harmful ones like
Salmonella, Staphylococcus aureus, Bacillus cereus and Clostridium perfringens,
yeast and mould, E-coli, Coliform.
 Lack of real time knowledge of area sown, especially with annual crops.
2.1.14 EXPORT TRADE PROCEDURE AND RELATED ISSUES

Select a “quality” product based on the export potential and demand.
Select a particular overseas market. Concentrate only on few products and minimum three
countries, if you are a beginner. Ensure that you can manufacture or procure from other
sources the selected product at the competitive prices and in sufficient quantity and will be
able to meet the quality specifications, delivery schedule and other terms and conditions of
the overseas buyer. Get the full information of similar products of other manufacturers if
already available in selected markets, their prices, marketing techniques, business terms etc.
To offer your product(s) to foreign buyers with a bargaining edge in order to capture the
market. Assess the degree of competition of product (s) which you propose to export in a
particular market.
2.1.15 PROCEDURE FOR BECOMING AN EXPORTER:
 To apply for an import export code with the concerned office of the joint director general
of foreign trade with all the particulars and necessary fees in this regard.

 To find out the particular market and select a quality product and quote the prices in U S.
dollars which is a universally accepted currency for all import – export trade. The prices
may be quoted as under:-
 C & F: It means cost & freight. The price includes even the freight charges till the
destination. The buyer has to bear only the insurance and other delivery charges etc at
the port of destination.
 C I F: It means cost, insurance and freight. The price includes all expenses till the
port of destination. Once the price is acceptable to the buyer, he will immediately
open the letter of credit or will send an advance remittance through the banking
channels to the seller’s account.
The letter of credit should be always in the form of irrevocable and sight letter of credit. Once
the price is acceptable to the buyer, he will immediately open the letter of credit or will send
an advance remittance through the banking channels to the seller’s account. The letter of
credit should be always in the form of irrevocable and sight letter of credit.Once the lC is
opened the seller has to prepare the cargo as per the quality, packing specifications mentioned
in the lC and send the same to the port of loading so that the C&F (clearing and forwarding)
agent will do the rest of forwarding the consignment to the buyer. Once the shipment is over
C&F agent will prepare all the shipping documents called for in the lC.
The banker will thoroughly scrutinize the documents strictly as per the terms and conditions
of the lC and give credit to the sellers account and send the documents to buyers’ bankers for
getting the payment. Normally the payment is received within 10-15 days’ time. In addition
to lC and advance remittance, the payments can be in the form of D.P (documents against
payment) at sight which means exporter will ship the material and send all the original
shipping documents through his bank to the buyer’s bank. Buyer’s bank will collect the
money from the buyer and release the documents to him and send proceeds to Indian exporter
through the banking channels. In case of perishable commodities, no buyer will open L/C,
send advance remittance or even agree for D.P terms on a pre-agreed price.
It is all done on consignment sale basis. Exporter will ship the material and send the original
documents to the buyer and the buyer in some cases may send some part payment as advance
and the final account will be settled only against the sale of exported cargo. THE ROLE OF

E.C.G.C. (EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD). In order to

offset the exporter against unforeseen circumstances in exports, ECGC plays an important
role. ECGC covers various types of risks such as default by importer or the country, non-
receipt of payment due to wars, riots etc. and charge a nominal premium for this based on the
country classification (e.g. 0.3% to 0.8% of the value). ECGC also helps an exporter in
assessing the credit worthiness of the importer and will fix the credit limit accordingly. This
will help an exporter to expose his risks only to that extent.
2. COMPANY PROFILE
Akay Flavours and Aromatics Pvt Ltd Pathanamthittawere established as a Private limited
company on 15 April 1995, under company’s act 1956. The company was originally
promoted by two NRI’s Engineer entrepreneurs Mr.Alex Koshy and Mr.Rajendra Prasad
together established the company. Both belonging in Kerala have more than 23 years of
experience in engineering and manufacturing sector. Alex and Prasad (A&P) group has their
own business worlds spread over about six countries with headquarters in Ajman and United
Arab Emirates (UAE). The main promoter Mr. Alex Koshy from Pathanamthitta in Kerala
and is keen to contribute something to his place of birth too. Mr. Alex Koshy is chairman of
the company .They are the leading export from dealing with the production of oleoresins,
essentials oils and natural colours of species like ginger,pepper, cardamom, chilly etc.Akay
Flavours and Aromatic concentrating only in the foreign market and not in the local market.
The products are mainly sold for commercial purpose only. The company has got IS0
9001:2008 certificates for its quality. Mr. Alex Koshy and Mr.Rajendra Prasad the two non-
resident Indians (NRI’s) were the persons who started the world leader in this field. Today all
the day to day work reports are passed to the food pharmaceuticals and agricultural industries
in close cooperation with customers and partners. However their mission goes behind that to
improve the food quality people health and using natural ingredientsand proves. Akay, as a
food ingredient manufacturer and supplier globally, are fully committed to assure complete
food safety to our customers.
They communicate our commitment to conform to food safety requirements of the customer
and ensure compliance to statutory and regulatory requirements. They assure hygienic
processing in our facility to supply a completely safe food ingredient that meets the
expectations and needs of our customers”. At Akay, sourcing is done by a team of sourcing
specialists who have many years of experience in the respective field. Sourcing is done from

the local markets in India and globally, wherever raw materials, meeting our quality
standards, are available in abundant quantity.
Akay has its own management control system based on the strategies formulated by the Chr.
Hansen group. Thus it has become totally Chr. Hansen managed company as far management
control system are concerned. But like any other organization Akay also had its own setback
& weakness in its initial stage of operation of the company. Even while it was an
infantcompany, Akay could manage to get ISO 9001 Certification in its third year of
operation – 1998 with the support of the full-fledged control system of Chr. Hansen & he
arranged several training program for Akay’s staff.
Around 2003 Akay started one more extraction unit in Cochin. In this unit Akay have used
latest technologies & machines purchased from China and Belgium. This is fully automated
unit for the purpose of continuous, production process with an investment of Rs.8000 crore.
The company has successfully passed through the surveillance audits of the certification of
agency and could maintain consistency in quality. With corporate office in Cochin, Kerala,
Akay has production facilities in India and sales offices and ware houses in USA (New
Jersey), Europe (Hambrug, Germany) and China (Beijing), besides having a sales office in
Japan (Yokohama), Akay also has a wide network of distributors for all the major markets.
2.2.1 HISTORY & FACTS

Founded in 1995 by A & P Group and entered in to a joint venture with Chr.Hansen A/s.
Denmark in 1996. Akay is an independent company, since June 2007, belonging to the A & P
Group based in Dubai; UAE Akay manufactures paprika and spice oleoresins, natural
essential oils and natural colours for the global food industry. Akay has 160 employees
primarily situated in Kerala, India. Akay has a worldwide presence with own warehouses/
sales offices in USA, Europe, China and Japan.
Akay operates through dedicated distributors and agents. R&D as well as product
development centre in Cochin, India recognized by Department of Scientific and Industrial
Research, Ministry of Science and Technology, Government of India, Integrated
Management System certified by Bureau Veritas, consisting of ISO Quality Assurance
Laboratory accredited as per ISO 17025.

2.2.2 MISSION
Caring on manufacturing, extracting, formulating, purchasing, selling and dealing in aromatic
compounds and flavours, essential oils and their blends and derivation from spice herbs,fruit
plants and trees.
2.2.3 VISION
Thevision of Akay flavours and aromatics Pvt Ltd is to improve the quality of product and
provide good health for people all over the world.
Following steps are taken to implement their vision:
 Focus on providing the best service to their customers and partners with their
professional way of doing business.
 Aspiration is to supply products that always meet and exceed their customer’s
expectations.
 Are committed to ensure food safety, and their quality assurance systems are aimed at
providing safe products to their customers.
 Will work with dedication and to promote a close collaboration with all their
customers and partners in an open and transparent way.
 Are committed to remain attentive to their customers whenever they need the services
of Akay.
 Give high priority in maintaining decency in all endeavours.
 Strive for finding innovative solutions to serve the food industry in a better way.
2.2.4 VALUES
 Accountability:
Each of them should be accountable to the company, themselves and society – for the
quality of theirefforts, for contributing to their goals.
 Ambitions:
They set the highest standard in everything,they do and aim to achieve challenging goals.
 Responsibility:
They conduct business in a socially and environmentally responsible way.

 Honesty:
Their business practices are open and honest to protect the integrity of Akay and of each
employee.
 Readiness for change:

They make themselves prepared for change and use it to their advantage. Innovation is the
key to their business and therefore they encourage a learning culture for the continuous
development.
STRATEGY
Akay wishes to be lending global suppliers of spices extract business also wishes to value
added product for very past and ready to eat food market. Akay operates in the manufacture
of oleoresins essential oils and spices powder in small quantities.
IMPORTS
Company imports raw material from various countries to meet its manufacturing obligation
and purchased at prevailing international price subject to supply demand trend and a small
quantity of crude ginger oleoresins has been imported from Ethiopia.
DOMESTIC PURCHASE
Domestic suppliers cater the bulk of the raw material requirements of Akay and prices are
determined by market price prevailing the time of placing the purchase order.
MANUFACTURING FACILITIES
Akay has its manufacturing facilities located at Nallanikunnu in Pathanamthitta district
andAmbanadu in Ernakulam district.It has also a facility at Byadgi in the state of Karnataka
for the purpose of source of raw material mainly paprika of various varieties and engaging in
transport of raw material to its factories.
2.2.5 COMMITMENTS
Environmental responsibility:
The company improves the way they are operating in their production and sourcing areas by
setting higher objectives and by placing bioethical considerations before business. They
improve industrial performance and quality while saving on water, energy, raw materials and

waste. They make it a point to keep the environmental impacts to the minimum in all their
operations.
Social responsibility:
They are committed to follow the 9 principles of United Nations “Global Compact”. They
support UN’s convention on human rights.
2.2.6 QUALITY & FOOD SAFETY

Quality Policy:
The company has dedicated to supply product and services that meet with customer
requirements. Their products are for improving quality of food for people around the world.
To achieve this, they have established a quality management system, which ensures a logical
and systematic approach in improving customer satisfaction. The system is supported by all
employees with their contribution of knowledge, experience, innovation, enthusiasm, team
work and dedication. Training, education and individual development are provided to further
improve the effectiveness of their systems, processes and product.
Quality and Food Safety:

Their quality and food safety management strategy is aimed at embedding awareness of
quality and food safety in all their organizational process.
Quality Management:
Their quality management philosophy is firmly rooted in developing, producing and
delivering safe quality products to their customers. They have developed their quality
management system based on the ISO 9001 to ISO 2008 systems.
Food Safety Policy

The Akay, as a food ingredient manufacturer and supplier globally, are fully committed to
assure complete food safety to our customers. They communicate their commitment to
conform to food safety requirements of the customer and ensure compliance to statutory and
regulatory requirements. They assure hygienic processing in their facility to supply a
completely safe food ingredient that meets the expectations and needs of their customers.

Legislation
Theycomply with all relevant statutory and regulatory requirements of the countries
importing their products.
2.2.7 PRODUCT CERTIFICATIONS

Akay production facilities are ISO 9001:2008, ISO 14001:2004 and ISO 2200:2005 certified
by Bureau Veritas. For this an Integrated Management System (IMS) has been developed and
implemented. Akayis also certified to Publicity Available Specification (PAS) 220:2008
standards. In both these, Akay is the first in the spices industry.
PAS 220:2008 is a standard which specified requirements for prerequisite programmes to

assist in controlling, food safety chains. This PAS is indeed to be usedin conjunction with
ISO 22000, the internationally recognized standard for food safety management systems. ISO
22000 sets out specific food safety requirements for organizations in the food chain. On such
requirement is that organizations establish, implement and maintain prerequisite programmes
to assist in controlling food safety hazards. PAS 220:2008 has been developed to be used to
support management system designed to meet the requirements specified in ISO 22000, and
sets out the detailed requirements for those prerequisite programmes. Further spices board of
India has given ‘Spice House’ certification to Akay. Akay’sproducts carrykosher certification
from star –K –Kosher certification. The products are also Halal certifiable; declaration to
these effects is available on request. Additionally, Akay is the first certified manufacturer of
Organic Spice Extracts in India. Akay is also recognized Export house by the Government of
India.
SCIENCE
In Akay, they employ proven methods and advanced technologies in their manufacturing
process. It is indeed the in- depth research and development that enabled them to uncover
manufacturing processes conforming to superior technical standards. Quality is theirmotto
and we make it a point that the end products retain the flavour and aroma of the source,
which is why they have adopted the following scientific methods for their manufacturing
process.
 Steam Distillation
 Solvent Extraction
 Super Critical Extraction

PRESS
The media centre is dedicated for the news and events at Akay. As a global leader in the
supply of Paprika and Oleoresins from India, they play a part in various National and
International events related to their field. This section also provides exclusive Akay news.
The news section will be updated on a regular basis with the measures taken by the brand in
further improving the manufacturing quality and standards. The newsletter from Akay, Spice
News Publication, serves as a comprehensive resource on the various aspects of our field.
2.2.8 CORE COMPETENCIES

Sourcing expertise:
Situated in Kerala, the heart of India’s spice region, Akay natures a very close and special
relationship with the local spice farming community to ensure continues supply of high grade
raw materials. At Akay, sourcing is done by a team of sourcing specialists who have many
years of experience in the respective field. Sourcing is done from the local markets in India
and globally, wherever raw materials, meeting our quality standards, are available in
abundant quantity.
Extraction Expertise:
Akay has technical experts with more than 15 years of experience in solvent extraction
industry. Only non –chlorinated solvents were used for extraction. Along with our hatch
extraction plants are places for extracting various spices. Akay is also equipped with the
latest technology in extraction Super Critical Fluid Extraction (SCFE).
ORGANIZATION
Ownership:
Akay is fully owned by A&P Group based in Dubai. A&P holds in interest in various other
industries including Engineering & Marine Services, building materials, high quality packing
materials, pre cost products for the construction industry and snack foods
Management:
Akay is led by the Chairman and Board of Directors. The day to day running and
manufacturing operation are managed by the Managing Director. There is a management
team to assist the Managing Director, and this team represents the key segments of their
business. Their market, operations, quality management, supply chain, global operations.

2.2.9 BRANCHES OF AKAY FLAVOURS

1. Akay - Pathanamthitta
Akay Flavours & Aromatics Pvt. Ltd.
Nallanikunnu,
Elavumthitta P. O. Pathanamthitta,
689625, Kerala
Tel: +91 468 2257487
Fax: +91 468 2257471
2. Akay - Cochin:
Malaidamthuruthu P. O. South Vazhakkulam
Cochin 683561, Kerala, India
Contact: Emmanuel Nambusseril
E-mail: Emmanuel.Nambusseril@akay-group.com
Tel: +91 484 2686111 / 2 / 3
Fax: +91 484 2680891
3. Akay Europe GmbH:

Amtsstr. 3a,
22143 Hamburg, Germany.
Contact: AnetteWindstroem
E-mail: Anette.Winstroem@akay-group.com
Tel: +49 40 741 25 769
Cell: +49 172 235 0994
4. Akay Japan Co., Ltd.:

3-148-2-101, Negishi-cho, Naka-ku
231-0836 Yokohama, Japan.
Contact: Mr. Kenji Kawamori
E-mail: akayjapan@gol.com
Tel: +81 904833 6034 (mobile)

5. Akay (Beijing) Trade Co. Ltd.:

Room 1-8, Building 2, Hongfu Industry Zone,
Zhenggezhuang, BeiQiJia Town,
Changping District, Beijing.
PR China. PC: 102209
Contact: Mr. Robin Liu
E-mail: akaychina@gmail.com
Tel: +86 10 572 18806
Cell: +86 1300123 1848
6. Akay USA LLC:

500 Hartle Street Suite E, Sayreville, NJ 08872.
Contact: ShajiVilson
E-mail: akayusallc@gmail.com
Tel: +1 732 254 7177
Fax: +1 732 254 7178
Cell: +1 732 309 5398
7.Akay–Tadas
(Raw material pre-treatment center)
Tadas Village, ByadgiTaluk, Haveri District,
581106, Karnataka, India
Tel: +91 837 5292015
8. Middle east
Akay Group
P. O. Box 1029,
Ajman, UAE
Tel: +971 6 7435492 / 7436542

9. Akay Japan Co., Ltd.

3-148-2-101, Negishi-cho, Naka-ku, 231-0836,
Yokohama, Japan
Contact: Mr. Kenji Kawamori
Phone: + 81 90 4833 6034 (mobile)
Email: akayjapan@gol.com

2.2.10 CERTIFICATES AND ACHIEVEMENTS

 ISO 9001:2008/ ISO 22000 ISO 140001:2004
 ISO 9001:2008 (quality management system)
 ISO 22000:2005 (Food safety management system)
 ISO 14001:2004 (environment management system)
 Second prize of the state pollution control board for medium scale industries.
 Business excellence Award by spices board of India.
 NABL certificate
 (ISO 9001 & 14001) QMS & EMS
 FSSC 22000
 Kosher
 ISO 17025:2005 (QA Laboratory)
 SA 8000
 BS OHSAS
 GMP
NABL
National Accreditation Board for Testing and Calibration Laboratories (NABL) is an
autonomous body under the aegis of Department of Science & Technology, Government of
India, and is registered under the Societies Act. NABL has been established with the
objective to provide Government, Industry and Society in general with a scheme for third-
party assessment of the quality and technical competence of testing and calibration
laboratories. Government of India has authorized NABL as the sole accreditation body for
Testing and Calibration laboratories.
Laboratory Accreditation provides formal recognition of competent laboratories, thus

providing a ready means for customers to find reliable testing and calibration services in
order to meet their demands.
The SA 8000
The SA 8000 certification is the Social Accountability System standard. It is applicable to
companies of any size that wish to address the social and ethical aspects of their business. A
Social Accountability System proves to customers that the company holds adequate

provisions for the protection of workers' rights. Further, it ensures ethical production of all
goods manufactured by the company.
THE OHSAS 18001

The OHSAS 18001 is the international Occupational Health and Safety Management System
standard. These standards are applicable to companies of any size, but are especially relevant
to companies with a large work force, manual and heavy work tasks, and/or high risk work
environments. Targeting the health and safety of employees proves that you are actively
working to ensure that your operations are safe both for your employees and the surrounding
environment.OHSAS 18001: has been developed to be compatible with ISO 9001 and ISO
14001 to allow for easy integration. Legislative and regulatory commitment and continual
improvement are two important aspects of OHSAS 18001.
The elements of OSHAS including the following:
 Policy and commitment.
 Hazard identification, risk assessment and risk controls.
 Legal requirements.
 Objectives and Programs.
 Organization and personnel.
 Training, Communication and Consultation.
 Documentation and records.
 Operational Controls.
 Emergency Readiness.
 Measurement and monitoring.
 Accident & incident investigation, corrective & preventive action. Audit& Review.
GMP (GOOD MANUFACTURING PRACTICE)

GMP refers to the Good Manufacturing Practice Regulations promulgated by the US Food
and Drug Administration under the authority of the Federal Food, Drug, and Cosmetic Act
These regulations, which have the force of law, require that manufacturers, processors, and
packagers of drugs, medical devices, some food, and blood take proactive steps to ensure that
their products are safe, pure, and effective.

GMP regulations require a quality approach to manufacturing, enabling companies to

minimize or eliminate instances of contamination, mix-ups, and errors. This in turn, protects
the consumer from purchasing a product which is not effective or even dangerous. Failure of
firms to comply with GMP regulations can result in very serious consequences including
recall, seizure, fines, and jail time.
HAZARD ANALYSIS AND CRITICAL CONTROL POINTS (HACCP)

Hazard Analysis and Critical Control Points (HACCP) is a prevention-based food safety
system. It provides a systematic method for analysing food processes, determining the
possible hazards and designating the critical control points necessary to prevent unsafe food
from reaching the consumer.
HACCP IS BUILT AROUND SEVEN PRINCIPLES

 Analysis of food hazards: biological, chemical or physical
 Identification of critical control points: raw materials, storage, processing, distribution
and consumption
 Establishment of critical control limits and preventive measures: for example, minimum
cooking temperature and time.
 Monitoring of these critical control points
 Establishment of corrective actions
 keeping records
 Systematic and regular auditing of the system in place by independent third party
certification bodies
BENEFITS OF IMPLEMENTING HACCP

In addition to meeting the legal and moral obligation to produce food that is safe to eat,
HACCP offers a variety of other benefits for not only the consumer, but for the food industry
and the government. The following are examples of benefits that may be gained by
implementing a HACCP program.
 HACCP can be applied throughout the food chain from the primary producer to final
consumer.

 HACCP reduces the need for finished product testing by identifying the hazards associated
with the inputs into the process and the product and devising control measures which can
be monitored in order to minimize or eliminate the hazards.
 A HACCP program, when properly designed and implemented, will significantly reduce
the chance of microbiological, chemical, and physical contaminants from reaching the
customer.
 HACCP can reduce regulatory involvement (and hence costs) by replacing on-line
inspection with regular auditing.
 HACCP principles can be applied to other aspects of food quality and regulatory
requirements.
 Since HACCP increases one’s ability to detect poor quality product during production,
such product can be held before further value is added. Resources are saved and faulty
product is not produced. Productivity and profitability is improved.
 HACCP improves communications between supplier and customer. It encourages
businesses to work together more closely and to help them understand each other’s
capacity and requirements.
 HACCP is capable of accommodating changes such as advances in raw materials,
equipment and premise design, procedures, and technological developments.
 Communication between the different segments of the food chain improves as HACCP
provides a common language and a common focus on quality.
 Improved customer confidence leads to increased market share.
2.2.11 COMPETITORS
The main competitors of Akay flavours and Aromatics Pvt Limited are:
 Synthetic industrial chemical private Limited, synthetic valley, Kadayiruppu,
Kolencherry
 AVT natural products Limited, Maranpilly P.O, Cochin
 Plant Lipids Private Limited, Kolencherry, Cochin
 Boss International
AKAY’S MAIN CUSTOMERS

 Chr Hansen A/s Denmark
 SFK Denmark
 BBA Philippians

 Doney Bang Korea

 KNS Trading Company
2.2.12 LOGO
The logo of Akay depicts in the Indian Bindi. Thus the logo symbolizes the spices, the Indian
heritage and the purpose of Akay’s products. The logo is also meant to bring associations of a
growing plant to mind – symbolizing the raw materials – the essence of nature.
GENERAL INFORMATION IN A NUTSHELL:

 Founded in 1995 by A&P Group and entered in to a joint venture with Chr. Hansen A/S,
Denmark in 1996
 Akay is an independent company, since June 2007, belonging to the A&P Group based in
Dubai, UAE
 Akay manufactures paprika and spice oleoresins, natural essential oils, and naturalcolours
for the global food industry
 Akay has 160 employees primarily situated in Kerala, India
 Akay has a worldwide presence with own warehouses / sales offices in USA, Europe,
China and Japan
 Akay operates through dedicated distributors and agents
 R &D as well as product development centre in Cochin, India, recognized by Department
of Scientific and Industrial Research, Ministry of Science & Technology, Government of
India
 Integrated Management System certified by Bureau Veritas, consisting of ISO 9001:2008,
ISO 14001:2004 and ISO 22000:2005 with PAS 220:2008.
 Quality Assurance laboratory accredited as per ISO 17025:2005.

2.3 PRODUCT PROFILE
2.3.1 SPICE EXTRACT:

Spice extract serves as an alternative to whole and ground spices and provide flavours
stability and consistency required in the product formulation. They can be customized to meet
specific product need for aroma, taste, colour, constancy, stability and dispensability and are
microbiologically stable.
Spice extract fall under three categories:
1. Essential Oil
2. Oleoresins
3. Derivation of essential oils and Oleoresins
1. ESSENTIAL OILS
On steam distillation, the spices yield their volatile constituents. The essential oils thus
obtained are endowed with the major part of the spice and fragrance properties.
Spice oils, although characterized on the basis of their physiochemical properties, including
spectrophotometric characteristics, are ultimately judged by sensory and oil factory
evaluation. Depending on the final environment of use for the spice oil, the standards of
quality required will differ and this would demand of the manufacturer to oils to the
consumer’s exact requirements.
Generally, the characteristic flavour of a spice is contributed by its essential oils components.
The essential oils constituents of spices can be isolated via steam distillation. Essential oils
contain numerous compounds which are volatile. The nature and the relative proportion of
these are characteristics of a given plant material though variants could happen due to
changes in the plant species and / or the agro climatic conditions to which the plant is
exposed. Appropriate measure during harvesting and post-harvest processing are required to
retain the flavour properties of any spice.
Advantages of Essential oil
 Represents the characteristics aroma of the spices
 Don’t impart colour to the end product
 Provide uniform flavours quality
 Free from enzymes and tannins

2. OLEORESINS
Oleoresins, containing all the volatile as well as non-volatile constituents of the spices, most
closely represent the total flavour of the fresh spice in a highly concentrated form.
For this reason oleoresins are the preferred spice extract used for flavouring purposes. The
oleoresins are produced by extraction of the dry spices with an organic solvent/ solvent
mixture. The choice of the organic solvent is wide, it is usually restricted to the proven
solvent such as ethylene dichloride, to strip off residual solvent to ensure that any residue in
the oleoresins is minimal (always less than 30 ppm)
Spice oleoresins are essentially the concentrated liquid form obtained from spices. This spice
derivative has the same character and property of the spice it is obtained form. Oleoresins are
popularly used for food flavouring in the food processing industry.
The demand for these derivatives is on the rise in the global market and India too is chasing
on this booming market. India is one of the leading producers and exporters of black pepper
oleoresin. US are one of the chief importers of paprika and black pepper oleoresins. The
demand of this product can be attributed to sharp rise in the snack foods and fast food
industry for producing a standardized effect on taste. High concentration of oleoresins makes
them difficult to use in the food industry, unless they are diluted.
Oleoresins are the essence of spices representing their holistic character in terms of flavour,
colour, and taste attributes. Akay has a wide variety of spice extracts including their critical
flavour/colour/taste/ versions to meet the growing sophistication of the food processing
industry and its diverse needs.
They include black pepper, capsicum, clove, coriander,cumin, garlic, mace, turmeric,
cardamom, clove curry leaf, nutmeg, tamarind, paprika, fennel, white pepper etc. spice
extracts are developed to meet the new demands of the food processing industry.

Advantages of Oleoresins
 Uniform, standardized and whole some flavour of the spice
 Hygienic , free from the fifth and microbial contamination
 Negligible moisture content
 Long shelf life
 Less warehouse space
 Big potential for new product and development
 Consistency in flavour
 Convenience of use can be blended to achieve the desired characteristics
 Conventional hygienic substitutes for spice powders in fortifying flavour profiles of
food products
 Ease of storage and handling
 Full release of flavour during cooking
 Much longer shelf life
 Zero bacterial contamination
3. DERIVATION OF ESSENTIAL OILS AND OLEORESINS

They include plated and micro encapsulated form of spice extract, modified oleoresins and
seasoning. Micro encapsulated products are fine particles oil and oleoresins coated with an
envelope off starch, malt dextrin or gum so that the flavour is locked with in capsule.
Encapsulated products are generally prepared spray drying technique when incorporated in
food the outer coating dissolves off thereby releasing the flavour, oils and oleoresins are also
plated on dry carriers like starch salt flavour or dextrose to convert to powder from for
industries. Seasoning are blends if various spice extraction either in the liquid form they are
available in oil soluble version for dry powder seasoning liquid blends are plated dry carries.
Modified oleoresins are prepared by rending them water or oil soluble using permitted
additives as emulsion with gum or other emulsifiers.
Use of spice oils,oleoresins and seasonings

Spice oils have wide and varied application for flavouring foods, beverages, candy/ sugar/
flavour confectionary and cookies and in tobacco. They are also used in the variation of
fragrance for cosmetics, toiletries and deodorants. Many essential oil have physiological
action and carminatives or proves medical value. Lately they are widely used in

aromatherapy. Oleoresins are important source of flavouring for a wide spectrum of food
products. In modern’s food processing, oleoresins are convenient tools to consistent flavours
profile for final food production. Being highly concentration oleoresins are rarely used as
such in food. But are usually diluted, blended or modified to accomplish uniform spread.
Customers blend or premix seasoning for specific application such as sausages, soups, crisp,
meat and product enhance application convenience.
Guidelines for Replacements of Raw spices with Fore sins

Oleoresins serve as hygienic standardized and convenient substitute for spices powder in food
and flavour formation. In spice powder, the flavour principles are locked within the tissue and
are not fully released during processing. On the other hand, in oleoresins the total flavour
spectrum is available for perception. The quantity of oleoresins required to replace quantity
of spice powder is termed Spice Equivalence or Replacement Ratio.
Since spice oleoresins contains the both aroma and taste components, the relative
concentration of these fraction are important for obtaining a perfect flavour balance in the end
product. A spice equivalence chart as give below can serve as guidance for the application
trials
Flavour perception being highly subjective, actual replacement ratios must be determined
only after application trial for each product. In formulating seasonings, initial blending may
be done based on the spice equivalence data; some fine tuning will then be necessary to arrive
at the desired flavour profile.
2.3.2 NATURAL COLOURS

A consumer awareness increases about the link between diet and health, the trend moves
towards cleaner label products such as natural colours. A natural colour is any dye is obtained
from vegetables, herbs, spices, minerals etc. Akay offers a wide range of natural colours,
carefully chosen from sources of plant origin. These natural colours find unique application
in food, cosmetic and pharmaceuticals sectors to name a few: Paprika, spinach, turmeric.

2.3.3 ORGANIC SPICES ANDORGANIC OLEORESINS

ORGANIC SPICES
 Black Pepper
 White Pepper
 Ginger
 Mace
 Nutmeg
 Cinnamon leaf
 Cardamom
 Vanilla
 Turmeric
 Clove bud
ORGANIC OLEORESINS
 Black Pepper
 White Pepper
 Ginger
 Mace
 Nutmeg
 Clove bud
 Cardamom
BLACK PEPPER
Because of its provocation aroma and irresistible flavour, black pepper has been used for
thousands of years in a variety of food products. Prepared from the half matured dried berries
of pepper Nigram. This thick green liquid in a pourable at room temperature and the
characteristics aroma of black pepper. Soluble in water and oils with its oleoresins nature, this
is recommended to use in spice seasoning snack foods, soup base, processed meat and other
products that require the flavour or black pepper. Extractives of black pepper find application
in dehydrated and canned soups, poultry dressing, seafood, vegetable soups, egg dishes,
salads, pickles, condiments, pickling spice mixes, baked goods, confections, non-alcoholic
beverages, roasted beef rubs, etc. it is also used in seasoning for fried chicken, poultry
dressings, gravy mixes and meat sauces.

WHITE PEPPER
Prepared from fully matured dried decorticated berries of pepper Nigram, this viscous
suspension is pourable at room temperature and is creamy yellow to tan in colour the product
is available in water and oil soluble forms and is recommended for use in spice seasoning
snack foods, soup base, dressing and sauces.
TURMERIC
Turmeric has been traditionally used as a culinary spice, a food colorant, a medicine as a
general cosmetic. Thick viscous deep yellow liquid, pourable at ambient temperature with the
characteristics of aroma of ground turmeric. This is soluble in water and oil and has typical
turmeric flavour. Storage under recommended conditions guarantees a shelf life at 24 months.
Main commercial application of oleoresin turmeric is food colouring and is used in poultry,
egg, meat dishes, seafood, curried meat, salads, pickles, dressings, soups and mustards. The
colouring matter presented in turmeric is curcuminiods and the concentration of

curcuminiods in the oleoresins in usually reported in terms of colour value. Oleoresins with
varying concentration of curcuminiods are available and the spice replacement ratio for use
as colorant depends on the colour strength of the oleoresin. Turmeric colour is pH sensei.
CURCUMIN
Prepared from dried rhizomes of Turmeric, this is a golden yellow powder soluble in Alcohol
and is extracted acetic acid. This solvent is extracted to get turmeric oleoresins and then
crystallized to each reach correct concentration
REDCHILLY
A red chilly pourable at ambient temperature, this is soluble in vegetable oils and can be
added directly to food products with adequate mixing. Chilly contributes varying degree of
pungency and colour to food products. Oleoresins chilli finds application in seasoning for hot
Italian sausage, pepperoni, pizza loaf, pork sausage and pork patties. It can be used in all
dishes that call for pungent taste, like hot sauce, chilli non came, soups, pizza, chicken, fish,
vegetable dishes, pickles, meat, curries, baked goods and non-alcoholic beverages. In
medicines, it finds as counteririttitant and carminative.

CAPSICUM RED CHILLY

Viscous reddish brown homogeneous liquid, pourable at room temperature with a pungent
flavour. This has an aroma typical to dried, ground, hot chilli and creates a sensation of heat
at the black of the threat and the tongue. This is available in water and oil soluble farms and
is chiefly used in snack foods, processed meats, ethnic foods, for spice seasoning.
GINGER
A free flowering dark brown liquid with penetrating and spicy flavours. It represents the
strong impact of ginger with and stones of pungency and citrus. This product available in
water and oil soluble forms it’s recommended to be used in snack foods, processed meats.
Pickling spices and other food items that require the characteristics of ginger. Ginger oil and
oleoresin are also used as flavouring ingredients in non-alcoholic beverages, liqueurs, Ice
creams, confections, baked goods, sauces, condiments and seasonings for meat. The spice
goes well in macaroni and cheese, fruit desserts, cakes and cookies, puddings and barbeque
sauces. Ginger has a tendency to round out some flavours while at the same time accenting
others; it contributes freshness to foods which other spices do not. In pharmacy,ginger is used
to reduce flatulence and colic; as an aromatic stimulant and as a carminative.

CASSIA FISTUALA
It is extracted from the direct bark of Indonesian Cassia Fistulae; this is a free flowing brown
liquid available in water and oil soluble forms. It has a sweet, delicate spicy aroma similar to
fresh ground cassia. It is used in food products like can functionary product, backed goods,
meat products, seasoning and condiment mixtures where a cinnamon cassia flavour.
CLOVE BUD
Prepared from dried unopened flower buds of Eugenia Caryophyllus, oil of clove bud has a
strong spicy, warmly phenolic odour and a pungent flavour. Eugenol is the major constituents
of the volatile oil. This colourless to pale yellow oil are used in food product which requires
the aroma and flavour of clove. The essential oil and oleoresins from the buds possess strong
aromatic order and are used in baked goods, confections, tomato catsup, chilli sauce,
preserves, chewing gums, ice cream mix, alcoholic and non-alcoholic beverages, desserts,
pudding mixes and poultry dressing. Oil of clove has antiseptic qualities and is recommended
by Dental analgesic. It is used in toothpaste and mouthwashes.

FENNEL
This is the greenish liquid, pourable at ambient temperature and has a strong aroma and the
characteristics taste of fennel prepared from the dried seeds Foeniculumvulgare miller, this
has minimum shelf life of 24 months when stored as recommended. The product is available
in water and oil soluble forms.
MACE
A free flowing red to brown liquid with sweet, delicate aroma similar to fresh ground mace
and a slightly bitter flavour. Prepared from carefully sourced dried arillus of Myristica
fragrant hot, this product is recommended for the usage of seasoning meat products baked
goods, condiment mixture and food products which require a maze flavour. Steam volatile oil
from the arils of MyristicafragransHoutt, this is a clear to light yellow liquid with fresh, light
spicy odour and warm bitter flavour. Mace oil and oleoresins are excellent flavouring in
bakery products such as cookies, cake, biscuits, and condiment mixes, meat products, and
other food products in which the flavour and aroma of mace is needed.

CUMIN
Essential oils of cumin seeds are very spicy, strong and warm and persistent aroma and it is
used in perfumery and flavour formulations. The oil is also used as stimulant, antispasmodic,
and combinative.Prepared from the dried seeds of cumin cyminuml, this brownish yellow
green fluid has warn mildly pungent aromatic flavour. Available in water and oil soluble
forms, the product is ideal to be used in snack foods, processed meat, confectionary products
baked foods and in pickling spices. Oleoresins and essential oils are extensively in seasoning
for soups, stews, sausage, cheese, pickles, and meats, etc.
NUTMEG
Prepared from the dried ripe seeds of Myristica fragrance houtt, this is a viscous yellow
brownish paste. It has a penetrating and spicy flavour and carries the strong impact of
nutmeg. Soluble in water and oil, this product is ideal for pickling spices, snack food
processed meat. Fresh, light and sweetly spicy flavour. This is a steam volatile oil from the
seeds of MyristicafragransHoutt. The product has a minimum shelf life of 12 months, when
stored under recommended conditions. It is widely used in the preparation of food products

such as baked goods, mincemeat, non-alcoholic beverages, liqueurs, ice creams, chewing
gum, icings and syrupswhere the flavour and aroma of nutmeg is required.
CELERY SEEDS
Prepared from carefully sourced dried seeds of celery – apium grave lens –L, this is a free
flowing dark green, oily liquid, pourable at ambient temperature. The flavour is pleasantly
sweet and burdening on the apparently bitter. The aroma is typically celery and is mildly
lemon like herbal tone. Shows solubility in water and oil, this is recommended to be used in
survey and flavours, other products that require characteristics of celery. They are also used
in seasonings for soups and gravies and for flavouring non-alcoholic beverages, confections,
salad dressing chewing gems and baked foods.
PAPRIKA
A viscous reddish homogenous liquid, pourable at ambient temperature. This is soluble in
vegetable oils and can be added directly to food products with adequate mixing. This can be

used in spice seasonings, snack foods, processed meat and other food products that require
the characteristic colour/flavour of paprika. Oleoresins paprika and its equivalent chilli colour
are concentrates of the colour principle of capsicum with negligible or nil pungency and mild
flavour. It improves the colour of chicken dishes, sauces, salad dressing, goulashes, prepared
veal and other meat dishes.
LEMONGRASS
Extracted from freshly cut and partially dried lemon grass (Cymbopogonflexuosus L.), oil of
lemon grass is a dark yellow to light brownish red liquid with a pronounced heavy lemon-like
odour. This oil is chiefly used in food and aromatic products where the special aromatic
characters of lemon grass required.

2.3.4 EXPORT ORIENTED UNIT AND EXPORT PROCESSING ZONE

Akay Flavours and Aromaticsis a 100% Export Oriented Unit (EOU) so its gets some special
incentives. Special incentives are available to unit set up in Export Processing Zones (EPZ)
or unit that are 100% exports oriented. While EOU may be set up anywhere in country EPZ
are designed area within which manufacturing and processing activities are carried out only
for the purpose of export. These are seven designated EPZs in India: 1.Kandla-free-
Trade-zones-in-Gujarat 2.Mumbai in
Maharashtra 3.Madras in Tamil
Nadu 4.Falta in Tamil Nadu
5. Cochin in Kerala
6. Noida in Uttar Pradesh
7. Vishakhapatnam in Andhra Pradesh
These EPZs are designed to provide an internationally competitive duty free environment at
low cost for export production through basic infrastructure facilities like developed land
standard design factors buildings built-up sheds, rounds, power, water supply and drainage,
custom clearance, facilities.

CHAPTER III
ORGANIZATIONAL STRUCTURE
3.1 ORGANIZATIONAL STRUCTURE

An organizational structure is mostly hierarchical concept of subordination of entities that

collaborate and contribute to serve one common aim. Organizations are a number of clustered
entities. The structure of an organization is usually setup in one of a variety of styles,
dependent on their objectives and ambience. The structure of an organization will determine
the modes in which it shall operate and will perform.
Organizational structure allows the expressed allocation of responsibilities for different

functions and processes to different entities. The description of such entities is as branch, site,
department, work groups and individuals. Contracting of individuals in an organizational
structure normally is under timely limited work contracts or work orders or under timely
unlimited employment contracts or program orders.
The common success criteria for organizational structure are:

 Decentralized reporting
 Flat hierarchy
 High transient speed
 High transparency
 Low residual mass
 Permanent monitoring
 Rapid response
 Shared reliability
 Matrix structure
ORGANIZATIONAL STRUCTURE
MANAGING DIRECTOR
HUMAN QUALITY PRODU MAINTE MATER R&D FINAN MARK

RESOUR ASSURAN CTION NANCE IAL DEPT CE ETING
CE DEPT CE DEPT DEPT DEPT DEPT DEPT DEPT
SENIOR TECHNI TECHNI TECHNI VP SENIOR SENIOR GENERA

MANAGE CAL VP CAL VP CAL VP GLOBAL MANAG MANAGER L
R HR SOURCING FINANCE MANAGE
ER R
MANA ASST. DEPUT EXECU ASST. MAN

EXECU MANA GER Y AGER
MANA TIVE MANA
TIVE GER GENER
GER GER
AL
SENIO ASST. EXECU SENIOR ASST. OFFIC SENIOR EXEC

R MANA TIVE OFFICE MANA ER OFFICER UTIVE
OFFICE GER R GER
R
JUNIOR EXEC SENIO OFFICE SENIOR SENIOR

OFFICE UTIVE R R OFFICER OFFICE
R OFFIC R
ER
SENIOR OFFICE JUNIOR JUNIOR OFFICE

OFFICER R OFFICE OFFICER R
R
JUNIOR JUNIOR JUNIOR

OFFICER OFFICER OFFICE
R
(Fig 3.1)
3.2 FUNCTIONAL DEPARTMENTS

DEPARTMENT ANALYSIS
There are 200 employees in Akay flavours and aromatics Pvt Ltd working in different
departments. The fundamental aim is to improve the quality of food and people health and to
do so using natural ingredient and processes.
The departments are:

1. Human Resource Department
2. Material Department
3. Production Department
4. Maintenance Department
5. Quality Assurance Department
6. Marketing Department
7. Finance Department
8. Research and Development Department
FUNCTIONAL DEPARTMENT HIERARCHY

AKAY FLAVOURS AND AROMATICS PVT LTD
Human Resource Department
Material Department
Production Department
Maintenance Department
Quality Assurance Department
Marketing Department
Finance Department
Research and Development

Department
(Fig 3.2)
3.2.1 HUMANRESOURCE DEPARTMENT

The head of the HR department is Mr. Manoj Mathew. The department is very effective with
his presence. The main duty is to achieve the organization goal and excellent harmony
teamwork. HR manager organizes the department to carry out the functions entrusted to him.
This department develop the source of recruitment, select the right people for the right job at
right time, managing compensation for employees and buildingsuitable transfer policy. This
department is also responsible for training and development of employees.
Being labour incentive the Akayhas nearly 150 employees. The company recognizes that it
most variable assetsare its work force. The details of work shift are given below
Three Shifts:
6.00 AM – 2.00 PM
2.00 PM – 10.00 PM
10.00 PM – 6.00 AM
HUMAN RESOURCE DEPARTMENT HIERARCHY
SENIOR MANAGER HR
ASST. MANAGER HR
EXECUTIVE
SENIOR OFFICER
JUNIOR OFFICER
(Fig 3.3)
FUNCTIONS OF DEPARTMENT
 Recruitment

 Training
 Grievance handling
 Management of visitors
 Welfare activities
 Placement and induction
 Conducting annual tour
 Evaluation of employee’s performance
 Providing efficient hygiene and sanitation
 Management of transportation
 Management of trade union
RECRUITMENT
Recruitment is a linking function joining those with jobs to fill and those seeking jobs. It is
the process of searching for prospective employees and stimulating them to apply for jobs in
organization. Akay usemainly three types of recruitment. They are:
 Examinations
 Campus selection
 Advertisements through Media, News Paper
SELECTION
After receiving the applications from the prospective candidates, the selection process begins.
Selection involves the screening and testing of the applicants based on educational
qualifications, skills and personality.
INDUCTION AND PLACEMENT

Placement means the posting of the selected candidates to the right job at the right time.
Orientation or induction means the task of introducing and familiarizing the new candidate to
the enterprise. It means newly appointed persons to understand the process functions and the
persons of the organization.
TRAINING PROGRAMME

The company is conducting training programs for the welfare of employees very frequently
on different aspects. 80% of the training is given on the basis of the work procedures.
Training are conducted both inside and outside the organization.Both employees and
employers are send to outside the organization for training programmes which cost around
Rs.20000-30000.
ORIENTATION PROGRAMMES
Akay organises two or more orientation programmes for the employee in a year. Any outside
or inside expert conducts the programme.
SAFETY
Another important aspect that is considered by Akay is safety. Safety is given very much
importance in the company. Special training is given to the entire employees and uniforms
which includes shoes and caps are provided by the company.
 Providing uniform dresses without pockets
 Providing helmets, caps and boots
 Maintenance of building and machinery
 Pressure plants
 Prohibition of women employees in the factory
 Fencing of machinery
PERFORMANCE APPRAISAL
Performance appraisal is a method of evaluating the behaviour of employees in the work
spot, normally including both quantitative and qualitative aspects of job performance. The
method of performance appraisal in Akay is self-appraisal and immediate supervisor
appraisal.
TRADE UNION
Inside the company, there is no party. The employees of this firm have a union called
Swathanthra union and the union meeting held in the presence of the employees and the
management and solution is suggested for the problem.
EMPLOYEE WELFARE

The employer’s welfare is divided into statutory and non-statutory welfare. Company
provided medical claim insurance to their employees and their family members. They have a
canteen facility, resting room and the company has an arts and sports club. The employees
are given 1 day medical leave, 12 days casual leaves per year and earned leaves if necessary.
There is a tour package for the employees of the firm and their family members.Vegetarian
categories cater to employee in all the three shiftsin order to maintain proper health for better
efficiency in all areas of work. Tiffin are provided the employees with tea twice a day and
meals at a subsided at rate Rs. 5.
OTHER WELFARE ACTIVITIES

 Facility for sitting
 Welfare officer
 Shelters, rest rooms and lunch rooms
 Housing facility
 Uniform and foot wear
 Employee welfare fund
 First aid appliance
 Transport facility
 Sports and recreation
 Lockers for employees
 Dispensaries
 Retirement benefit scheme
 Health of workers
 Cleaning of the Factory
 Disposal of waste and affluent
 Ventilation and temperature control
 Dust and fume control
 Artificial Humidification
 Lighting
 Provision for drinking
KSPCB (Kerala State Pollution Control Board)

Akay is a certified company under KSPCB for reducing pollution. Company examines the
waste water that leaves to the drainage. It is separate process called ETP.
GRIEVANCE HANDLING
If the employees have any grievance or any complaints, it is firstly presented to the HR
department and if the problem is not solved by the HR department, then the problem is
presented to Top level management and if the top level fails to solve problem, other legal
formalities are taken.
DUTIES AND RESPONSIBILITIES OF HR MANAGER

 Duties and responsibilities of HR manager is planning, implementing, managing,
recruiting and selecting the people in the organization.
 The main duty is to achieve the organizational goal and excellent harmony of tem
work.
 The HR managers are responsible for training and development of employees.
3.2.2 PRODUCTION DEPARTMENT

Production is the heart of any organization. Every organization takes birth with a mission and
vision, then path to achieve this vision will be checked out and this is known as the mission.
The basic aim of any production process in simple terms is to convert the input into required
output efficiently. The basic principles that drive in designing a production process are
customer satisfaction, profitability and timeliness. In any production process the resource is
in material, human capitals are transferred in to higher valued goods and services.
Production department of the firm is led by Mr.Koshy. Around 120 workers are there in the
production department. In Pathanamthitta unit they produce variety of products i.e.
Oleoresins of all spices including chilly is doing. Here batch processing is the type of
production. There is only one plant and machinery for all the products. However for different
products, the process of extraction is different. Different procedures are there for different
products. The cleaning processes also differ from product to product. Production quality and
quantity is directly related with the quality and quantity of rawmaterials used. They use better
raw materials in the production we get maximum results. In Akay the main activities of
operation management are convert raw material into finished goods this is under the control
of production department.
Raw materials used for production:
Red Chilli
Turmeric
Black Pepper
Others
(Fig 3.4)
In the diagram we can see the most important product is Red chilli. About 50% of the
production is concentrated on the red chilli and 40% of production is equally divided for the
pepper and turmeric. The 10% of production contain other sectional product.

PRODUCTION DEPARTMENT HIERARCHY
PRODUCTION DEPARTMENT
General Manager
Manager
Executive
Supervisors
Junior officers
(Fig 3.5)
INPUT, OUTPUT PRODUCTION

The output proportion is 10% of the total quantity of raw material used. That is if we take
input of 100 Kgs of raw materials then we get 10% of finished products. In the case of chilly
it is 10% in turmeric 5 % in the case of pepper is 8%. Production is a process of creating new
products that can serve new use to the customers. Production ends only after performing
various kinds of processes.
The process is classified into:

 Steam Distillation

 Solvent Extraction
 Value addition
 STEAMDISTILLATION:
Most of the spices contain essential oils that give them a specific aroma profile, unique to
each spice. These volatile oils are recovered from the spices through steam distillation
process. This process involves 3 stages of operation they are:
i. Pre-treatment cleaning and flaking
ii. Steam distillation and fraction collection
iii. Drying of the steam distilled spice
i. Pre-treatment:
It is the first and most important process in the production. It means transforming the raw
materials are used for the production process. For different raw materials pre-treatment is
different. Pre-treatment is done after considering the quantity of raw materials.
The spice is cleaned of all dust and dirt and is sent for flaking. Spices are generally flaked
using a roller mill that is cooled by running cold water. These very thin flakes are charged to
the steam distillation vessel.
ii.Steam Distillation and Fraction Collection:

Steam is purged to the flaked spice charged in the steam distillation vessel. This steam carries
with the volatile oil which in turn is cooled through cooling water condensers. The condensed
steam along with the essential oil is cooled in steel tanks. The oil segregates in the top and the
water is continuously removed from the bottom of the tank. The essential oil is collected as
three fractions – the lighter, medium and high, by adjusting the distillation time.
iii. Drying of the steam distilled spice:

The flaked spice after steam distillation is dried inside the vessel using hot air. This dried
spice is then transferred to the solvent extractors.
 SOLVENT EXTRACTION

This process involves extraction of the spice using solvents like hexane, acetone or a mixture
based on the spice used. We have two batch extraction plants and a continuous extraction
plant for the extraction of spice. The batch extraction process involves percolation of the
solvent through the spice, after steam distillation, by several washing with the solvent until
the extraction is complete, i.e. till all the active ingredients in the spice are fully taken to the
solvent. The miscella thus formed contains about 10% of extracts (oleoresin) from the spice
and 90% solvents. This miscella is then evaporated in a 3 stage evaporation system.
1. First stage RFE (Rise film evaporator)
2. Second Stage RFE
3. ATFE (Agitated Thin Film Evaporator)
With this three stage continuous evaporation system we reduce the contact time of the
miscella with heat to the minimum level, thereby reducing the degradation of the active
natural molecules present in the spice.
The concentrated Oleoresin after the ATFE is taken for final solvent removal in vacuum
desolventiser. Here high vacuum is applied to remove the solvent traces below 25 ppm. The
product is then stored in quarantine tanks and inspected for residual solvent levels and other
quality parameters. This crude oleoresin is then blended to the required specification as per
the customer requirements or the standard specifications.
 VALUE ADDITION:
It is the final process, some additional technology employing liquefied carbon dioxide as the
solvent. It behaves as an excellent solvent for extraction. As the super critical nature of the
carbon dioxide is achieved at high pressure above 30 mega Pascal, the process of
supercritical extraction is done at very high pressure.
They employ specially designed high pressure extractors for extraction. By adjusting the
pressure it is possible to take the essential oil first followed by oleoresins. By releasing the
pressure the carbon dioxide is transferred to the collection tank and the essential oils and
oleoresins are collected in separate oil tanks by the differential pressure maintained in the
receivers. Supercritical carbon dioxide is agreen solvent system approved by for organic
products. At Akay flavours and aromatics Pvt Ltd, this extraction system is used to
manufacture organic extracts. All products are coming through the given processes:

EXAMINING THE PROCESS
Pelletizing:
It is pre- treatment process done for red chilli. The red chilli powder is transformed into
pellets, it looks like the capsules. In powder form the density is high. Therefore, the amount
of the solvent for the production is high. It is done by the trial and error method.
Solvents:
It is transparent lubricant used for the extraction of the colour from the product. After the
extraction, the solvent is recycled and used for the future process paprika. It is the colour
extracted from chilly.
Pungency:
It is the heat of red chill, processing of red chilli isPre-treatment of red chilli, solvent
addition, separation, testing and packing.
DISTORTING AND FLAKING

These are the pre-treatment process for pepper. Distorting is a process of removing the
unwanted things from the raw material. Flaking is a process of splitting the raw materials for
passing
PEPPER DINE AND OIL

Pepper dine is the taste extracted from the pepper and pepper oil means oil extracted from
pepper.
FREE CUTTING
It is done for turmeric for equalizing the size and shape of the raw materials. It is very
important in the value addition or solvent extraction process.
DUTIES AND RESPONSIBILITIES OF PRODUCTION MANAGER

 Forecasting the requirements of the production in order to achieve the production

target.
 Making most efficient utilization of available resources for production.
 Improving the productivity level of the workers on continuous basis by workers
training.
 One of the most important responsibilities of production manager deals with reducing
material handling cost.
PRODUCTION PROCESS

Raw Material
Pelletizing
Solvent Addition
Capcisince
Separation
Oil Pungency
Desolventising Desolventising
Quality Checking
Packing
(Fig 3.6)
3.2.3 MATERIALS DEPARTMENT

The goal of material management is to provide an unbroken chain of components of

production to manufacture goods on time for the customer base. The materials is charged
with releasing materials to a supply base, ensuring that the materials department is charged
with releasing materials to supply base, ensuring that the materials are delivered on time to
the company using the correct carrier. Materials is generally measured by accomplishing on
time delivery to the customer, on time delivery from the supply base, attaining freight budget,
inventory shrink management, and inventory accuracy. The materials department is also
charged with the responsibility of managing new launches.
Inside the Materials Department there are about ten persons are working. Material department
developed for maintaining the materials in the company. There is a departmental head, under
him the assistant manager the executive and the supervisor, under them six workers are
employed.
Head of Materials Department is Mr.Shibu. This department deals with the procurement and
maintains the stock of raw materials and essential itemswhich are needed for the working of
the company. Each item for the company passes through the Material department. There is a
certain procedure through which materials pass to different departments of the company.
MATERIALS DEPARTMENT HIERARCHY

Senior General Manager
Assistant Manager
Senior Officer
Junior Officer
Helper
(Fig 3.7)
PURCHASE OF RAWMATERIAL
Whatever raw materials are needed for the day to day process, it is the duty of the department
to make sure that availability of raw materials. All raw materials are seasonal so it is difficult
to get it in bulk quantity every time. It is done with the help of some brokertraders.
OTHER PRODUCTION MATERIAL

The materials that are required for the process, other than raw materials that is solvent,
electrical goods, consumables stationary, furnishes oil, stains.
ENGINEERING MATERIALS
Engineering materials are those used for smooth running of the machine or mechanical part
of a machine like convert belt, tool for repair,nutsetc.
CAPITAL GOODS:

Capital goods mean the goods that have a capital value. It may be tangible or intangible
assets for the company like machinery, building, land equipment etc.
Purchase procedure:
1. The committee makes an annual purchase plan for raw material. The committee consisting
of MD, manager of all departments meets in a month and finalizes the product quantity.
2. Approved suppliers are identified and are evaluated in every six months.
3. Materials are purchased from these approved suppliers.
4. Orders are booked over phone and recorded in purchase orders.
5. If we raw materials are not within the specification, it will reject.
6. The quantity of the raw materials is tested there and is accepted or rejected.
7. On receipt of raw materials, sample sent to the lab and tested there.
SAMPLING OF RAW MATERIALS

There are certain procedures before taking the raw materials to the lab for quality assurance.
They are:
 As soon as the raw material lot arrives at the warehouse, the sample sent to the laboratory
by the warehouse personnel’s.
 Samples are to be taken from the 10% of total number with maximum of 10 bags at each
sampling in the presence of Analytical chemist.
 For raw materials except chilly, the bags are emptied on the clean floor and mixed
thoroughly, then sample of about 1 kilogram is taken by ‘loaning and quarter sing .
 For chilly samples are drawn from three different locations by cutting the bags vertically.
These samples are mixed thoroughly and reduced to 500 grams by ‘conning and quarter
sing’
 Label the sample with item, lot number and date of sampling and the send sample to the
laboratory with quality reports duly filled in with lot number, quantity, supplier, date of
receipt item etc.
 Work instruction for receipt, storage, and issue of solvent emulsifiers and semi-finished
goods are:

 In case of solvents and semi-finished goods as soon as the materials arrives the quality
assurance. Quality Assurance(QA) Department is informed for taking the samples. After
the QA approval the same is issued immediately to production department.
 In case of emulsifiers, QA department is informed for taking the sample and a sample
report is issued along with the sample.
 After the QA approval the material is stored in the warehouse and issued to the material
requisition along with the sample
 In case of rejection of materials by the customer, red tag indicating the product name, lot
number and quantity is placed on the product container.
 After obtaining the clearance from the control excise authority, a sample is taken from the
lab. A quality report also raised the store department
 After obtaining clearance from the QA department, the material issued to the production
department
VENDOR RATING
Suppliers are evaluated at every six months based on quality. SQC report on raw material is
prepared by the QA department and send to the manager materials monthly. There are
separate vendor evaluation cards. If the sub-contractor fails in his performance three times
continuously, he is removed from the approved list of suppliers. As and when required
market survey is conducted.
FUNCTIONS OF PURCHASE MANAGER

 Prepare a purchase budget
 Receive purchase requisition and ascertain the material requirements.
 Ascertain the source of supply
 Invite tenders from suppliers
 Select the customers who is offering the best terms and condition
 Issuing purchase order to the supplier concerned
 Follow up the purchase order to avail at any necessary delay in delivery
 Receive the goods received note and goods inspection report to make sure that the right
type and right quality of materials have been received
 Return the materials to the suppliers which are not according to the required
specifications

 Verify the invoice with regards to the quantity, price and other relevant particulars and
pass it for payment
 Send the invoice to the accounting section
The functions of a purchase manager are also sourcing of raw materials, sampling of raw
materials, purchasing of raw materials and inventory managements. The objective of this
department is to ensure continuity of supply of raw materials, sub contracted items and spare
parts at the same time to reduce the ultimate cost of the finished goods. The three principles
of purchasing are purchasing items with right price, at right quality, right quantity.
Centralizes purchase means all items are purchased by the specialized department organizes
for specific purpose of purchasing. In Akay flavours and aromatic Pvt Ltd centralized
purchasing is adopted. In this here is only one purchase department and is headed by the
materials manager.
Centralized purchase will avoid duplication, overlapping and non –uniform procedures. The
materials department find out all the sources of available materials. This department also
invites quotation are compared with each other and efficient supplier is selected.
After finding out the supplier, the department prepares a purchase order for supply of
materials. It is actually a document which gives the authority for the customer department to
receive the materials they have ordered and for the account department to accept the bill for
payment from the supplier. The purchase order is prepared in triplicate form. The original is
send to the supplier, then duplicate is send to the concerned supervisor and the last one to
purchase department. The goods which are sent by the suppliers are checked by the
concerned security at the company gate and are passed to the factory.
Duties and responsibilities of the storekeeper:

 Prepare stock statements
 Make purchase indents
 Arrange and maintaining all storage identification and preservation activities
 Prepare dying receipt
 Control non-conforming receipts

 Initiate corrective and preventive action

 Ensure that available space in the store is economically utilized
 Ensure first in first out (FIFO)
 Receive all incoming materials and issues to user departments.
DUTIES AND RESPONSIBILITIES OF MATERIAL MANAGER

 Oversee the material movement through production cycle and identify material
requirements from production
 Create purchase order, solicit proposal bids review goods requisition
 Analyse price proposal and financial reports to identify reasonable prices.

3.2.4 MAINTENANCE DEPARTMENT

Maintenance department is having an important role in the day to day functioning of Akay
flavours and aromatics. Maintenance is the combination of task that is required to keep a
machine or a part of the machine in a good condition. Maintenance includes tasks such as
lubricating, adjusting and replacing parts. The combination of all technical and administrative
actions including supervision actions, intended to retain in item, or of organized activities that
are carried in order to keep an item in its best operational condition with minimum cost
required.
The Maintenance department islead by Mr.Rozario RJD. Under him one Assistant Manager,
Officer, One officer Training & around 11 operators (4 Electricians, 3 Boiler operators and 4
Technicians for workshop). The main function of Maintenance department is to provide zero
maintenance of preventive maintenance. The maintenance activities start from 9.00 am to
10.15 pm. At this period major maintenance problems are reported. It should be done by the
approval of production department. The most critical machine in production plant is the
Aromatic Pelletier; other critical machines are boiler, chillier plant.
The Maintenance department supports the production. The main aim of the department is to
make sure that all the machineries are in working conditions and there would be no
interruption in the production.

MAINTENANCE DEPARTMENT HIERARCHY
Vice president technical
Assistant Manager
Senior officer
Officer
Junior officer
(Fig 3.8)
Following are the procedures that are followed by the Akayflavours and Aromatics Pvt Ltd:
INSPECTION:
Inspection is considered as the most important activity of a maintenance department. This can
be done in two ways, external inspection and internal inspection. External inspection helps in
identifying the leakage of oil and water, feeling the roughness of the surface and spotting dust
or crack on the machine. Internal inspection identifies faults in the internal parts of the
machine and defects like internal cracks etc.

LUBRICATION:
Regular and proper lubrication of machine helps in reducing the rate of wear and tear,
maintains the temperature of the machine and its parts from corrosion and moisture failure of
lubricating the machine has been a major reason for the breakdown of the machines.
CLEANING:
Regular cleaning of machine and its surroundings provides a clean and healthy environment
which can boost the morale of people. In Akay flavours and aromatics Pvt ltd machines and
their parts are regularly cleaned to avoid the coating of dust on the machine because as with
time the dust will mixed with lubricants and causes abrasion.
RETIGHTENING
The moving parts were monitored periodically and retightening will done on the spot.
Functions of maintenance department are as follows:
 Preventive maintenance
 Break down maintenance
 Shut down maintenance
 PREVENTIVE MAINTENANCE
Regular check-up of the machineries and the plant equipment’s are done in daily and weekly
manner. It is to ensure that there is no problem with the machines and the production will not
be interrupted. Daily oiling and greasing are done as a part of maintenance.
 BREAK DOWN MAINTENANCE

During production, if there is something wrong in the production machineries instant services
are given and make that the production will not interrupted.
 SHUTDOWN MAINTENANCE
The shutdown maintenance is given the early basis. i.e. once in a year all the maintenance
workers which are to be done. Any replacement is necessary is also done.

3.2.5 QUALITY ASSURANCE DEPARTMENT

The Quality Assurance Department refers to the department of engineering activities
implemented in a quality system so that requirements for a product or service will be
fulfilled. It is the systematic measurement, comparison with a standard process, monitoring of
process and an associated feedback loop that confers error prevention. This can be contrasted
with quality control, which is on process output.
The quality assurance department leads by Mr.Rajappan R.S. The QA department is one of
the important departments which maintain the production quality. The QA department checks
the quality of raw materials, if it fails in the test then it will be rejected and will be sent back
to the suppliers. If the raw materials are of good quality then these raw materials are used in
the production department. After starting the production there are many steps to check the
quality of production. In between process the sample for the product are taken and tested.
This is to make sure that the production is being made in the desired quality.
There are so many instruments for checking the raw materials and finished goods. They are
Gas Chromatograph Mass Spectrometer (GCMS), Statistical Quality Control (SQC),
spectrometer, atomic absorption Spectrometer, High Performance Liquid Chromatograph
(HPLC), Polari meter and preventive action procedures used in Akay flavours and aromatics
Pvt Ltd are:
Internal Quality Audit:Non conformities related to quality system are identified through
internal credit by auditors and causes are discussed and will take corrective actions.
Laboratory Analysis:
Non conformities related to products are identified through lab analysis. It is an ISO certified
company, so the company is using a written format for corrective and preventive action.
Sample Selection for Quality Checking:

Is done by the following methods, steam distillation, which is used for oil extraction,
purification is used for oil extraction, stripping is used for solvent extraction, blending is a
process in which blending the red chilliescolour (paprika) and heat capsicum.

QUALITY ASSURANCE DEPARTMENT HIERARCHY
VP Technical
Manager
Asst. Manager
Executive
Senior Officer
Junior officer
Trainee
(Fig 3.9)
DUTIES AND RESPONSIBILITIES OF QUALITY ASSURANCE MANAGER

 Specifying quality requirements of raw material with suppliers.
 Ensuring the manufacturing processes comply with standard at both National and
International level.
 Working with operating staff to establish procedures and standard system.
 Recording, analysing and distributing statistical information.

3.2.6 MARKETING DEPARTMENT

Marketing department of the company is Mr. Emmanuel E.T. By personal selling company
make good relation with the consumer and that helps to improve the goodwillof the
company.Marketing department is the selection of a company dealing with marketing and
sales. Marketing is the process of communicating the value of a product or services to
customers, for the purpose of selling the product or service. It is a critical business function
for attracting customers. From a societal point of view; marketing is the link between
society’s material requirements and is economic pattern of response. Marketing satisfies these
needs and wants through exchange process and building long term relationships. It is the
process of communicating the value of a product or service throughexchange process and
building long term relationships. It is the process of communicating the value of a product or
service to customers. Marketing can be looked at as an organizational function and a set of
processes for creating and delivering and communicating value to customers, and managing
customer relationships in ways that also benefit the organization and its shareholders.
Marketing is the science of choosing target markets through analysis and market
segmentation, as well as understand the consumer buying behaviour and providing superior
customer value.
Resenting the company all over the Asia, the company is one among the top 15 companies in
the same field. It is a multinational company. The promotion strategy of the company is
giving some advertisements in the food magazines taking part in exhibitions etc. The
company has around 12 key accounts.i.e. The minimum turnover with these customers will
be more than us $5000000. The early turnover of the company is $ 15 million. Since the
product is an industrial one, the packaging and labelling are of international standards.

MARKETING DEPARTMENT HIERACHY
VP Marketing
Deputy General Manager
Executive
Senior officer
Officer
Junior officer
(Fig 3.10)
FUNCTIONS OF MARKETING DEPARTMENT PRICING STRATEGY:

There are several strategies that are typically used to determine pricing for a product line. The
objective of pricing strategy include: gaining market share, achieving performance,
positioning of the product, stimulating demand and for influencing competition. Standard
pricing strategies include cost in based, going rate, and target profit, cost plus and breakeven.
Akay is following cost plus pricing strategy. Determining the breakeven point by calculating
the fixed and variable cost that goes into producing the product.

Since the company in a 100% export oriented unit, there are certain procedures for exporting
the goods. Some of the documents for the exports of goods are:
 Ft invoice
 Ft packing list
 Ft bill of lading or airway bill
 Certificate of origin
In some transaction to buyers, the certificate of analysis and fumigation certificate also.
Marketing Network
It has a very good marketing network being an exported oriented company it concentrated
mostly on outside part of India. It has target market in Europe, again countries maintaining
the quality. It has very good transportation facilities, most of them are contract carrier.
Personal Selling
By personal selling, Akay gave more customer care services at free of cost. It tells about our
product and low to use it make an enquiry that the customer is satisfied with our, if not why,
what modification can be to improve the product and passes the information to the R&D
department.
Advertisement
Advertisement is another method of their3 marketing Akay gave advertisement in magazines,
newspapers, channels, etc.
Consultants and Brokers

Consultants and brokers another wing in marketing and they do a very good job for
marketing.
SEGMENTATION
A market segment of groups of customers who share similar set of wants. The major
segmentation variables for customer market such as geographic, demographic, and
behavioural factors.
The marketing strategy varied according to each country regulations. These major market
segments are:

 United States: They are following high margin and low margin strategy.
 Asia: they are following high margin customers are very loyal
 Europe: Europe considering Akay products is superior. So in Europe, Akay have good
brand image. The problem is that the regulations of Europe are very strict.
After segmentation they target their market. Akay follows niche marketing. Niche marketing
is narrowly defined group seeking a distinctive mix of benefits. The customers in the niche
have a distinctive need. Here each region of has different concentration of essential and
oleoresins. Akay are extracting the enrichment.
They are positioning their product comes under food and beverages and also the products
which are used for preparing different meat items such as finished meals, success and
marinades. Paprika oleoresins are used by flavouring the in western countries. Thus Akay has
only international operations. They have meetings for making decision about exporting.
PRICING STRATEGY
There are several strategies that are typically used to determine pricing for product or product
live. The objective of pricing strategies include gaining market share, achieving financial
performance, repositioning the product, stimulating demand and influencing competition.
Standard pricing include cost-based, going rate, target profit, cost-plus and break even.Akay
following “Cost-Plus pricing strategy”. Determining the breakeven point (by calculating the
fixed and variable costs that go in producing the product) will gave a price floor. By selling
the price just above the price floor, earn profit and should remain competitive in the industry.
This is known as cost based, cost plus or break even pricing.
Since the company is a 100% EOU, there are certain procedures for exporting the goods.
Some of the documents required for the exports of goods are:
 Invoice
 Packing list
 Bill of lading
 Certificate of origin
 Certificate of Analysis

DUTIES AND RESPONSIBILITIES OF MARKETING MANAGER

 The marketing manager aimed at developing and implementing the long and short term
marketing strategies.
 Perhaps the most important duty performed by marketing manager is the development of
the employee’s brand.
 Market planning should be at the core to any business and is usually presented in the
form of written marketing plan.

3.2.7 FINANCE DEPARTMENT

Finance department is the part of an organization that manages its money. The business
function of a Finance Department typically includes planning, organizing, auditing,
accounting and controlling its company’s finances. The finance department also usually
produce the company’s financial statements.
Mr.Joby Joseph is the Finance Manager of the company. The major activity of the finance
department is data entry, book keeping, prepare budgets. The financial year of the company
starts from 1st April to 30thMarch. Now the company is running in a safe position. The
company has a cash credit with SBT. The total turnover of the company is 50 crores. The
finance department verifies all the bills passed various departments and the bills are cleared,
either on the same day some of the customers have credit for one month.
FINANCE DEPARTMENT HIERARCHY
Senior manager
Asst.Manager
Executive
Senior officer
Junior officer
(Fig 3.11)

FUNCTIONS OF FINANCE DEPARTMENT

1. Preparation of Cash Flow Budget (monthly, quarterly, yearly).
2. Preparation of Capital Expenditure Budget.
3. Preparation of Revenue Budget (monthly, quarterly, yearly).
4. Budget varies statement (monthly, quarterly, yearly).
5. Costing statement
a) Standard costing statement on yearly basis.
b) Actual costing statement on monthly basis.
6. Preparing monthly Profit and Loss Account and Balance Sheet on or before 5 th of every
month.
a) Banking
b) Working capital loan management
c) Cash flow management
Akay provide periodical performance to the bank, Company budget is made by the
financial manager, including production, purchase and sales.
7. Akay give credit facility to pre-shipment credit. Period allowed for the customer is 30-60
days.
8. Accounting: start with data entering, source with data documents. Accounting is done
according to the account manual of the company; account also follows the policies and
procedures of the company.
9. Documentation
a) Sales documentation
 Sales invoice
 Packing
 Bill of loading
 Shipping bill
 Copy of purchase order
b) Purchase documentation
 Original invoice of the party
 Copy of purchase or clear
 Quantity reports and bill of loading in case of import
 Goods received note

c) Payment Documentation
 Supporting bills approved by authorized signature
 Insurance
 Secretarial matters based on companies Act 1956 and reporting.
10. Sales tax
Monthly / yearly sales tax returns and assessment
11. Income tax
 TDS monthly deduction and payment and annual reporting to income tax department.
 Income tax quarterly payment & monthly reporting to ITD. Reporting to Cochin
special economic zone quarterly and annually and review meeting, reporting to spice
board quarterly and annually.
USE OF FUNDS OR APPLICATION OF FUNDS

1. Sizeable portion goes to the working capital funds
2. Then the others will be goes to fixed assets, i.e. land, building
BANKING
The banks whichthe Akay deals:
 Central bank of India
 ICICI
 SBT
 Bank of Baroda
Receivables management and payable management

The company gives credit facility to replenishment and post shipment credit allowed for the
customer is 30 – 60 days. The main aim of the company is to get maximum credit from
suppliers and reduce credit to the customers, follow up on payments from customers abroad
and increase inventory turnover and management.
WORKING CAPITAL
Akay provide periodical performance to the bank and also their company renew their
working capital facility every year based on credit Monetary Account (MA) statement.
Company budget is made by the financial manager including production, purchase and sales.

Working capital is classified in to three:

 Cash credit
 Packing credit
 Bill discount
DUTIES AND RESPONSIBILITIES OF FINANCE MANAGER

 Oversee the overall corporate budgeting preparation and monitoring processes.
 The finance manager performs financialanalysis reporting and management activities.
 To develop standard accounting procedures to improve financial operations.
 To establish financial strategies to enhance business profitability.

3.2.8 RESEARCH AND DEVELOPMENTDEPARTMENT

The department is handled by Dr. Krishna Kumar manager of the department. Under him
there are two researchers. Research and development is one of the means by which business
can experience future growth by developing new product or processes to improve and expand
their operations. New product design and development is more often than not a crucial factor
in the survival of accompany. In an industry that is fast changing, firms must continually
revise their design and range of products. This is necessary due to continuous technology
change and development as well as other competitors and the changing preference of
customers. Research is considered as an endeavour to at answers to intellectual and practical
problems through application of scientific methods. Research is considered as an endeavour
to intellectual and practical problems through the application of scientific methods.
AREAS OF FOCUS OF THE R&D DEPARTMENT

 New product development
 Energy utilization
 Instrumentation and process control
 New product technique
 Improve the product and process quality
 New technique in production and packing
RESEARCH AND DEVELOPMENT DEPARTMENT HIERARCHY
Senior manager
Executive
Officer
(Fig 3.12)

STUDIES CONDUCTED BY RESEARCH AND DEVELOPMENT

Role of cur cumin in cancer, antioxidants, Cur cumin is a natural yellow pigment with great
potential. Abstract cur cumin is an example of a natural dietary agent capable of acting at
multilevel in cellular pathway for the prevention or treatment of diseases with multifactorial
etiologists such as cancer. Various studies have reported that cur cumin inhabits
Angiogenesis, the formation of new blood vessels from the host vasculature to feed the
growing tumour in non-malignant cells, and reduces the number and reduces the number and
sizes of existing tumours and decreases the incidence of new tumour formation. It can also
affect proteins related to cell – cell adhesion and inhibits the production of cytokines relevant
in tumour growth.
Fenugreek as a novel source of dietary fibre: fenugreek (tigonellaFoenumgracium is an

annual leguminous herb possessing wonderful medical values. The dried seeds are aromatic
and bitter, which have been used traditionally in India, china and Egypt and in some parts of
Europe for its well-known carminative, galactogouge, and antibacterial, anti-inflammatory,
insulin tropic and rejuvenating effects. The major constituents of fenugreek seeds have been
identified as proteins 20 to 25%.
This chapter is discussed about the spices industry in general and about the history and
development of Akay flavours and Aromatics Pvt Ltd. The functioning and task performed
by various departments were discussed in detail and gives an in depth knowledge about the
functions performed by various departments. The foregoing discussions in the next chapter
that is the analysis chapter gives an idea about the strengths, weakness, opportunities, and
threats of the company.
DUTIES AND RESPONSIBILITIES OF R&D MANAGER

 Develop concept, procedure and solution byworking with company business unit.
 Determine improved technologies used by suppliers, competitors and customers.
 Suggest training tools to enhance employee’s performance and skill development.

CHAPTER IV
SWOT ANALYSIS

4.1 SWOT ANALYSIS
SWOT analysis is very helpful to obtain some meaningful information from the data
collected. Identification of threats and opportunities in the environment and strength and
weakness of the firm is a vital factor for business policy formulation. It is the factors that
determine the course of action to ensure the growth of the firm. The environment might
contain opportunities but the company might not have the strength to exploit all the
opportunities. Similarly sometimes a firm will not have the strength to meet the environment
threats. The Swot analysis gives a firm a thorough understanding of its internal and external
competencies and weaknesses.
STRENGTHS
 Use of modern and automatic machines
 Efficient management.
 Punctuality of employees.
 Satisfied customers.
 High Quality products.
 Location of the plant
 Professional management team
 100% EOU
 HACCP and ISO certification
 Largest manufacture of agro product in Kerala
 Absence of registered trade union
WEAKNESS
 Poor product innovation as compared to the competitors.
 Underutilization of installed capacity.
 Limited no. of local customers.

OPPORTUNITIES
 Globalization increased the opportunity for the export of extracts
 Increased demand for products all over the world
 Product diversification is possible.
 Very few competitors in the field.
 India is the largest producers in spices.
 Increased awareness about the certifications of the company in the market
THREATS
 Increasing competition.
 Product is seasonal
 Increasing price of raw materials.
 High manufacturing cost.
 Change in taste and preference of customer.
 Rules and financial policies of the exporting countries.
 Unpredictable strikes
 New taxation policies
 Usage of artificial colour and flavours.

CHAPTER V
FINDINGS AND SUGGESTIONS
CONCLUSION

5.1 FINDINGS
Following are the findings from this study:
 The Company continuously strives to meet the expectations of the customers.
 The company has 4th place in manufacturing Oleoresins and Essential Oils in India.
 There is good co-operation between management and employees.
 The employees are not following the guidelines strictly.
 There is no IT department in the organization.
 Team effort and honesty is the strength of Akay.
 The Company is modernized in many areas.
 Lack of proper training in maintenance department.
 Production capacity is not sufficient to meet the changing demand.
 Lack of innovative products to meet the changing preferences and trend of the market
 Rising production cost because of increasing expenditure.
 Unscientific pricing strategies.
 No customer service numbers is there.
 The system practiced at Akay seems to be apt and beneficial for the business model
followed.
 Welfare activities of Akay are good.
 The company promotes environment friendly activities like Rainwater harvesting, water
and waste reprocessing etc.
 Woman employees are not appointed in production department
 The company has not faced any strike for past few years.
 Quality Assurance Performance makes the product process more valuable. The company
use manual as well as Electronic Quality Checking method.

5.2 SUGGESTIONS
 Akay Flavours and Aromatics should focus on superior service, innovative product and
fair pricing.
 The company may make the employees to follow the safety measures strictly, since,
prevention is better than cure
 Try to cut down the manufacturing cost by reducing expenditures
 Existing medical capacity to employees should be improved.
 Improve the drinking water facilities and provide more spittoons.
 Provide awareness about the product to the general public as it will increase the sales of
the company.
 Modernize the production department in such a way that it performs multiple tasks.
 Reduce the number of intermediaries in the distribution channel to make the supply
chain more efficient and effective.
 Proper training should be given to the employees in maintenance department and
periodic coaching should be provided to all employees as it helps in tactfully handling
the risks.
 Introduce latest technologies in the entire mechanisms.
 Encourage innovative promotional strategies to counter the competitors
 The company may introduce innovative products according to the trend and changing
preferences of the customers
 Enlarge production capacity to meet the changing demand of the market.
 Provide more job opportunities for women also.

5.3 CONCLUSION
The general conclusion from this study reveals that the organization is in its forming stage by
reaching commendable profit for the past twelve years. The organization is the pride of the
spice forming community. The present study has given an insight in to the field of
management practice. The functioning of an organization is clearly understood by this study.
Akay Flavours and Aromatics Pvt.Ltd is the best example in the state for the best
entrepreneurship and enjoy a good market presence and reputation. They have still chances
for expansion and diversification due to different management and control by the board. The
success behind Akay rests with the employees whom forms part of Akay family.
The study was done to analyse the practical aspects of business management in the modern
business scenario and also to study the various functions of department in the organization.
This study helps to gain practical knowledge of the various processes in the organization.
Although the organization study was a great experience to me. It gave me a good idea about
the working culture of one organization. Akay flavours and aromatics Pvt Ltd. is an emerging
company having a wider scope of opportunities, if the management and employees are going
in a more dedicated way they can become the market leader.

BIBLIOGRAPHY

BIBLIOGRAPHY
Books:
[1]. Chandler, AD. (1962), Strategy and structure: chapters in history of American Industrial
Enterprise. MIT press, Cambridge, MA
[2]. Chester I Bernard (1938) ‘the functions of the executive’, Harvard university press,
Cambridge
[3]. Cleland David L. and King William (1972) ‘A system approach McGraw hill. New
York’, Dalton, E. McFarland (1979) ‘Management foundations and practices’, The
Macmillan Co., New Delhi
[4]. Daniel Katz and R.L Kahn (1978),‘Thesocial Psychology of Organizing’, John wiley,
New York
[5]. Edger Schein (1973), ‘organizational Psychology’, Prentice Hall, New York, enterprise,
MIT press Cambridge
[6]. Max weber (1947),‘The theory of social and economic organization’, Translated by A. M
Henderson and Jalcott Parsons, Free press, New York.
[7]. RobbinS.P (1989), ‘Organizational behaviour concepts’, controversies and application,

Prentice Hall of India, New Delhi
Journals
[8]. Lawrence, P and Lorsch.(1967) ‘Differentiation and Integration in complex
Organizations’, Administrative science quarterly. 12
[9]. Allen, L.A (1958), ‘Management Organization’, McGraw hill Tokyo, Japan
[10]. Akay Brochures
Websites:
www.akaygroup.com
http://www.spicesboard.in
http://www.indianspices.com

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Akay Flavours And Aromatics Pvt Ltd

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Organization is defined as collectively for achieving common objectives. Every organization

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1.1 NEED OF THE STUDY

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1.2 OBJECTIVES OF THE STUDY

 To understand the functioning and operations of different departments in Akay

1.3 RESEARCH METHODOLOGY

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 Web site of the organization, etc.

1.4 LIMITATIONS OF THE STUDY

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2.1 INDUSTRY PROFILE

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2.1.1 HISTORY OF SPICES

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2.1.2 INDIAN SPICES

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2.1.3 WORLD SCENARIO

2.1.4 INDIAN SCENARIO

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2.1.5 STATE SCENARIO

2.1.6THE SPICES BOARD, INDIA

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The Board consists of: -

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2.1.7MAJOR SPICE EXPORTED

Seed spices 22%

Spices oil and oleoresin 7%

Nut mug & Mace 1%

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2.1.8PROBLEMS THAT ARE FACED BY SPICES INDUSTRY:

 Poor Product Quality :

 Insufficiency of Legal Provisions:

 Some Indigenous Varieties are disappearing:

 Poor Post-harvest Handling:

 Insufficient Mechanization of Spice Production and Processing:

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2.1.9 REJECTION OF EXPORT MATERIALS

2.1.10 AGRICULTURAL EXTENSION IS NOT MARKET-ORIENTED

Problems of the Growers of Uttaranchal:

 Inadequate price for the exporters

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 Pest and Disease Problems and Dependence on Nature:

 Poor availability of Inputs:

 Crop Insurance is absent:

2.1.11 INDIA’S SHARE IN THE GLOBAL SPICE MARKET

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2.1.12 ORGANISATIONS RELATED WITH THE PROMOTION OF EXPORTS

 Agricultural and Processed Food

 Visweswaraya Industrial Trade Centre, Kasturba Road,

 Joint Director General of Foreign Trade,

2.1.13 PROBLEMS OF THE EXPORTERS

 Inadequate surplus of the exporters

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 Insufficient Quantities of Quality Spices:

2.1.14 EXPORT TRADE PROCEDURE AND RELATED ISSUES

2.1.15 PROCEDURE FOR BECOMING AN EXPORTER:

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